patrick.net

About b-school.

But President Bush is the only U.S. President with an MBA, from a top-tier school no less.

justme,

I don't think that there's a crime since OJ's wife was killed that this guy didn't confess to.

Nice to know these things are all wrapped up now.

Anyone see this? How much did the NAR pay Ben Stein to do this "commercial"? I liked it better when he was doing the "clear eyes" commercials.

Randy H writes:
Here’s the kicker. As I started searching I was floored to find a huge bifurcation in rent levels for big South Marin SFHs. I commented on this before, that there seemed to be FB homes, priced right around PITI for people who would have bought in the last 1-2 years. And then there were a few homes about $500-$1,000 less per month.

I'm observing the same for 4-5 BR houses in the South Bay.

Is it these lower rent houses represent “perma-rent” stock that are simply now starting to turn over tenants amidst an ever growing pool of FB McMansion “please cover my mortgage” homes? And the owners of the other homes just have lower cost basis, don’t pay that much attention to the micro-market, or would gladly forfeit some short-term bubble-rents in order to secure a tenant fast, and for a *fair* rent that easily earns them a comfortable positive cash flow?

Makes sense. My current landlord operates that way. He bought the house in 1994 at a quarter of its "value" today, and could probably still make money if he rented it out for half of what he's charging me - which, even after the recent increase, is still about 20% below market.

Anyway, houses with realistic asking rents are usually gone fast, whereas the others linger for weeks.

The danger is though that landlords who look into Craigslist as an indicator of "market rents" get the wrong picture and ratchet up their own expectations, which may ultimately make rents go up.
Could it really work that way?

Some observations that I found noteworthy:
Some time in February, a brand new 3000SF+ 5BR house in Campbell went up on Craigslist for $3200. It lasted surprisingly long (maybe 3-4 weeks).
I'm currently watching an older house in Saratoga. It's pretty funny: Every week, they cut the asking rent by $100 - right now, they're at $3850, down from $4150. My guess is that it'll rent at about $3k.

It certainly seems that the air becomes pretty thin at $3k.

Ben Stein appears regularly on Neil Cavuto's Cavuto on Business Show on Saturday mornings. He continues to advocate buying real estate and buying emerging markets (which are dropping recently in a major way.)

He explains that he is not a market timer and in the long term, these investments will do well. I think it is a disservice to get people into these these investments just before they start dropping.

These gurus make lots of mistakes in their investment advice. They must make most of their money on books or whatever, but would probably go broke following their own investment advice.

Ben Stein is a paid shill! Probably on the NAR's payroll. This guys advice is going against all logic. Some people value money more than their own reputation!

The only thing we have to drink is beer itself.

Bap33,

"is it not odd that the mass media has successfully drafted and controlled the entire thought process for the entire self-proclaimed smartest bunch on the planet?? - aka Libs ??"

Interestingly the most recent examples of media groupthink that I can come up with aren't exactly those perpetrated by the 'Libs', but rather by the 'Cons', and cons they were. The entire debacle about the existence of WMDs in Iraq, with such liberal media outlets as CNN, MSNBC, NBC, ABC, CBS and Fox news all attacking Scott Ritter and Hans Blix about their views that Iraq hasn't had WMDs since 1992. I remember one particular interview in which Paula Zahn insinuated that Scott Ritter was unpatriotic and on Saddam Hussein's payroll because he didn't believe that WMDs were in Iraq.

Or how about Judith Miller, at that famously liberal paper, the NYT, dutifully reporting the Doug Feith spin on yellowcake and Niger? She never investigated at all, she simply reported what was given to her by people working with the vice-president.

Or how about right now? The mass media is failing to look into the funneling of money through Fouad Siniora to Sunni jihadi groups that is being run by a combination of people close to Cheney and the Saudis. It's interesting because some of the people involve include Eliot Abrams and Negroponte, who reportedly left his position as Director of National Intelligence to avoid another Iran-Contra scandal. How much mainstream media have you seen about that?

If the media is controlled by liberals they seem to prefer stories that present the neocon point of view.

LILL, I think I've found my next realtor. I hope he/she is in California. You just shook my belief system.

FormerAptBroker Says:
Malcolm Quotes the NYT article that Says:

> “This is the problem I have with the real-estate-equals-
> dot-com argument. Most homeowners buy to have a
> place to live. If prices fall, they react precisely unlike
> stock traders; rather than bail out, they stay put longer.”

Then Says:

> This is a true statement. The problem is that you can’t
> just wish prices to stay where they are. The prediction
> is that panic sets in as prices fall and sellers pile on as
> they fear losing more and more equity.

