Monday Open Thread (2010-01-25)

Here is your open thread for Monday January 25th, 2010. 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.

87 comments:

  1. 1
    Trigger says:

    Wow. So we are due for a GDP increase again. What happened to that depression and deflation everybody was talking about? What will start happening if in 1 year’s time the economy starts adding jobs?

  2. 2
    Cheap South says:

    I guess it’s not a “strategic default” (foreclosure is for peons) until you miss a payment. This is just a “return to the creditors”.

    http://www.nytimes.com/2010/01/25/nyregion/25stuy.html?hp

  3. 3
    The Tim says:

    RE: Trigger @ 1 – Fake it till you make it is definitely a sustainable way to run an economy. Everything is fine I’m sure.

  4. 4

    RE: Trigger @ 1

    I Thought 2009 Was the Year We Were Adding 3-4M Jobs after spending $1.7T to Prop it Up?

    Maybe 2010 will be the hope off the cliff too, just like 2009?

    Oh, BTW, we need add about 2M jobs in 2010 just to keep up with insourced population density increases for 2010, so gravy for the current American unemployed doesn’t start until 2M+ are added.

  5. 5
    David Losh says:

    RE: Trigger @ 1
    http://www.chrismartenson.com/crashcourse

    This explains the GDP in detail. It’s worth reposting.

  6. 6
    AMS says:

    All this talk of GDP make me wonder, how much new construction is happening? Existing home sales don’t add much to the GDP. There are always some new things that go along with a new home, but it’s a relative small amount.

    How much repair and maintenance is happening in the residential real estate market? When I hear reports of roofers having a problem finding work, I wonder if that suggests all the roofs in all of America have been fixed. You know, that super material that lasts generations has been applied to all homes. I am sure when you look around you cannot find a roof that need be replaced.

    All that said, tomorrow is the last Tuesday of the month. We all know what that means! C-S data!

  7. 7

    RE: AMS @ 6

    There’s Two Types of GDP Increases

    1. Short-term debt GDP increases to the service sector hoping savy American technicals will innovate new businesses for the industrial base [i.e., long-term tax base]….which BTW, ain’t happenning.

    2. Long-term GDP increases that exceed the population density impact [in other words a real GDP increase] and are directly fueling our long-term domestic industrial base. Call #2 a pipe dream.

  8. 8
    AMS says:

    This is exactly as I expected:

    “WASHINGTON – Sales of previously occupied homes took the largest monthly drop in more than 40 years last month, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit.”

    Please recall that I discussed that sales would increase toward the tax credit deadline. Of course when the deadline was extended, it softened my position on the issue, but a dramatic drop in sales was expected.

    Once again, I’ll look for another increase in sales toward the extended deadline, but this next time it won’t be so prevalent, as many of those who wanted participate already did. It’s a matter of diminishing returns.

    http://news.yahoo.com/s/ap/20100125/ap_on_bi_ge/us_home_sales;_ylt=A

    Any early reports/guesses on January 2010? January is not normally a month with high activity.

    “Total sales for 2009 closed out the year at 5.16 million, up about 5 percent from a year earlier. That was the first annual sales gain since 2005. But prices fell dramatically last year, declining 12.4 percent to a median of $173,500, the largest decline since the Great Depression.”

  9. 9
    AMS says:

    It’s tough to keep up with the all real estate news this morning.

    “NEW YORK – The financially troubled owners of two massive apartment complexes that sold for a record $5.4 billion a few years ago said Monday they’re turning them over to their creditors.

    The joint venture ownership team led by Tishman Speyer Properties and BlackRock Realty, hurt by the real estate market collapse, couldn’t make a multimillion-dollar loan payment earlier this month for the Stuyvesant Town and Peter Cooper Village apartments in Manhattan.

    Over the last few days it became clear the only viable alternative to bankruptcy would be to transfer to lenders control and operation of the 110 buildings and 11,000 apartments overlooking the East River, partnership spokesman Bud Perrone said.”

    A few billion here, a few billion there…

    Bankruptcy is the new recovery.

  10. 10
    pfft says:

    Buried in the bad dec. numbers.

