Mid-Week Open Thread (2010-10-20)

Here is your open thread for the mid-week on October 20th, 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.

32 comments:

  1. 1
  2. 2
    Scotsman says:

    Whoa! The first tremors of a quantum shift? Maybe the government can’t just spend and spend, saving every homeowner, bank, pension, etc. Maybe higher taxes in a declining economy aren’t really an option? And from a democrat? Hmmm.

    “The U.S. government must shrink if it wants to return to a fiscally sustainable course, Sen. Kent Conrad (D-N.D.) said Wednesday.

    Conrad, the chairman of the Senate Budget Committee and a member of President Obama’s fiscal commission, said that there was no other choice but to cut spending in order to balance the budget.

    “This government is going to have to be smaller,” Conrad said on MSNBC. “There is no option.”

    Conrad, the top Democrat on budgetary issues, is among the 18-member fiscal commission Obama appointed earlier this year to generate recommendations on how to bring U.S. deficits and debt under control.”

    http://thehill.com/blogs/blog-briefing-room/news/124993-sen-conrad-this-government-is-going-to-have-to-be-smaller

  3. 3
    The Danza says:

    Sorry if this was already posted. Funny/Sad Daily show clip on MBA defaulting on their office building.

    http://www.thedailyshow.com/watch/thu-october-7-2010/mortgage-bankers-association-strategic-default

  4. 4

    RE: The Danza @ 3 – It’s been discussed. It was actually a short sale rather than a strategic default, but as I noted before, The Daily Show only purports to be fake news.

  5. 5
    WestSideBilly says:

    “Conrad … said that there was no other choice but to cut spending in order to balance the budget.”

    Or, you know, raise taxes on the top 5-10% of Americans that are rapidly growing their share of the pie…

  6. 6
    Dirty_Renter says:

    RE: Scotsman @ 2
    Great article.
    Conrad is apparently afraid of the bond vigilantes, as well he should be. They strike in the middle of the night and never, ever, take prisoners.
    America, meet Zimbabwe; Zimbabwe, America.

  7. 7

    RE: Scotsman @ 2

    Nanny Government Needs to Feed It’s Screaming Babies

    Article in part:

    “…Fannie Mae (OTC BB:FNMA.OB – News) and Freddie Mac (OTC BB:FMCC.OB – News) may need as much as $215 billion in additional capital from the Treasury through 2013 to offset losses and maintain a positive net worth, their federal regulator said on Thursday….”

    http://finance.yahoo.com/news/Fannie-and-Freddie-may-need-rb-2323937639.html;_ylt=ApmDYt4I36v_itS5HLkZDla7YWsA;_ylu=X3oDMTE1dDNoNHNvBHBvcwM0BHNlYwN0b3BTdG9yaWVzBHNsawNmYW5uaWVhbmRmcmU-?x=0&sec=topStories&pos=1&asset=&ccode=

  8. 8
    D.G. says:

    I have a situation that I feel it may be helpful to share and discuss and get some advise. My husband has accepted a job out of state. In April we moved into a underpriced rental house and signed a lease until June 2011 thinking that if we leave it will be easily rented out. It’s been listed a for a week and shown once, the couple wanted it and filled out application, but they did not pass the screening. I looked at craigslist in hopes of finding our listing (it wasn’t there) but the lists of houses for rent in Bellevue was 3 pages long…I could not believe it, we’ve been looking at the market for the past 3 years and it was tight. So now I’m worried the house may not rent. I’m thinking of how much will this cost me. I’m wondering about my rights. I’m thinking that just how many will not pass a screening in our new economy. I’ve been an avid reader of this blog for 2 years and have even posted a comment or 2. I’d appreciate hearing some thoughts on this.

  9. 9
  10. 10
    Dirty_Renter says:

    Lest we forget:
    http://www.youtube.com/watch?v=2I0QN-FYkpw

    Peter Schiff…2006-2007

  11. 11
    Lurker says:

    RE: D.G. @ 8

    Hi D, if you don’t see a craigslist ad for your place in there, make your own and give the rental manager’s contact info. I’ve seen it done before and thought it was a very clever way of making sure things were done quickly and in their best interest.

  12. 12
    wreckingbull says:

    RE: Cheap South @ 9 – Any home that has a cupola is very cool in my book. If I ever get around to building something, I would build it with a little cupola reading room, only big enough for two comfy chairs, small book shelf, a small table big enough for a lamp and a cold beer, and some windows that swing out in the summertime.

