patrick.net

Sport your local yuppie a headbutt. Shit, must not booze and email.

Ecchs?

What's that Cracker?

Too bad you and your Mom were cashing food stamps to buy burgers, (remember those special trips to miccydees when you dad was drunk?) when i was getting a Ph.D on the guberment dime*

*Note: not investment advice.

C-A-M-A-R-O*. Fool, not Camero, which, of course, is the true mark of a uneducated redneck.

*I've had two, both bought from the original owners, #1 was a '67 SS/RS 350 champagne gold with white top and #2 '68 RS covert with deluxe interior.

Jackass.

But neither were as pimp as my current '63 Diamond Blue Tbird, bought also, from the original owner.

Note: Bought means the title, under the "owner" section says "Surfer-X". SV_Renter, this is similar to when you and your Mother use your Section 8 vouchers and pencil in the "owner", but a bit different in that the "owner" in your case is the bank. But hey, similar to you, I used guberment funds to get a Ph.D, while you used the W.I.C. funds to help pay for yet another mouth to feed.

I guess greed will blind people to anything even if it is as plain as day. Same thing with other emotions too i guess. I guess when u fall in love your brain refuses to see any negative side effects, so u fall in love. a month later u realize this has been a folly played by your own brain. some people are brave enough to accept it and move on, others may be retarded and hence stick on with their life and hang on to the memories and work hard to make it work.

I think the media in every country is a big fraud. I was watching a commercial in spanish language, It was about a cardiac surgeon doing a cardiac transplant and how successful it was and shows some kids smiling. Not only the cardiac surgeon but the hospital that was doing it was mentioned. When i saw it it evokes a lot of emotions in any person. U IMMEDIATELY THINK WHAT A GOOD THING THAT THESE DOCS AND HOSPITALS ARE DOING. 2) 1=2 years ago i saw another add about pakistani kids being treated in Bangalore hospital, India. It was played all over the media But when the hype is over if you analyze what was done and why u will realize their is a motive. I think it is a propoganda for these docs and shameless publicity for the hospitals. These same countries cannot take care of their own children. But joe public cannot analyze deeper or dont bother about it until it affects them personally.

Let me make it a little more interesting here. Cricket is a national pass time in india, pakistan, srilanka, commonwealth countries. I still love watching it but i wont bet my farm on it anymore. the cricketers are very highly paid prostitutes, they do all kinds of deals and win or loose based on some gambling spots in the underworld of DUBAI. Actually this story has a lot of credence because one of the pakistani fast bowlers, sarfraz nawaz, has already broached this topic. In 2004=2005 Indians were invited to pakistan to play cricket matches there. there was a lot of tension in the air because apparently osama was hiding in pakistan occupied kashmir and the Indian army was in combat position with pakistani army all along kashmir. Some how President Musharraf convinced the Indian govt that the indians had to play in pakistan and probably the matches were fixed way in advance. Indians won some cricket matches there in pakistan and it was the first time. Indians have never won games against pakistan before particularly in pakistan. Actually pakistans team had some of the best bowlers in the world.

For the ordinary Joe public it seems all is well and are carried away by the emotions of winning/loosing. Then during the same time the pakistany army bambarded some of the north west province because apparently osama was hiding there. Now imagine the hue and cry if your own army goes into texas and starts bombing the hell out of waco, but if the media is covering some other football game the outrage is may be reduced. such is the power of all the 5 net works in USA. They are now concerned about howmuch howard stern makes.

Look at the alito show. Look the media covered alitos wife crying when democrat leader, J. Biden asked tough questions. Oh poor mrs alito, look when your husband gets elected he is going to make so many women cry because they are going to have to go out of the usa to get an abortion.
BTW¨: i dont beleive in abortion. However i also dont beleive in imposing my religious/ social views on any body else. Why is the state deciding what a woman can or cannot do. There is no difference in this aspect between The so called USA and the taliban of AFGHANISTAN.

I just VIOLENTLY REACTED to the MYTH that 100K is HIGH SALARY …. that is all

Herein lies the problem when people try to use unbounded statistics to "prove" their point. Firstly, 120K, or even 100K are neither the average nor median salaries for the BA Metro census area (actually the dataset is San Jose Metro in Federal data).