    “For full-year 2009, the NAR said 5.2 million existing homes were sold, up about 5 percent over 2008. That was the first annual rise in sales since 2005.”

    http://www.bizjournals.com/cincinnati/stories/2010/01/25/daily8.html

    not bad. the first sign that housing was in trouble was YOY sales declined. I think that was in jan or 2006. housing may be bottoming just like it may have been topping in 2006.

  11. 11
    pfft says:

    By Trigger @ 1:

    Wow. So we are due for a GDP increase again. What happened to that depression and deflation everybody was talking about? What will start happening if in 1 year’s time the economy starts adding jobs?

    we could add jobs in the next 3 months.

  12. 12
    pfft says:

    By AMS @ 9:

    IThe financially troubled owners of two massive apartment complexes that sold for a record $5.4 billion a few years ago said Monday they’re turning them over to their creditors.
    .

    that sounds more like a bottom in the CRE space not the beginning of the next shoe dropping.

  13. 13
    AMS says:

    RE: pfft @ 12 – Are you sure you are not related to Bob Packwood? It seems everything looks like a bottom to you.

  14. 14
    AMS says:

    RE: pfft @ 10 – I think you left off the part about prices “declining 12.4 percent to a median of $173,500, the largest decline since the Great Depression.”

    I guess it took a price reduction of over 10% to increase sales with another 10% (or $8k max) immediate income tax credit for qualified buyers. That’s the sign of a really strong market.

    So strong that the tax credit was expanded and extended.

  15. 15

    RE: AMS @ 13
    You heard that Bob Packwood lost the Senate spelling bee?
    He thought harass was two words.

  16. 16
  17. 17

    I feel sorry for Aubrey. Look at the moron Unregistered Users he has to deal with on his Boeing stories. Try to find a comment without a spelling/punctuation error.

    http://blog.seattlepi.com/aerospace/archives/192112.asp#comments

  18. 18

    RE: Kary L. Krismer @ 17

    LOL

    I don’t know if its “choked” or “shocked” they’re talking about.

  19. 19
    AMS says:

    Just when I thought the economy wasn’t doing so well, a guy finds a solution to the problem of energy.

    http://www.youtube.com/watch?v=Tft_5Mhc54Y

    I wonder, is this guy a regular here?

  20. 20
    Scotsman says:

    RE: pfft @ 12

    This has a good chance of being the “next shoe dropping:”

    “The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. The stakes for the economy are massive: If the market again falls into a tailspin, homeowners could face another wave of trouble…

    …Keeping the mortgage rates at historic lows, which required a commitment of more than $1 trillion, was viewed within the administration as a central plank of the economic strategy last year, senior officials said.”

    http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402996.html?hpid=topnews

    They’ve put it off for over a year now, but it looks like interest rates will finally be headed up to a more real market equilibrium. Basically, the .gov can’t afford to subsidize any more. As I posted on the weekend open thread there is already a projected $700B shortfall in demand for treasuries at current interest rates and close to $2T in debt to issue/roll over in the coming months.

    It’s going to be a more interesting than usual spring in the housing market and economy as a whole.

  21. 21
    patient says:

    Bernanke’s confirmation is getting more and more politically infected:
    http://www.reuters.com/article/idUSN2519310720100125?type=marketsNews

    good, though the chance seems slim that he will be rejected after the WHs arm twisting there are still some hope.

  22. 22
    AMS says:

    “WASHINGTON (Reuters) – Bill Gates, the world’s richest man, said on Monday the U.S. economy could take years to recover from recession and predicted taxes will have to rise to bring the federal budget into balance.

    Speaking on ABC’s Good Morning America, Gates also warned against too much government intervention and urged President Barack Obama to focus policy on long-term issues such as education to combat the effects of the worst recession since the Great Depression.”

    “We’re having a slow recovery and everybody’s frustrated by the pace of the recovery. But I don’t think the government could change and magically make it speed up a lot,” he said.

    “If you try to do too much, it can distort things. The government’s role is more of a long term role, investing in education.”

    Gates also said the United States needs its leaders to level with the American people about the long-term challenges the country faces and the sacrifices needed to overcome them.”

    http://news.yahoo.com/s/nm/20100125/us_nm/us_usa_economy_gates;_ylt=A

  23. 23

    Horrifying Commercial Loan Problems in Today’s News

    New York’s Monstrous Commercial Loan Problem, article in part:

    “…The financially troubled owners of two massive apartment complexes that sold for a record $5.4 billion a few years ago said Monday they’re turning them over to their creditors….”

    http://finance.yahoo.com/news/Owners-54B-NY-housing-apf-2493139299.html?x=0

  24. 24
    Scotsman says:

    RE: AMS @ 22

    I’m not surprised, Bill was always pretty good at math.