You have selected only an excerpt for you purposes. If you actually read the whole thing you may be surprised.
To add to that, a lot of owners won't have a choice to hold out. Things like divorce, or new job offers can force someone to sell so not everyone can hold out indefinitely.

And I wasn't quoting the article, I was rebutting the otherside using that article to support her point.

To add to that, a lot of owners won’t have a choice to hold out. Things like divorce, or new job offers can force someone to sell so not everyone can hold out indefinitely.

.........or am ARM reset.

Yup

All I said was that her point was partially true, there are many well rooted owners who are in it for the long term, but they become irrelevant.

SFWoman Says:

> Interestingly the most recent examples of media
> groupthink that I can come up with aren’t exactly
> those perpetrated by the ‘Libs’, but rather by the
> ‘Cons’, and cons they were. If the media is controlled
> by liberals they seem to prefer stories that present
> the neocon point of view.

Rich liberals are mostly neocons (e.g. Diane, Nancy & Hillary and a lot of guys that support Israel). If the US pulls out of the middle east Israel (and many big Dem. contributors who have names ending in stein and berg) will not be happy.

The overall spin of the mainstream media is Liberal (with a Conservative spin from most AM talk radio and Fox News).

I don’t think a day goes by in the Bay Area when I don’t hear about “the increase in Greenhouse Gasses that cause Global Warming”.

When I drive down to the Santa Clara Valley I see a lot less crap in the air (and way less crap in the air when I down in the San Gabriel Valley).

When my Great Uncle moved to Marin after the bridge opened he said that the road at the bottom of Tennessee Valley would flood when it was raining at a real high tide, now 70 years later the road still only floods when it is raining at real high tide…

P.S. I liked the conservative spin on the Gore wins an Oscar story that said “Former Vice President Al Gore was spotted in Hollywood fondling a short naked man”…

danville woman, you said

"Ben Stein appears regularly on Neil Cavuto’s Cavuto on Business Show on Saturday mornings. He continues to advocate buying real estate"

He also writes on Yahoo Finance...he spoke about how prices do decline and decline painfully.

What to Do When a Boom Goes Bust

http://finance.yahoo.com/expert/article/yourlife/10255

The real estate crash to end all real estate crashes began the next month. Within three years, I couldn't have given that house away. If I'd been able to sell it, I might have gotten $350,000 for it.

The price languished in the same miserable range for a few years, then revived, and then took off for the moon. By early 2005, I might have been able to sell it for $1.8 million -- a tidy profit. Plus, I had very much enjoyed living there. (Although I do recommend that you never buy a home with a septic tank.)

Then, in the early months of 2006, the real estate boom collapsed. I could put the house up for sale, but there are few buyers out there. I certainly couldn't get anywhere near what I could have gotten for it in early 2005.

Brand said..

I’m pretty sure that the only reason homeowners think housing is a great investment is because most of them lived through hyperinflation in the 70’s and 80’s, when they were paying a joke mortgage payment compared to the sale price of the house. And younger people point to that as a great example of real estate being a great investment (as it has been recently).

Good points... many forget we had wage inflation. Therefore landlords would increase rents and creating higher bottom line profits. Then the producer prices inflation kicked in and the inflation cycle would repeat. All this ended when Volker notched up rates double digit. Since then we had very very low inflation. Technology since the 80s has been deflationary. Products are better but also cheaper... Moore's law.

'If prices fall, they react precisely unlike stock traders; rather than bail out, they stay put longer.”

Yes....For primary residence.. but also we had many homeowners buying 2-3 homes for flipping or and vacation. That excess purchase may flip back to inventory when the net returns turn under say 5-7%. S&P index may return more in the future. And yes rental prices also may decline in the future making the investment not so desirable.

that the road at the bottom of Tennessee Valley would flood when it was raining at a real high tide, now 70 years later the road still only floods when it is raining at real high tide…

And barely at that. It really only floods at the 101/hwy 1 park-n-ride and Caltrans yard. They have to block the exit ramp for a couple hours, but that's the worst of it. The worse problems are downtown mudslides from overbuilding.

Has anyone heard of Bill Wattenberg's ideas on terrorism lately? He scared me out of my mind. He states that Iran is about a year from developing nukes and there is a possibility nukes can easily get through our ports. He is usually so grounded and calming, that I was shocked at his concern about this possibility.

I don't think a nuke will be set off.
More probably, they will wait till they have many nukes in many cities, then set them all off at once.

SFWoman,

You need to realise that many people think that all of the organisations you mentioned (except Fox) ARE liberal propaganda outlets. They consider Fox to be 'balanced'.

