patrick.net

bmwman91 says

What Would You Do If Nothing Changed?

Well,nothing is permanent, it has to change. I am saying it is gonna get worse.

Dan8267 says

Travis Bickle says

If it continues for that long and nothing changes, I'll go ex-pat and run for the exits.

I just moved back to the States from Vancouver. By comparison, it makes even San Francisco look like a super bargain. Patrick posted an Economist article yesterday that basically stated that US real estate is under priced. Many countries are still way overpriced. I highly recommend you read it. These were the same guys who predicted this housing crash and seem to have excellent assessments of the global economy.

Ditto. If we are priced out forever, then we'll go to another market. Our savings would go far in other countries.

I'm answering my own questions. It is pretty pathetic that after two years, I find one, probably over priced property with a few good qualities, such as location within the city, access to transportation, and importantly business centers with at least (hopefully) job prospects. Basically, I would have to accept the possibility I would have a low interest payment, but underwater..

US empire is on the verge of collapse. How can things not change? This is gross violation of natural laws of economics.

http://research.stlouisfed.org/fred2/graph/?id=GFDEBTN

Bluedistantstar says:

"It's not greedy to want to make the right financial decision for yourself..."

a lot of people are telling me to buy right now (especially people who have recently bought), but i'm holding out for something better. i'm being greedy.

greed...is good.

The Iranians need a Tea party movement.... To the Victors belong the Gullible. Too also I think the Federal Reserve corp. Empire could be failing. No one wants to think it. Could it be true. Only a few hundred years of paper. Before that.....

AdamCarollaFan says

Bluedistantstar says:

"It's not greedy to want to make the right financial decision for yourself..."

a lot of people are telling me to buy right now (especially people who have recently bought), but i'm holding out for something better. i'm being greedy.

greed...is good.

what if prices are flat for the next 20 years?

@toothfairy

ceteris paribus, i'd either choose 1 of two options:

a. rent as cheap as I could, or
b. buy a little bungalow that fits my needs

after a year or two of option a, i'd probably choose option b.

bubblesitter says

How can things not change? This is gross violation of natural laws of economics.

http://research.stlouisfed.org/fred2/graph/?id=GFDEBTN

That's only one part in isolation.

Looking at the whole picture:

http://research.stlouisfed.org/fred2/series/TCMDO

we can see a Great Flattening.

Clearly what's happening is private sphere is deleveraging while the public sphere is getting loaded up on debt.

Graphing by component:

http://research.stlouisfed.org/fred2/graph/?g=3BP

one can see Big Finance (yellow) defaulting on debt, households (red) in the penalty box, and corporations (green) slowly adding debt.

The Feds (blue) are the ones carrying the debt ball forward now.

My favorite is the SWIFFY SWIFFER. Right round the Iraq incursion. They started selling SWIFFY SWIFFERS. No one really needed a SWIFFY SWIFFER. I started having nightmares of being assualted with a swiffer. I even married a swiffer in one dream.

I tried to figure out why Chase Manhattan would even want to sell swiffers. One of my tenants had one. I tried it out. Hey slick but damn do they have to run that commercial 300 times a day? I was being nice. Of course. I really had doubts about anyone really wanting a swiffer. It was ok. Nothing a mop couldn't do of course with some lemmon i guess.

Think of all the people it employ's someone was thinking. Yea and think of all the half filled boxes of cookies and same of bags of potato chips. My silent question was does ripping your neighbor off constitute an honest jobbie. More often than not it may not.

So America needs SWIFFERS. BADLY. Dunking dognuts and Starbucks the place to meet. I prefer a good church to meet. I have met more people at church than anywhere or a mosque. True you have to put up with the religous bullshit. But hey its a good place to get free liquor and find a fun girl. Not trying to scare anyone but you just may be on track. Anyway. Here is my offering to the great state of California and its way hip people.

ArtimusMaxtor says

o America needs SWIFFERS. BADLY. Dunking dognuts and Starbucks the place to meet. I prefer a good church to meet. I have met more people at church than anywhere or a mosque. True you have to put up with the religous bullshit. But hey its a good place to get free liquor and find a fun girl. Not trying to scare anyone but you just may be on track. Anyway. Here is my offering to the great state of California and its way hip people.

SWIFFER is not a all together bad deal Art but you gonna want to wash what ever it is you are swiffing with a real good scrub at some later point. ok. it is just a fast job for suprise company or if you in a hurry.

Lemon does a good job.