  25. 25
    Jillayne says:

    Hey look what the first learning objective is for the 2010 required course that all real estate agents must take called Core Curriculum:

    “Learn that not all licensees are equipped with the proper training and experience to handle distressed properties and/or short sales. Sometimes, the most appropriate service a licensee can give a distressed property homeowner is to refer that homeowner to legal counsel and/or to another licensee who has the proper training and experience to handle distressed properties and/or short sales.”

    Gee I’ve only been saying this for 8 years.

    I think that at some point, it should become mandatory that the only real estate agents allowed to take these listings would be agents who are already experienced with this type of transaction. New/newer agents wanting to learn short sales should be required to co-list with an experienced agent.

  26. 26
    pfft says:

    By AMS @ 13:

    RE: pfft @ 12 – Are you sure you are not related to Bob Packwood? It seems everything looks like a bottom to you.

    better to be slightly bullish on CRE on the bankruptcy of one of the largest CRE deals and not on the completion of the largest CRE deal. I just say what the data is telling me.

    By AMS @ 14:

    RE: pfft @ 10 – I think you left off the part about prices “declining 12.4 percent to a median of $173,500, the largest decline since the Great Depression.”

    I guess it took a price reduction of over 10% to increase sales with another 10% (or $8k max) immediate income tax credit for qualified buyers. That’s the sign of a really strong market.

    So strong that the tax credit was expanded and extended.

    no I didn’t leave out anything. YOY sales numbers lead prices. YOY sales numbers declined before we had YOY price declines nationally. so YOY sales increases are good and a sign that the market could be recovering. tax credit or no tax credit people won’t buy houses if they don’t feel good about their financial situation.

  27. 27
    patient says:

    Anecdotal surprise today. Sellers in our hood on the eastside has up until now completely ignored that the bubble has burst and listed their homes for 2007 prices, and of course nothing has sold in the last two years. The signs are still there, some replaced with other firms and or agents but with the same price. Yesterday the home across the street came to the market for the first time at about $150k ( or ~20%) less than 2007s pricing. It’s not a short sale or a foreclosure but to my surprise a seller that has accepted today’s market from day one of entering it. Extraordinary uncommon around here, probably the first time I see it to be honest. It will be interrresting to see if/when it sells. Also if this is a one time wonder or if sellers in genreral will get more realistic in 2010.

  28. 28
    pfft says:

    By Scotsman @ 20:

    RE: pfft @ 12

    This has a good chance of being the “next shoe dropping:”

    “The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. The stakes for the economy are massive: If the market again falls into a tailspin, homeowners could face another wave of trouble…

    …Keeping the mortgage rates at historic lows, which required a commitment of more than $1 trillion, was viewed within the administration as a central plank of the economic strategy last year, senior officials said.”

    http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402996.html?hpid=topnews

    They’ve put it off for over a year now, but it looks like interest rates will finally be headed up to a more real market equilibrium. Basically, the .gov can’t afford to subsidize any more. As I posted on the weekend open thread there is already a projected $700B shortfall in demand for treasuries at current interest rates and close to $2T in debt to issue/roll over in the coming months.

    It’s going to be a more interesting than usual spring in the housing market and economy as a whole.

    didn’t they say that about 2009? about how we weren’t going to be able sell all that debt without interests rates going way up? the retail investor poured money into bonds. companies are cash rich and the chinese haven’t bought as many bonds as they have in earlier years.

    interest rates usually go up during a recovery anyways as investors put money into stocks and move out of the safety of bonds.

  29. 29
    Scotsman says:

    RE: pfft @ 28

    Yeah, you’re right- nothing has changed over the last 15 months, just more of the same-old, same-old.

    Did you know that when the rear bumper of a car traveling 90 mph hits a solid barrier it’s considered a “lagging indicator” for contact by the front end of the car? Yup, it’s true.

