..............one finds the execupundit, Michael Wade.
Here, here, here, here, and here for starters.
Saturday, September 11, 2010
Whither go housing prices...............?
Our friends at Keeping Current Matters believe that the time
to sell is now because that old supply/demand thing will be
increasingly putting downward pressure on prices. Full essay here.
If you have followed this blog, you might be inclined to think that
I concur. You would be correct. Housing prices have no where
to go but down. The question is......how far is down?
First, some historical data put together by the Case-Shiller folks
and charted by Bill McBride at Calculated Risk.
The bad news is that clicking on the image may not increase
it to readable scale. The good new is that if you go here,
the image will be enlargeable.
I do not read these charts for a living, but it sure looks like
that by January of 2010 housing values had retreated from
early 2006 highs to approximately the level of housing
values in mid-2003.
If we met at a cocktail party and you insisted that I opine
on where housing values are going to bottom out, I would
tell you that I don't have a clue. If you were persistent, got
me another drink, and really, really insisted, I would cluelessly
tell you that, in my unsupported and unscientific opinion,
housing values are headed back to January 2000 pricing levels.
If you foolishly got me another drink, I might tell you that we will
not see housing values back at the January 2006 level in the next
twenty years.
There, I said it. Sorry.
to sell is now because that old supply/demand thing will be
increasingly putting downward pressure on prices. Full essay here.
If you have followed this blog, you might be inclined to think that
I concur. You would be correct. Housing prices have no where
to go but down. The question is......how far is down?
First, some historical data put together by the Case-Shiller folks
and charted by Bill McBride at Calculated Risk.
The bad news is that clicking on the image may not increase
it to readable scale. The good new is that if you go here,
the image will be enlargeable.
I do not read these charts for a living, but it sure looks like
that by January of 2010 housing values had retreated from
early 2006 highs to approximately the level of housing
values in mid-2003.
If we met at a cocktail party and you insisted that I opine
on where housing values are going to bottom out, I would
tell you that I don't have a clue. If you were persistent, got
me another drink, and really, really insisted, I would cluelessly
tell you that, in my unsupported and unscientific opinion,
housing values are headed back to January 2000 pricing levels.
If you foolishly got me another drink, I might tell you that we will
not see housing values back at the January 2006 level in the next
twenty years.
There, I said it. Sorry.
The circles are unbroken......................
Musically, and visually, fun link here.
I'd like to give credit for the introduction, but can't
remember who sent me there. Sorry, but thanks.
Click away. The more you click, the more music you make.
I'd like to give credit for the introduction, but can't
remember who sent me there. Sorry, but thanks.
Click away. The more you click, the more music you make.
Insanity still reigns....................
There is probably an excellent chance that, even after thirty years
of doing this, I still don't understand investing in real estate.
Jonathan Hipp, who follows net leased real estate, just posted an
article titled "Lack of Inventory= Lower Cap Rates", here.
Here is an interesting excerpt:
"High net-worth buyers with excess cash are not satisfied
with the 1% return they are receiving from banks, are leery
of the turbulent stock market and worried about increased
inflation. They desire to invest their cash into secure assets
which produce high returns. In many ways, net lease
investments are the perfect option. The problem is there are
so few high quality net lease assets available.
"Today we are seeing cap rates between 5.75-7.50% (they
were at 6.75-8.5% six months ago). These are numbers not
seen since the height of the market in 2006. This is not a
long-term trend as much as the odd environment we are
currently in. Lack of supply plus increases in demand has
equaled lower cap rates."
"Buyers want the best assets available; risky assets are no
longer popular."
Like a lonely voice in the wilderness, I'm here to tell you that
investing in real estate, long-term net leased or not, at a 6% cap
rate is highly risky. It is short term thinking with a long term
asset. I hope they have a plan for getting the return of their
investment, while they are getting a return on their investment.
Over-paying for, and more importantly, over-lending on,
investment real estate is one of the causes of our current
economic situation.
I have a hard time believing that smart people have forgotten the
lesson so quickly.
of doing this, I still don't understand investing in real estate.
Jonathan Hipp, who follows net leased real estate, just posted an
article titled "Lack of Inventory= Lower Cap Rates", here.