Secondly, either statistic (the true median is closer to 70K, family income) is meaningless without considering the variability and bounding measures. As an exercise to Haha, go look up the standard deviation of family income. The BA has an extremely high variability to salaries, which diminishes the relevance of the median or average. Secondly, the confidence interval for all this data is pretty low. I'll have to look, but I think it's 80% or lower. This means that there is only a 1-in-5 chance that these statistics accurately predict family income.

there is only a 1-in-5 chance that these statistics accurately predict family income.

Correction: there is a 1-in-5 chance that these statistics do _NOT_ predict family income.

Someone on here said:

"The era of McMansions, 700 sqft kitchens, overpriced “artisan” foods, Humvees, and other excesses of consumption could be ending."

Just as long as I can get my Safeway Select, "Artisan" Ciabatta bread
for 99 cents, that's all I care. Tortillas be damned!

Slap on a piece of baloney, a thick slice of American cheese, a little mustard, and I'm on my way over the hill from San Jose to Santa Cruz, via Highway 17.

I got my four-pack of Cali Coolers in the trunk, boogieboard in the back seat, the Outfield blaring from my stereo, and hot babes in skimpy shorts on my mind and...

...and then I woke up in Phoenix, from a pre-housing bubble, circa 1980s round of California dreamin'.

Come to think of it, Chiabatta wasn't even invented then. Funny how the mind leaps from concept to concept in a dream. First you're here, then instantly you're there, in a kaleidoscope, or should I say Cal-eidoscope and fantasmagoria of prehistoric images and thoughts.

Oh, well, what does it matter anyway.

At least surfer-X had the enjoyment of owning some pimp Camaros. I could never afford one, but glad to know someone's keeping it going.

Surfer-X is probably one of the last dudes standing from the 80s era. I remember talking to surfers from the 60s, back in the 80s, who said the Cali beach scene was twice as pimped during those days, the Vietnam War notwithstanding.

I guess it just got gradually worse and worse.

I just feel the need to point the finger. I blame Huey Lewis and the News.

It's their fault!

I predict DEFLATION. The whole problem is when the collateral fails through foreclosures and bankruptcy pushing the houses (collateral) into the hands of the GSE's (Freddie and Fannie). This causes the mortgage backed bonds to fail or be seriously impaired. Borrowing against homes added $600 billion to consumers' spending power in 2004, according to research by Federal Reserve Chairman Alan Greenspan. D

Banks will fail and cause commercial loans to medium or small business to disappear. Credit risk and credit rating will fall slowing the "velocity" of money and the GDP. The hundred of trillions world wide in derivatives based on mortgaged backed bonds will unwind destroying worldwide liquidity. The feds will step in to salvage and consolidate the surviving banks and thrifts after the collapse as the lender of last resort. The fed will be "pushing on a string", unable to stimulate the economy.

People will not be able to buy major purchases. Many foreign manufacturers such as Honda, Toyota, Chinese, chip or computer and memory maker will fail as Americans fail to buy. Commodities will fall.

Dark times will encompass the first world economy.

Ha Ha

Burning furniture from China is the problem. China and many countries encourage by treaties have developed export economies dependent on the US to take in their ever increasing production. This created an oversupply of goods and services (ie service jobs in India) in the export to the US countries. DEFLATION is overproduction chasing to few dollars. With the dark times from our collapsing velocity of money and unwinding derivatives the removal of our ATM borrowing from our home equity in the form of loans will DEFLATE not only the US but also the world.

jeffolie-

Overproduction is not sufficient to cause deflation. A requisite for a sustained deflationary cycle is lack of liquidity. Unless you posit that the Fed has no ability or is unwilling to pump liquidity, then deflation is extremely unlikely. Given the risk of deflation, the Fed will opt for inflation, even stagflation instead. The US has an enormous untapped capacity for "inflation solutions"--much greater than row (rest of world).

The velocity of money is increasing by all econometric measures, not "collapsing". This is primarily a transactional efficiency phenomenon.

Ha Ha-

Bernanke's statement is a macro truism (in terms of the ISLM model). If we carry current account deficits then somewhere else must have a savings surplus for the equation to balance.

OC Homeowner

Save all the cash you can and be very long term patient before you decide to move up to a bigger freaking house. The housing market in Japan has been declining for 15 years from 1990. So, wait, wait and wait some more. You will need a good credit history and maintain your employment for the consolidated remaining banks to give you a mortgage when you want it.

At least surfer-X had the enjoyment of owning some pimp Camaros. I could never afford one, but glad to know someone’s keeping it going.

