patrick.net

Bruce,

The heavy-duty M+A private equity LBO type stuff reminds me of the 80's (think "Wall Street"), while the other stuff does seem more 70's.

Allman Bros, good. Bee Gees, or disco in general, not so good.

skibum,

I am SOOOO ready to watch KKR and gang to start squirming.

Bruce says: I’m getting that deja vu all over again feeling as well. Only, I think it’s actually 1970. Where are the Allman brothers?

Suddenly, and for a very brief moment, this whole situation seemed far cooler than it really was.

I am so ready for the paper pushers on the street who generate nothing but reap everything to go under.

Is Alan Parson's Project more 70s or 80s?

Is Alan Parson’s Project more 70s or 80s?

I'd say more 70's than 80's, but either way, they're lame.

eburbed Says:
Reminds me of union negotiations in New York.
Round 1 - FIGHT!
City Negotiator: You’ll get a 2% raise over the next 5 years.
Round 2 - STRIKE!
Round 3 - DENOUEMENT!
Union and City: We agreed on 5% a year raises for the next 5 years.
Union: We won! See? That’s why you should keep paying your union dues!

that's the whole point, the unions deliberately put out ambit claims that they know they probably won't get, then negotiate back, in order to at least maintain wage parity with inflation. it's a time-honoured strategy. note that the city was offering 2% total and the union ended up getting 5% x 5. that's the point. as long as the dues are not 4.5% of your wage, you're ahead, and hopefully keeping parity with real inflation. typical dues are about $10 a week, that's 1% of a wage...

a friend of mine in a non-unionised call centre (as they all are) ended up getting a $20 a month pay rise over 3 years. pretty scary stuff when real inflation is probably about 6-7% right now.

It is pretty hard for GM to compete with auto makers in countries where the work force all has nationalized health care.

Jimbo Says:
It is pretty hard for GM to compete with auto makers in countries where the work force all has nationalized health care.

Is this an ambit claim for Hilarised medicine? ;)

The thing is that nationalised medicine countries achieve the same result at approx half the cost per capita of the US system, and some of these countries have taxes no higher than the US to do it. Apparently nationalised medicine was attractive for GM placing plants in Canada (until they tried to shift them to Mexico). But these are multinationals who have factories around the world, in rich countries and poor -- not all have good medical systems necessarily, e.g. Mexico. The overarching factor is always to produce for less, altho Keynesian theory says that the more you offshore, the poorer your target consumers become also...

Ugly national existing sales numbers for August:

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1.psdAxTViI&refer=home

This is really before the credit crunch effect has had a significant impact...

SQT Says:
> My dad has been in the auto industry for 25+
> years and business has been crappy for years.
> He thinks the auto manufacturers are deliberately
> trying to break the unions.

While I'm sure that the big 3 want the unions to go away I don't think they have been working a plan over the last 20 years building ugly crappy cars that use a lot of gas just to break the unions...

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/09/25/BUKCS4NNB.DTL

Real estate blogger taps into bursting market bubble

@lunarpark,

Much thanks for the link! I can't believe some clown interviewed Patrick just to read him the riot act about his bearish web-site! Oh and the fact that he's WAY upside down on his home.

Skibum will be heartened to know that "McAlbatross" made the short list from our expansive glossary! Too funny.

Jimbo Says:
It is pretty hard for GM to compete with auto makers in countries where the work force all has nationalized health care.

I find that rather difficult to square that statement with the fact that the English automakers didn't do too well despite their workforce having NHS coverage. Building godawful crappy cars will kill a car company, even if their workers have taxpayer funded healthcare.

Socialized medicine is the answer to GM's problems? I think not.

SP

While I’m sure that the big 3 want the unions to go away I don’t think they have been working a plan over the last 20 years building ugly crappy cars that use a lot of gas just to break the unions…

Yeah, I'm not sure where the whole build a crappy car thing fits in.

lunarpark,
Thanks for the link. I wonder which of us is "Peter Christiansen"?