  30. 30
    AMS says:

    RE: Jillayne @ 25 – Such a training/experience requirement should have been long before the increase in distressed listings. Now the number of experienced agents is probably too small.

    That said, I have been visiting various personal REALTOR web sites, and I am surprised to see all the new training certifications that are cropping up. My initial reaction is that these REALTORs are trying to follow the market trends, which I think is a good way to go.

    Moving forward, dealing with the existing lender is, as has been extensively discussed here and elsewhere, a major challenge.

    Buyers offer far less, and because of the challenges rightfully so, yet lenders want premium prices. This is the usual story, but lenders have no personal interest in the property, don’t personally know the neighborhood, and so on.

    About a year ago I took a road trip. As always, I check the market out. I was over 2,000 miles from the Pacific Northwest, yet when I was checking the county records on properties I noticed that some of the lenders where from the Pacific Northwest. Other lenders were located in other parts of the country, but I was talking to the locals and I knew much more about the property than the person in a far away land approving any offer.

    I honestly believe that a good understanding of basic economics and finance, including discounted cash flows, should be a requirement to be a listing agent. Accounting rules are another challenge. If a lender approves a short sale, then there is no question that the loss will be realized right away. On the other hand, I suspect that many of the REOs that are not one the market are being held at a book value far above fair market value. These pressures are very difficult for a seller to overcome. For example, when the FDIC is suggesting to increase assets, it’s an impossible sell to suggest a troubled bank realize losses sooner. Of course it’s pretend and extend, but what can the poor seller caught in the larger trap do?

    On a personal note, I suggested to a long time friend to list his home with an experienced agent, but he had a family member who was a REALTOR. My opinion is that the family member botched the short sale. He now has experienced a foreclosure. I really think that the foreclosure could have been avoided. He was willing to do whatever he could. And my personal read is that the home could have been sold without the need for foreclosure.

    “If you think a professional costs too much, try an amateur.”

    Minimizing the losses during war can be a difficult thing. The best course is to never have to go to battle-Sun Tzu.

    Thank you for the update.

  31. 31
    AMS says:

    RE: Scotsman @ 24 – By the way, Warren Buffett’s annual letter should be released in about a month. I’m looking forward to what he has to say.

  32. 32
    pfft says:

    By Scotsman @ 29:

    RE: pfft @ 28

    Yeah, you’re right- nothing has changed over the last 15 months, just more of the same-old, same-old.

    Did you know that when the rear bumper of a car traveling 90 mph hits a solid barrier it’s considered a “lagging indicator” for contact by the front end of the car? Yup, it’s true.

    I guess you don’t know what a leading and lagging indicator means. the first increase in sales since 2005 is a good thing. the decrease in YOY sales in jan 2006 was a sign that things were bad even though home prices were still going up.

  33. 33
    AMS says:

    RE: pfft @ 32 – What about total volume in dollars, defined as number of sales times average selling price?

    The total volume has been falling as prices have been falling, even if the number of sales has increase.

    Note that the number of sales has increased 5%, but the median sales prices has decreased over 10%. We don’t have the average price reduction, but it should be clear that the total sales volume in dollars is decreasing.

    Is that a leading or lagging indicator?

    When companies go bankrupt, I often see the number of shares sold increase substantially, but the value of the sales, the cap rate, is approaching zero. Using your theory, the increasing number of shares sold would be a good indicator, even if the company is bankrupt, right?

  34. 34
    Scotsman says:

    Party At The Fed!

    This is a riot, Hayek vs. Keynes done as a rap. Actually pretty informative, from NPR.

    http://www.youtube.com/watch?v=d0nERTFo-Sk

  35. 35
    Jillayne says:

    AMS I have a copy of Sun Tzu’s book sitting right in front of me.

    It is very, very rare when I meet a real estate agent who has any experience in accounting. There are execptions. Michael Lindenkugel who works with Reba and sometimes posts comments here has an accounting degree. Every now and then I’ll meet a student who understands accounting principles, Ardell has a background in banking where she did a wide variety of work. Those are the exceptions.

    It is horrifyingly worse in mortgage lending. I taught a 3 day class last week to experienced LOs and gave them a simple BASIC 4 page mortgage math worksheet and many didn’t even know how to use a simple calculator to solve percentages or baby algebra problems. Today’s LOs mostly use software that does all the math for them. But there are going to be basic math questions on their national LO exam. There was one brand new student who has a degree in…..accounting and she got all the questions right. She’s going to be a very good LO.

