Groundhog Day Open Thread (2011-02-02)

Here is your open thread for the mid-week on February 2nd, 2011. 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
    softwarengineer says:

    A Good Reason for Mortgage Rates Going Up

    I read an interesting blog this morning:

    “,,,The fascist Federal Reserve (along with Wall Street) is trapped. Either continue to run cheap money policy to inflate everything to the moon and see what happens inevitably (see Tunisia, Egypt for further details …) OR raise interest rates like other emerging markets now and bust up the levered, historically debt ridden economy and eventually engender more debt based bankrupt entities ranging from investment banks, commercial banks, big and small business etc….

    Wealth is not created from debt. THINK ABOUT IT UNCLE BEN….”

    http://finance.yahoo.com/news/China-to-raise-interest-rates-rb-3534901297.html?x=0&sec=topStories&pos=6&asset=&ccode=

    I’d add to the blogger’s comments that savings wealth of $400/mo at 0.5% MM for each million invested makes 401Ks a complete joke.

  2. 2
    calvis says:

    Happy Groundhog Day Everyone!

    I recently got a card from an agent that I used 11 years ago when I first moved to Redmond. At the time she was working for Windermere and I found her on the Internet as I was located in another state. I basically found the property myself and she facilitated the sale. At the time it was her biggest sale of her career. Her last gig was at ZipRealty.

    Actually I don’t why she sent this note to me because she knows that my wife is an agent (the wife says the test was easy) and we use to be friends on Facebook, but she defriended me for some reason. That alone is enough for me not to do business with her.

    But the card does give some insight of the current state of the real estate industry.

    And it goes as follows:

    “So over a cup of coffee…can we talk? ZipRealty has made many
    corporate announcements of late. Agents recently lost all benefits.
    11 districts are closing, the website is now leased to outside
    agents in Atlanta, and agent compensation has been reduced.
    I believe Zip has a great website, but I believe it’s time for
    me to make a change.

    Going forward. I am excited to announce my new association
    with Keller Williams Real Estate! The focus there includes
    great technology, top customer service, experienced full-time
    agents and to top it off. I’m joining just in time to attend
    their annual conference in Anaheim where I hear
    they have an external weather feature called ‘sun’ which I’am
    looking forward to experiencing…

    I hope it’s okay if I follow up later with more info and a
    business card, in case there’s someone you know who would
    benefit from my services. With my new team, there will be
    even better resources for both buyers and sellers! As always,
    your referrals will be greatly appreciated and well taken care of!”

  3. 3
    redmondjp says:

    mm pa pah, mm pa pah, mm pa pah, “I got you babe . . . ”

    Anybody else hear that song on the radio this morning?

  4. 4
    pfft says:

    By softwarengineer @ 1:

    A Good Reason for Mortgage Rates Going Up

    I read an interesting blog this morning:

    “,,,The fascist Federal Reserve (along with Wall Street) is trapped. Either continue to run cheap money policy to inflate everything to the moon and see what happens inevitably (see Tunisia, Egypt for further details …) OR raise interest rates like other emerging markets now and bust up the levered, historically debt ridden economy and eventually engender more debt based bankrupt entities ranging from investment banks, commercial banks, big and small business etc….

    Wealth is not created from debt. THINK ABOUT IT UNCLE BEN….”

    http://finance.yahoo.com/news/China-to-raise-interest-rates-rb-3534901297.html?x=0&sec=topStories&pos=6&asset=&ccode=

    I’d add to the blogger’s comments that savings wealth of $400/mo at 0.5% MM for each million invested makes 401Ks a complete joke.

    commodities aren’t going up just because of the Fed. we’ve got supply problems(in part because of climate change) and the emerging economies are booming. the Fed doesn’t set monetary policy for emerging markets.

  5. 5

    RE: calvis @ 2 – It’s odd she even considers her firm’s website to be a consideration. Consumers have almost no loyalty to the firm that hosts the website they use. When we moved offices two years ago that wasn’t even a factor. The web isn’t totally irrelevant, however. When we moved having an office that automatically fed listings to Realtor.com was, and was one of the primary reasons for our move (besides being closer to home).

  6. 6
  7. 7
    calvis says:

    RE: Kary L. Krismer @ 5

    Yeah, I thought that was kind of odd as well.

  8. 8
    pfft says:

    By Dirty Renter @ 6:

    A good read:
    http://blogs.wsj.com/deals/2011/02/02/bill-gross-this-is-not-gods-work/?mod=yahoo_hs

    central bankers don’t keep rates low. the market does. the fed just follows the market.

    rates are low because at the same time that people are pouring money into bonds and savings banks are reluctant to lend and borrowers are reluctant to borrow. there is no competition for loans that would drive up rates.

    gross wasn’t complaining when the government made his day the best day ever.

    Bill Gross’s Best Day Ever
    http://money.usnews.com/money/blogs/the-ticker/2008/9/9/bill-grosss-best-day-ever.html

  9. 9
    Blake says:

    RE: pfft @ 8
    pft at #4: “commodities aren’t going up just because of the Fed. … the Fed doesn’t set monetary policy for emerging markets.”
    >> Hey dough head… Commodities are priced and traded in US $s… just where do you think those come from?? Back in the late 60s were we exporting our inflation – LBJ’s guns AND butter policies. But back then then the French and others could cash in their dollars for gold, and they did til Nixon closed the gold window. Today them foreigners get to choose: buy US bonds, stocks, US real estate… or commodities…??

    pft at #8: “central bankers don’t keep rates low. the market does. the fed just follows the market.”
    >> Sure… and I bet if the Fed would raise rates 1 1/4% next month the market would not “follow??”
    pfft!