  13. 13
    deejayoh says:

    By Dirty_Renter @ 10:

    Lest we forget:
    http://www.youtube.com/watch?v=2I0QN-FYkpw

    Peter Schiff…2006-2007

    http://globaleconomicanalysis.blogspot.com/2009/01/peter-schiff-was-wrong.html

    Are we supposed to believe he was right, or remember all of his blathering about hyperinflation and $8k gold prices that made his investors all quite a bit poorer?

    I’ve read that the youtube video was put together by his own staff to raise money for his senate campaign

  14. 14
    Haybaler says:

    RE: D.G. @ 8 – Hi D,

    I’ve had tenants who wanted to break a lease a time or two. When tenants ask me to release them from a lease I always remind them of the terms …and then I state that “if they can help find an acceptable replacement then I can release them, subject to a satisfactory move out inspection, of course”…

    I’ll bet the current management would have the same attitude. Ask them.

    If you know when you plan to vacate the premises go ahead and advertise the place on your own. Show it. Interview folks. Check w/ the manager to see if the terms need to be modified because of the owners instructions so that you can convey the correct info to prospects.

    Naturally, the management isn’t going be motivated to replace you on their own because you are responsible and collectible and they have other units to fill.

  15. 15
    Dirty_Renter says:

    RE: deejayoh @ 13
    Schiff made great US housing and US equity calls in 2006, 2007 and 2008. I watched the Fox Saturday morning investment shows and saw all of them. The youtube piece covers that period.
    You, or Mish, for that matter, can’t take that away from him.
    Schiff missed the bull market of March 09, as did Mish, Denninger,Tice, Whalen, Whitney and countless others.

  16. 16
    wreckingbull says:

    RE: Dirty_Renter @ 15 – Many others were predicting the same thing, sans:

    “This is hyperinflation; this is Zimbabwe; this is the identical monetary policy of the Weimar Republic.”

    Would you trust your money with someone like this? Maybe you do, but I prefer a little more balanced, cognitive approach.

  17. 17
    deejayoh says:

    By wreckingbull @ 16:

    RE: Dirty_Renter @ 15 – Many others were predicting the same thing, sans:

    “This is hyperinflation; this is Zimbabwe; this is the identical monetary policy of the Weimar Republic.”

    Would you trust your money with someone like this? Maybe you do, but I prefer a little more balanced, cognitive approach.

    I agree. He got the housing crisis right. Most everything else wrong. And gave bad advice to his clients. Pretty much everyone on this blog figured out the housing bubble too. Doesnt make us geniuses.

  18. 18
    David Losh says:

    RE: deejayoh @ 17

    I was in the hyper inflation camp, and made my bets accordingly, as econ e is fond of pointing out. Where it all went wrong was in the global decoupling.

    Who would have thought that the entire global economy would be so intertwined?

    For me it was our trips to Peru, and Spain that convinced me that something was terribly wrong. Within four years in Peru people went from an economy of $600 a month to everybody having credit cards, and there being shopping malls.

    The only guy here who got it right was sniglet. I had never considered deflation in my life until I read his stuff.

  19. 19
    Beekeeper says:

    Alright experts, I was going to buy a house this fall/winter but after following this blog for a few weeks have decided to wait it out.
    Here’s my question: Given the current situation, what is your prediction for the rental market, specifically houses, in city for the near future? I am looking at renting a 2-3 bedrooom house (not apartment) and havent seen alot of downward trend yet, but there also appears to be very little availiable at the moment in 98109 or 98119 (small search area but my kids are in the schools).
    Given the number of sellers that havent been able to sell, I thought I would have better offerings. Any ideas/strategies here? I don’t need to move right away.

  20. 20
    ivan says:

    RE: D.G. @ 8
    Generally, residential leases in WA can’t be longer than one year:

    “RCW 59.18.210
    Tenancies from year to year except under written contract.

    Tenancies from year to year are hereby abolished except when the same are created by express written contract. Leases may be in writing or print, or partly in writing and partly in print, and shall be legal and valid for any term or period not exceeding one year, without acknowledgment, witnesses or seals.”

    If you need some low cost advice, try the Housing Justice Project through the King County Bar.

  21. 21
    deejayoh says:

    By David Losh @ 18:

    The only guy here who got it right was sniglet. I had never considered deflation in my life until I read his stuff.

    he’s not right either. As I pointed out yesterday, he’s still waiting to be right about selling his house 7 years ago.