    Oh, you’ll love this: I helped one of my trainers put together an Econ 101 class for Realtors. It’s scheduled for the first part of Feb. I’m very curious to see if anyone signs up.

  36. 36
    Snigliastic says:

    RE: pfft @ 32
    No way is Pfft a real person. He must be AMS or Sniglet creating some sort of straw man to knock down.

    Either that, or it’s
    a) David Losh in disguise
    or
    b) David Losh’s troglodytic half-brother who learned how to type sentences a subject AND predicate.

  37. 37
    mukoh says:

    RE: Snigliastic @ 36 – LOL. Thats funny. Losh wouldn’t do that. He doesn’t know how to swap cookies IMO.

    On the commercial side I am seeing somewhat a weird situaton. A few of the commercial deals that at least make sense at X are getting multiple offers at X +20%. Being bank liquidations 50-60% off the 2007 market they only make sense at X. Person who gets their LOI accepted at X+20% starts running around financial groups in town looking for money to close. Gets booted two weeks later by every group. Then the group gets the deal for X.
    The activity however is picking up pretty fast.

  38. 38

    “David Losh’s troglodytic half-brother”….
    If that’s not a great name for a band.!
    ” Dude! I play bass for David Losh’s Troglodytic Half-Brother!”

  39. 39
    Jillayne says:

    Hi mukoh,

    “The activity however is picking up pretty fast.”

    Who is getting the deal at X? The first person or a different group of people? Thanks.

  40. 40
    mukoh says:

    RE: Jillayne @ 39 – Mainly the financial groups that have now turned to instead of lending to the buyers are buying it themselves, whilst turning the buyer down.

  41. 41
    AMS says:

    RE: Scotsman @ 34 – Nice find. That’s much higher quality than the video I posted earlier.

  42. 42
  43. 43
    David Losh says:

    RE: mukoh @ 40

    On second thought, most people who comment here wouldn’t know, in my opinion, how absurd your comment is.

    Lenders lend money. Why would any lender tie up cash in commercial Real Estate today? in my opinion you are making some leap from the article in Sunday’s Real Estate section that investors are paying cash for properties.

    Why would any one put cash into the black hole of Real Estate today? I can see paying a property off, as long as you have no cash in the deal, but to waste your cash like that? Come on.

    As long as I’m at it, you made another absurd comment a while back that you like your rent money to be paid on the first. Why would any one pay you rent? I can see right now that all the smart guys are counting their money before it’s in the bank, but that won’t last long.

    What’s the incentive going to be next year to give you the gift of rent money?

  44. 44
    mukoh says:

    RE: David Losh @ 43 – David as usual you step out as uninformed as the “investors” you always claim that consult with you. A black hole is something a cleaning crew looks at all day sorry for the pun but its too easy with ya.

    I am not aware of the article you are referring to. What I know is that the game field has changed as far as its nature of money and the last 12 months have been if not the most impressive as to the amount of old players who are finding themselves shut out of it. They come for money to the same source now its shut off, and the game has changed, and the new faces are real bright.

    And again I did not use lenders you did. These are not lenders as qualified by FDIC and SEC.

    To me 1st of the month is special, thats all.

  45. 45
    pfft says:

    By AMS @ 33:

    RE: pfft @ 32 – What about total volume in dollars, defined as number of sales times average selling price?

    The total volume has been falling as prices have been falling, even if the number of sales has increase.

    Note that the number of sales has increased 5%, but the median sales prices has decreased over 10%. We don’t have the average price reduction, but it should be clear that the total sales volume in dollars is decreasing.

    Is that a leading or lagging indicator?

    When companies go bankrupt, I often see the number of shares sold increase substantially, but the value of the sales, the cap rate, is approaching zero. Using your theory, the increasing number of shares sold would be a good indicator, even if the company is bankrupt, right?

    I don’t think that you can really compare the housing market to the stock of a soon to be bankrupt company.

    “Is that a leading or lagging indicator?”

    the rate of change is the indicator. if total sales volume in dollars fell 10% but that’s better than the 20% that it previously fell that’s good.

