patrick.net

With deferred taxes alone I can imagine a dozen ways to concoct a system that guarantees single-party rule.

I see wealth as reflection of power. Throughout history, wealth tends to consolidate, despite minor occasional disruptions like revolutions.

Power too tends to consolidate. Eventually, single-party rule will return, at least in effect.

Are there real differences between the two parties in the US?

Randy :

I agree with you that since we monitor/regulate credit card companies, and they don't have the choice of canceling cards (or charging a fee) for those who pay it off every month - there is a shifting of burden.

But they can charge annual fees to cover these expenses. Some cards do. Many used to and competition forced them to reduce/eliminate the fees.

Also they definitely need at least some customers to pay a lot more than minimum. Else they will have a cash flow problem. So although people like me don't give them a boost in profit, we help them with the cash flow so that they can earn the profit from people who carry a balance. It's arguments like these that create the problem with the analogy.

Nevertheless, I am convinced that the behavior of people who made bad loans and who are now begging for a bail-out are immoral. It may be legal to behave this way, it may be an expected way to behave this way for most. That hardly makes it moral.

Are there real differences between the two parties in the US?

Yes. They each have different cartoon animals as mascots.

Red’s Eats in Maine
Funny you should mention them as we just passed by there last week. I have returned from my hiatus; what did I miss? A bank run, nice... Thankfully, I withdrew some pocket cash before leaving as it would have been quite disconcerting to have my Wells Fargo account "locked down" while on vacation.

On the real estate front, still a lot of for sale signs in the area where I was staying. The property next to my inlaws place is still for sale (on the market for at least two years). I would say the the market probably peaked in their locale around 1-2 years ago. The house was inherited (I think) 2+ years ago, and I'm sure the daughter saw (and is still seeing) the property as a gold mine (after all, we can't just give it away). One has to wonder after how many years does the maintenance and various other carrying costs finally get to you (give it another five years of stagnant to falling prices). And, of course, it goes without saying, this place is special: it's an island, so they're not making any more land (pay no mind to the collapse of the the vacation/second home market). Anecdotally, it seems that ferry traffic may be down for this time of year... of course, this just means that folks went home early (not that there actually may be fewer people visiting :-) )

I only forced one person to listen to my REIC rant as I explained the "securitization food chain" and how everybody involved had an interest in keeping it going... Didn't have the heart to pull out the CS ARM reset chart.

SF seemed to take a nice hit (pdf alert) with the June Case Shiller Index numbers (6-7% annualized). My favorite city to watch, though, is Miami. They rose the highest, had the most staying power.... and of course, are falling hard (down 1.7% month-to-month). Will be interesting to watch Boston as they are being pegged as the canary in the coal mine -- now being monitored to see if they bird is able to breathe again. Oh, and Stumptown continues to show relative strength as their numbers are still positive...

O.K, we can argue about, is it ethical, legal, moral but what stands out most in my mind... is it embarrassing?! Should Bill Gross (who btw was dancing on equity traders graves barely 3 short years ago) should feel humiliated by his own comments? My guess? Yes.

SO... just b/c something *isn't* unethical, illegal or immoral certainly doesn't mean it can't be as embarrassing as f@ck! :)

So DinOR,

What you mean is that instead of writing to "The Ethicist" guy in the NY Times about these guys, we should be writing to Miss Manners?

EBGuy,

Glad you had a nice vacation! So, where you there primarily to look for vacation property? No, wait don't tell me! Let me guess, HELL NO!

Thanks for bringing to light the absolute collapse in the vaction home market. With the bank run, credit crunch and all I was afraid that would get lost in the shuffle? What I find interesting is the similarities in the ME market (and it's proximity to Boston) and what that might tell us about the future of the Bend, OR market?

And yes, the Stumptown market is "alive and well"!

I'd say they're more like communists, than socialists; but they're actually worse than that. Communists are those less fortunate that take from the wealthy; these guys are the exact opposite. Since there isn't a term worse than communists; I will make one up: scumbags! or scumbagism!

EBGuy,

Did you stop at Red's Eats? Man, I still dream about their lobstah rolls.

Why did my comment go into moderation?

PermaRenter said: Squatters are already moving into empty homes. “If you know what you’re doing, you can get six months in a place with a kick-ass view,” said Los Angeles police officer Chris Ragsdale.

I am surprised this doesn't happen a lot more. My impecunious college roommate stayed in a luxury guesthouse in the B.V.I. many years ago. The twist was that the owner of the estate (a european movie star) had no idea. The main house was off limits, but there was a guest house and campsites on the private beach that the housekeeper was renting out to make some money on the sly.

