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Serious Money:
Fourth generation Southern Californian here... just spent 2 weeks there. Saw your pictures.. waaaaayyyyyyyyy overpopulated... and, a graphic depiction of the area. We have pic's from 1906 to present. Can remember cows/squirrels/farms in South Bay area. Not now!!!! Nearly 95% of the homeowners there CAN NOT afford to 're-buy' their own home. Something has got to give....
Your reference in this post hits the mark. Every person you identified is a boomer (the largest & BEST educated generation to EVER hit the earth). So.... why did we change the manner in which we educated OUR children??? We've been ruining the "old" system of education ever since we were powerful enough to swing the vote. In this case, our generation was dead wrong... time has proven that point. And, the posts here on that subject narrate the degradation that the past 3 decades of 'ever-changing methods' have caused.
It is pitiful.
Quick media coverage, no?
WSJ
May 20, 2005 -- 5:05 p.m. EDT
Bush Threatens Veto
Underscoring a widening rift with his own party in Congress, President Bush vowed that if Congress passes a bill to expand federal spending on stem-cell research using human embryos, "I will veto it." He added: "I'm a strong supporter of adult stem-cell research, of course. But I made it very clear to the Congress that the use of federal money, taxpayers' money, to promote science which destroys life in order to save life is -- I'm against that." Legislation being pushed in the House of Representatives would loosen the administration's curbs on federally funded research into embryonic stem cells.
Mr. Bush also said he is "very concerned about cloning," an apparent reference to announcements from South Korea and the United Kingdom that researchers had made advances in cloning embryos for stem-cell research purposes. "I worry about a world in which cloning becomes acceptable," he said.
* * *
Ditto, ditto, ditto!!!
I certainly "second" that one! The pricing pressures are being met with resistance. I don't think it is sustainable.
If Americans would STOP "buying into" the phrase -> "trend", then they could change the trend direction. Remember the guy who told me that our insurance was going up 17% and that it was "in-line" with the national trend? And that I felt he was 'inferring' that I should, therefore, "accept" the increase cuz e-v-e-r-y-b-o-d-y else did??
E-X-C-U-S-E me!!!!!!!!! I don't think so!! They are thieves. I say this because the increase was due to their own stupid market losses... the wrong 'actuarial' pencil pushing in their back offices... the judgment errors in investment vehicles... the very FACT that the market was 'down' and they needed money. So....... I should pay for these inefficiencies? And, the trend is that Americans will pay 17% more to help fill the insurance coffers? Who filled MY coffer when I made a bad decision?
Imagine asking your employer for a 17% raise cuz you lost the money in the market... I bet the stupidity of that insurance agents' reasoning would become VERY clear!
Now then, Court.... since you ARE an employer, what would YOUR reaction to be to an employee's request such as that?? Better yet..... I'm pretty sure that I do nooooot want to know!
Everything is relative, no?
If the WTO is to succeed, then the lopsided imbalances must find the mean.
I believe we will have to (and are) ratcheting down... they will ratchet up. For every "full" ratchet down we have, they might ratchet up a tenth. Eventually, the imbalance will disappear.
So.... like Stanley Tool wages of $14.75/hr PLUS benefits (another $6-$7/hr) versus Mexico's $3.25/hr (no benefits) for the same position within the company.... how much 'ratcheting' must occur when the only substantial difference is 'frt to the consumer' to level that playing field? And, would that not (in the ending spiral of lower wages, lower consumption, etc) bring about a deflationary cycle?
No tools will be made here until Stanley Tool sees an advantage. Frankly, EVERY business must see that advantage.
I believe we are at, or very near, the topping process of the inflationary cycle. Can't help it. It's very clear to me... not tea leaf soothsaying... it's a reality. Whether we are topping inflation now... or 'will' top in the next few months... the pressure to correct JUST the trading ability of Americans will hit home.
Minus ONE tariff on textiles & what happened? Foreign boats were full... in OUR harbors.... ready to unload... and, the minute the tariff expired, the deluge started. They unloaded the boats. And, they're sending MORE boats. We are now screaming 'unfair'. Businesses are throwing in the towel (no pun intended)... they can't compete in textiles. Hmmmmmmmm... only two months ago.... and, our markets have forgotten??
And, just 'when' do we start up our textile factories again? When an imbalance occurs -- an advantage to us--- that we can sell lower than they can sell.
Deflation. It must, and will be, a reality. JMHO.
???!!! So, why do we rally???? Dannnnnnnnggg... something is wayyyyyyy out of wack.
No.. what did it say? They exasperate me to no end... almost can't get myself to read their articles anymore.
This was a good one?
And, in a deflationary environment, cash is king.