Here is an interesting excerpt:
"High net-worth buyers with excess cash are not satisfied
with the 1% return they are receiving from banks, are leery
of the turbulent stock market and worried about increased
inflation. They desire to invest their cash into secure assets
which produce high returns. In many ways, net lease
investments are the perfect option. The problem is there are
so few high quality net lease assets available.
"Today we are seeing cap rates between 5.75-7.50% (they
were at 6.75-8.5% six months ago). These are numbers not
seen since the height of the market in 2006. This is not a
long-term trend as much as the odd environment we are
currently in. Lack of supply plus increases in demand has
equaled lower cap rates."
"Buyers want the best assets available; risky assets are no
longer popular."
Like a lonely voice in the wilderness, I'm here to tell you that
investing in real estate, long-term net leased or not, at a 6% cap
rate is highly risky. It is short term thinking with a long term
asset. I hope they have a plan for getting the return of their
investment, while they are getting a return on their investment.
Over-paying for, and more importantly, over-lending on,
investment real estate is one of the causes of our current
economic situation.
I have a hard time believing that smart people have forgotten the
lesson so quickly.
Friday, September 10, 2010
Everything you need to know about the problems with investment real estate............
........in one handy chart.
Capitalization Rates are supposed to reflect the risk and reward
ratio of investment ownership. The higher the risk, the higher the
rate. They have not been used that way lately.
A Capitalization Rate is calculated by dividing the investment's
net operating income by the cost of the acquisition. If you were
thinking about buying an investment property that has an annual
net operating income of $100,000, at a cap rate is 10%, you
would pay $1,000,000. If the cap rate was 6%, you would pay
$1,666,666 for the same income stream. A bit of a difference.
As noted on the chart, cap rates were in the vicinity of 10% in
the year 2000. By the year 2007, cap rates had fallen to the 6%
neighborhood.
Sellers gained. Buyers paid too much. Banks lent too much.
Therein lies the problem.
This blog has covered this topic before. Real estate is not the
same as a financial instrument, yet really smart people were
benchmarking cap rates to the rates of return available from
financial instruments. Our current economy would suggest
that was a bad decision.
From a layman's point of view, if someone offers you a real
estate investment priced at a 6% cap rate, run, don't walk,
run away.
Capitalization Rates are supposed to reflect the risk and reward
ratio of investment ownership. The higher the risk, the higher the
rate. They have not been used that way lately.
A Capitalization Rate is calculated by dividing the investment's
net operating income by the cost of the acquisition. If you were
thinking about buying an investment property that has an annual
net operating income of $100,000, at a cap rate is 10%, you
would pay $1,000,000. If the cap rate was 6%, you would pay
$1,666,666 for the same income stream. A bit of a difference.
As noted on the chart, cap rates were in the vicinity of 10% in
the year 2000. By the year 2007, cap rates had fallen to the 6%
neighborhood.
Sellers gained. Buyers paid too much. Banks lent too much.
Therein lies the problem.
This blog has covered this topic before. Real estate is not the
same as a financial instrument, yet really smart people were
benchmarking cap rates to the rates of return available from
financial instruments. Our current economy would suggest
that was a bad decision.
From a layman's point of view, if someone offers you a real
estate investment priced at a 6% cap rate, run, don't walk,
run away.
Oh, the irony of it all.................
The Ohio Realtor newsletter arrived in the mail this week. One of
the main articles is titled "Seven reasons banks are denying home
loans". It is a sign of the times that this is news, but here are the
reasons banks are saying "no":
1. Poor credit
2. Insufficient liquidity (as in no cash for a downpayment)
3. Lack of income
4. Lying on the application
5. Debt (as in too much)
6. Unemployment
7. Self-employment
That applying these standards constitutes a problem tells
you how far off track our industry was in the mid-2000's.
The article then concludes:
"Once the traditional lending route has been exhausted, both
Realtors and potential buyers are often times at a loss of what
to do as a back-up plan. Private lending has been around for
many years, but most borrowers and brokers have no idea
that it's even an option.
" 'With the strict underwriting guidelines banks are governed
by these days, private lending is the wave of the future for
getting real estate loans funded,' explains Eric Wohl, president
of Noteflo, an online private lending marketplace launching
today.