Surfer-X is probably one of the last dudes standing from the 80s era. I remember talking to surfers from the 60s, back in the 80s, who said the Cali beach scene was twice as pimped during those days, the Vietnam War notwithstanding.

Senor Holliday, I was very fortunate in that I found original pimp daddy Camaro (camero?) owners who didn't want outrageous profit from their cars. I bought them in original condition, restored them and basically got to drive them for a few years for free. Regarding the Cali beach scene in the '80's, yeah it was flat out pimp. That's the problem, I know first hand how fucking great it can be. But as you probably know the best '80s period occured from 88-91, well at least for me. I was in undergraduate school at Cal Poly SLO and the Morro Bay/Pismo scene was outerworldly, tasty waves and cool buds. Well except for the fact I don't huff the bong. Shit so many parties that like the vile boomer scum and the 60's i don't really remember my undergraduate time all that much, it's all a bit hazy. I am forced to quote my "buddy" Jackie, "you were either throwing up or drunk". Ahhh. California still has pockets of greatness, my friends for one, this blog for another*

*Discounting the obvious troll factor.

on a full scholarship on your D average and shitbrown skin

Are you fucking kidding? Dude I'm a reverse coconut, white on the outside, brown on the inside. Shhhit my cracker friend, us mexi's can always take spanish and get a B*

*Cheech etal.

And my finacial aid package was nothing to write home about, but I must say that back in the late 80's there was much more "free" money for poor mexi college students then now. I got about 1/2 free the rest was loans, but the same package was available to your cracker ass also, but you would first have to stop blaming others for your blue collar hell. Now? It's a different story, all loans, but hey at least you can still go to college, but the problem is that the degrees now typically aren't worth the paper they are printed on. But I digress.

If you mean "The World is Flat..."--Friedman, then you should also read "Globalization and Its Discontents"--Stiglitz in order to gain insight into just how complex the entire global economic situation is. I think both Friedman and Stiglitz are theoretical geniuses, but woefully lacking in practicality. Easterly has a more profoundly realistic view.

"I think the media in every country is a big fraud." -- HessesFan

Your damn right it is! I highly recommend Noam Chomsky's book "Manufacturing Consent" for a very interesting perspective on the media. Chomsky is actually a bit too far to the Left even for me, but he is very smart and observant and has some very good ideas that I never considered untill I read that book. Anyway, in my mind the bottom line with the media is that they'll cover whatever they think is going to sell, and that doesn't make me feel too good about the intellect of your average "Joe Public." I mean seriously, when people are more worried about J Lo's ass than the economic imbalances in our system of the world, our society has got issues. I fully understand that I am more interested in Economics/Finance than your average citizen (as are probably most of us on this blog or we wouldn't be here), but these are SERIOUS ISSUES that affect ALL OF OUR LIVES.

"BTW¨: i dont beleive in abortion. However i also dont beleive in imposing my religious/ social views on any body else." -- HessesFan

THANK YOU. If more people in our country thought this way we could achieve so much more with our Political system, rather than wasting so much time with this ridiculous bickering between the Left and Right.

PS: "Siddartha" by Hesse is one of the best books ever written!

I predict that the debt held by China and Japan in US Treasuries will not be dumped onto the marketplace. The Fed will lower interest rates eventually to rescue the collapsed bubble. The debt held by China etc will then be at a much higher interest rate than the Fed lowered rates resulting in a premium in value and interest earnings.

"This means that there is only a 1-in-5 chance that these statistics accurately predict family income." -- Randy H.

Whatever dude, 67.892% of all statistics are actually made up. Ha ha ha I love that joke! But I'm the biggest dork in the world. I just did a full review of ProbStat because I'm studying for the CFA exam in June. All joking aside, probability and statistics are fundamental subjects for achieving a basic understanding of how the world works. Very important shit.

"or should I say Cal-eidoscope and fantasmagoria of prehistoric images and thoughts." -- Michael Holliday

It's "phantasmorgia." That's a good fucking word regardless; you get bonus points for using that one dude.

DinOR, yeah I have fond memories of that period, we didn't have a pot to piss in, but man we were happy, ahhh ignorance is truly bliss. Dude, our surf equipment bit ass, we had this two piece farmer john wetsuit, the type with the top section that buckles under your ass and the overall bottoms, my buddy Rick and I would split it up. Shit I guess I was the "top" :) Freezing our asses off and a grin from ear to ear. What's odd about this era of unparalled prosperity we live in, the smiles have gone away. A lot of fuck you now, not a lot of happy. Odd. Fucking boomers.

