Here is your open thread for Monday November 2nd, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
Hugh Dominic » Nov 2, 2009 at 7:31 am
It looks like the data is saying stabilization or mild recovery. Sales up, prices up, djia up, treasury auctions going well…
Trigger » Nov 2, 2009 at 7:40 am
So what’s up with this deflation? It was supposed to be that the govt cannot do anything. It was supposed to be a tsunami. It was supposed to be the Great Depression II. All we see is kind of stagnation, higher unemployment but kind of hanging in there. Ok there will not be some huge growth but still.
Markor » Nov 2, 2009 at 9:04 am
Like the economy of someone taking a cash advance on their seventh credit card to pay their bills, including the minimum payments on their other cards. There’s still some money for a nice dinner, even though cat food is the future.
Trigger » Nov 2, 2009 at 10:50 am
RE: Markor @ 3 – Markor – The difference is that we can issue new cash whenever we want. Kind of we can get infinite amount of credit cards. This is the difference. We can print. And if investors and China allow it – we can print whatever we want while keeping interest rates low. The inflation might be 5% and we can issue treasury bills for say 3% because people are willing to live with the new situation.
Markor » Nov 2, 2009 at 11:43 am
RE: Trigger @ 4 –
Investors in US debt may make calculated bets within a wider strategy, but highly doubtful that they seek to lose money overall. Increasing our debt per capita and mostly wasting that borrowed money is likely to adversely impact the average standard of living in the US in the long run.
Trigger » Nov 2, 2009 at 12:34 pm
RE: Markor @ 5 – Actually Markor I read a nice article that the US dollar will rally in the middle of this mess.
http://www.ft.com/cms/s/0/9a5b3216-c70b-11de-bb6f-00144feab49a.html
So it would suggest that the US govt can print money and the USD will go up anyways. Basically you have to look at the relative mess.
So getting into debt is a bit of a biggie but you can print yourself out of the debt.
Markor » Nov 2, 2009 at 12:57 pm
The USD can increase relative to other currencies while the average American standard of living falls. That happened last year. The USD is the fallback (in an global economic crisis) & reserve currency of choice, but that won’t last as we take on ever higher levels of debt per capita. That explains efforts of countries to wean themselves off their USD dependency, probably to a basket of currencies. Things could change quite a bit in the next five years even.
Trigger » Nov 2, 2009 at 1:06 pm
RE: Markor @ 7 – Maybe long erm. But who knows what the future has in store for us. In the next 2 years – do you believe people will wean off the dollar? And during this time Bernake might decide – let’s wipe out all the debt by printing a couple of bucks. If countries and investors ok this move then the debt will not be such a biggie after all. It all depends what kind of bailout we can get!
Markor » Nov 2, 2009 at 1:16 pm
RE: Trigger @ 8 –
Well investors vote with their money. Printing too much money makes those folk go away or demand higher interest. The US is walking a tightrope between two undesirable outcomes now; it’s a tightrope due to the debt load. As one article I read noted, the likely future is the US oscillating somewhat between those outcomes, continuing to walk the rope. Unfortunately the rope is also getting skinnier as the debt increases. My bet is higher interest rates in the future, with the real (inflation-adjusted) prices of many things including houses falling. For the risk-adverse without a house, that favors holding cash now, even at low interest rates.
softwarengineer » Nov 2, 2009 at 1:18 pm
RE: Hugh Dominic @ 1 –
Hi Hugh:
Everyone’s happy except the approx 50,000,000 unemployed and severely underemployed in America today; but they don’t matter at all, do they. They’re just a “lagging indicator”.
Trigger » Nov 2, 2009 at 2:11 pm
RE: Markor @ 9 – Right. This I agree with. The US needs to sniff what investors are able to put up with to prop up the US economy. If the investors are cool with some money printing then so be it. If they are not cool and this jeopordizes the economy then you have to be careful and chill out a bit.
SoftwareEngineer:
The unemployed – they just need to adjust their expectations. Maybe if you were earning 50K – earning 20K should look good enough for now. As long as those people are also able to move out for the job and work harder then it should be ok. Look at people coming in from Mexico. You don’t see them unemployed. Why? Because they accept jobs that sometimes pay below minimum wage.
I am not saying that expectations need to go that low – but just lower and then everybody will be cool with it.
And then people should chill, hike a bit, hike some more and just unwind. Seattle is a great place for this. Just hop on highway 20 West, take in the views and forget about your troubles. And if you need to unwind head in for Steven’s pass.