How do you like the counter point from yet another Realtor (tm):

"I laugh at bubble bloggers," said Matt Lanning, a Realtor with Zephyr Real Estate in San Francisco, whose sfhomeblog.com takes a considerably more upbeat view of the market. "I don't claim the world is always going to be stable, but there is no way the San Francisco market will collapse. It's a lot like the sensational journalism we're seeing with subprime mortgages which are far less of an issue than the media is making them out to be."

Yeah, great example of sensational journalism, saying the subprime crisis is overblown. Let's see, world-wide credit crunch, bank runs in the UK, RE market taking another huge hit, Fed forced to lower rates and increase inflation risk. Okay, I guess that was sensational journalism, you nimrod.

When I was in college many of my friends interned and others had full time job as engineers at GM in southern Ontario, most of them tell me it's the best place to draw a paycheck without doing anything. A friend of mine got hired as an engineer at GM and he drove his Nissan to work and was told to park at the visitor's lot. He quit after 2 months.

There are many foreign auto-makers that build cars here (albeit most of them are in the anti-union south), they seemed to do quite well. The fact is the big 3 only "know" how to make trucks and SUV's; everytime I go on vacation when I drive a domestic rental cars, they still seemed to be of really poor quality.

"The MEDIA have OVERBLOWN the subprime crisis."

Translated from REICSpeak:

"We absolutely adored the media when they unquestioningly reported ten and twenty percent year-over-year gains in the median house prices. Now that the party is over, and we're all drunk, we're pissed that the media won't give us our car keys back."

"I can’t believe some clown interviewed Patrick just to read him the riot act about his bearish web-site!"

I know! That is just crazy!!!

“I laugh at bubble bloggers,”

Laugh away man, laugh away...

What is the starting wage of a GM employee nowadays? What about the guy who can put the right size nut on the right sized bolt (a skilled worker)?

Remember the gov takeover of airline pensions a while back? The major air carriers had granted heavy compensation packages that were unsupportable in the long run. Therefore, when the bills came due on the pensions, the gov insurance came into play. And like the UAW, the retired pilots were looking for public sympathy. That sympathy dried up when the actual numbers came out, when it was made public that the pilots were expecting in excess of $100,000 per year pension.

Public familiarity with GM pay scales may elicit more a "stop crying and get back to work" than any form of sympathy.

“I laugh at bubble bloggers,”

After you settle down from the knee-slapping belly laughing, are you going to go out and purchase a new residence or investment property?

Gee, why not?

The article (thanks lunapark) does point out one important fact. This community is oriented towards value investing.

I am surprised by the positive tone of the articles towards us. But I feel less important now. We are no longer causing the bubble to burst ? We are just skeptics ? Not gloom and doom guys who want the world to go down in flames ? How dare they call us realists !

@skibum,

If Mr. Lanning finds Patrick so "unbalanced" in his approach to covering the bubble I suppose he won't mind if we post at sfhomeblog.com?

Yeah, fat chance of THAT happening? Well actually two chances, Slim and None (and Slim just left town).

StuckinBA,

I don't "feel" marginalized by... any level of mainstream acceptance. And more than just saying "we're a value crowd" I think it goes further than that. I mean so many of the phrases Diana Olick and others have "grafted" from here speak more to "the investment has to make sense" than anything!

Loans that make sense.

Price to Rent ratios that make sense.

Price to Income ratios that make sense.

Appraisal and lending standards that make sense.

If it were just about "value investing" the ING conf. call is starting in about 45 minutes!

Is Alan Parson’s Project more 70s or 80s?
Wasn't "Eye in the Sky" about the Fed chairman?

DinOR :

Yes, it is more than value investing. More like rational investing.

I was only kidding about feeling less important. I am so used to being hated that I cannot even tolerate an ounce of love !

StuckinBA,

Good points. I couldn't care less about gettin' love (especially the REIC kind) or that I've been so hated for so long? What we WOULD like credit for, is being RIGHT!