  46. 46
    pfft says:

    By Snigliastic @ 36:

    RE: pfft @ 32
    No way is Pfft a real person. He must be AMS or Sniglet creating some sort of straw man to knock down.

    Either that, or it’s
    a) David Losh in disguise
    or
    b) David Losh’s troglodytic half-brother who learned how to type sentences a subject AND predicate.

    why do you say that? I am trying to look for signs that things are recovering because the data is starting to say that. we have had an epic decline in housing and CRE, time to look for the recovery.

  47. 47
    mukoh says:

    RE: pfft @ 46 – Time for recovery will be IMO long from now.

  48. 48
    David Losh says:

    RE: mukoh @ 47RE: mukoh @ 44

    Two opposing comments, same thread,

    I understand the game. Of course I would rather generate the dollars than borrow them, and if I did borrow dollars they would go into money making activities.

    Real Estate is a cash on cash return. There is no gaurantee, in today’s Real Estate market place, that any one will pay a return on a Real Estate investment.

    Renters, are going to stop paying rent. The Sheriff will tell people there is a couple of month waiting list. More properties will go into default, and why would the renter base care?

    If people are defaulting on mortgages, for what ever reason, where does the money come from for rent? Come to think of it, why wouldn’t some one sign a lease with an owner who is tight on the mortgage payment, stop paying, and force them in to default. Once the owner is in default it becomes a legal dispute.

    You haven’t lived until that day when a group of renters in a building collective decide not to pay because they don’t like the building condition.

    More to the point will be the people who own commercial Real Estate, collect the rents for a few months, just not pay the mortgage,.and walk away.

    We haven’t even gotten started yet and you are talking about puttig your money, or that an investor is putting money, into property. It’s absurd.

  49. 49
    patient says:

    C/S is out for November:

    “What is more interesting is that four of the markets – Charlotte, Las Vegas, Seattle and Tampa – posted new low index levels as measured by the past four years. In other words, any gains they might have seen in recent months have been erased and November is now considered their current trough value.”

    Oups what happened to the “super-star city”? That’s not very good company. My guess is that the people who staunchly rejected the notion that our market was just delayed to the bubble pop now will support that idea because the alternative explanation is that we are like like LV and Tampa…

  50. 50

    RE: patient @ 49 – Yep, one month of data proves the very simplistic theory that Seattle is on some sort of a delay with other cities. That’s just silly, IMHO. How about posting the drop from peak for LV and Tampa if you think we’re so similar, or the YOY drops for those cities compared to Seattle?

  51. 51

    RE: Scotsman @ 20

    Very Savy Insights Scotsman

    Who in their right minds is gonna tie up money in short term treasuries at around 0% interest when a mattress is so much safer?

    “….The U.S. dollar rose versus major counterparts on Tuesday, earlier touching the highest in more than a month, on news that China wanted to rein in bank lending and that Japan’s debt rating is in jeopardy….”

    http://www.marketwatch.com/story/dollar-rises-pares-losses-vs-yen-2010-01-26

    Looks like the Asian debt cookie jar is empty too. Where’s all those the dollar’s falling fast “doom-sayers” now? Probably counting their gold/oil commodity losses lately….LOL

  52. 52
    One Eyed Man says:

    Just like a year ago, if there aren’t enough other buyers for Treasuries and GSE debt this spring, and interest rates start moving up too far, the Fed will buy whatever it takes to keep rates low enough so the anemic economy keeps circulating goods and green backs. They may have fucked up big time by letting bubbles form, but that’s history now. The last thing Ben and the majority of Fed members want is for their head stones to read “He could have stopped the second great depression but chose to support the dollar instead.”

  53. 53

    RE: One Eyed Man @ 52

    We’ll See, Won’t We

  54. 54
    mukoh says:

    RE: David Losh @ 48 – Dave the last two paragraphs prove exactly why you have absolutely no knowledge of what has been bought/sold for how much and to who. Some people have already realized 20+% returns cash on cash. So sit back relax. Clean a little and don’t talk about things you have no grasp of. You are not involved in any of it.

  55. 55
  56. 56
    patient says:

    By Kary L. Krismer @ 50:

    RE: patient @ 49 – Yep, one month of data proves the very simplistic theory that Seattle is on some sort of a delay with other cities. That’s just silly, IMHO. How about posting the drop from peak for LV and Tampa if you think we’re so similar, or the YOY drops for those cities compared to Seattle?