Trigger » Nov 2, 2009 at 2:18 pm
Also I am not sure if Obama should not think about lowering minimum wage to help the unemployed. Maybe the minimum wage should be for $4 per hour. He should also consider giving employers more rights – like employment at will – this will help the unemployed. And he could help the unemployed more by not allowing workers to sue employers for overtime. Basically the employer could ask the employee to work longer and harder and pay nothing for overtime. This would greatly help the employees so that they can find jobs.
Plus the social security payments could be solved by paying fewer benefits to people. This would also help the gov control finances and would secure a better future for everybody.
So basically work harder and get less pay. But it is better than nothing. A small sacrifice to get rid of this crisis.
Tim » Nov 2, 2009 at 3:36 pm
“So basically work harder and get less pay. But it is better than nothing”
How will working harder for less pay ‘get rid of this crisis’?
anonymous » Nov 2, 2009 at 4:18 pm
RE: Trigger @ 12 – I don’t see how any of that would help create jobs. Sure you may beat someone else out for a no-skill job if you are willing to work for less, but there would be the same number of jobs in the US, and the same number of people, therefore the same number of unemployed.
Those who are employed would make less, therefore they would spend less, creating fewer jobs for people providing them with goods and services, and you might see unemployment rising.
Oh, and Steven’s pass will be snow covered very soon. Skiing isn’t exactly cheap entertainment. Driving 2 hours each way isn’t all that cheap either.
mukoh » Nov 2, 2009 at 8:03 pm
The inventory tracker on the right is showing a strange depression in numbers 8800 now for king. Geesus when can we find all the great deals at 80% off now.
Kary L. Krismer » Nov 2, 2009 at 8:27 pm
RE: mukoh @ 15 – I don’t track them that carefully, but about 1100 of those are short sales, so the inventory is really much lower if you’re not one of the few buyers in the market for a short sale.
Kary L. Krismer » Nov 2, 2009 at 8:33 pm
I caught a bit of Maria Cantwell on TV complaining about Geithner saying that banks needed to take more risk right now.
First, the idea that Cantwell is on the finance committee is absurd. There’s probably not a Senator out there that knows less about finance and economics than Cantwell.
Second, what Geithner is talking about isn’t at all the same type of risk as what got banks in trouble, as claimed by Cantwell. What he’s talking about is making more loans to medium and small business. It was pretty clear and you’d have to be either a liar or a moron to not understand that. I guess the only question is which is Cantwell (or is she both?)
Third, Cantwell should not be complaining about others and risk. This is the same person who leveraged her stock to become a Senator, leaving her with little or nothing after the stock declined in value–except she did have a tax debt which I don’t think she ever fully disclosed. With financial skills like that I can really see why they put her on the Senate finance committee.
mukoh » Nov 2, 2009 at 8:37 pm
RE: Kary L. Krismer @ 16 – Not a buyer of retail homes. Already have my own.
Cantwell just needs to be sent packing along with Gregoire. Murray needs to pack it up as well. I think the state needs more business oriented leadership.
Kary L. Krismer » Nov 2, 2009 at 8:41 pm
Of the three, Cantwell is by far the wost, IMHO. I don’t think she does much of anything, other than say stupid things every now and then. I was expecting Gregoire to be a lot worse than she is.
Herman » Nov 2, 2009 at 10:20 pm
I just saw something disturbing and tragic.
It was called, “Million Dollar Listing” – a TV show on Bravo. Even if you already think RE agent is the least honorable profession on Earth, after this show you’ll hold them in even lower esteem.
It features three twentysomething agents who chase million dollar buyers/sellers in LA, promote themselves, browbeat their idiot clients into taking whatever deal is on the table, and drive away in sports cars.
patient » Nov 2, 2009 at 11:21 pm
RE: mukoh @ 15 – I’m not sure why there is such a wild swing but October 2 there was about 9300 on the invetory tracker and on October 24 about 10300. So it’s some kind of huge purge at the start of each month and then it picks it all back up again. At least it’s been like that the last couple of months. So nothing new, still averaging around 10k, little sells and little is listed. The story of 2009 I guess.
buystocks » Nov 3, 2009 at 2:39 am
RE: Herman @ 20 –
This is my favorite show right now. Here’s my favorite scene:
http://www.hulu.com/watch/100691/million-dollar-listing-price-reduction-shock
Trigger » Nov 3, 2009 at 7:22 am
RE: Tim @ 13 – Work harder, longer for less pay could help with the crisis. Some jobs are disappearing. But there are always jobs out there just that they pay less. Mexicans are constantly jumping over the fence and can find jobs.
My friend owns a construction business and said that if not for workers who are willing to work for less than minimum wage – his business would go bust. So if there are willing workers to work for less and there are new jobs created that pay less then allow those people to do this legally. And this is a hell lot better than just staying on welfare or doing nothing.