I just rented a house in $anta Barbara, pretty damn pimp, $1900 a month, and get this, the house just sold for 1.67 million. Do the math.

"I predict that the debt held by China and Japan in US Treasuries will not be dumped onto the marketplace." --Jeffolie

Agreed. The Asian countries would be shooting themselves in the foot if they dumped our debt, and they are way too smart for that. The current "Bretton Woods II" system is more beneficial to them than it is to us. I think that is the main reason our current account imbalance is persisting for so long. It will likely persist for a longer than many think.

Ha Ha:

I am currently reading "The Birth of Plenty" by Bernstein and "Empire of Debt" by Wiggin. Both are worth a read.

jeffolie,

I predict that the debt held by China and Japan in US Treasuries will not be dumped onto the marketplace. The Fed will lower interest rates eventually to rescue the collapsed bubble. The debt held by China etc will then be at a much higher interest rate than the Fed lowered rates resulting in a premium in value and interest earnings.

If you follow that logic, the PPP in China will explode into hyper-inflation, and their nominal rate differential will be less than the real rate they earn on the dollar debt they hold. The US categorically will *not* relegate monetary policy to defending the dollar. Remember, with monetary policy a central bank can either fix its currency, or control M, but not both simultaneously. A further weakened dollar will indeed worsen the current account deficit, but it will also largely reverse the direction of capital flows, severely punishing the EU and fixed-currency Asian trading partners.

In simpler terms: don't worry about China so much. They don't have very many short-term options. If they "diversify out of" the dollar, then they will do it over many years, perhaps decades. Short term moves would devestate their economy, and they know this.

Randy H.

I do posit that liquidity will dry up. The hundred of trillions world wide in derivatives based on mortgaged backed bonds will unwind destroying worldwide liquidity. Even the Fed cannot reinflate the world.

In Japan, the economy deflated for 15 years while their central bank reduce their interest rates to virtually zero.

In common usage deflation is generally considered to be "falling prices". But there is much more to it than that. Often people confuse deflation with disinflation or with Depression (as in "the Great Depression"). These three terms are related but not synonymous.

According to Investorwords.com the definition of Deflation is "a decline in general price levels, often caused by a reduction in the supply of money or credit. Deflation can also be brought about by direct contractions in spending, either in the form of a reduction in government spending, personal spending or investment spending. Deflation has often had the side effect of increasing unemployment in an economy, since the process often leads to a lower level of demand in the economy. The opposite of inflation."

If, however, the quantity of money decreases to $5.00 the price will fall to 50¢ (deflation). This is what the first part of the above definition is referring to. The money supply can also be reduced if someone on our island hoards half of it and refuses to spend it on anything no matter what. This is the second part of the definition (reduction in spending) - velocity.

So there are four causes for Deflation.

Decreasing Money Supply
Increasing Supply of Goods
Decreasing Demand for Goods
Increasing Demand for Money

San Francisco RENTER Says:
PS: “Siddartha” by Hesse is one of the best books ever written!

Very true.
Warmly recommended especially if one's thoughts tend to revolve around things that ultimately don't matter (like real estate :-) ). I must go and read it again.

jeffolie,

I am agreeing with your reasoning, just not the deflation conclusion. Sorry if I was unclear. The other side of the QTM equations you invoke require a determination of what happens to savings and investment (and taxes, but we'll reduce that to G since the gov't in the US doesn't save). The US is not Japan. I cannot imagine a circumstance in which reducing the nominal rate in the US to anything near zero would not spur credit driven investment and consumption. Further differences, the US abides by the Large-Open Economy model, whereby the US has the power to set nominal rates outside of real rates (we can sustain differential nominal rates from the row). The US does not interfere with its currency, Japan does, thus reducing Japan's monetary effectivity. Finally, the US maintains an extra "trade credit" in terms its military sphere of influence--it's "umbrella" if you will. That is, the US could always reverse capital flows by retracting its military protection from Europe and Japan, thus forcing their G as a % of GDP to dramatically rise and ours to dramatically fall. (Keeping in mind the US already has a much lower G%GDP than either Japan or the EU).

Randy H

Deflation will happen and I reject your objections:

The US reduced its overnight fed funds rate to near zero in the 1930 while we were in Depression without spurring credit driven investment and consumption until WW II. So, for more than 10 years it happened here.