    1 month? How does 8 years sound? Take a look at The Tim’s time shifted graph in the C/S posts. It’s not a 1 month phenomena it tracks through the whole bubble. So who is silly now? ( Sorry, I normally don’t resort to name calling of other posters but you started and this one you really tee’d-up )

  57. 57
    patient says:

    2010 starts with a bang. First Chris Dodd announces that he will not run for re-election, then Bernanke’s confirmation is being questioned and now Geithner is in serious trouble over the AIG bailout. This truly is a great country with great people, a huge thanks to the people of MA. If now only Barney Frank could be put in the hot seat as well, perhaps when the next FHA report is out…

  58. 58
    pfft says:

    By mukoh @ 47:

    RE: pfft @ 46 – Time for recovery will be IMO long from now.

    that isn’t what the data says.

  59. 59
    AMS says:

    RE: Kary L. Krismer @ 50 – When you are at a local minimum (lowest point in 4 years), I’d hardly suggest that’s a month of data.

  60. 60
    Sniglet says:

    Just a reminder that the Optimistic Bear internet radio show will be airing live tonight (Tuesday the 26th) at 9:00pm Pacific Time. We will be discussing the past week in economics and finance. Feel free to call in and share your thoughts.

    http://surkanstance.blogspot.com/2009/11/introducing-optimistic-bear-weekly.html

  61. 61
    Researcher says:

    RE: softwarengineer @ 51

    The manipulation of gold will continue until the US dollar is worthless, At that point, gold and silver will skyrocket. It goes without saying that the banking firms that set the price of gold and silver on the spot market will shake out the weak hands. Owning gold and silver is not a short-term purchase, nor is it designed to make money in the traditional sense. It is simply the only thing worth owning when you know the US dollar is heading into endless escalating dilution, and the GDP has been next to or below zero (the real numbers) for the last 10 years, and probably many more.

    Following gold and silver prices while the US dollar is still trading as if it is valuable is a waste of time, IMO. Please keep in mind that nearly all the central banks worldwide went from selling gold to purchasing gold in the last year. Many are expected to load up a lot more, though this will be done quietly, without much news coverage. Just like China which doubled its gold reserves in the last five years. China recently said it would not purchase more gold until the price came down… well guess what China is doing right now?

    One other thing worth noting is that regardless of the manipulated spot price of gold and silver, the premiums have been escalating by leaps and bounds. The premiums represent the secondary price which cannot be manipulated, as it represents true demand — and demand is very strong. Premiums went from about 4% to over 25% in one year, not to mention the increase of the spot prices as well. When you sell your metals, you get to charge similar premiums, as well.

  62. 62
    David Losh says:

    RE: mukoh @ 54

    You’re trawling for business some how, but again you aren’t making any sense. 20% of what? You would have to supply numbers for that to mean anything.

    It’s not important. You have brought up an interesting talking point with your absurd statements, and assertions:

    What will a recovery look like without Real Estate? The United States economy has relied on building housing units for the baby boomers for so long, what will we do now that it’s over. Now that we have massively over built, what will drive our economy?

  63. 63
    Scotsman says:

    RE: pfft @ 58

    What does the data say?

  64. 64
    David Losh says:

    RE: Researcher @ 61

    Unless you have a few pounds, hundreds of pounds of gold, you really aren’t going to find some one to trade with. Gold has become an institutional investment.

    If the dollar crashes like you are describing you would be many dollars ahead by owning guns.

  65. 65
    The Tim says:

    RE: Researcher @ 61 – You just gave me a good idea for next week’s poll… The question will be something like “What’s the best asset to buy to hedge against inflation?” The choices will be gold, silver, real estate, (guns?)…

    Anybody got more suggestions?

  66. 66
    AMS says:

    RE: The Tim @ 65 – US Equities
    other commodities
    foreign currencies

    Nice pacific island

    (Is Researcher describing a gold bubble or opportunity?)

  67. 67
    pfft says:

    By Scotsman @ 63:

    RE: pfft @ 58

    What does the data say?

    recovery.