I watched them take out the Occupy in LA. Hippies used to have problems gathering. The way they used to do things? They would line the streets. Outside of clubs. Not going in all that much but going in. Then when it came time to march they would gather. There was way to many out lining the streets. Smoking weed, talking, drinking, sleeping in various places.

In many cases the entire city was filled with them crashing together in apt buildings. Sometimes as many as 15 in one apartment. Was far to spread out to manage. It took them 6 years to get rid of them all after Vietnam. It was a real pain. In came ole slick Jimmy Carter of grecian formula fame. He had a lot of people fooled me included. I watched a film called Gumball Rally the other night. There it was kind of transparent in many respects.

Everyone thought he was something else. Nothing more than Plato with grey hair and a practiced smile. Obomber calmed the world down. Seems to go that way when we are in deep shit with the rest of the world. The system gave itself away this time. Too juicy a target I guess. Plus we owe the debt merchants for military equipment. Leases on our battleships from England. Also mostly everything else of asset.

Some people also don't realize how far other countries will go for the debt merchants. Sometimes just for a slice of the pie. I demonstrated how Iraq was sliced up and given away. Makes me wonder about the carving up of Afganistan. A taken peoples don't have much choice.

Here we sit as fools. Not knowing a GD thing or able to do anything about it. You pile the no nothings and too afraid to say on us. The war buzzards that try to hustle us. That don't have enough sense to figure out all their people are in debt. But hey isn't war great and aren't we having fun as a gang? Look at all this great stuff. We don't really own shit. But its great to look at.

I look at the songs of the Vietnam era. I came to the realization they were nothing more than the debt merchants having fun with youth and love. Things like: say you want a revolution. Don't you want somebody to love? The songs contained nothing of revolution for the most part. Just the things of love. Some of lifestyle. Arlo Guthries: Coming into Los Angeles. Which the police might love. Police work can be big business too. I guess.

"Coming in from London from over the pole
Flying in a big airliner"

Dan8267 says

Travis Bickle says

If it continues for that long and nothing changes, I'll go ex-pat and run for the exits.

Ditto. If we are priced out forever, then we'll go to another market. Our savings would go far in other countries.

+1

This is very good question. I'm beginning to sense that there won't be any
change in our financial system. They want to show nothing is wrong with
the system despite a few hiccups.

US might rhyme similar to Japan of last 20 years. Maybe housing/stock
market won't be as depressed as Japan's lost decades. But we will pay
other ways.

I'm uncertain as other people but I think I'll do following
1. I will stay invested in assets(house, stock etc) but don't expect high
return and be aware I am paying much higher price than it looks.
2. Hedge inflation: invest in some commodities but fight daily inflation.
3. Forget social security/medicare and prepare retirement by myself.

Plus if conservatives succeed in hand waving away the two trillion plus in FICA over contributions, St. Reagan will have really raised taxes on the middle quintiles.

The Economic Recovery Tax Act of 1981

Summary of provisions

The Office of Tax Analysis of the United States Department of the Treasury summarized the tax changes as follows[2]:

phased-in 23% cut in individual tax rates over 3 years; top rate dropped from 70% to 50%
accelerated depreciation deductions; replaced depreciation system with ACRS
indexed individual income tax parameters (beginning in 1985)
created 10% exclusion on income for two-earner married couples ($3,000 cap)
phased-in increase in estate tax exemption from $175,625 to $600,000 in 1987
reduced windfall profit taxes
allowed all working taxpayers to establish IRAs
expanded provisions for employee stock ownership plans (ESOPs)
replaced $200 interest exclusion with 15% net interest exclusion ($900 cap) (begin in 1985)

How did I miss this thread?

thomas.wong1986 says

Real Reagan Economic Record: Responsible and Successful Fiscal Policy

pretty sad you've gotta link to a right-wing propaganda mill to make your point, thomas.

Whatever our economy accomplished during the 1980s, it was built on an s-curve of leverage:

http://research.stlouisfed.org/fred2/graph/?g=3CQ

It might have been "successful", but it wasn't responsible. Something was certainly rotten in the state of Denmark when I was coming out of college in the early 1990s, and frankly I have yet to really undertand what really underpinned the recovery of the mid-1990s.

One thing that did get rolling in the mid-1990s was the return of leverage in the financial sector:

http://research.stlouisfed.org/fred2/graph/?g=3CS

shows how annual debt take-on in Big Finance went to over 5% of GDP in the mid-1990s.