We are absolutely experiencing inflation, Eric. It's happening rapidly... and it is not only in basic commodities, it's in the overhead "items". Everything (insurance, business overhead items... you name it) is rising very quickly. And... we have zero pricing power in the upcoming months to absorb it. In fact, we will NOT be able to move those costs into prices going forward. Margins are moving to razor thin. The "little bit" that we can get away with (now) in upward pricing will evaporate & disappear on us in months (not years) ahead.
Everything is relative. A deflationary cycle, I trully believe, is around the corner. Copper & aluminum prices jolted... so did steel... not good. In history, after every vaulting price in copper, our country suffered through a recession shortly thereafter. Copper has been on a tear for over a year...
The climate "feelers" I have out there are feelin' that this time will NOT be different. Watch the price of copper, okay?
Hold onto your seat if this holds true again! It will not be pleasant.
Interesting charts... commentary as well!
Those 5 yr ARMS... the 2007 day of reckoning... possible upside down debt/equity ratios---> not all eyes will be in front of greedy bankers with high rates.
One of the four Hardship Withdrawals from pension/profit sharing plans is a withdrawal to stop foreclosure on a primary residence. They can withdraw (albeit with penalties). Many plans have loans which will be favorable interest-wise. This all is dependent (if you're reading, Court, don't laugh) that the borrow HAS some type of retirement plan from which to draw.
With regard to escalating prices on homes (let's NOT consider the bubble areas) ---> it boils down to: "how much can you pay per month?". When interest rates first lowered, the price of the house moved UP & the gain went to the seller (John Q). Seller's priced the home on what the market could bear. Once that cycle started, it hasn't stopped. When the interest rate goes UP, it will be the s-a-m-e question: "how much can your pay per month?". To move the house, the seller must lower the sale price and.... hmmmmmmmm... sell at what the market can bear. And, to boot, to a smaller audience of buyers.
When a seller has to sell, he must surrender price in a rising interest rate environment. (and... banks win in the longrun... so much for John Q's hayday). I'm sure you know all of this... most of us do... but a reminder that the key element in all of this is the individual choices people make which are freely (or nearly dictated) that constitute the trend. Rising interest rates will absolutely affect home prices. No question about it.
Hey... wanted you to know that I read about half of your site... wrote you a long disertation, then cancelled it. I'll save it for another day. But... the bottom line... I place my vote (I think I was on post 136 or thereabouts), on deflation. Very thoughtful posts...
I've printed these off & will read all tonight. But, "Ask & Ye Shall Receive' ---> This author is j-u-s-t as suspicious as I am. Thank goodness the thinking caps are going onto folks! http://moneycentral.msn.com/content/P116244.asp
Right on time!
Court,
I have vivid memories (as do we all!) of the last gas shortage. I'm having trouble trying to nail down the "tipping" point in today's dollars whereby I'm certain that "this is gonna hurt".
I'm certainly curious as to what your take is on this...
In Oct, 2001, the Fed decided to stop issuing the 30-yr bond. Instead, they moved from the higher 30-yr yield to the lower shorter term yields of the 10-yr.
This would mean to me that the Fed anticipated the upcoming interest rate drop & made the move out of the 30 & into the 10 yr ahead of that trend.
With the consideration of the 30-yr bond new issue (as explained: to lock in rates over an extended period of time & manage our debt more efficiently), do you think they actually foresee a "concerning" trend ahead?
I somehow feel that moving this sizeable debt to long-term (now) is a move that will grab the rate before higher rates are demanded by lenders. I realize that will be good for our country. But the signal it is giving to me (in the business community) is that the slowdown we have right now might be more than a "softening" going forward. It might be a very difficult time...
What do you think?
Court,
Is there a way to translate the "peak" cost of oil (indexed for inflation, dollar devaluation, etc) to what that would mean in todays' dollars?
I believe I could get a better grasp of what life would be like if I knew that comparison.
Thanks,
Elena
Three "F's", you're out???
DITTO!
I certainly (based on patriotism & whatnot) hope you are right about the 'top dog' position. I'm just not sure if there is an erosion of that position due to our debt. And, if an erosion can happen due to "excessive indebtedness", then we should never (ever) put ourselves in that position.
Actually, it's the change in the yield curve & the following consequences economically.
Supposedly, the inverted yield curve we experienced in'99 & '00 fortold (6-months in advance) that a recession was coming. All inverted yield curves have accurately predicted (or could have caused???) the recession thereafter.
On the 30yr bond--> you saw that the govt is reconsidering bringing it back? Due to excessive deficits, the govt needs to go long-term in financing... answer to bring it back comes Aug 1. Now then... I think some of the graph you had on the 30-yr reflected its rarity (in that it was no longer offered after 2001). The 30-yr may (once again) become our benchmark. In the meantime, institutions relied on the 10-yr.