MD Renter: I could easily afford a median-priced house in my area. The price would be 3x my income, and I already have a 20% downpayment. But I am not comfortable buying a house right now. I fear a drop in house prices (I have already seen 5-10% here in the last year). I fear a market change in tech that causes my spinoff to cut back employees. I fear the loss of the flexibility that comes from renting, and I dislike the idea of trading nice vacations and good wine for a house payment.

I agree with your Aristotle reference that most virtues in moderation are good things. Fear is a natural reaction to the unknown or to a known menace. It should not be ignored lightly.

It continues to amaze me that people make the biggest financial decision of their lives without really understanding the finance or market forces involved. If you held out for better understanding, that was a good decision, even if you theoretically missed some appreciation along the way.

CB its amazing that prices have gone from 200K to 1.5M in 10 years.
Lots of fundemental reasons behind all these prices... Oh yea...Must be Google employees buying... Again... LOL!

Fear: what are you afraid of?

(1) Buyers 'buying into' the SF Bay Area RE myth... actually believing houses should be selling for $1-1.5M ... never mind they are buying 2000 sq ft SFR that had Granite Counter Type and Hot Tob etc and was on the market in 1997 for $200-300K.

(2) Buyers actually believing there are multipe bidders without confirmation...
Yes I trust you mr realtor, that someone else has bid over asking..."and I can go higher by 10% if I really want to buy this home. You deserve a bigger commission'...

I guess they would also believe Enron was a real company who did not rip-off California consumers to the tune $9B because they (enron did not) cause the shortages which spiked the prices.

FAB, astrid, hessesfan, and Randy, thanks for your laptop advice.

I am still typing away on my 4 year old IBM T40 but the lid is now semi-detached. :)

I am too cheap to pay $1200 for a laptop. Probably I will just get a late model reconditioned IBM/Dell/HP with Core Duo for $700. It is better to have someone pay for the initial depreciation. ;)

global warming is a clear and present phenomenon. there are some pacific islands increasingly underwater already, the sea rises further every year, and they can no longer grow traditional crops on their lands... plus polar bears drowning, ice caps melting, glaciers retreating, etc... oh well, a change is as good as a holiday...

For those who wondered how real estate agents and landlords can 'conspire' to raise the rent, here's a chilling story. The REI circulates a fax or letter to all RE agents in their member network encouraging to push up rents 10% annually, etc.

Media Watch: Front Page - Who's Raising The Rent? (26/02/2007)

I remember one particular interview in which Paula Zahn insinuated that Scott Ritter was unpatriotic and on Saddam Hussein’s payroll because he didn’t believe that WMDs were in Iraq.

Or how about Judith Miller, at that famously liberal paper, the NYT, dutifully reporting the Doug Feith spin on yellowcake and Niger?

that degree of bias is almost unheard in the West outside of the US -- for a large country, there seems to be a certain insularity, parochialism and groupthink (apart from downright collusion) that you just don't find elsewhere.

however, REI antics are the same everywhere....

saw a story on southern afghanistan, opium crops and the taliban on telly tonite... the taliban are taking large opium sale profits, opium crops are up 65% from last year, and there is virtually no control over opium growers by the govt, altho the crops pay the taliban handsomely. there is, of course, a huge international heroin market to service. however, 'coalition' troops are bravely fighting the taliban directly, never you mind about that.

further, there is major unrest in pakistan, and strong dislike of Musharraf, the military dictator so favoured by george bush, with the arrest of top judicial figures for being outspoken against the regime. it will be increasingly hard to get a pipeline from the caspian sea thru afghanistan AND pakistan at this rate, they just won't fall into line and set up puppet govts with repressive dictators the way we want, curse those whirling dervishes and howling cannibals...

SFWoman,

I've set a tidy trap for myself re KST, haven't I? But I intended a compliment.

danville woman Says:

Has anyone heard of Bill Wattenberg’s ideas on terrorism lately? He scared me out of my mind. He states that Iran is about a year from developing nukes and there is a possibility nukes can easily get through our ports. He is usually so grounded and calming, that I was shocked at his concern about this possibility.
_____

Aside from some personal clashes I had with Wattenberg a few years back, his views on Iran's nuclear situation deserve respect.

Also, he's been a voice of reason against the Japanese electronics invasion/dumping of the '80s+, and the liberal environmental whacko hijacking of science for the pseudo metaphysics of global warming hysteria.

Perhaps if he was sorry for his inappropriate, arrogant behavior towards me in the past, a genuine friendly overture, I might be sorry for some of the things I said in response.

