By scotsman @ 34:

RE: Kary L. Krismer @ 28 –

I’m not sure what your point is. Did you read the study methodology?

http://www.edmunds.com/help/about/press/159446/article.html

It seems like pretty straight forward statistical analysis to me. And apparently the same conclusion has been reached in a seperate study done at Yale. There isn’t any rocket science here, just another expensive governmental fail of epic proportions. Hey, the feds own Gm and they wanted some rebates to help push sales. What could go wrong?

Well if I had forecast even higher increasing sales for autos, starting coincidentally with the CFC program, and not letting up thereafter, and even increasing, I’d come to the same conclusion too. Who was predicting such a thing? Seriously. Who?.

To answer my own question, it wasn’t Edmunds. Look at their press releases. They only estimate a given month very late in the month, on say the 25th.

http://www.edmunds.com/help/about/press/

Also, they predicted that the original CFC program would have a hard time meeting its sales quota of 250,000 units.

http://www.edmunds.com/help/about/press/151267/article.html

This was because they thought most people who would qualify couldn’t or wouldn’t want to take on car payments.

The program, however, blew through 250,000 sales the first four days.

http://money.cnn.com/2009/10/28/autos/clunkers_analysis/?postversion=2009102910

After that the program was expanded (more funding), and in the end there were apparently over 700,000 qualifying sales, so their forecast of demand missed the boat by quite a bit.

http://www.time.com/time/business/article/0,8599,1918692,00.html

Sad story Tim. It reminds me of driving past people stranded on the highway or hitchhiking. You want to help but you know everyone tells you not to for your own safety. I’ve decided that I have to reach a reasonable compromise of my humanitarian principles so now I only stop for really attractive women that are worth the risk.

Seriously, I wish I had some good advice because it’s a real ethical dilemma for those with a social conscience. You can’t employ incompetent people, but that doesn’t mean you give up completely. Scotsman keeps volunteering at the food bank even though some people drive away with free groceries in the back of their Benz. But even so, I don’t think the person in the Benz should push their luck with Scotsman too far. That right wing heart only bleeds for so long when faced with hypocrisy.

I’d note however that the median is much simpler. Contrary to the claims of Ardell, a sale of $20,000,000 in Seattle doesn’t affect the median any more than a sale of $500,000. And the same could be said of a sale for $10.00. And it has the advantage of being completely transparent (a word I very reluctantly use). And at least for us agents, we can come up with unofficial numbers including, excluding, or only including short sales.

It would be interesting to note how many people fit into the category of family transaction vs. rushed transaction. I probably don’t have a good feel for the former because family often (but not always) excludes agents.

RE: Kary L. Krismer @ 28 –

I’m not sure what your point is. Did you read the study methodology?

http://www.edmunds.com/help/about/press/159446/article.html

It seems like pretty straight forward statistical analysis to me. And apparently the same conclusion has been reached in a seperate study done at Yale. There isn’t any rocket science here, just another expensive governmental fail of epic proportions. Hey, the feds own Gm and they wanted some rebates to help push sales. What could go wrong?

Well if I had forecast even higher increasing sales for autos, starting coincidentally with the CFC program, and not letting up thereafter, and even increasing, I’d come to the same conclusion too. Who was predicting such a thing? Seriously. Who?

Like I said, a study designed to come to a conclusion. Auto sales were not increasing and no one was predicting they would, that soon. Down the road a bit further, of course they’d have to increase. So to that extent I’d agree that they’re just borrowing from future demand. But not so soon.

Good old AU H2O. Didn’t he say we should use nuke’s in Viet Nam? But in all seriousness, he did call ‘em like he saw ‘em regardless of the party line.

Everybody remembers Reagan Democrats. But a few years ago my father referred to a political grouping I had never heard of before. He said that during the 1930’s his parents were Roosevelt Republicans. I guess that’s what Scotsman must be.;-)

Yeah, I just don’t understand. Thing is, I want to give people a hand, but man, I guess I’m just going to have to hire people and contractors who have been in business during thick and thin—there’s probably a reason they are still in business. When a guy looks at a Simpson Strong Tie Post Connector
and can’t figure out how to attach it to beam/post connection (after telling me of their experience in home improvement) I wanted just wanted to call my son (6th grader) and have him show the guy how to do it. What made it worse was working in today’s miserable weather.

