Monday Open Thread (2010-07-05)

Here is your open thread for Monday July 5th, 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.

35 comments:

  1. 1

    This is a good example of a funny thread from that inspection site:

    http://www.inspectionnews.net/home_inspection/attic-areas-home-inspection-commercial-inspection/20626-looks-good-outside.html

    Of course it’s only funny until you realize some one paid for something and got totally ripped off.

  2. 2
    Trigger says:

    RE: David Losh @ 41

    David – Israel has already a lot of military potential and just needs to be able to start living with Arabs together. Military force is not an answer. You kill a few Arabs and new ones get an incentive to do suicide attacks. It is a waste to send them so much money. Why not immediately just cut funding by 80%. They will still be happy to get some money.

    You are right – you need more allies.

    And yes – some jobs will disappear if you cut the military funding – but it is better to do so now. Later on you might have to cut funding for healthcare or sthg more important. So it might be a good idea to cut this.

    Also it might be a good idea to cut funding for military bases in countries like Germany etc.

    So maybe the key to get out of this crisis is to cut military spending. I think the US already has a lot of military power as it is. Rogue states will not be able to catch up for a very long time. Probably the biggest expense item is Israel though – so cutting funding there might make most sense.

  3. 3
    One Eyed Man says:

    RE: Trigger @ 2

    Military spending should be cut, but the military budeget including the wars and retirement etc is only about 750B. We need to cut everything, including entitlements and pensions to fill the gap of 1.3T in the federal budget. Hopefully, about 300B in tax revenues will come back in 2010 and 2011 so the gap will be smaller, but its still to big to fill by military cuts alone.

  4. 4
    Daniel says:

    RE: One Eyed Man @ 3 – If you include all other defense related expenditures you are actually up to about 950 billion (not including taxes on debt incurred in past wars).

  5. 5
    softwarengineer says:

    RE: Trigger @ 2

    No Basic Industrial Base in America Today

    IMO, the only hope we have in America of holding on to a domestic/stealth industrial base [one that isn’t handed over to greedy foreign jobs/corporations] is our military, with it’s security of industrial secrets and it’s Buy American Clause.

    Ideas to the private sector just produce jobs in China and/or elesewhere with slave labor rates…..i.e., our stimulus debt did produce jobs, in China.

    You can hate the military, but IMO it’s our only hope left.

  6. 6
    pfft says:

    By softwarengineer @ 5:

    RE: Trigger @ 2

    No Basic Industrial Base in America Today.

    this is just so wrong and oft repeated I don’t even know where to start. do you know how much america exports a year? over a trillion dollars a year. our GDP is over $10 trillion. you think none of that is manufacturing?

  7. 7
    Dirty_Renter says:

    I have failed.
    29 years of cajoling my nephew to live beneath his means, save, invest, always have enough passive income to tell a cr*ppy boss to FO, and what does he do? He makes a bid on a house without first having his house sold and worse yet, it’s a 4000 sq ft McMansion, and he and his wife have no children.
    Just shoot me.

  8. 8
    Trigger says:

    RE: softwarengineer @ 5 – I think long term wages in China and the US will be similar or at least somewhat similar. Then there will be industrial base in America for sure. I think we are going thru a process making this world one global place. And China works like America in the sense that there is supply and demand economics. Right now Chinese maybe willing to work for a bowl of rice like Americans 100 years ago – but in 20 years time – employers might need to give more to keep the Chinese worker happy.

  9. 9
    David Losh says:

    RE: Trigger @ 2

    Here’s the dilemma about war, war products, and military spending, war is profitable.

    The history of the military is to conquer. Spoils of war have made empires great. The United States are the last great empire.

    What no one looks at is the collapse of the Soviet Union as the end of military might in the world.

    I responded to Kary’s assertions about the Iraq war in the week end thread. The truth is that Iraq was a useless expense that destroyed infrastructure for no military advantage. There’s no conquest there, there’s no benefit, no reasoning, no stability. We are at fault. Our allies trusted us, and they are mired in the same mistake.

