Monday Open Thread (2009-10-19)

Here is your open thread for Monday October 19th, 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!

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About 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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

23 comments:

  1. 1
    Scotsman says:

    “DAYTON — As if the mortgage foreclosure crisis wasn’t bad enough, sometime last year a new phenomenon began to emerge: Experts say mortgage lenders and banks began walking away from foreclosed properties, especially in urban areas.”

    http://www.daytondailynews.com/news/dayton-news/a-new-crisis-lenders-abandon-properties-352642.html

    http://www.daytondailynews.com/news/dayton-news/drop-in-foreclosures-called-very-scary-352689.html

  2. 2
    Trigger says:

    I think things are going in the right direction. The deficit is going up but China is cool with it and will support all the deficit spending.

    Growth in China is booming. The regime in China is relaxed.

    Obama is spending like a lunatic. Push comes to shove a new bailout package will be approved by congress. The Fed is printing.

    So I think the best thing one can do is relax. Go to the mountains, hike a bit, then hike some more. Breathe fresh air. And then top it off with Yoga. Just be cool and do not worry too much. The stock market brought lots of money to a lot of people. Lots of people are now taking the profit and buying new things for themselves because they like the profit.

    Same is with shacks. Lots of people bought shacks in 2001 and they like the profit. Now they can buy new things for themselves, hike a bit and enjoy life.

    And if really push comes to shove – the US administration can ask China to pitch in and send some reloads and relax a bit.

  3. 3
    Sniglet says:

    I have posted a couple new podcasts.

    The weekly economics round-table discusses the significance of Dow 10,000 and the fact that the cards are stacked against bearish investors.

    http://bit.ly/NlTjn

    There is an interview with Michael Panzner (author of financial armageddon), who talk about his belief we are seeing the end of the American era, and headed towards massive inflation.

    http://bit.ly/4b9srd

  4. 4
    Trigger says:

    RE: Sniglet @ 3 – Sniglet – but you were the anti inflationary guy….. What is going on? Deflation as it is – if it is happening it is very slow…… So nothing major so far and we are 1 year into the crisis at least.

  5. 5
    Sniglet says:

    Deflation as it is – if it is happening it is very slow

    Actually, deflation is starting to bite more and more, with grocery sto re price wars, drops in tuition, etc. That said, I do expect that deflation will bite much more severely in the next leg down of the depression. We have just been having a dead-cat-bounce in the market/economy this year, similar to what happened in 1930 when the Dow had recovered much of it’s 1929 losses.

    Also, deflation doesn’t have to be instantenous to exist. Look at how deflation has slowly been tightening a noose around Japan for 20 years. There was no immediate collapse in asset prices in Japan, just a slow, incessant, drop in prices, interspersed with bought of re-inflation that could last for up to 2 years before prices resumed their inexorable trend down to even new lows.

  6. 6
    WestSideBilly says:

    Drops in tuition? Where?

  7. 7
    Sniglet says:

    Drops in tuition? Where?

    My brother (who teaches at a pricey private K-12 school in Atlanta) tells me that they have went from offering financial aid to less than 20% of the student body 2 years ago to now over 60%. The list price tuition hasn’t changed, but the school is offering de-facto discounts to over half the student body now.

    I have heard of similar things happening at many other private schools. I think my brother’s school offers a brilliant example of the “stealth” deflation that is taking place. You can haggle over everything these days, even if the official prices haven’t changed.

  8. 8
    jimmythev says:

    Tim,

    Google Voice is displaying recorded conversations… This one is between a Seattle realtor & someone unknown (Mentor maybe). It gets interesting around the 8min mark… It seems like they’re talking about something not so ethical… or is it just me? Maybe this is just how business is done in the real-estate world.

    (Sorry for the long URL)

    https://www.google.com/voice/fm/13418109598078281795/AHwOX_BbMJKUY4hxCzi409VvgNE2YU6cbtvVI-3k5jIADAM4rcffg7dySgycGNA5X6RvoVLSdKunt7x1aWhjKK3xJgT6X-l6R0-zRE3Kb6U2Gp1zXgCM9W4mwnvWCQSFVA8EPjjUqIBW7g9T8yZrKEflBVH-PWdAyQ

  9. 9
    Kary L. Krismer says:

    http://www.msnbc.msn.com/id/33382851/ns/business-real_estate/

    I’m not sure what the second part of this program is, but the first part is just more of the first time buyer program type that I don’t think is good. You are not likely doing anyone a favor by getting them a loan that they don’t otherwise qualify for. That’s true of governments and family members taking action.

  10. 10
    TJ_98370 says:

    .
    Shiller: Market Overvalued but that Doesn’t Mean You Should Dump Stocks
    .

    Yale economist Robert Shiller, who called both the Internet and housing busts, says that he doesn’t see another era of “irrational exuberance” occurring anytime soon. But that doesn’t mean he’s not concerned about both the stock market and housing market.
    .
    “Given the economic situation, I’m worried about the stock market — both of them, stock and housing market,” Shiller tells Yahoo! TechTicker. “These booms we’re seeing now can’t be trusted to continue.”…….

    .

  11. 11
  12. 12
    Kary L. Krismer says:

    RE: EuroCracker @ 11 – If only someone had posted news of the same story 62 minutes earlier than you did! ;-)

    Seriously, that Reuters article does explain the second part better, but I’m still not really following it.