If a job pays a lot it will never be minimum wage job anyways.
Also the unemployed ideally would reset their expectations to be able to thrive in a new situation where you work harder and get less money.
This also would get rid of outsourcing. US workers by earning less could better compete with their Chinese counterparts.
Alan » Nov 3, 2009 at 7:59 am
RE: Trigger @ 23 – You seem to be missing the downward spiral implicit in your recommendations. California (whose revenue stream is severely dependent on income and sales tax, over 50%), is living the nightmare now. I’m not sure you realize just how many jobs in the US are government jobs…….if the government isn’t making money then government jobs are gonna get hammered.
It’s way more complicated than simply lowering wages and adjusting expectations. I agree those things need to happen and I’ve been adjusting mine but I believe you’re going to have a real hard sell getting the cronies on wall street and DC to give up anything, let alone their requisite share.
My big fear is that the US DOES try to print their way out of this mess. Weimar germany, Zimbabwe, Rome, are three countries/civilizations that played with increasing their currency to solve problems, they are all defunct……dead…..bygone and reset. If you would be so kind as to point out any country or civilization that managed to successfully solve their problems through inflation I’d love to hear about it because I simply don’t know of any.
Hope for the best and prepare for the worst………Don’t know who said it first.
az
Kary L. Krismer » Nov 3, 2009 at 8:07 am
By Trigger @ 23:
I think the solution there is not everyone else working for less. It’s for your friend to get a real job, or at least change their business model.
But let’s just say that this friend operates in the building construction trade. I could easily see how you could have two companies build two identical houses, and have the one that uses under the table undocumented workers lose money and the one that uses union carpenters make money. In that regard, I’m not sure it’s labor quality that lead to so many Snohomish County multi-family buildings being re-sided, but those are often 7 figure jobs, and I really doubt that the contractor made money on that job if they were found liable for the siding issue.
David Losh » Nov 3, 2009 at 8:08 am
RE: patient @ 21 – RE: mukoh @ 15 –
The chart is reflecting the expired listings at the end of the months. October is one of the big months for expireds, may of those won’t come back until next year.
I think a lot of people are confused about what has happened in the Real Estate market. Even if things have gone to heck in a hand basket the system will take years to correct. There is way too much pressure on generating sales of existing and especially new homes.
The amount of money tied up in Real Estate will take a decade to unwind. No one is just going to pull the plug on what are now bad investments.
Kary L. Krismer » Nov 3, 2009 at 8:09 am
By Alan @ 24:
If we wanted people to live in poverty it would be easier to just make a deal with Mexico or some other third world country to accept some of our citizens.
David Losh » Nov 3, 2009 at 8:31 am
RE: Trigger @ 23 –
I was kidding about doing away with the minimum wage, it should be raised if anything. I also think that jobs with tips, like waiters, should be exempted.
Paying your workers less never works out in attracting labor. It costs you money to redo stuff or watch every move labor makes. I had a guy on a job do $2000 worth of damage in under thirty minutes. I pay well, he seemed OK, he was only doing casual labor, but he chipped a bath tub by dropping a hammer and dropped a load of lumber on some landscaping, he had to go.
Kary L. Krismer » Nov 3, 2009 at 12:00 pm
YOY increases in October for most automakers.
http://seattletimes.nwsource.com/html/businesstechnology/2010192927_apusautosales.html
Maybe CFC didn’t steal as much demand as we thought?
scotsman » Nov 3, 2009 at 12:45 pm
RE: Kary L. Krismer @ 29 –
Or, more likely, it’s because auto sales for 10/08 were absolutely hammered by last fall’s financial meltdown. Remember all that “financial crisis” stuff that was going on just prior to the election? It’s kind of like 110% of zero is still… zero.
Lurker » Nov 3, 2009 at 12:58 pm
All of the articles I read the other day were that overall auto sales for October 09 increased from the low inventory September 09 but overall was still lower than October 2008.
Kary L. Krismer » Nov 3, 2009 at 1:02 pm
RE: scotsman @ 30 – I would agree it’s affected by that, to a very large extent, but some of the predictions for CFC borrowing from the future were pretty dire. I would say this merely means the worst prodictions didn’t come true.
If I get time I’ll look up what it was in 2007, sort of like what I did in the thread today regarding King County SFR home sales.
AMS » Nov 3, 2009 at 1:41 pm
RE: Lurker @ 31 – Auto sales have improved, somewhat, but the total sales are so small that percentages don’t mean much. Increase near-zero sales by 10% and the sales are still near zero.