Additionally, the yuan rate was lowered dramatically prior to 1995:

http://research.stlouisfed.org/fred2/series/AEXCHUS

That's part of the story but I haven't worked it all out yet.

Maybe it was the return of the Baby Boom too that got the economy rolling again. They were aged 34 to 49 in 1995. Or maybe it was all the $1 gasoline, that was great. Plus Windows 95 and the dotcom revolution, that didn't hurt either.

thomas.wong1986 says

The Economic Recovery Tax Act of 1981

which was followed by a tax rise:

" One year after his massive tax cut, Reagan agreed to a tax increase to reduce the deficit that restored fully one-third of the previous year's reduction. "

http://www.washingtonmonthly.com/features/2001/0301.green.html

Bellingham Bill says

which was followed by a tax rise:

You mean consolidated 15 to 4 tax rate brackets. Similar to what we have today.

http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986

Income tax rates

The top tax rate was lowered from 50% to 28% while the bottom rate was raised from 11% to 15%. Many lower level tax brackets were consolidated, and the upper income level of the bottom rate (married filing jointly) was increased from $5,720/year to $29,750/year. This package ultimately consolidated tax brackets from fifteen levels of income to four levels of income.[1] This would be the only time in the history of the U.S. income tax (which dates back to the passage of the Revenue Act of 1862) that the top rate was reduced and the bottom rate increased concomitantly. In addition, capital gains faced the same tax rate as ordinary income.

The rate structure also maintained a novel "bubble rate." The rates were not 15%/28%, as widely reported. Rather, the rates were 15%/28%/33%/28%. The "bubble rate" of 33% simply elevated the 15% rate to 28% for higher-income taxpayers. As a result, for taxpayers after a certain income level, TRA86 provided a flat tax of 28%. This was jettisoned in the Omnibus Budget Reconciliation Act of 1990, otherwise known as the "Bush tax increase", which violated his Taxpayer Protection Pledge.

thomas.wong1986 says

It just kills you, that Reagan has outclassed many far and wide margin.

Reagan was a clown, but yes, it kills me that so many retards in this country idolize his administration.

Bellingham Bill says

It might have been "successful", but it wasn't responsible. Something was certainly rotten in the state of Denmark when I was coming out of college in the early 1990s, and frankly I have yet to really undertand what really underpinned the recovery of the mid-1990s.

Think back 10-12 years prior to you coming out of college. Well it sure was rotten in the US when Carter was in office.

Bellingham Bill says

Reagan was a clown, but yes, it kills me that so many retards in this country idolize his administration.

Maybe ... they were right and you were wrong.

thomas.wong1986 says

they were right and you were wrong.

if by 'right' you mean looting my country, then yes, conservatives were right.

So much misinvestment and disinvestment started in the 1980s, eg. the reversion to Vietnam-level defense spending:

http://research.stlouisfed.org/fred2/graph/?g=3Du

It was the beginning of the unravelling.

In 2005 dollars, we have spent $16T on defense since FY82, $500B per year, $4000 per household per year suck of wealth.

thomas.wong1986 says

Libs... I guess you prefer Mondale ?

you guys are that old? :)

thomas.wong1986 says

The Economic Recovery Tax Act of 1981

Reagan had multiple tax laws passed -- the 1981 one is the main one where taxes went way down, but look at his tax laws from 1982 and 1984, for example, to see where these cuts were pared way back. Then look at 1983 when payroll taxes were hiked for Social Security and Medicare. The 1986 tax reform was intended to be revenue neutral, but generally served to raise taxes on the rich a bit by cutting deductions/exemptions that largely benefited the rich. Overall taxes during the Reagan era matched the 40-year average, and overall spending was noticeably higher than the 40-year average because Reagan thought deficits didn't matter (http://money.cnn.com/2010/09/08/news/economy/reagan_years_taxes/index.htm).

There are many good analyses of Reagan's various tax laws around the web that explain how much taxes were actually raised by broadening the tax base and doing other things. These facts are only a mystery to people who naively think supply-side economics works. It's not that lowering rates brought in more tax revenue -- the combination of raising taxes by broadening the tax base and the economy getting better brought in more tax revenue. Another key principle was keeping the income tax the same as the capital gains tax so that there was no tax preference for labor vs. investment. As I've mentioned before, I've even spoken to Reagan's tax policy architect about some of these issues. Bruce Bartlett who worked in the Reagan administration has also talked about this a bit too.

Reagan was also the inventor of "amnesty" (as teabaggers call it) for undocumented immigrants. It raised GDP, of course, as comprehensive immigration reform would do today.