We should be, for the most part, on the same side.

Everything I just said is true, by the way.

Top 10 U-Haul Destinations For 2006

Wow, this is kind of surprising to me. Los angeles is number one on the list. N.Y. didn't make the list, go figure!

down goes frazier Says:
I fear we pull the troops out and the war comes to the US. Bombs going off on a regular basis.

That’s all we need.

Maybe it is, who knows.

Anyhow, they need you to be in this highly rational fear mode, stops you from thinking... pissed off Iraqis crossing thousands of miles to bomb the local WalMart because they hate your freedom...

I don't know about fear so much? How about a "healthy respect"?

Given the fact that with the exception of polar inversion just about everything we've discussed HAS come to fruition I can't imagine anyone here would have a great deal to fear.

If your entry point on housing pre-dates the bubble, you're fine. If you're renting with plenty of "dry powder" you're fine. If you're over-leveraged and bought (or "re-bought"*) your home in the last 3-4 years you're screwed. In which case you no longer having anything to fear. It's already happened. (As in, "it used to hurt, now I can't even hold an apple in there") so why worry.

*With apologies to Surfer X, you ARE correct Sir! I should have corrected HARM for having given me credit on that little gem before going into "weekend mode"! There are some quotes here that I've cottoned to SO well that I've sort of "adopted" them. Athena's "making someone else's retirement o n e p a y m e n t at a t i m e" has also become part of my vocabulary.

Well, the environment.

It is interesting to me that observations about changes in climate almost inevitably devolve along the lines of philosophical or political tropisms. Most hard statements on the subject have in common the imputation that the opposition is stupid.

At least some of the opposition always is stupid.

My take on the subject rests on two observations. I understand that climate on this planet has been and remains a dynamic phenomenon. And I see that we are to a degree capable of making choices which direct that dynamism in ways which are favorable to ourselves.

The introduction of varying degrees of insult is noise in the data.

Malcom, (from previous)

I'm not sure that's the "frank" I used to know? An occasional poster here that used that screen name was a real sensible mid-western kind of guy and never antagonistic. If it IS the same guy... I dunno, severe bump on the head?

A few years ago when we first moved in town (from the country) I was assigned a new phone number. Pffft, my luck it turns out it belonged to the biggest dead beat in Marion County history. The calls I got were beyond RUDE! (And it takes a lot to steam a cold-call broker!) I even got a call from my drinking buddy (manages local tire store) and I said "Dude, you don't recognize me when you're sober do you?"

Well after enduring about as much profanity as I was going to take I contacted the AG (for Indiana) and it all stopped! I just hated their explantion to the AG. Some form letter BS about "attempting to collect on a debt from someone w/a similar or identical name". That really fried me b/c our last names were nothing alike and there are only 7 living males w/my last name, none of which are "Matt". Nice try, @ssclown.

My Ron Paul newsletter arrived this morning:

"But capitalism is not to blame for the housing bubble, the Federal Reserve is. Specifically, Fed intervention in the economy-- through the manipulation of interest rates and the creation of money-- caused the artificial boom in mortgage lending...."

http://www.house.gov/paul/tst/tst2007/tst031907.htm

FAB,
I would strongly disagree that NBC and MSNBC were at all liberal leading up to the Iraq war. I'd also challenge the rich Jews =neocons. Some wealthy Jews, mainly those associated with either the American or Israeli defence industries or associated with some of the more aggressive neo-zionist movements are neocons, but I think the perspective that this is widely supported in the Jewish community is from AIPAC's spin and ability to stifle public discussion of Israeli policy with their (and Alan Dershowitz's) instant labelling of such discussion as anti-Semitic. I have several affluent Jewish friends who are actively involved in the peace movement.

justme,

I'd blame media consolidation for a good part of the decline of solid investigative journalism. GE owns NBC and MSNBC, can you imagine a good investigative piece on any GE related issue? Murdoch owns Fox and large numbers of papers and media outlets. Murdoch has publicly stated that he tried to help re-elect Bush in 2004 (just before he held a fundraiser in NYC for Hillary Clinton). Fair and Balanced? Then there's Viacom and Clearchannel.

I am firmly in the belief that a free and functioning media is necessary for a democracy to survive, and our media isn't performing its function well at all.

I think we did all see the failure of the media to report on the real estate industry bubble in its earlier stages. Many of the articles we saw were actually cheer-leading articles, little more than advertisements in fact, written by Realtor(TM). Unfortunately that is what we get about a lot of issues in the news today, and this is harmful if you are a liberal or conservative or libertarian. It's not news, it's propaganda and it is very, very effective at fooling most people.