Where does Matt Lanning come off saying "Patrick hasn't been right about anything"? Come again? What *haven't* we been right about? In some cases our predictions haven't been dire enough!

How about a new thread? I have always wanted to have a discussion about a Real Estate discontinuity. Something that fundamentally changes the market. It has been a theory of mine that most people in the Bay Area hate the congestion and high housing prices. Given the chance to live close enough to the Bay Area to get access to entertainment, dining, and culture but far enough to pay reasonable prices for housing and eliminate traffic, that many would opt out to areas like Napa. Telecommuting and the virtual office should make this possible. Stubbornly this has not happened. Ideas?

Case-Shiller Index numbers came out today. To sum up Robert Shiller's comments: the last time it was worse than this was 1991 and declines are accelerating. Other highlights, Miami, which had the highest index at one point, just passed LA on the way down. Will be interesting to see if Cleveland and Detroit have turned a corner or if they have more to fall (both are under 120). Stumptown is still positive, but the SF Bay Area fell 0.4% from June to July. I think I would sell my depreciating asset if it wasn't my home....

@DinOR,

Thanks for the "McAlbatross" (tm) props. It sure looks like I'm going to get a ton of mileage outta that one!

It is pretty hard for GM to compete with auto makers in countries where the work force all has nationalized health care.

I will buy a Cadillac if my wife allows.

American cars are not that bad.

Case-Shiller always provides a treasure trove of material. Futures are now trading up to four years out. The crystal ball shows a 24% decline in the SF Bay Area (SF, San Mateo, Marin, Alameda, and CC counties). Throw in some inflation and you have about a 36-40% decline in the next four years. Ay caramba! Here is a link to the entry on Socketsite. I know that this shouldn't be shocking (as I carry around Randy's Shiller graph in my wallet), but it always throws me for a loop to see the financial markets in action.

American cars are not that bad.

Completely disagree. You must not use rental cars very much. Unless US automakers ship off the bottom of the barrel to the rental companies, the US cars I've driven consistently suck. Crummy engines, mediocre mileage, chintzy interiors, horrible ergonomics. The list goes on and on. The "best" US car we've rented was a Jeep Cherokee in Salt Lake City - even that was crappy.

Duke,

O.K. I'm a sport. I already telecommute (Portland area) but why stop there! If I "could" I'd have a NV address and a (702) number!

@skibum,

What made it more credible is that Carolyn Said had free run of the entire glossary yet managed to select the very definitions I would have my damn self!

Serial re-fi, loanowner, all the ones that are the most pivotal in understanding our position!

Mark Wolfe, the group’s executive director, called on the Bush administration to immediately release money from the government’s Low Income Home Energy Program, commonly known as LIHEAP, to help poor families pay their heating bills as well as cover past-due high cooling bills from the summer.

This drives me crazy. When my family could not afford to heat our house, we did not heat it. We have never cooled our house. It is maddening that we subsidize everything.

You must not use rental cars very much.

We rented a town car on our Sedona trip. It was not too bad. It even had parking sensors. :)

This drives me crazy.

Ron Paul. Ron Paul. Ron Paul.

DinOR :

She even included a link to the complete glossary ! So people can even find NAAVLP in there.

And yes, "Loanowner" really captures it well.

As an aside, the link is for an old thread (no 63) when MarinaPrime was in full form. He turned out wrong about so many things. Did Peter P or HARM get their sushi for winning the bets ?

I miss MarinaPrime. He should get a troll award.

I used to be a proud advocate for GM. I proudly boasted about my Chevy Monte Carlo. Andi criticized those that drove foreign cars. Well when she hit 100k, you wouldnt want this car if I gave it to you. Everything was breaking. Pops who drove a Nissan after decades of GM product, warned me. Now drive German. I am so impressed I feel like a sucker for buying into the "Buy American" jingoism. This has an exponential characteristic because now I seek out European manufacturers for all of my prospective purchases. If I cant trust the great American GM product, what American product can I trust?