"NoteFlo's unique service allows borrowers to post loan
funding requests for free, which will be broadcast out to
thousands of private lenders that will bid for the opportunity
to fund their loan.
" 'Our goal is to make sure borrowers know that they
have plenty of other options if their loan application is
denied by a traditional bank.' says Wohl.
"For more information, visit www.noteflo.com."
All I can say is WOW. I wonder if the editors of the Ohio Realtor
have visited the noteflo web site.
Maybe I'm reading it wrong, but their web site sure makes it look
like their featured loans include 60% loan to value ratios and
interest rates higher than 11%. I know some private lenders.
They have always asked a premium of at least 6% over what
was available from a bank. So the indicated rates on NoteFlo's
site are not a surprise.
What is a surprise is that someone thinks this lending avenue
will be helping the person turned down by the bank.
Somehow I doubt that "private lenders" are much of a threat to
traditional banker or much of a help to the typical borrower.
I'm just curious what the editors of the Ohio Realtor were
thinking when they included this article in the September
newsletter.
the main articles is titled "Seven reasons banks are denying home
loans". It is a sign of the times that this is news, but here are the
reasons banks are saying "no":
1. Poor credit
2. Insufficient liquidity (as in no cash for a downpayment)
3. Lack of income
4. Lying on the application
5. Debt (as in too much)
6. Unemployment
7. Self-employment
That applying these standards constitutes a problem tells
you how far off track our industry was in the mid-2000's.
The article then concludes:
"Once the traditional lending route has been exhausted, both
Realtors and potential buyers are often times at a loss of what
to do as a back-up plan. Private lending has been around for
many years, but most borrowers and brokers have no idea
that it's even an option.
" 'With the strict underwriting guidelines banks are governed
by these days, private lending is the wave of the future for
getting real estate loans funded,' explains Eric Wohl, president
of Noteflo, an online private lending marketplace launching
today.
"NoteFlo's unique service allows borrowers to post loan
funding requests for free, which will be broadcast out to
thousands of private lenders that will bid for the opportunity
to fund their loan.
" 'Our goal is to make sure borrowers know that they
have plenty of other options if their loan application is
denied by a traditional bank.' says Wohl.
"For more information, visit www.noteflo.com."
All I can say is WOW. I wonder if the editors of the Ohio Realtor
have visited the noteflo web site.
Maybe I'm reading it wrong, but their web site sure makes it look
like their featured loans include 60% loan to value ratios and
interest rates higher than 11%. I know some private lenders.
They have always asked a premium of at least 6% over what
was available from a bank. So the indicated rates on NoteFlo's
site are not a surprise.
What is a surprise is that someone thinks this lending avenue
will be helping the person turned down by the bank.
Somehow I doubt that "private lenders" are much of a threat to
traditional banker or much of a help to the typical borrower.
I'm just curious what the editors of the Ohio Realtor were
thinking when they included this article in the September
newsletter.
Thursday, September 9, 2010
Music from when I was 17..........
1969. High school graduation. Freshman year at Denison. An
amazing year.
amazing year.
Talk about ridiculous assignments..............
........trying to find the "Best" of Nicholas Bate. It is all good.
He has been an absent blogger for almost two weeks now.
Over the past six months I developed the morning ritual of
awaking, turning on the computer, reading his new posts-
which inevitably were a gentle prodding towards growth
and fullness of life, then starting my day. Pretty healthy
stuff.
Looking at his archives this morning, I stopped here:
7 Great Quotes to Live By
1. Stay hungry. Stay foolish.
-Steve Jobs
2. And in the end, the love you take is equal to the love you make
-Paul McCartney
3. Dream as if you will live for ever. Live as if you will die today.
-James Dean
4. Seek first to understand, then to be understood.
-Stephen Covey
5. Be the Change you are Seeking
-Ghandi
6. There is no failure, only feed-back
-Richard Bandler
7. Whatever you do, do it with passion.
-Carlos Castaneda.
and here:
He has been an absent blogger for almost two weeks now.
Over the past six months I developed the morning ritual of
awaking, turning on the computer, reading his new posts-
which inevitably were a gentle prodding towards growth
and fullness of life, then starting my day. Pretty healthy
stuff.