Some of the increase might be lingering sales from the CFC euphoria. A single month does not make a trend, and I don’t expect new car sales to be on firm foundation until the number of unemployed is drastically reduced.
deejayoh » Nov 3, 2009 at 1:41 pm
I think Trigger is FinanceGuru
Kary L. Krismer » Nov 3, 2009 at 1:49 pm
RE: AMS @ 33 – How would the increase be based on CFC euphoria at this point in time? Procrastinators that don’t pay attention to details like expiration dates? ;-)
Cheap South » Nov 3, 2009 at 1:55 pm
Kary – “First, the idea that Cantwell is on the finance committee is absurd. There’s probably not a Senator out there that knows less about finance and economics than Cantwell.”
Kary; you are obviously not familiar with the actions of the senators from the South (to top it off, talking like Forrest Gump does not help).
Kary L. Krismer » Nov 3, 2009 at 2:05 pm
RE: Cheap South @ 36 – I wouldn’t hold an accent against them. But I did realize that I wasn’t talking about the most talented group of people in the world with the Senate.
wreckingbull » Nov 3, 2009 at 3:01 pm
RE: deejayoh @ 34 –
I think Trigger is FinanceGuru
Quite possibly, although the post does lack the reference to entertaining “The Ladies” in his First Hill condo, a ‘Guru hallmark.
S. Marty Pantz » Nov 3, 2009 at 3:13 pm
“Celebs Are Selling Their Mansions at Rock-Bottom Prices”: http://omg.yahoo.com/news/celebs-are-selling-their-mansions-at-rock-bottom-prices/30561?nc
Kary L. Krismer » Nov 3, 2009 at 3:17 pm
RE: S. Marty Pantz @ 39 – After 5 years without a taker, Eddie Murphy cuts the list price from 30M to 15M. He sure is on top of the market! ;-)
One thing I’ve noticed is a lot of bigger named stars are showing up in bit pieces on network evening TV shows. I’d assumed it was because they’d lost a ton of money on their investments and were feeling poor.
AMS » Nov 3, 2009 at 3:41 pm
RE: Kary L. Krismer @ 35 – People see me in my new vehicle, and I love to talk about the CFC deal I made. I made a good deal, but there are plenty of others who did not.
Moving forward, I spoke with a gal who the dealer offered to give her a “cash for clunkers” deal, even though the government sponsored program was over. Don’t ask me to explain the logic, as it’s really beyond me. But I will give you what I understood.
She drove away with a new vehicle. (There seems little dispute about that)
She traded in two vehicles (There seems to be little dispute about this as a fact.)
She suggested that she owed money on at least one of the vehicles she traded in.
I did not get to see the vehicles that she traded in, nor was it clear how much was owed.
I did not see the new vehicle either, as I was discussing it inside.
But, here is where the situation fell apart.
I said, “After all the deductions, my new vehicle was under $10k…”
There was a very puzzled look on her face–I wish I could have recorded it.
Then she indicated that the cost of the new vehicle after the cash for the two trades was deducted, net of the amounts owed, was over $30k, financed.
I couldn’t take it–I had to end the conversation there, as if I would have continued only bad would have resulted.
I was thinking: WTF? Over $30k plus your two other vehicles, and you call that “Cash for Clunkers?”
The car was probably only worth $25k, but she finance over $30k, probably based on the “large down payment” of inflated prices on her two surrendered vehicles.
It reminded me of the salesman that I talked to who suggested that “They have buyers,” and my CFC vehicle “might be worth more than $4,500.” Clearly there was no way to get more than $4,500 for a vehicle when it was going to a crusher. Later I found out that he was on the job for less than a week. The point, however, is that there are all kinds of finance games, and I am sure this gal was a part of that.
How many other people are out buying new cars because their neighbor did? (This gal was not my neighbor, and I doubt my neighbors are buying vehicles based on my purchase, but there are plenty of people who do try to outdo their neighbor)
Kary L. Krismer » Nov 3, 2009 at 4:03 pm
RE: AMS @ 41 – And the lender on that transaction, who possibly is an assignee of the dealer who committed those acts, was given additional rights under the bankruptcy act when it was enacted a few years ago. That’s the type of thinking you get out of Congress when campaign contributions are involved.
AMS » Nov 3, 2009 at 4:27 pm
RE: Kary L. Krismer @ 42 – Let’s talk about how strong the economy is, given the underlying rules of the game. It’s tough for accountants to value and record these things.
scotsman » Nov 3, 2009 at 5:52 pm
http://i410.photobucket.com/albums/pp181/replicators_album/gifs/obama.gif
AMS » Nov 3, 2009 at 7:05 pm
RE: scotsman @ 44 – A good use for Helicopter 1, maybe?