Pay per view? I might prefer to watch Home Shopping Network or a Golden Girls rerun.

Just a little something for the worthless information file. It cracked me up that you guys were adversarial enough to argue over whether short sales affected the CS index in a way that could be understood by users of the index. Kary has an excuss, he’s a lawyer, but you should know better AMS.;-) I thought I remembered the information quoted below so I looked it up in the Case Shiller Methodology but didn’t have time to post it then.

I think the quote below is the closest Case Shiller comes to a qualitative explanation of how they treat items like short sales. To summarize, after they weed out non-arms length transactions and transactions involving substantial changes in the property through information in the deeds, etc.(as I think AMS had said), they assign a weight of 1 for approximately 85% of the transactions and less than one for about 15% of the transactions. The result would be that if a short sales sells for a variance high enough to put it in the approximately 15%, that sale receive a weight which is less than one but greater than zero.

Ironically, I think that means that AMS is right that the CS methodology includes short sales and adjusts for them in a manner to some degree related to statistical significance, and Kary is right that there is no real way to tell how much the short sales affect the CS index for any market, and how much of the effect is dampened by the weighting process. It would appear, however, that the greater the percentage of short sales in the index the more weight short sales as a class would receive in the index.

Based upon the above, we have a judges ruling of no decision in the previous controversy between AMS and Kary. The scheduling of a rematch is pending completion of negotiations for pay per view rights with HBO.

This is from page 19 of the methodology:

“The Weighting of Sale Pairs
Although non-arms-length transactions and sales of physically altered properties are
discarded during the pairing process, it is not possible to identify all of these sales based
on the information available from deed records. Furthermore, the price changes observed
for individual homes may be the result of non-market, idiosyncratic factors specific to a
property (which cannot be identified from the deed information) or a property’s
neighborhood. For example, a buyer was in a special hurry to buy and paid too much,
boosting the value of nearby properties relative to the market, or an individual property
may have not been well maintained, reducing its value relative to the market. Finally,
errors in recorded sale prices may cause a particular sale pair to mismeasure the actual
price change of an individual property.
To account for sale pairs that include anomalous prices or that measure idiosyncratic
price changes, the repeat sales index model employs a robust weighting procedure. This
automated, statistical procedure mitigates the influence of sale pairs with extreme price
changes. Each sale pair is assigned a weight of one (no down-weighting) or a weight less
than one but greater than zero, based on a comparison between the price change for that
pair and the average price change for the entire market. The degree to which sale pairs
with extreme price changes are down-weighted depends on the magnitude of the absolute
difference between the sale pair price change and the market price change. No sale pair
is eliminated by the robust weighting procedure (i.e., no pair is assigned a zero weight)
and only sale pairs with extreme price changes are down-weighted. Although the number
of sale pairs that are down-weighted depends the statistical distribution of price changes
across all of the sale pairs, in large metro area markets, typically 85% to 90% of pairs are
assigned a weight of one (no down-weighting), 5% to 8% are assigned a weight between
one and one-half, and 5% to 8% are assigned a weight between one-half and zero.”

I’m not sure what your point is. Did you read the study methodology?

http://www.edmunds.com/help/about/press/159446/article.html

It seems like pretty straight forward statistical analysis to me. And apparently the same conclusion has been reached in a seperate study done at Yale. There isn’t any rocket science here, just another expensive governmental fail of epic proportions. Hey, the feds own Gm and they wanted some rebates to help push sales. What could go wrong?

Over the years I’ve come to the conclusion that with very, very few exceptions reality is looking me right in the eye, but I don’t want to see it. People are where they are for a reason. You may not always see the reason up front, but it’s there, and will reveal itself in time. It’s frustrating, because you want to help out, you want to provide the opportunity for folks to get it right, but very few respond as expected.

I’ve decided that much of what makes a difference in someones life has to be taught and learned at a fairly early age, because by the late teens/early twenties expectations and attittudes are set, and change comes very slowly, if at all. But i suppose we have to keep trying, it’s part of our humanity.