Looking at his archives this morning, I stopped here:
7 Great Quotes to Live By
1. Stay hungry. Stay foolish.
-Steve Jobs
2. And in the end, the love you take is equal to the love you make
-Paul McCartney
3. Dream as if you will live for ever. Live as if you will die today.
-James Dean
4. Seek first to understand, then to be understood.
-Stephen Covey
5. Be the Change you are Seeking
-Ghandi
6. There is no failure, only feed-back
-Richard Bandler
7. Whatever you do, do it with passion.
-Carlos Castaneda.
and here:
I don't like being disagreeable, but..................
"If the crisis has a single lesson, it is that the too-big-to-fail
problem must be solved," Bernanke said.....
I have to disagree with this quote (clearly taken out of context
from this article at the HousingWire).
Surely this crisis has more than one lesson. But............if
forced to name THE single lesson, I would suggest this:
standards must be upheld.
It is a violation of standards to provide mortgages (and credit
cards) to people who have no apparent means of repaying the
loan.
It is a violation of standards to allow such a thing as a "no
document" loan.
It is a violation of standards to offer gimmick mortgages like those
featuring negative amortization and teaser interest rates.
It is a violation of standards to build buildings for which there
are no readily apparent users.
It is violation of standards for underwriting agencies to bless
investment vehicles that they themselves do not understand
as AAA investments.
It is a violation of standards to tie peoples' pay and bonuses
to how fast they can lend money, if there is no claw-back
of pay and bonuses if the lent money is so clearly not
repayable.
It is a violation of standards for really smart Wall Street
types to package and sell mortgage backed securities when
they clearly knew that the underlying collateral was deficient and
not deserving of the AAA credit rating.
Ben Bernanke is way smarter than me, so I'm probably
wrong about this: If proper standards are upheld, too-big-
to-fail is not an issue.
problem must be solved," Bernanke said.....
I have to disagree with this quote (clearly taken out of context
from this article at the HousingWire).
Surely this crisis has more than one lesson. But............if
forced to name THE single lesson, I would suggest this:
standards must be upheld.
It is a violation of standards to provide mortgages (and credit
cards) to people who have no apparent means of repaying the
loan.
It is a violation of standards to allow such a thing as a "no
document" loan.
It is a violation of standards to offer gimmick mortgages like those
featuring negative amortization and teaser interest rates.
It is a violation of standards to build buildings for which there
are no readily apparent users.
It is violation of standards for underwriting agencies to bless
investment vehicles that they themselves do not understand
as AAA investments.
It is a violation of standards to tie peoples' pay and bonuses
to how fast they can lend money, if there is no claw-back
of pay and bonuses if the lent money is so clearly not
repayable.
It is a violation of standards for really smart Wall Street
types to package and sell mortgage backed securities when
they clearly knew that the underlying collateral was deficient and
not deserving of the AAA credit rating.
Ben Bernanke is way smarter than me, so I'm probably
wrong about this: If proper standards are upheld, too-big-
to-fail is not an issue.
Of staples and luxuries....................
Our friend Richard Green indirectly points out the folly of looking
at residential real estate as a national market. It just isn't. It is a
compilation of a countless number of local markets, each one
different from the next.
Full essay here.
at residential real estate as a national market. It just isn't. It is a
compilation of a countless number of local markets, each one
different from the next.
Full essay here.
Wednesday, September 8, 2010
"I had never worked so hard in my life"..........
John Grisham is a fine writer. A few years back I overdosed on
his books. I think I read six (The Pelican Brief, The Street
Lawyer, Testament, Rainmaker, The Firm, The Partner) of
them in a month. I loved them, but have not picked up one of
his books since.
Grisham recently wrote about becoming a writer in the
New York Times. It is well worth reading- here.
Time to head to the library again.
his books. I think I read six (The Pelican Brief, The Street
Lawyer, Testament, Rainmaker, The Firm, The Partner) of
them in a month. I loved them, but have not picked up one of
his books since.
Grisham recently wrote about becoming a writer in the
New York Times. It is well worth reading- here.
Time to head to the library again.
Re-visiting John Tuccillo...........probably not his finest hours....