  68. 68
    pfft says:

    By Researcher @ 61:

    RE: softwarengineer @ 51

    The manipulation of gold will continue until the US dollar is worthless, At that point, gold and silver will skyrocket.

    considering gold and silver have already skyrocketed, they aren’t doing a very good job of manipulating it.

    don’t listen to ted butler. spitzer investigated the silver market and didn’t find anything.

  69. 69

    RE: The Tim @ 65

    Farmland.
    Artwork.
    Comic Books.

  70. 70
    AMS says:

    RE: Ira Sacharoff @ 69
    How about hookers and blow?

  71. 71
    Scotsman says:

    RE: pfft @ 67
    How do you come to that conclusion? When I look at the third chart from the top, “total decline from peak,” the best I can see is “plateau.” And while some other cities were headed back up for a while, it now appears they have turned and are headed down again. What am I missing? Details, please!

  72. 72
    Scotsman says:

    RE: pfft @ 68

    Bunky Hunt’s ghost paid him off.

  73. 73
    AMS says:

    People like you. People like you who own. You think you’re a cut above renters. And why? Why, I ask. Because you pay your payment to a far away lender? Because you pay to fix up your place? Because you pay when the furnace goes out? Because you don’t mind taking losses when you go to sell?

    “It’s not just a question of money. We think differently from most renters, and our needs are different.”

    lol

  74. 74
    One Eyed Man says:

    RE: Scotsman @ 72

    At one time I had an original letter to one of my clients from Bunker Hunt. He actually signed it “Bunky Hunt.” I almost asked the client if I could keep it and get it framed.

    So if we’re going to wait for silver to get bacK to $50/oz are we still recovering from 1981?;-)

    .

  75. 75

    RE: AMS @ 70
    No. Hookers and blow are not good hedges against inflation, and maybe even a worse investment than a house.
    Rare comic books can be maintained in beautiful shape. Far less common in hookers. And blow might have a tendency to disappear..There goes the inflation hedge, right up the nostril.

  76. 76
    AMS says:

    RE: Ira Sacharoff @ 75 – Oh come on, when times are bad, we all need a little something to make us feel better.

    I’m guessing that sales of the various drugs that treat depression are going up, up, up and away.

    (This post is 50% fiction & 50% truth, you guess which half is which.)

  77. 77
    AMS says:

    RE: One Eyed Man @ 74 – “So if we’re going to wait for silver to get bacK to $50/oz are we still recovering from 1981?;-)”

    YES!

  78. 78
    One Eyed Man says:

    RE: AMS @ 73

    How about “Because we are the landed gentry to whom serfs pay omage for the right to shelter at our grace.” I think that’s the way it worked for a few thousand years of human history anyway. Plus, and perhaps more accurately, “Because my wife told me we had to get a nice house or I wasn’t going to get any for another few thousand years of human history.”

  79. 79
    Scotsman says:

    RE: One Eyed Man @ 74

    I’d be tempted too.

    You’ve got to be from Texas to get away with a name like “Bunky.”

  80. 80
    AMS says:

    RE: One Eyed Man @ 78 – “Because my wife told me we had to get a nice house or I wasn’t going to get any for another few thousand years of human history.”

    When I get the present value of that computed, I’ll get back with you. First I need to figure out an appropriate discount rate… Maybe I’ll think in terms of break-even points. In message #70 I spoke of investing in “hookers and blow,” and a wife is probably a better deal.

  81. 81
    The Tim says:

    RE: AMS @ 70 – “Yeah, well… I’m gonna go build my own theme park, with blackjack and hookers. In fact, forget the park!”

  82. 82
    gordonshumway says:

    By AMS @ 70:

    RE: Ira Sacharoff @ 69
    How about hookers and blow?

    Change for a nickel?

  83. 83
    mukoh says:

    RE: David Losh @ 62 – Dave relax. My business is my own. You are the one linking to a scraper blog. Relax you are not there never have been and missed whatever entry point there ever was. Just stick to what you know. The bowls need to shine bright.

  84. 84
    AMS says:

    RE: gordonshumway @ 82 – Clearly you’re a home owner.

  85. 85
  86. 86
    David Losh says:

    RE: mukoh @ 83

    What business are you in?

  87. 87
    David Losh says:

    Whoa, you’re right, my name does link to a pretty good looking blog!

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