Employment: I’ve gone way out of my way to hire people who are out of work to do some projects on my property over the last year. Today I had another experience with someone I’ve given a chance and paid exceptionally well. I even went so far as to say that “with good pay comes high expectations.” Today was the last straw. There are bonafide reasons why people are out of work. I thought my strategy of hiring “experienced” help and paying better than expected would incent the people to kick it in high gear. I experienced the opposite. Frustrating.

Yes. I have an “experienced” friend who has been fired from probably 5 90k+ jobs in past 18 months.

http://money.cnn.com/2009/10/28/autos/clunkers_analysis/index.htm

Trigger- you think this is sustainable, real economic recovery? Pass the pipe.

“NY Gov. Roosevelt addresses Advertising Club: “We have had our financial fun following false prophets. We know once and for all that prosperity is not the handmaid or creature of any political party … Continued optimistic statements by individuals … or by politicians do little real good.” Says necessary to find the cause of depression, whether foreign markets or overproduction, and then to employ every means to restore business to a stable basis.

Fed. Reserve member banks continue to buy securities heavily, holding a record high of $6.667B on Oct. 22, up $126M in the week and $1.272B vs. 1929.

Central Trust of Ill. says current pessimism unjustified based on actual reduction in total incomes of only 5%. Sees hopeful sign in inventory declines, indicating consumption has exceeded production for some time; buying has decreased more than buying power; readjustment of retail prices will restore sales.”

Spooky! It’s like deja-vu all over again! Ah, if they only knew what was coming…..

Is there a link where the most recent comments can be read? The last 5 are listed on the right, but I am looking for more.

Thanks.

You Got It Scotsman

The Recession’s Over and Q3 GDP is +3%, Break Out the Overpopulation Champaign

Per article from 9/2009 Whitehouse Q3 2009 report in part:

“…There is broad agreement that the ARRA has added between 2 and 3 percentage points to baseline real GDP growth in the second quarter of 2009 and around 3 percentage points in the third quarter….”

The rest of the URL:

http://www.whitehouse.gov/administration/eop/cea/Economic-Impact/

Meaning, without the almost $1 trillion dollar stimulus IOU to our grandkids, made earlier this year, our “Overpopulation champaign Q3 GDP” goes back to about zero [or worse, IMO].

Ask the approx 50,000,000 severely underemployed and unemployed Americans today if “the recession’s over” and more uncontrolled population growth won’t hurt us at all now.

Ah, another credible source. I hope she posts here!

Or is she going to be working at “Sugar’s?”

“The US conumers may spend less but the govt will spend more”

And every quarter that this happens digs the economy further and further into a hole it will never escape. We are so far past the point where a little government stimulus ” kick starts” the economy that we can’t even see it on the horizon. Each dollar of additional government debt yields less and less “stimulus” than the one before it until there is no net positive effect. We are very close to that point now. In the past I’ve posted a chart showing the return per additional dollar of debt- here it is again. We’re shooting rubber bullets with no effect- except that the debt remains, and stifles the economy and consumer going forward. Note the chart ends in 2007 at twenty cents per dollar spent. With the huge expanssion of 2008-2009 that number has dropped even further. It won’t work.

http://mwhodges.home.att.net/nat-debt/ni-per-debt.gif

http://market-ticker.org/archives/1550-GDP-Is…..-Better-Than-Expected.html

Investing Today

There is no good way to invest today IMO, the safe interest rates are too dinky and locking money up in a CD to grab an extra 1% is a joke to me anyway…..so my strategy?

Save and save…..the money you can theoretically put away each month [especially keeping out of RE with affordable rent or a house that's already paid for] will most likely make your investment income/losses look like a joke anyway.

How can you save with car payments, tuition costs, electric bills, property tax, food, dental expenses, etc, etc????