In March of 2008, the former chief economist for the National
Association of Realtors was quoted as saying,
"People think the market is down and the market will
still go down. That's not the truth. The market is down,
but it's not going down anymore."
"I think it's because consumers focus on national news
and not enough on local news."
In April of 2009, Tuccillo said,
"Yes, knowledge is power, but increasingly in a world
where we are told far more than we need to know,
knowledge is fear. Take the swine flu affair. A virulent
disease which is ripping its way through Mexico is being
played as if the Apocalypse is upon us. Yet, in the United
States, a country where vaccines and drugs are readily
available to blunt the symptoms of the disease, there
have been only a handful of cases. On this basis, the
price of airline stocks dip, oil prices go down and there
is a widespread belief that our friend the pig will bring
down the whole world economy.
The handling of this story by the media is intended to make
us very, very afraid. But so was the media handling of the
real estate cycle, and so it still is. We are coming out of a
severe downturn in the real estate market, a price we are
paying for a ten year expansion. These things happen,
sometimes gently, sometimes harshly. The reporting of this
story has ignored how cycles operated, focused on prices
rather than sales and made a hero out of Bob Shiller, an
economist-entrepreneur who is attempting to profit from a
futures market that has yet to get off the ground. And we
are being taught to be very, very afraid.
Pretty sure I disagree with that "knowledge is fear" quote. Pretty
sure I agree with the "price we are paying for a ten year
expansion" part.
This punditry stuff is a tough business.
Association of Realtors was quoted as saying,
"People think the market is down and the market will
still go down. That's not the truth. The market is down,
but it's not going down anymore."
"I think it's because consumers focus on national news
and not enough on local news."
In April of 2009, Tuccillo said,
"Yes, knowledge is power, but increasingly in a world
where we are told far more than we need to know,
knowledge is fear. Take the swine flu affair. A virulent
disease which is ripping its way through Mexico is being
played as if the Apocalypse is upon us. Yet, in the United
States, a country where vaccines and drugs are readily
available to blunt the symptoms of the disease, there
have been only a handful of cases. On this basis, the
price of airline stocks dip, oil prices go down and there
is a widespread belief that our friend the pig will bring
down the whole world economy.
The handling of this story by the media is intended to make
us very, very afraid. But so was the media handling of the
real estate cycle, and so it still is. We are coming out of a
severe downturn in the real estate market, a price we are
paying for a ten year expansion. These things happen,
sometimes gently, sometimes harshly. The reporting of this
story has ignored how cycles operated, focused on prices
rather than sales and made a hero out of Bob Shiller, an
economist-entrepreneur who is attempting to profit from a
futures market that has yet to get off the ground. And we
are being taught to be very, very afraid.
Pretty sure I disagree with that "knowledge is fear" quote. Pretty
sure I agree with the "price we are paying for a ten year
expansion" part.
This punditry stuff is a tough business.
More comedic genius.........................
Sid Caesar, born this day in 1922, and Nanette Fabray
have an argument while Beethoven fiddles......
have an argument while Beethoven fiddles......
Tuesday, September 7, 2010
"So it’s time for everyone to take a deep breath and try a bold new strategy:
DO NOTHING."
So opines Mathew Ferrara, whose blog is really worth following if
real estate is important to you.
Some fun excerpts from one of his recent posts:
"Forget about the contradictory charts, reports, media
and analysts. If any other sector of the economy were
reported on with such daily deviation, the public would
conclude that someone was drunk."
"Nothing is exactly what we need. More accurately,
doing nothing else to distort or delay the market
correction, no matter how painful or disruptive.
Doing nothing has worked before: we’ve been through
asset bubbles, dot-com manias, equity explosions, and
credit-fueled consumption by irresponsible consumers
before. Pardon the pun, but the house of cards has
collapsed many times over the centuries. And it came
back into shape without any help from then-nonexistent
Federal reserves, mortgage tax deductions, housing
subsidies or tax credits."
"Doing nothing takes time, which is terminal for
politicians and sometimes difficult for the real estate
industry itself."
"Until we admit that housing purchases are discretionary,
we won’t understand that sometimes there’s nothing to
actually “do” when the absorption rate falls some years.