I vaguely remember an old Rock Hudson + Gina Lollobrigida movie with this kind of theme too.

SP

@skibum,

LOL! Earlier today CNBC was having a "panel of experts" trying to sort out just what a HF is? Herb Greenberg made some good points but I'll make this simple for people. If you ran a fund (any fund) and were *not* AIMR Compliant (meaning there was NO audit of your performance and net asset value) you ran a HF!

That makes things nice and simple, no doesn't it? If BG can't have his assets "marked to market" then he ran a HF too! This is why he is so focused on damage control for real estate values. Now that he's upside down in his positions he wants someone to save his bacon? That's whiney AND rude!

The DOW is down 280 pts!

Sorry about comments held in moderation. I really do not understand the algorithm. It' s not just keywords. I have now approved every comment that was not spam.

Please write me directly at p@patrick.net if you get a comment held, and I'll release it. Unless you're a spammer, in which case you should go abuse yourself.

Patrick

Ah, we might get the DOW under under 13,000 again! That is wonderful news, since everyone who has dollars is seeing them get worth more shares by the minute.

Patrick

Did you stop at Red’s Eats? Man, I still dream about their lobstah rolls.
Much to my shame (given the number of times I've been to Maine), I've never (gasp!) even had a lobstah roll. I must admit, since it is past my lunch time, my mouth is watering (oh, and I did go the the RoadFood website). Most of the time when we are passing Red's I am comatose in the back seat after taking a redeye (which allows you to catch a ferry after landing, since you "lose" a day flying) -- doubly so now that we are traveling with kids. Red's is also ground zero for the dreaded Wiscasset traffic jam (which wasn't all that bad this year -- coincidence?)
Our "food pilgrimage" (more like tradition) is a stop at Moody's Diner.

Man, I still dream about their lobstah rolls.

Where can I find good lobstah roll in the Bay Area? :(

EBGuy,

Yeah, I think the Wicasset traffic jam is in large part the fault of Red's! Don't know if you've been to these places, but some other places up there worth trying (pretty geographically diverse):

- Maine Diner (I think it's in or near Wells)
- Duck Fat in Portland
- Hurricaine's in Ogunquit

Peter P,
Have you tried Woodhouse Fish Co. in the Castro? Not bad, considering.

Rumors of Crapertino's demise have been greatly exaggerated. June's numbers, unfortunately, were a statistical anomaly. Hopefully, August will give us some "downward" inertia.

Have you tried Woodhouse Fish Co. in the Castro? Not bad, considering.

Castro St in Mountain View or San Francisco?

Rumors of Crapertino’s demise have been greatly exaggerated.

It can definitely rise again from its ashes. It can become another Dubai if it will simply franchise Monta Vista.

SP,

I was wrong, the graveyard is located off Big Basin / Highway 9, a bit off the downtown. Therefore, that is a pocket where you see almost no Asian buyers at all.

Peter P,

Castro in SF:

http://www.woodhousefish.com/

Rumors of Crapertino’s demise have been greatly exaggerated. June’s numbers, unfortunately, were a statistical anomaly. Hopefully, August will give us some “downward” inertia.

Looking at those stats, I have 3 things to say:

- It goes to show you how volatile the data is when the "n" is so small
- Who the fu(k buys a $4.2M place in Crapatino?
- Crapatino, welcome back to the Bay Area. You are officially on probation. Any more price declines, and "see ya!"

Castro in SF

Thanks!

StuckInBA,

Also they definitely need at least some customers to pay a lot more than minimum. Else they will have a cash flow problem. So although people like me don’t give them a boost in profit, we help them with the cash flow so that they can earn the profit from people who carry a balance. It’s arguments like these that create the problem with the analogy.

Except that the transaction fees go to the transaction network provider, and the issuing bank is left with annual fees and interest + penalties. Since they cannot charge different annual fees based upon your average balance (in most states & cases), they are forced to have low or no fees because of competition, as you point out. But you are missing the fact that they cannot recover their margins in annual fees by and large.

Also, your low/no average balance is a net flow problem for them, not a benefit. Their working capital is tuned to receivables and collections. It's only because these banks earn such tremendous margins on interest and penalties that they can carry the free-riders along without much trouble. We should see proof of this in the coming months as many issuing banks have problems collecting bad credit, and end up writing off as much as 1/3 so I heard last. At this point many of the banks will try to do things to eliminate the free rider problem, yet again, in order to preserve margins.

