patrick.net

I think I out did myslef. Is there some kind of length limit, or what? I'll try to break up, so that I can set this board straight with the TRUTH!

Reginald: This is relevant to the housing discussion for a number of reasons:

1.Economic historians leverage knowledge of the past to understand current macro-economic events. The HB is certainly driven in part by international trade. For example, Chinese and greater asian mercantilsm drives the credit bubbles causing greenspan's conundrum. US industrialization leading the civil is the model that all national industrialization programs have followed. The Chinese approach has striking differences, actually. But they started from an understanding of the US experience and modified it from there.

2 Much like the cycle creating hurricanes in the gulf for the next ten years, there are economic/political cycles that last 150 years. Economic cycles and cycles of Nationalistic tension run in paralell. Today's polarized political environment can unly be understood in the context of the previous cycle that got us here. Also, you can't understand the motivation of the Red states without understanding their view of US history.

3. Many people have asked what to do with their money while they are bubble sitting. They are going to have to worry about inflation, currency value, and the stability of the US financial system. Rmember, the US dollar is a faith based currency; It isn't worth the paper that it is printed on. Politics and stability determine the value of the dollar.

4. The rise of red state political/economic power is key to understanding the future. Also, the political implications of increased housing stock are significant. The houses will still be there.

In particular, the blue states have built much affordable housing for the red states for free. The red states will use that advantage to steal jobs and educated workers from blue states. That will go into a feedback loop that will crush the economies of the Blue states, which is BAD FOR HOUSING PRICES.

DeoVindice,

I can't argue about the international contribution to the housing bubble --specifically that the huge quantities of bonds and MBS paper purchased by our asian "friends" keeping long rates low, despite Mr. Greenspan's recent rate hikes. Of course, it was AG's original rate cuts and the GSEs that really got the ball rolling in the first place. We can't blame China for that.

As far as viewing the housing bubble as something deliberately created by "Red" states as a way to even the score over the Civil War or Culture War, etc., I'm less than convinced. Housing stock has definitely increased in so-called "Red" states, but they have also increased dramatically in "Blue" states. Plus, there's no evidence that this asset bubble (or any previous bubble) is anything more than the unintended consequence of greed, easy credit and poor government policy.

Let's also keep in mind that all states have a mix of conservative, liberal & moderate voters, and even the "reddest" or "bluest" states have a significant percentage of "other" voters. I tend to think that the whole Red/Blue state thing oversimplifies and overstates the actual degree of difference.

If some red states use the advantage to steal jobs and educated workers from blue states, I say more power to 'em. Heck, I may even join 'em. This would accelerate the unwinding of this bubble, which in my mind is a good thing for families and responsible savers.

I’ve been following this listing on craiglist. The price has been reduced twice (that I know of) and now they’re listing it as a lease option.

Lease for $2100? Who is going to rent that? It does not even have graniteel, although it does have wood floor.

I give up. My shit ain't going through........

Good night!

we have TODAY (hurry, these offers will expire TONIGHT) :

$458,000.00 at a 3.27,% fixed-rate
$389,000.00 at a 3.68,% variable-rate
$478,000.00 at a 3.99,% interest-only
$288,000.00 at a 3.10,% fixed-rate
$147,000.00 at a 3.85,% variable-rate

Clearly introduction rates. Why would anyone lend to a sheep at 3.27% when they can lend to the government at 4.3%?

I give up. My shit ain’t going through……..

Try putting it on a website and post a link. That should work if you shrink the url with tinyurl.

Plus, who the hell would lease option anything in a declining market, granishcmeel or not? That pilgrim would love to lock in todays price on that bitch and start collecting rent.

Lease options are complex arrangements. I bet most people do not understand options when they enter into such agreements. Many will face reality. :-P

Welcome back, Mr. Up. How is the weather down there? Have you seen surfer-x lately? :)

And many will get their faces ripped off by it as well.

Faceless reality? :)

PolishKnight,

God love you good sir!