Reagan was far more of a pragmatist than the Tea-flavored Kool Aid-drinking people who seem to be running his party now. He would likely be considered a heretic and a RINO.

corntrollio says

Reagan was far more of a pragmatist

That was even true as California Governor. He was simply way way ahead of many.
http://www.youtube.com/embed/n-p-Nuu8hYQ

All this Marxist vs Capitalist hoo-ha is so out-of-date. I love when the tea-baggers accuse someone of being socialist because they reveal that they don't know what the word means.

Marxism failed, for sure. But our current course of laissez faire capitalism is an equal failure.

So, what is working on the globe? Do we want to be Somalia (no government regulation!) or Germany (Heavily regulated).

Seems to me, that the Northern European model is the one to follow... Germany, Iceland (and the other Scandinavian countries) are in much better shape than the USA. I might point out that Canada is also in better shape than the USA... and follows the Northern European model of relatively high taxes, a strong social safety net and heavily regulated corporations (especially banks).

Oh... and for the inevitable commenter that tells me to "move there" - please spare me your pointless vitriol.

ChrisSoCal says

Oh... and for the inevitable commenter that tells me to "move there" - please spare me your pointless vitriol.

Lets get back down to earth and ask.. YOU as a consumer would you Move there and over-bid, over-pay, over-borrow ?

Some how people moving to Irvine came up with silly notion that homes were really actually worth 3-4x more than 1997 prices. What kind of bank regulations will solve this notion ?

Turn your question around, what happened that allowed such lousy underwriting? Answer: the repeal of Glass-Steagall. That allowed investment banks to get involved caused the creation of mortgage derivatives and the "off-loading" of risk. Suddenly, banks didn't give two hoots about your ability to repay and they flooded the market with money to create more loans, which they then packaged and resold. They needed an endless supply of new loans to fuel their ponzi-like compensation model that was dependent getting new debtor to take loans so banksters could "earn" commission.

Because so few seem to know this, here is a definition of MARXISM/SOCIALISM: "In a socialist society private property in the means of production would be superseded by co-operative ownership. There would be no private ownership of productive capacity."

---------

I don't see anyone advocating that... so the word does not belong in this debate. It's become a childish insult like saying "Such-and-such is so gay" when it has nothing to do with homosexuality AT ALL.

Like I said..."As if its going to change your pathic little neo-marxist views".

ChrisSoCal says

Turn your question around, what happened that allowed such lousy underwriting? Answer: the repeal of Glass-Steagall. That allowed investment banks to get involved caused the creation of mortgage derivatives and the "off-loading" of risk. Suddenly, banks didn't give two hoots about your ability to repay and they flooded the market with money to create more loans, which they then packaged and resold. They needed an endless supply of new loans to fuel their ponzi-like compensation model that was dependent getting new debtor to take loans so banksters could "earn" commission.

If you want to talk about the Pozi "Commission" scheme you can certainly discuss that as it comes to real estate agents. Banks do no earn a commission. They generate a fee, not distributed to any one individual employee.

At what point exactly in you comments above, made the buyer think the homes like in Irvine were worth 2-3x more than a few years ago. Have you ever seen prices like in Irvine skyrocket that high in such a short period of time. Is that 200-300K home really worth 700-800K in less than 10 years ? What were these people thinking ...

OK, guys. Let's not make this thread into a lame political dispute. I mean, it is sort of too late, but how about a separate thread in the politics section.

APOCALYPSEFUCK is Tony Manero says

All other things being equal, or different, I'd still take a shit on a Realtor®'s face.

That was implied. Really, does anyone NOT know that step #1 of buying or selling a house requires a sufficiently sloppy dump to be unloaded on a realtor's face? Some prefer to be unconventional and give them a good old Cleveland Steamer instead. It is important to be inclusive of all preferences for buying & selling styles!

E-man says

What would I do if nothing change? I'd keep on buying & selling real estate. Keep on adding 2 rental properties to my portfolio per year for the next 10 years.

YES buy REAL ESTATE! EMAN has the bright lights on...buy houses. any where you can fine them cheap and and rent them out. some one needs the rental so you are not hogging up the homes $$$$$$ Awesome stuff EMAN you will be rich.

Cleveland! Had many good timesin Cleveland! Bought my first car there in fact 1956 Imperial hardtop wish i still had it.

Yes, but did you ride a steamer? You seemed to enjoy yourself there, so I would assume so.

no sir. not sure on the steamers. is there Ohio river steamer?