    We invaded for stability of the region to protect against weapons of mass destruction. None existed, none were found, we bombed the heck out of a country incapable of defending itself.

    Now, like with Israel, we are in the region defending actions taken by Allied Forces. We can’t walk away.

    For all of the talk about Obama he has brought more peace to the world than any President of the United States before him. He stood up in a gathering of Arabs and invoked the name of Allah. That sets him apart from the Crusaders. Crusaders is a term Arabs use.

    What has to happen is a continuation of the rebuilding efforts to repair the damage done to infrastructure in Iraq. In Afghanistan we need to continue our funding of regional leadership. Israel has to be brought to the bargaining table.

    All of that takes money. Lot’s of money. Lots of our tax dollars need to be spent in that region the same as Reagan spent tax dollars to crush any will the Soviet Union had to escalate in military might.

    Wars will be won by economy. A stronger Israel along side a stronger Arab community would go a long way in changing the purpose of warfare.

  10. 10
    Trigger says:

    RE: David Losh @ 9 – David agree. But we need to evaluate if we can afford all of this.

    Israel does not need to keep all the Arabs impoverished. It can start rebuilding Palestine and help Arabs rebuild their lives. Then there will no longer be an incentive to fight so much. Peace would help get rid of debt. Israel just needs to make sure to kill fewer Arabs. So there are no actions that we are defending in Israel. We just need to ask them to kill fewer Arabs and spend money on rebuilding lives of people in Palestine. And also it needs to stop settlements and negotiate how Palestine is going to be a free country. Nothing more.

    So I hope we will just cut off their dough. Nothing more.

  11. 11

    Just out of curiosity, does anyone here happen to know anyone who happened to say that they use either Zillow or Trulia to look for listings? With the various broker listing sites I can’t imagine why anyone uses these two.

  12. 12

    RE: pfft @ 6

    LOL Pfft

    What is manufactured in America anymore?

    Go to Walmart and find me some examples.

    Nope, I heard we’re 9% of the manufacturing power we were in the 70s.

  13. 13
    Civil Servant says:

    I don’t know anyone who uses Zillow or Trulia to look for/at listings. They use those two sites more for non-property-specific research, trend analysis, or (w/r/t Zillow) the generation of schadenfreude. To look at listings in a more granular way, everyone I know sticks to Redfin initially. Of course this “everyone” category is a lot smaller than it used to be, since most people I know have already bought and the few who have not aren’t looking as actively.

  14. 14
    Trigger says:

    RE: softwarengineer @ 12 – But if the wage in the US was similar to that of China I bet you that we would see a lot of US manufactured products. So it is all about the wages. In the future Chinese workers will demand more money for their work.

  15. 15

    RE: Trigger @ 14

    LOL Trigger

    If we ever get down to $2/hr like China, Seattle homes will go for $10K. How about depopulate and everyone makes $40K/yr…..and in the mean time tarriffs?

  16. 16
    pfft says:

    By softwarengineer @ 12:

    RE: pfft @ 6

    LOL Pfft

    What is manufactured in America anymore?

    plenty.

  17. 17

    Surprisingly, China apparently isn’t that hostile to union activity.

  18. 18
    matsayswhat says:

    By pfft @ 16:

    By softwarengineer @ 12:

    RE: pfft @ 6

    LOL Pfft

    What is manufactured in America anymore?

    plenty.

    As in:
    http://www.hersheys.com/products/details/goodandplenty.asp ?
    I was always more of a Snickers guy myself, but ok.

  19. 19
    Trigger says:

    RE: softwarengineer @ 15 – I would start by floating the juan freely. The problem is that $2 in China is not the same $2 in Seattle. I think this is a big issue.

    So I think Chinese wages simply need to go up. They can offset the fact that they will be less attractive for outsourcing by creating a more robust internal demand.

    But whatever happens – the US can print like a lunatic. Pass new stimulus packages. Until the investors say no to that. So I would focus on more printing. Getting into more debt. Passing more stimulus like crazy. Same is with housing. I would go for some permanent 20-30K tax credit on every home.

