Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

118 responses to “Weekend Open Thread (2010-02-05)”

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  1. David Losh

    RE: Pegasus @ 100

    I went to get a fresh cup of coffee, to settle in, and read about reality. Some how secret meetings, and reality seem kind of far apart.

    Could this have to do with the G-8 meeting in Canada? http://www.g7.utoronto.ca/

    Greece and Spain were questionable entries into the European Economic Union. As the article points out there is a lot of wealth in these countries. The wealthy avoid paying taxes there by simple corruption. We might as well throw Italy into this mix, because that is another place the government is lax when it comes to wealth.

    We are going to see another round of debt forgiveness coming up. Maybe that’s your concern? Because most people are unable to pay. That seems to be the bottom line. People who won’t, don’t, or can’t pay the taxes to keep the illusion alive any more.

    I’m having a hard time understanding how this will change anything. This is a global matter and here in the United States we have a system in place that can deal with the reality of having no money. We are a big country with a lot of resources and an infrastructure to distribute those resource. For that matter if we wanted to look at North and South America as extended resources we could.

    The bottom line is that the entire world could go to heck in a hand basket and the United States would secure it’s borders to survive. We have the means, capapbility, and resources.

    Then again if you are concerned about our government, the Constitution gaurantees our right to be armed.

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  2. Scotsman

    RE: pfft @ 99

    Noise in the machine. We were doomed well before the housing/financial crisis took hold by demographics and trends in government spending. You’ve got to look at a bigger picture than just the next couple of months. Pull up some graphs on 10-30 year trends in returns on capital and debt, projections for federal expenditures, adjusted personal income growth (none), etc. Sure, the road is a bit smoother here than it was, but just ahead, around that curve, the bridge is still out.

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  3. HappyRenter

    Is the dollar going down or up this year?

    In 2008, when the FED lowered interest rates, the dollar plummeted. If the FED increases the interest rates this year, is the reverse going to happen, i.e., the dollar goes up?

    Any thoughts about that?

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  4. Ira Sacharoff

    RE: HappyRenter @ 103
    My guess is that the FED won’t increase interest rates enough this year to cause the dollar to rise. I don’t think the economy has recovered to the point where the FED can risk much of an interest rate hike. Interest rate hikes are used to slow down the economy and prevent inflation.
    At this point, we still have close to 10% unemployment ( officially) and the recovery, if there is one, is pretty fragile. I’d bet on the dollar falling .

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  5. corncob

    RE: HappyRenter @ 103 – Money this year will be flowing out of Europe (due to the PIIGS situation) and probably out of Japan (which is teetering), there are not many “safe” currencies for it to go into so I would expect much to become dollars.

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  6. David Losh

    RE: Scotsman @ 102

    You are forgetting the Reagan years when personal income grew from the tax code adjustments in 1981 and 1986. In my opinion, if George Bush the First would have continued the Reagan policies, adjusted the tax code again to exclude families that made less than $250K, and again, reaffirmed that individuals making over one million dollars should pay a fair share, we would have done better than we have. Whether you agree with Clinton or not he was right to address the issue of debt. It was pretty hard to make two trillion dollars worth of debt disappear, but he did raise the issue.

    I’m just saying that there is a way to make the tax codes work, and there is money in our system to pay the tax bills. The wealth that has left the country, or will leave the country, should have a harder time getting back in. In the next few weeks I’ll research a little bit on the Foreign Investment Tax structure, but my feeling is you are right, we should be paying greater attention to the money that is moving globally.

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  7. HappyRenter

    RE: corncob @ 105

    So, you think the dollar will increase in value?

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  8. AMS

    I know a few too many people who suggested the NOLA Saints would never win…

    “WASHINGTON – Treasury Secretary Timothy Geithner says the U.S. government “will never” lose its sterling credit rating despite big budget deficits and a newly increased debt limit that now tops $14 trillion.

    Geithner says in an interview broadcast Sunday that in times of economic crisis, international investors will continue to buy U.S. Treasury bonds because the bonds are a safe investment.

    Moody’s Investors Service recently issued a warning that the government’s credit rating could eventually be in jeopardy if nation’s finances don’t improve. The cost of borrowing would increase significantly if the ratings service lowered the credit rating, also known as a bond rating, for U.S. Treasuries.

    Geithner tells ABC’s “This Week” that will never happen.”

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  9. David Losh

    Our economy is secure. The dollar is secure. The noise is from countries that have mouths to feed, like Russia, China, India, Ireland, and Iceland. Remarkably the Third World has done pretty well.

    Let’s pretend it all collapses. Where would you want to be? If you could be anywhere in the World when the global economy totally collapses where would you want to be? A better question is where would the people of other countries want to be?

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  10. pfft

    By Pegasus @ 100:

    pfft @ 98
    Sorry I work with reality…not fiction. Saying everything is OK when it clearly is not won’t fix the economy.

    I didn’t say that. I said we are in recovery mode.

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  11. pfft

    By Scotsman @ 102:

    RE: pfft @ 99

    Noise in the machine. We were doomed well before the housing/financial crisis took hold by demographics and trends in government spending. You’ve got to look at a bigger picture than just the next couple of months. Pull up some graphs on 10-30 year trends in returns on capital and debt, projections for federal expenditures, adjusted personal income growth (none), etc. Sure, the road is a bit smoother here than it was, but just ahead, around that curve, the bridge is still out.

    projections are just that- projections.

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  12. AMS

    RE: David Losh @ 109 – What do you mean by “It all collapses?”

    What is it?

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  13. AMS

    RE: pfft @ 110 – You are projecting recovery?

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  14. corncob

    RE: HappyRenter @ 107 – Yes, as reserve currency it is only natural. The next phase of this mess is festering in Europe and is already well beyond the point of no return. Much of the world developed their own real estate bubbles, however only a few (US included) are so far along in popping (not that it is done here). If EU countries and/or banks start going tits up (which looks increasingly likely to occur), I believe the dollar will show very large gains from money fleeing the continent.

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  15. corncob

    RE: AMS @ 113 – pfft is predicting that it is very easy to get a rise out of this crowd.

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  16. AMS

    RE: corncob @ 115 – I’ve pretty much quit feeding him. When he gets a little over-the-top absurd, I find a little humor. As time goes on, pfft’s entertainment value is quickly approaching zero.

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  17. pfft

    By AMS @ 113:

    RE: pfft @ 110 – You are projecting recovery?

    we are already in recovery.

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  18. pfft

    By corncob @ 115:

    RE: AMS @ 113 – pfft is predicting that it is very easy to get a rise out of this crowd.

    I am just reading the data. I was bearish like everyone else in the spring of 2009. the data has changed though. the economy is constantly shifting.

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