Remember, there’s no necessary requirement to purchase
a home, compared to other products such as food or energy.
And since there’s sufficient stock to accommodate the
housing needs of nearly everyone, there could be a lull in
housing volume for quite some time.
"The only reason to “do something” is emotional. We’re
a society that doesn’t like the fact that some times are tough
and some people have to feel pain. Our laudable tendency for
social compassion has become complete avoidance of any
problems, along with political and financial absolution for
any mistakes, even the ones we bring on ourselves.
Unfortunately, social compassion isn’t an economic policy.
Good emotions often lead to bad market interventions and
unintended consequences that mostly make things even
worse."
No more Mr. Nice Guy. I think I'm going to post that last
paragraph again later this week.
So opines Mathew Ferrara, whose blog is really worth following if
real estate is important to you.
Some fun excerpts from one of his recent posts:
"Forget about the contradictory charts, reports, media
and analysts. If any other sector of the economy were
reported on with such daily deviation, the public would
conclude that someone was drunk."
"Nothing is exactly what we need. More accurately,
doing nothing else to distort or delay the market
correction, no matter how painful or disruptive.
Doing nothing has worked before: we’ve been through
asset bubbles, dot-com manias, equity explosions, and
credit-fueled consumption by irresponsible consumers
before. Pardon the pun, but the house of cards has
collapsed many times over the centuries. And it came
back into shape without any help from then-nonexistent
Federal reserves, mortgage tax deductions, housing
subsidies or tax credits."
"Doing nothing takes time, which is terminal for
politicians and sometimes difficult for the real estate
industry itself."
"Until we admit that housing purchases are discretionary,
we won’t understand that sometimes there’s nothing to
actually “do” when the absorption rate falls some years.
Remember, there’s no necessary requirement to purchase
a home, compared to other products such as food or energy.
And since there’s sufficient stock to accommodate the
housing needs of nearly everyone, there could be a lull in
housing volume for quite some time.
"The only reason to “do something” is emotional. We’re
a society that doesn’t like the fact that some times are tough
and some people have to feel pain. Our laudable tendency for
social compassion has become complete avoidance of any
problems, along with political and financial absolution for
any mistakes, even the ones we bring on ourselves.
Unfortunately, social compassion isn’t an economic policy.
Good emotions often lead to bad market interventions and
unintended consequences that mostly make things even
worse."
No more Mr. Nice Guy. I think I'm going to post that last
paragraph again later this week.
On becoming human.......................still some work left to do
“A human being should be able to change a diaper, plan an
invasion, butcher a hog, conn a ship, design a building, write
a sonnet, balance accounts, build a wall, set a bone, comfort
the dying, take orders, give orders, cooperate, act alone, solve
equations, analyze a new problem, pitch manure, program a
computer, cook a tasty meal, fight efficiently, die gallantly.
Specialization is for insects."
-Robert Heinlein
invasion, butcher a hog, conn a ship, design a building, write
a sonnet, balance accounts, build a wall, set a bone, comfort
the dying, take orders, give orders, cooperate, act alone, solve
equations, analyze a new problem, pitch manure, program a
computer, cook a tasty meal, fight efficiently, die gallantly.
Specialization is for insects."
-Robert Heinlein
John Tucillo as a "dutch uncle".................
Twenty some years ago, when I was a lot more active in my
local Board of Realtors, John Tuccillo was the chief
economist for the National Association of Realtors. He knows
some stuff about real estate
Reading one of his recent blog posts tipped me off that maybe
he is no longer employed by the National Association.
Besides making an enormous amount of sense about
what happens when rebates and credits are offered,
he puts the real estate industry's favorite sacred cow in play.
Full essay here.
Fun excerpts here:
"The market is now verging on being in the same position
as retailers during the Christmas season. Consumers have
been trained to wait as long as possible to buy ......... they
hold out in expectation that the best deals are yet to come.
This is what the home buyer tax credit is doing to the
housing market. Buyers will wait, knowing that the industry
will lobby for yet another tax credit and that will come on
top of even lower prices....... Consumers are not dumb; they
see what’s going on and they act accordingly."
"Between the mortgage interest tax deduction and the
recurring tax credits, the government is underwriting
massive portions of the cost of becoming a homeowner.