The US does interfere with its currency often. The US makes agreement and persuades other central banks to revalue relative to the dollar. Very recently, China revalued its currency at our request. Nixon once arbitrarily revalued the dollar by 10 percent and took us off the gold standard.

The US has not and will not remove the forces kept around the world. These bases constitute forward positions to project our superpower might, image and trade.

Surfer-X says:
I just rented a house in $anta Barbara, pretty damn pimp, $1900 a month, and get this, the house just sold for 1.67 million. Do the math.

Heh. Your rent barely covers the owner's property tax liability. Negative cash flow of around $100k per year, plus $100k transaction cost to sell the house. Nice.

Speaking of property tax... Over the last few years, I've witnessed quite a few people be very surprised when their first property tax bill arrived, as if either nobody had told them about it, or they had deliberately ignored that figure in their mental model. Odd.

The US reduced its overnight fed funds rate to near zero in the 1930 while we were in Depression without spurring credit driven investment and consumption until WW II. So, for more than 10 years it happened here.

This contradicts the data. Reference Mankiw et. al.

The US does interfere with its currency often. The US makes agreement and persuades other central banks to revalue relative to the dollar. Very recently, China revalued its currency at our request. Nixon once arbitrarily revalued the dollar by 10 percent and took us off the gold standard.

Neither of the examples you state are monetary intervention, but political intervention. While political urging may indeed affect exchange rates, it is not monetary intervention. Please provide an example of direct monetary intervention by the US in the USD FX post Carter.

The US has not and will not remove the forces kept around the world. These bases constitute forward positions to project our superpower might, image and trade.

You invoked the 30s as an example of historical recurrance. What do you think occurred between 1924 and 1941? If the depression can happen again, so can isolationism and mercantilism.

Randy H

We will have to agree that we disagree politely. I admire your thoughtful comments.

I have a hard time separating politics from monetary actions. I find them mixed together, overlapping, and neither acting in isolation. Just as the US Supreme Court appointees come from political decisions, so do Fed appointments. Central banks in non democratic countries do not act independent of totalitarian powers.

I agree central banks will push money supply; however, I doubt it will overcome the loss of liquidity from derivatives collapsing. I could be wrong at many junctures and assumptions.

Certainly, in the long term as regions of Asia, South America and the Asian subcontinent consume more resources, then commodities will be in short supply with rising prices.

In the relatively short term of months and not more than a couple of years, hindsight will be claimed as foresight by most.

The US has not and will not remove the forces kept around the world. These bases constitute forward positions to project our superpower might, image and trade.

Any possibility the US may need to pull back troops due to budgetary concerns? Just a practical observation--irrespective of politics.

KurtS

There was a great book around 1987about the failures of empires. One of the author's (Paul Kennedy, The Rise and Fall of Great Powers) conclussions was that empirial military overreach would eventually be unsustantable in the waining empires because of diminishing wealth. Certainly the British withdrew troops and bases because of budetary concerns after WW II.

I speculate that China will rise up in 20 years or so and maybe we will withdraw. The US has shown great flexibilty and adaptability to adjust to changing economic and political realities over time. I will not sell the US short as a Great Power, a superpower that projects force.

jeffolie-

Agreed to disagree. Surely we'll find out which theoretical position proves true soon enough. My only point in arguing is that I fear people might prepare for deflation only to get burned worse by inflation. My prediction for the future is a rising risk of stagflation as energy costs establish ever higher floors.

KurtS, I'm not sure budgetary concerns will directly indicate a miitary pullback, although costs will be invoked by politicians for political cover should they ever decide to do it. The larger reasons would be strategic in nature. That is, a marked shift in US foreign policy towards isolationism. This would probably not happen unless the US suffered a severe shock that forced a major turn inwards. Something like a pandemic, major natural disaster (on a regional scale, like a New Madrid earthquake), a catastrophic political crises (like a major state or region trying to seced), or of course another Great Depression.

“...or should I say Cal-eidoscope and fantasmagoria of prehistoric images and thoughts.” — Michael Holliday

It’s “phantasmorgia.” That’s a good fucking word regardless; you get bonus points for using that one dude.

Thanks! I was thinking of Fantasia the Disney movie...Phantasia?

Randy H

Democraghically and economically the vast two paycheck households have no choice but to ride out the collapse whether its deflation, stagflation, hypeinflation or currency collapse. Households have a negative savings rate with little money to prepare for anything on the event horizon. Most of the wealth of households resides in their residence's equity. The upper class may chose to prepare or not since most of the savings and fungible assets reside amongst them.