  20. 20
    karl says:

    Heck yes! Trigger…….. then default….everybody else is doing it.

  21. 21
    D. in Ballard says:

    RE: Kary L. Krismer @ 11 – I use Zillow to look up zestimates when the seller of a property has requested that no estimates be shown.

    I think a lot of users of zillow are most likely machines. Not sure if they charge per hit for their API or if it’s free, but there’s been talk at my work about consuming it in some of our web sites.

  22. 22
    One Eyed Man says:

    Here are some of the stats on manufacturing output. The last link gives a comparison of manufacturing wages in various countries.

    These stats are all about 5 yrs old but I’ve never been able to find anything more recent. The US is still ahead in total manufacturing, but not when measured in Manufacturing per capita or other similar measures that level out the playing field for Japan and European countries with smaller populations

    “Currently, the largest share of world industrial output is held by the United States (23.3 percent), followed by Japan (18.2 percent) and Germany (7.4 percent). China ranks fourth with 6.9 percent.”

    http://www.ipsnews.net/news.asp?idnews=35402

    http://www.nationmaster.com/graph/ind_man_val_add_cur_us-manufacturing-value-added-current-us

    http://www.bls.gov/spotlight/2008/around_the_world/

  23. 23
    Scotsman says:

    RE: One Eyed Man @ 22

    This is really a trick question. Of course the U.S. manufactures a variety of goods- it’s the world’s largest economic and industrial power. So statistics will always show that even if we are only manufacturing a fraction of what we did 40 years ago that fraction multiplied by our huge share of the world’s total economic activity is going to be impressive.

    The real question is what portion of our consumption do we manufacture, and how close are we to some level of self sufficiency? How has that changed over the last 40 years? If we wanted to become more self sufficient, do we have the skilled labor and capital base to make that happen? I think the answers to these questions would be less impressive.

  24. 24
    pfft says:

    By One Eyed Man @ 22:

    Here are some of the stats on manufacturing output. The last link gives a comparison of manufacturing wages in various countries.

    These stats are all about 5 yrs old but I’ve never been able to find anything more recent. The US is still ahead in total manufacturing, but not when measured in Manufacturing per capita or other similar measures that level out the playing field for Japan and European countries with smaller populations

    “Currently, the largest share of world industrial output is held by the United States (23.3 percent), followed by Japan (18.2 percent) and Germany (7.4 percent). China ranks fourth with 6.9 percent.”

    http://www.ipsnews.net/news.asp?idnews=35402

    http://www.nationmaster.com/graph/ind_man_val_add_cur_us-manufacturing-value-added-current-us

    http://www.bls.gov/spotlight/2008/around_the_world/

    don’t let “facts” get into the way of a good meme. we don’t manufacture ANYTHING. our $150 billion dollars in exports a month are just an illusion.

  25. 25
    pfft says:

    By Scotsman @ 23:

    RE: One Eyed Man @ 22

    This is really a trick question. Of course the U.S. manufactures a variety of goods- it’s the world’s largest economic and industrial power. So statistics will always show that even if we are only manufacturing a fraction of what we did 40 years ago that fraction multiplied by our huge share of the world’s total economic activity is going to be impressive.

    The real question is what portion of our consumption do we manufacture, and how close are we to some level of self sufficiency? How has that changed over the last 40 years? If we wanted to become more self sufficient, do we have the skilled labor and capital base to make that happen? I think the answers to these questions would be less impressive.

    in other words now that that meme has been knocked down we’ll just roll out some new hurdle.

    ” If we wanted to become more self sufficient, do we have the skilled labor and capital base to make that happen?”

    of course, we have tons of unemployed workers as you remind us every single minute.

    we have tons of manufacturing capacity not being used.

    http://calculatedriskimages.blogspot.com/2010/06/capacity-utilization-may-2010.html

    for all the bears explain why if things aren’t getting better cap utilization bottomed almost a year ago. just look at the chart. cap was at 68% and it now at 75%. if someone can tell me how that’s bad I’d like to know.