I’m amused when Realtors rail against creeping socialism
when they are in a sector which is a the head of the chow
line."
Ouch!
local Board of Realtors, John Tuccillo was the chief
economist for the National Association of Realtors. He knows
some stuff about real estate
Reading one of his recent blog posts tipped me off that maybe
he is no longer employed by the National Association.
Besides making an enormous amount of sense about
what happens when rebates and credits are offered,
he puts the real estate industry's favorite sacred cow in play.
Full essay here.
Fun excerpts here:
"The market is now verging on being in the same position
as retailers during the Christmas season. Consumers have
been trained to wait as long as possible to buy ......... they
hold out in expectation that the best deals are yet to come.
This is what the home buyer tax credit is doing to the
housing market. Buyers will wait, knowing that the industry
will lobby for yet another tax credit and that will come on
top of even lower prices....... Consumers are not dumb; they
see what’s going on and they act accordingly."
"Between the mortgage interest tax deduction and the
recurring tax credits, the government is underwriting
massive portions of the cost of becoming a homeowner.
I’m amused when Realtors rail against creeping socialism
when they are in a sector which is a the head of the chow
line."
Ouch!
Monday, September 6, 2010
A Poem for Labor Day.............
CHICAGO
Hog Butcher for the World,
Tool Maker, Stacker of Wheat,
Player with Railroads and the Nation's Freight Handler;
Stormy, husky, brawling,
City of the Big Shoulders:
They tell me you are wicked and I believe them, for I have seen
your painted women under the gas lamps luring the farm boys.
And they tell me you are crooked and I answer: Yes, it is true I
have seen the gunman kill and go free to kill again.
And they tell me you are brutal and my reply is: On the faces
of women and children I have seen the marks of wanton
hunger.
And having answered so I turn once more to those who sneer at
this my city, and I give them back the sneer and say to them:
Come and show me another city with lifted head singing so
proud to be alive and coarse and strong and cunning.
Flinging magnetic curses amid the toil of piling job on job, here
is a tall bold slugger set vivid against the little soft cities;
Fierce as a dog with tongue lapping for action, cunning as a
savage pitted against the wilderness,
Bareheaded,
Shoveling,
Wrecking,
Planning,
Building, breaking, rebuilding,
Under the smoke, dust all over his mouth, laughing with white
teeth,
Under the terrible burden of destiny laughing as a young man
laughs,
Laughing even as an ignorant fighter laughs who has never lost
a battle,
Bragging and laughing that under his wrist is the pulse, and
under his ribs the heart of the people,
Laughing!
Laughing the stormy, husky, brawling laughter of Youth, half-
naked, sweating, proud to be Hog Butcher, Tool Maker,
Stacker of Wheat, Player with Railroads and Freight
Handler to the Nation.
-Carl Sandburg
Hog Butcher for the World,
Tool Maker, Stacker of Wheat,
Player with Railroads and the Nation's Freight Handler;
Stormy, husky, brawling,
City of the Big Shoulders:
They tell me you are wicked and I believe them, for I have seen
your painted women under the gas lamps luring the farm boys.
And they tell me you are crooked and I answer: Yes, it is true I
have seen the gunman kill and go free to kill again.
And they tell me you are brutal and my reply is: On the faces
of women and children I have seen the marks of wanton
hunger.
And having answered so I turn once more to those who sneer at
this my city, and I give them back the sneer and say to them:
Come and show me another city with lifted head singing so
proud to be alive and coarse and strong and cunning.
Flinging magnetic curses amid the toil of piling job on job, here
is a tall bold slugger set vivid against the little soft cities;
Fierce as a dog with tongue lapping for action, cunning as a
savage pitted against the wilderness,
Bareheaded,
Shoveling,
Wrecking,
Planning,
Building, breaking, rebuilding,
Under the smoke, dust all over his mouth, laughing with white
teeth,
Under the terrible burden of destiny laughing as a young man
laughs,
Laughing even as an ignorant fighter laughs who has never lost
a battle,
Bragging and laughing that under his wrist is the pulse, and
under his ribs the heart of the people,
Laughing!