    Bill Gross: “As a profession we have failed miserably at our primary function – the efficient and productive allocation of capital.”

    ‘nuf said… $7 trillion dollar hole… yet on Wall Street the party goes on (like it’s 1999)!??

  10. 10
    Scotsman says:

    RE: Blake @ 9

    “central bankers don’t keep rates low. the market does. the fed just follows the market.”

    I agree with your correction- in the good old days this was probably true, but now that the Fed IS the market to a previously unimaginable extent it no longer holds. When the Fed steps in with 10% of GDP in its’ hip pocket to buy bonds it clearly moves the market, at least for a period. There’s more to it than that, of course, but I couldn’t help responding.

  11. 11
    David Losh says:

    RE: pfft @ 4

    You have to be a contrived responder. No one could be so contradictory for no reason, with no point.

    In food, both wheat, and rice are rising. The climate change argument goes only so far. Then when you step back all commodity prices are rising. That’s not a market place.

  12. 12

    By David Losh @ 11:

    In food, both wheat, and rice are rising. The climate change argument goes only so far. Then when you step back all commodity prices are rising. That’s not a market place.

    Why not? Do you deny that when crops are poor prices will rise?

  13. 13

    As noted in another thread, the NWMLS numbers are out. The median is a new recent low, barely. The mean is also a new recent low, but a good amount. Volume is slightly above last year, which I think was during a tax credit period. The median pendings is very low!

  14. 14

    RE: Kary L. Krismer @ 13 – That should have read that the mean is a recent low, by a good amount.

  15. 15

    RE: pfft @ 4

    Climate Change Pfft?

    http://news.yahoo.com/s/ap/20110203/ap_on_re_us/us_winter_weather

    At least the Seattle December Puget Power Bill said our colder winter this year the MSM predicted was all hogwash….we were 5 degrees warmer this winter than last year.

  16. 16
    Dawn Glover says:

    On RainCityGuide I have been commenting on a piece about voting if a homeowner is a miserable deadbeat or nice person for walking away from mortgage. I found the article to be baited considering the author is a Lawyer who is counselling such situations. It would really be interesting if more people joined the discussion

  17. 17
    David Losh says:

    RE: Kary L. Krismer @ 12

    Two sets of climates.

  18. 18
    Ben says:

    RE: Dawn Glover @ 16 – I think it is situational. I have serious and righteous anger for serial refinancers who are underwater after purposly pulling out as much “equity” as lenders were willing to lend to live the high life.

    On the flip side, I have much sympathy for those who lost their jobs or fell prey to bubble financing that was pushed on them by many mortgage brokers and lenders.

    People that fall in between? It’s a business decision.

  19. 19
    pfft says:

    By Blake @ 9:

    RE: pfft @ 8
    pft at #4: “commodities arenâ��t going up just because of the Fed. … the Fed doesnâ��t set monetary policy for emerging markets.”
    >> Hey dough head… Commodities are priced and traded in US $s… just where do you think those come from?? Back in the late 60s were we exporting our inflation – LBJ’s guns AND butter policies. But back then then the French and others could cash in their dollars for gold, and they did til Nixon closed the gold window. Today them foreigners get to choose: buy US bonds, stocks, US real estate… or commodities…??

    pft at #8: “central bankers donâ��t keep rates low. the market does. the fed just follows the market.”
    >> Sure… and I bet if the Fed would raise rates 1 1/4% next month the market would not “follow??”
    pfft!

    Bill Gross: “As a profession we have failed miserably at our primary function â�� the efficient and productive allocation of capital.”

    ‘nuf said… $7 trillion dollar hole… yet on Wall Street the party goes on (like it’s 1999)!??

    commodities are going up because of supply and demand. climate change and the weather are another.

    news flash. when the dollar goes down another currency rises.

    the US can’t raise rates because of inflation in another country. that would make no sense.

  20. 20
    pfft says:

    By softwarengineer @ 15:

    RE: pfft @ 4

    Climate Change Pfft?

    http://news.yahoo.com/s/ap/20110203/ap_on_re_us/us_winter_weather

    At least the Seattle December Puget Power Bill said our colder winter this year the MSM predicted was all hogwash….we were 5 degrees warmer this winter than last year.

    yes climate change. it was the hottest year on record. EVER.

  21. 21
    pfft says:

    By Scotsman @ 10:

    RE: Blake @ 9

    �central bankers don�t keep rates low. the market does. the fed just follows the market.�

    I agree with your correction- in the good old days this was probably true, but now that the Fed IS the market to a previously unimaginable extent it no longer holds. When the Fed steps in with 10% of GDP in its’ hip pocket to buy bonds it clearly moves the market, at least for a period. There’s more to it than that, of course, but I couldn’t help responding.

    10% of GDP?

  22. 22
    pfft says:

    after doing some research, meaning I went on wikipedia, it seems that egypt has a semi-floating currency, has a lot of fuel subsidies which seem to be receding and they have high inflation. the US can’t do anything about that. from what I gathered egyptian interest rates are at 10%. there isn’t much the US can do. bernanke could raise rates because of inflation in egypt but that would make as much sense egypt lowering rates because of low inflation and high unemployment in the US.

    the US can’t set monetary policy for every country.

  23. 23
    Blake says:

    RE: pfft @ 22
    Egypt imports 40% of it’s grain now… they must pay for these imports (and oil imports) with US$s.

    >> “when the dollar goes down another currency rises.”
    ?? Egypt – like many countries – tries to keep it’s currency pegged to the dollar.

    … oh why bother…??

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