    Even Shadowstats doesn’t think we are in deflation. As a matter of fact, they show that “actual” inflation is higher than what is claimed by the government

    Just different cases of extreme views.

  22. 22
    Ross Jordan says:

    By David Losh @ 18:

    The only guy here who got it right was sniglet. I had never considered deflation in my life until I read his stuff.

    I don’t think we’ve seen deflation since the beginning of the housing crisis. Sure inflation is lower, but its still positive. GDP growth was positive most of the time too – we did have a couple months of retraction … but we’ve had GDP growth for ~1yr. So that’s not deflation. And based on the race to devalue in Japan, US and Europe — I think it’s pretty unlikely we’ll see deflation going forward. I think they’ve finally found a way to push the yuan up – by devaluing the rest of the world.

  23. 23
    patient says:

    “Pretty much everyone on this blog figured out the housing bubble too. Doesnt make us geniuses.”

    No not even close but smarter than the brain trust at the Treasury, The fed, Goldman Sachs, Bear Sterns, Wachovia, Citi, Morgan Stanley, Lehman Bros, Bank of America, Wells Fargo and another couple of hundred banks. Pretty scary huh?

  24. 24
    wreckingbull says:

    RE: patient @ 23 – Don’t get me wrong. I absolutely enjoyed the Youtube videos of Schiff destroying REIC bimbos like Connie deGroot. I just think you have to look at his entire suite of predictions.

  25. 25
    Dirty_Renter says:

    Thanks for all your responses.
    I am no fan of Schiff but still laugh when I watch the video.
    The nut made great calls 06-08…in housing, equities & gold.

    And please folks…no more links from Mish, a civil engineer from my alma mater, who profusely writes about economics and banking, of which he knows very little. God bless the internet. Instead of taking coursework on the north end of campus, he should have sojourned south and communed with Julian Simon, Norton Bedford, and Stephen Sears.

  26. 26
    David Losh says:

    RE: deejayoh @ 21

    Geitner uttered the word deflation in is answers about quantitative easing. It makes no difference if it becomes a reality, it is now a part of our economic thinking. I’m saying in my life time it was never a consideration.

  27. 27
    wreckingbull says:

    RE: Dirty_Renter @ 25 – One of the most gifted software engineers I have ever known was a philosophy major. Another great one was a marketing major. I also have worked with those with an M.S. in Comp Sci who were worthless. While I value education, I find myself putting less and less stock in a piece of paper from an institution.

  28. 28
    Fran Tarkenton says:

    RE: ivan @ 20 – All that means is that for a lease >1 year, you need your written lease to be notarized. And, really, that’s only if you want to enforce it in court. No one is going to come kick you out of a rental /sua sponte/ because you’re in there on an oral 2-year lease.

    Disclaimer: I haven’t thought about this stuff in years. There’s definitely other people here who know more than me on this subject.

  29. 29

    By ivan @ 20:

    RE: D.G. @ 8
    Generally, residential leases in WA can’t be longer than one year:

    “RCW 59.18.210
    Tenancies from year to year except under written contract.

    Tenancies from year to year are hereby abolished except when the same are created by express written contract. Leases may be in writing or print, or partly in writing and partly in print, and shall be legal and valid for any term or period not exceeding one year, without acknowledgment, witnesses or seals.”

    If you need some low cost advice, try the Housing Justice Project through the King County Bar.

    That’s a rather bizarre statute. I’ve never seen something say a contract can be in writing or print or partly in writing and partly in print. :-D

    But I think you’re wrong as to the effect of the statute. I think it’s just saying that a lease longer than a year needs to be notarized (“acknowledged”).

  30. 30

    By Fran Tarkenton @ 28:

    RE: ivan @ 20 – No one is going to come kick you out of a rental /sua sponte/ because you’re in there on an oral 2-year lease..

    A buyer at a foreclosure sale might, although not “sua sponte.”

  31. 31

    […] Today’s Best Rental StrategiesBy The Tim on October 22, 2010 | Leave a responseA reader asked this question about strategies for today’s rental market:Alright experts, I was going to buy a house this […]

  32. 32

    […] Renter?By The Tim on November 4, 2010 | Leave a responseA reader asked a somewhat offbeat question a couple weeks ago that I think merits some futher discussion.My husband and I are leaving the state for work in the […]

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