    EDIT: US corporations have $1.3 trillion, yes trillion, in cash. there is plenty of money. that is more than impressive.

  26. 26
    Coloradoan says:

    I disagree that the US needs a large manufacturing base. We import goods and services from countries that have a comparative advantage in that good or service. The US exports its technology, as the world’s most advanced country should. Econ 101 boys.

  27. 27
    pfft says:

    I know this is ten years old but it’s still funny.

    Seattle area leads nation in export trade
    http://www.seattlepi.com/business/exp10.shtml

  28. 28
    pfft says:

    By Coloradoan @ 26:

    I disagree that the US needs a large manufacturing base. We import goods and services from countries that have a comparative advantage in that good or service. The US exports its technology, as the world’s most advanced country should. Econ 101 boys.

    there are two problems.

    1. the us dollar should be lower because of the trade deficit.

    2. we need to save more.

    these would reduce imports and lower the trade deficit. a lower dollar would raise US incomes and make US manufactures more competitive. a higher savings rate would harm our domestic growth but hopefully rising incomes from manufacturing would cushion the blow.

    if you look at countries that suffered drastic currency devaluations their economy recovered faster than people realized because of the rebound in the manufacturing sector.

  29. 29
    pfft says:

    where do we even start when it comes to robert prechter?

    A Market Forecast That Says ‘Take Cover’
    http://www.nytimes.com/2010/07/04/your-money/04stra.html?_r=1&scp=1&sq=prechter&st=cse

    if you are bearish or bullish long enough you can become a guru. they’ll trot you out for 20 years. peter schiff is the new example. he was right about housing but completely wrong about just about everything else. nobody calls him on it.

  30. 30
    Coloradoan says:

    RE: pfft @ 28

    Both good points. My statement was a little simplistic.

    Also, good point about Peter Schiff. I would also add though that Schiff is one of the most compelling individuals to listen to, right or wrong.

  31. 31
    pfft says:

    By Coloradoan @ 30:

    RE: pfft @ 28

    Both good points. My statement was a little simplistic.

    Also, good point about Peter Schiff. I would also add though that Schiff is one of the most compelling individuals to listen to, right or wrong.

    he’s stubborn. he’s a true believer. he’s either going to make a ton of money or lose a ton of money. somewhere there is someone who is the opposite of peter schiff and he’ll either make a ton of money or lose a ton of money. I can’t figure out how he can be so confident when he’s put himself so far out and he helps direct so much investment money. nobody should be that confident about anything.

  32. 32
  33. 33
    One Eyed Man says:

    RE: Scotsman @ 23

    US manufacturing has been growing up thru at least 2007, but not as fast as some other countries like China. But US employment in manufacturing has been decreasing as a percentage of the labor force. The more important issue you bring up is the growing reliance of the US on importing a large portion of manufactured goods.

    I’ve always assumed that the best proxy for that was the trade imbalance (current account deficit?) after removing the service component. You know as well as I do that its been ugly and generally growing worse for about 30 yrs (very similar to the debt growth). It’s pretty much the indicator that lead me to the conclusion for years that 5% of consumption (and possibly GDP) has to go away just to break even on a current basis. BEA has a ton of data, info and articles at the second link. The last link is a 2007 article discussing globalization and the current account deficit. Its by the NY Fed and I haven’t read it but I don’t think that they shared my concern over the current account deficit. I wonder if they’d come to the same conclusions in 2010?

    http://www.economicshelp.org/blog/economics/us-current-account-deficit-graph/

    http://www.bea.gov/international/index.htm#bop

    http://www.newyorkfed.org/research/current_issues/ci13-11.pdf

  34. 34

    RE: One Eyed Man @ 33 – If the Internet had been around 80 years ago we’d be able to search through posts complaining about the decline of American farming. ;-)

  35. 35
    pfft says:

    By Kary L. Krismer @ 34:

    RE: One Eyed Man @ 33 – If the Internet had been around 80 years ago we’d be able to search through posts complaining about the decline of American farming. ;-)

    great comment. you win monday’s open thread

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