Details aside, I am a bit puzzled by the insatiable need people have to always think of their own actions and judgments as righteous. I may be odd, but I really could care less if my paying off my balance in full every month on a credit card is "greedy", "moral", or "anti-social". I am happy with the choices I make to maximize the security, wealth and happiness of my own family and community as best I can. I really care squat if it's moral or not. If I'm acting unethically in someone else's eyes, well, too bad. I don't need to prove their logic wrong -- in fact I might be wrong. That still won't change my course of action. Be I evil or good is irrelevant when it comes to doing right by my family.

Details aside, I am a bit puzzled by the insatiable need people have to always think of their own actions and judgments as righteous.

I find it funny too. I do not mind preaching other people about right and wrong if that improves my position though. :twisted:

If I’m acting unethically in someone else’s eyes, well, too bad. I don’t need to prove their logic wrong — in fact I might be wrong. That still won’t change my course of action. Be I evil or good is irrelevant when it comes to doing right by my family.

Randy, do you want to start a cult with me? I think this line of thinking can be highly marketable. :)

Only if it involves 3d avatars and clunky streaming content client interfaces.

Let's mash that up over the long weekend in RoR, playa!

mosquitoes breeding in stagnant koi ponds...

skibum,

actually I looked at that $4.2M place, it was initially offered for $6M, on the market for over 18 months. It's in the Crappertino foothills bordering Saratoga hills backing into a natural reserve, the house itself is not spectacular, but to me the attraction is it has 10+ acres land with a commanding view, so from the land perspective, I think it is a much better deal than buying a new house on 1/4 acre land in Los Altos for $2.5M.

Only if it involves 3d avatars and clunky streaming content client interfaces.

That is the only way to start a cult in Web 2.0 times.

credit cards are a discretionary luxury item, not a necessity. they are sometimes handy, but once upon a time people used to pay for things with savings. if they were a necessity, the govt would hand out credit cards to the needy. they are a short term personal loan with very high interest that are very lucrative for the CC cards thank you very much, despite the existence of early payers. the CC companies have provided, sometimes, for interest-free periods of up to 55 days in their business model in order to get consumers in (then get them on the debt treadmill) and have factored it into their business model. paying off early is more than allowable in their system under their own deliberate intentional rules. if early payers were unwelcome, they would not create 55 days interest free in the model, they would charge interest from the time of purchase, end of story. and they would probably get fewer customers as a result.

further, there is far more earnest discussion over the evils of credit cards as a debt trap than there are over early payers, much like the evils of poker machines and gambling addiction. we're talking 14-18% interest rates here. household savings are at an all-time low right now, and indebtedness at an all-time high thanks to banks pushing higher and higher credit limits these days. more and more people are being sucked into the credit trap in both housing and consumer goods -- there are people showing up in dire straits for financial counselling and assistance buying mcmansions and plasma screen TVs, i kid you not.

it's ludicrous, for how many months should we pay interest on a balance to reach the moral and ethical stance of not being a 'freeloader' on a personal loan? why not just front-end load the payment instead then? it's not a social system, it's a banking product of convenience designed to make money for CC cos and the banks, in the 'must have it now' society.

show me an article written and published somewhere reputable which claims that early CC payers are somehow immoral (doing something totally legitimate) and i'll show you an off-the-rails idiot with no clue...

credit cards are a discretionary luxury item, not a necessity.

Anything not needed by a caveman is a luxury item.

Better yet, luxury is a necessity.

Btw, I am curious if anyone knows of the Quito Village in Saratoga? Is it going to be a Chinese mall development? The buyer of Quito Village, Peter Pau, is the same developer who did the Cupertino Village, the home of Ranch 99 and a whole array of Chinese retaurants. Looks like Saratoga is following suit of Cupertino. Peter is known to have a very good relationship with Chinese retailers.

http://sanjose.bizjournals.com/sanjose/stories/2007/07/16/daily24.html

Anything not needed by a caveman is a luxury item.

actually, yes. we can survive on very little. however, there is a minimum level of material wellbeing we need to participate effectively in a society. hence the vexed problem of what constitutes a definition of 'poverty'.

it's unlikely people lived in caves much, btw, the pattern seems to have been more of nomadism with retreats to sacred sites like caves for ritualistic purposes. it was certainly very far from universal in history, when you look at the sheltering habits of african, australian and other palaeolithic-type societies today. perhaps in the case of the last Ice Age in Europe about 10,000 years ago where it was just bloody freezing and you got insulation effects from blocking up cave-like structures, once you kicked out the hibernating bears...

So caves were not a necessity, but a luxury. Therefore it follows that kicking bears out of caves was not unethical either.