  13. 13

    Sniglet and Trigger Both make Good Points

    I noticed oil is heading for $80/bbl, but they can’t sell it….so offer gas for like $2.55/gal, down from the $65/bbl $2.75/gal, we can call that forced deflation with inflation?

    The restaurants are like empty, so treat you like royalty with a 2 for 1 coupon, just happy to fill a table. It wasn’t that way years ago.

    No one buys anything unless its on sale anymore….

    We may have inflation, but the consumer is saying “up your’s”….?

    Does anyone travel without first looking up the cheap seats on planes and stays at 50% off Priceline hotels?

    They may raise that 5 star room to $200/night, but most of us pay $100/night….LOL

  14. 14
    David Losh says:

    RE: Kary L. Krismer @ 12

    This is the affordable housing component that has been long forgotten.

    Local and State agencies are set up to make affordable housing loans, and grants. In about 1995 Real Estate began taking on a life of it’s own. List it low and watch it go was the theme of that day. Multiple offers for lower priced homes took most afforable housing out of the rental or low income housing sector.

    Investors, rather than hold rental property forever sold for a profit.

    Now that the affordable housing buyers have been over sold for so long it looks like the States are trying to restart that housing market.

  15. 15
    Trigger says:

    Wow. But look at the rally. We might be testing 11,000 points within a month or two. All investors are jumpy. The dollar is sinking like crazy though.

  16. 16

    RE: Trigger @ 15

    Stocks are Plummetting Today

    The stock market is psychologically driven too, sometimes it takes a while for the investor sheep to figure out the American Consumer is still dead and housing is too, albeit stocks are driven by what they think the future may hold and today the mood is gloomy.

  17. 17
    AMS says:

    Nothing new, but another illustration of the world we live in. Housing related, in so far as the claim made is to save a house. Of course the discussion could, and should, and to some extent does extend far beyond the house.

    Here is another attempt to beg for dollars, supposedly to save a ‘home:’

    http://community.livejournal.com/save_dave/283.html

    Tomorrow there will be another
    and then another

    Ponzi, maybe?

  18. 18

    RE: AMS @ 17

    Habitat for Humanity

    Have you ever wondered how they select the lucky family for the almost free home? I have.

    I talked to a non-proft agency manager for that works for HFH in the Seattle area recently and asked her why they just don’t use a lottery, rather than possible questionable internal picks. She assured me it was fair.

    I’m still not convinced, not with just the verbal assurance I was given.

    Their ambiguous selection process with no random lottery mentioned:

    http://www.habitatsaltlake.com/family_selection.php

  19. 19
    David Losh says:

    RE: softwarengineer @ 18

    It’s a committee process. The kicker is the community service done after the family moves in.

    Habitat for Humanity is a great program that Jimmy Carter has endorsed and stayed involved with. I have met representatives from Atlanta and found them to be honest, straight forward. caring people who certainly could have done anything in life. These are people dedicated to a cause of making housing affordable for all of us.

  20. 20
    Herman says:

    Hey, let’s say I wanted to buy all the energy that I’ll use or otherwise be on the hook for for the rest of my life at today’s prices.

    Let’s say I have 50 years to go. How much of of the AIM Energy fund should I buy? $50,000?

    First I added up my gas/heat/elec bills up for the year and multiplied by 50. But then I realized that energy costs are also embedded in just about everything I buy. Advice?

  21. 21
    Kary L. Krismer says:

    RE: Herman @ 20 – Why on earth would you want to do that? It reminds me of California that bought a bunch of long term contracts for electricity at the peak. When they finally raised prices for consumers, they’d bought more than they could use. I’d think you’d face both risks (buying more than you need as a result of efficiencies, such as LED lighting, and paying more because renewable energy sources probably will become cheaper). Beyond that, I’d assume you’re going to be paying a premium on today’s prices to be able to lock in. 50 years is a long time for all those factors.

  22. 22
    Herman says:

    RE: Kary L. Krismer @ 21 – I’m a peak-oil believer, and I also believe that humanity’s appetite for energy is insatiable. Buying an energy fund in an amount equal to my lifetime exposure to energy price fluctuations is a hedge. It’s not quite the same as pre-purchasing electricity, but has the same effect.

    I also believe that dollars are a long-term decliner, so I want to convert dollars into units of energy currency at today’s prices.

  23. 23
    WestSideBilly says:

    By Sniglet @ 7:

    Drops in tuition? Where?

    My brother (who teaches at a pricey private K-12 school in Atlanta) tells me that they have went from offering financial aid to less than 20% of the student body 2 years ago to now over 60%. The list price tuition hasn’t changed, but the school is offering de-facto discounts to over half the student body now.

    I have heard of similar things happening at many other private schools. I think my brother’s school offers a brilliant example of the “stealth” deflation that is taking place. You can haggle over everything these days, even if the official prices haven’t changed.

    College tuitions continue to rise at a very fast pace – nationwide it was about 6.5% increase this year. Grants and scholarships are declining in nearly every state. Yes, there is more financial aid, but it’s all loans. There’s no deflation in higher education – much of the subsidization is being pared back.

    I don’t know much about private k-12 schools because nobody really tracks them.

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