Laughing the stormy, husky, brawling laughter of Youth, half-
naked, sweating, proud to be Hog Butcher, Tool Maker,
Stacker of Wheat, Player with Railroads and Freight
Handler to the Nation.
-Carl Sandburg
Rube Goldberg redux.......................
Rube Goldberg got lots of play on this blog back on July 4th
(his birthday).
Boingboing posts a video Goldbergian disciples hard at play-
here.
(his birthday).
Boingboing posts a video Goldbergian disciples hard at play-
here.
The Law of Unintended Consequenses strikes yet again................
September 1, 2010 story from Edmunds.com - here
"Prices of used cars jumped 10.3 percent overall in July
from a year earlier, or by $1,800 on average, according
to Edmunds.com."
My favorite law in action- here
"Why are used-car prices rocketing?"
".....part of the answer is that the supply of used cars is
artificially low, because your Uncle Sam decided last year
to destroy hundreds of thousands of perfectly good
automobiles as part of its hare-brained Car Allowance
Rebate System — or, as most of us called it, Cash for
Clunkers. That was the program under which the
government paid consumers up to $4,500 when they traded
in an old car and bought a new one with better gas mileage.
The traded-in cars — which had to be in drivable condition
to qualify for the rebate — were then demolished...."
"Congress and the Obama administration trumpeted Cash for
Clunkers as a triumph — the president pronounced it
“successful beyond anybody’s imagination.’’ Which it was, if
you define success as getting people to take “free’’ money to
make a purchase most of them are going to make anyway,
while simultaneously wiping out productive assets that could
provide value to many other consumers for years to come. By
any rational standard, however, this program was sheer
folly."
"No great insight was needed to realize that Cash for Clunkers
would work a hardship on people unable to afford a new car.
'All this program did for them,' I wrote last August, 'was
guarantee that used cars will become more expensive. Poorer
drivers will be penalized to subsidize new cars for wealthier
drivers.' Alec Gutierrez, a senior analyst for Kelley Blue Book,
predicted that used-car prices would surge by up to 10
percent. “It’s going to drive prices up on some of the most
affordable vehicles we have on the road,’’ he told USA Today.
In short, Washington spent nearly $3 billion to raise the price
of mobility for drivers on a budget......."
"Prices of used cars jumped 10.3 percent overall in July
from a year earlier, or by $1,800 on average, according
to Edmunds.com."
My favorite law in action- here
"Why are used-car prices rocketing?"
".....part of the answer is that the supply of used cars is
artificially low, because your Uncle Sam decided last year
to destroy hundreds of thousands of perfectly good
automobiles as part of its hare-brained Car Allowance
Rebate System — or, as most of us called it, Cash for
Clunkers. That was the program under which the
government paid consumers up to $4,500 when they traded
in an old car and bought a new one with better gas mileage.
The traded-in cars — which had to be in drivable condition
to qualify for the rebate — were then demolished...."
"Congress and the Obama administration trumpeted Cash for
Clunkers as a triumph — the president pronounced it
“successful beyond anybody’s imagination.’’ Which it was, if
you define success as getting people to take “free’’ money to
make a purchase most of them are going to make anyway,
while simultaneously wiping out productive assets that could
provide value to many other consumers for years to come. By
any rational standard, however, this program was sheer
folly."
"No great insight was needed to realize that Cash for Clunkers
would work a hardship on people unable to afford a new car.
'All this program did for them,' I wrote last August, 'was
guarantee that used cars will become more expensive. Poorer
drivers will be penalized to subsidize new cars for wealthier
drivers.' Alec Gutierrez, a senior analyst for Kelley Blue Book,
predicted that used-car prices would surge by up to 10
percent. “It’s going to drive prices up on some of the most
affordable vehicles we have on the road,’’ he told USA Today.
In short, Washington spent nearly $3 billion to raise the price
of mobility for drivers on a budget......."
Sunday, September 5, 2010
Music from when I was thirteen..............
This classic from the Temptations can only be watched on
Youtube. Eleven million + views. It is worth the trip- here.
A few other favorites from 1965.
Youtube. Eleven million + views. It is worth the trip- here.
A few other favorites from 1965.
In lieu of Sunday's Verse........................
Paul Harvey's Letter from God................Good Day!
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