Your comments are very much at the core of this issue. We took the low road every step of the way. Should we,

Stimulate the economy through investment in cap. ex. to assure our leadership role in the global economy? (High Road) or

Spend our weekends at Home Despot (TM) mimicking what we say during weeknights on Trading Spaces? (low road)

Should we,

Confront our economic and tax policies? (High Road) or

Shop for a ridiculously priced RV? (low road)

I won't beat it to death but you get the idea! Whenever we've been confronted with chioces over the last several years we've plunged headlong towards the low road. Now that our very currency is in peril we're out of low roads to take. Bulls like to point out that the FED could lower rates if their precious bubble deflates too quickly and I suppose that might be an option as long as you don't mind paying $5.75 for a gallon of gas!

Hey, you guys ever hear the term "7 sigma events"? It's what I've been going on about. It says that weird shit happens. I am convinced that we are going to see some things that are years in the making, and it will catch most people off guard. I think that debating whether or not there is a housing bubble is now a moot point. I also enjoy the Schadenfreude of hearing about greedy homebuyers getting their due will partially mitigate the total collapse of the global financial system.

I think in the end, people are going to properly forecast the collapse of this bubble, because they won't have the guts to make dire enough predictions.

Anyone ever have trouble posting with the copy paste method from word? Am I doing something wrong? The world needs to see my masterwork.......and it's never too early to start looking at the end game.

People, please consider the purchase of some firearms. BTW, San Francisco does not have the power to suspend the second amendment. I'm waiting for some patriot who lives in SF to go after those fascists.

Hey, you guys ever hear the term “7 sigma events”?

I was predicting a 10-sigma event for October but it did not happen. :(

Perhaps a tsunami on the west coast?

One created by eco-terrorists to show that "global warming" is real? :)

RE: yield-curve inversion

I remember that when the yield-curve was last inverted in 2000, so many people were discussing why it would not matter.

From Ben's blog:

"Although house prices are down about 10 percent from July’s peak, MAR President David Wluka isn’t alarmed. 'This is not a harbinger of anything I see other than a return to normalcy,' he said."

I also remember hearing "a return to normalcy" in year 2000. :)

I guess a crash is a normal event.

Its interesting that George Bush seemed to really hold the Torch for Home Ownership- I think I heard him 2-3 times talking about how great times were and referring to how many % of americans were proud home-owners. He was really doing a Sales Pithc for people to buy homes.

Homeownership is a good thing. However, entry point is very important. I doubt many people would prefer to be renters regardless of market conditions.

The Term Ownership doesn’t really exist… Never Really has..
It really just different Level Of Control..

It is also a way to manipulate emoticons.

emoticons -> emotions :)

emoticons -> emotions ~No Big Deal its Called Fingers one finger typing faster than the other.. or hitting the wrong key- I’m plagued with it~!!

Or "fat-finger risk"?

http://tinyurl.com/c42yq

It can cost hundreds of millions. :)

I Wouldn’t be the one to write the book I would have to get someone to write it for me. My talent doesn’t apply toward writing.

Jamie or SQT may be able to help.

MAYBE FAT FINGERS ARE MY PROBLEM…. 5 Feet 8-9 and size 12 Shoes and FAT FAT FINGERS Myself to match my Shoe Size.

It is not literal. :)

No, but I’ll bet he’s dropped some of his hard earned in one of my businesses.

extremely doubtful, a true 10 sigma event. I don't spend any money in SLO, and if you're one of the fucks that owns CCS, given the recent surfboard price gouging, I won't even buy a bar of wax from them. Panchos just got 650 from me for a 9'6" stewart hydrohull though.

Besides I thought your business was selling bullhorns so you and your piece of shit yuppie friends can laugh more effectively at all the lower class servants.

So what are you guys’ New Year’s resolutions?

Probably a little more work, a bit less internet.
Especially today--we're cleaning up from a nasty storm.
4 foot of water rushed through downtown San Anselmo.
Lucky we're located on a hill (but just 20ft above sea level)

I bet Jack's out there cleaning up as well.
Spending New Year's in Sonoma, that is...if Russian River doesn't wash us away.

Another storm due tonight before dawn though, so I may still be in for a three sigma event before its all over. Thanks and hope you have a Happy New Year in Sonoma!

Thanks, Jack! Have a great (and hopefully drier) New Years everyone!

Local Bay Area bloggers: be on the watch for driving hazards tonight, such as news trucks and reporters clogging areas of local flooding.