Become debt free and when expenses come, shop around….dental bills are a good example, one dentist will charge you like $1200/crown, while the one down the street charges $600 [and insurance picks up like $100 of the bill]….is there a quality difference? The expensive dentist will tell you there is….LOL

Buying cars, same thing….I can go to lots of dealers and pay twice as much for newer used car with those phony warranties that cover nothing that breaks most of the time anyway. Get one without warranty costs added on [you'll save as much as 50%] and if you want a warranty, do your repair work at “lifetime” repair shops for things like brakes, etc….this stuff isn’t covered by dealer warranties anyway and does break time to time on any car….LOL….IMO, unless you buy new, avoid used cars that “keep their value” too….LOL

Now the govt can do those gimmicks by printing or by getting into more debt. At some point if people sniff that the govt went too far – they will simply dump the dollar etc. But as long this does not happen the US govt is free to do as many gimmicks like this as it wants.

Same is with the 8K credit. They could easily do a 20K or 40K credit and this would stop the falling of prices in real estate instantly. I posted I think over 1 year ago that the govt can stop the bleeding in real estate at a touch of a button whenever it wants. It really can.

China and other countries depend on the US and they do not want their economies to sink because the US goes down. As such the US govt can play those gimmicks for as long as it wants. And I think this is the most important lesson to be taken out today.

The US conumers may spend less but the govt will spend more….

Thank you. Maybe that will still be the price in 3-5 years (and in great condition).

The recession is over according to many economists.

You are joking, right? Why anyone would put faith in prognostications by economists when the vast majority of economists never even saw the recession coming in the first place is beyond me. In December of 2007 the annual poll of economists the Wall Street Journal not ONE of the nearly 100 economists saw there being an economic contraction in the coming year.

Today, I believe we are merely experiencing a dead-cat bounce in the growing depression. It is similar to 1930, which also saw the Dow recover most of it’s ‘29 losses, and the economists and policy makers were giddy with optimisism that the worst was over.

3.5% growth. Man – this is great!

Even if you take into cash for clunkers and new debt load.

Funny, we looked at this house a couple years ago. It is a log house and it is rotting. Many logs will need to be replaced. So you are basically buying land and it is at the top of the island. Not very desirable, for most commuters.

***********************************************************************************************
On another note… since we have been recently saved from buying an overpriced home, we just signed our rental agreement and have let go of the idea of owning for awhile….

I would love to hear from all of you, how should we invest our down payment money?

http://www.breitbart.com/article.php?id=D9BK94I01&show_article=1

Nice. 3800 jobs going to SC. At least to start. I bet the union is crapping its pants while WA state government is oblivious.

“Seattle Times business staff

Boeing’s board has voted unanimously to build a second 787 final assembly plant in Charleston.

“We’re taking prudent steps to protect the interests of our customers as we introduce the 787-9 and ramp up overall production to 10 twin-aisle 787 jets per month,” said Jim Albaugh, president and CEO of Boeing Commercial Airplanes, in a prepared statement.

South Carolina offered the company $170 million in upfront grants for startup costs, plus multiple tax breaks that would be worth tens of millions of dollars more.

The legislation assumes the company will invest $750 million and create 3,800 new jobs in South Carolina within seven years — if it doesn’t create that many jobs, it doesn’t get any of the money.”

This is funny…Boeing making wise decisions. No need to pay extra to operate in a “special” place!

http://www.reuters.com/article/companyNewsAndPR/idUSN2831294320091028

On my “Entrepreneurs Northwest” program, none other than “The Tim” himself speaks about SeattleBubble, as a business. If you want to hear about how Tim built SeattleBubble, and what it takes to keep it going, check out the interview.

http://bit.ly/mWSNW

There is a new interview with the founder of http://www.ponkabonk.com/ in my “Tales from the job search trenches” series. He talks about how ponkabonk empowers job-seekers by allowing them to offer commissions for successful job placement.

http://bit.ly/29Zgoj

As always, you can check out the latest economics round-table discussion, where my friends and I discuss the state of the economy. In the recent episode we talk about whether the tech industry has turned the corner and if Windows 7 will save Microsoft.

http://bit.ly/NlTjn

For good measure, some fellow Canadian friends and I had a discussion on the Canadian identity, and ask whether the primary feature of Canadianness is the ceaseless struggle NOT to be American.

http://bit.ly/3Oa94S

http://www.redfin.com/WA/Bainbridge-Island/14580-Madison-Ave-NE-98110/home/2349332