Adendum...
Bye the way, why would our government be sooooooooo pushed to 'protect the risk' that lenders have? And, the "lender" IS IN the RISK business? And, taking on "risk" can make or break you? Is that not what capitalism & risk is all about?
Can private industry now ask the government for laws that protect it from losses? We are in the Profit Business... and we need (sic) legislation to ensure that we make a profit and keep that profit?
How did the risk industry get away with this????
Side deals?? I have wondered about that!!
If Asian countries are our biggest debtor... and the "Generous Americans" who subsidize at our own BORROWING expense (ie: Israel, Afghanistan, global military bases, etc. ) are r-e-a-l-l-y subsidizing with THEIR capital, don't you think they have some 'say' in what we might do? Or at least 'demonstrate' their acceptance or disapproval?
Take the North Korea events of the past year or so. North Korea wanted to sit at the bargaining table with America.. George says no.... (knows they are on an economic collapse & that they want a handout)... won't sit alone with them cuz they can FORCE a handout...
And, a handout from (really) whom? Asian "savers". What does George say along with the "no"? He says "Asian countries, their neighbors, need to sit at the pow-wow". Now then, North Korea is NOT pleased with this. They want their neighbors money (raiding the Asian treasure chests via getting the money from who the Asians loaned it to) and think they will 'complete their raid' via shooting bottle rockets to scare everyone. Then... hmmm... maybe some hardcore fireworks that should scare everyone. Hmmmmmmm.
Was there a side deal? Or am I just too untrusting to read the headlines as the truth? Or, am I just tooooo simplistic with this whole problem?
Their incentive would be to chase the higher return rates that our treasury would be FORCED to offer to get our daily borrow "fix".
This is precisely the area of "sold our country" that I find deplorable--> the strong hand is the lender (foreign)... & we are tied (ball & chain) to the "borrow". At what point in that enslavement scenario does the borrower lose his subjectivity or integrity due to power the lender has on him directly? I believe we have ample history to answer that one... and it's not good.
Eric,
I'm going to send your chart to a guru with the question you posed. Hopefully, I will get an answer.
Meanwhile, in my little world of little knowledge, I'm still hooked on "everything is relative". Go to this link, click inside the graph & hold.. then move right to left watching the dynamic yield curve on the left. Notice the inverted curve in 2000... look where we've been since then with the yield curve. Then, put all of that "yield curve voodoo" (hahahaha) against the backdrop of what was happening economically, politically, globally during those years. Frankly, this chart tells me more than the individual treasuries 'by themselves'.
Thus, my "everything is relative".. might cover the "relative to the other treasury yields" or "relative to econmic conditions" or "relative to the M1/M2". Now then, that LAST one would be interesting, but I hardly believe I could comprehend the answer. Anyway, here's the link (and.. I certainly hope this isn't a redundant link for you! )
http://stockcharts.com/charts/YieldCurve.html
Bravo! Accurate assessment...
So pleased that you're "angry" with Greenspan. Folks in circles 'talk' but rationalize the issues to the point where they're not angry...
In this case, "angry" is healthy. If enough folks get angry, things might change. Albeit, I believe we have very little room for error. Politics has GOT to take a backseat to our economic issues. It's going to take some very, very unpleasant solutions.
Americans let the new bankruptcy laws favor the lenders. What a farce. Lenders just eliminated their "risk" via legislation... risk that's ALREADY on the books... risk that they've already supposedly "charged for" via higher rates/fees... risk that they put on their own books using aggressive con-artist-like solicitations? Or risk that drove them to higher returns catering to sub-prime borrowers?
I'd certainly like to charge someone 18% for cash advances, impose penalties for late payment, have all my expenses covered if I have to litigate and... now... have a lien on their lives if they default.
What is the price NOW for "Visa... think of the possibilities"?
Arghhhhhhhh!
Clever, Eric... & TRUE! Bye the bye.. what was 'with' that whole thing? Like they were the ONE & ONLY think tank?
Frankly, I believe the name "Fountainhead" (unbeknownst to Ayn) was an early description of Greenspan's conduct at the helm of printing presses. Or, should it have been "Head of the Fountain"?
So, you're thinking that Mssssssss. Rand will think he's a Fountainbutt?
ROFL !! What would Gary Cooper think???????!!!
Gaaaaaaaaads, Eric! That is w-o-n-d-e-r-f-u-l!
Bravo, guy!
So.. aren't you the least bit angry with this guy??? Aren't you wondering how the man could sit cool & calm in front of Senators & explain that the economy was moving forward unharmed due to homeowner "equity extraction"... that it was gooOOOOOOooood for the economy for folks to do that?? That he thought that the equity extraction, along with "accelerated use of derivatives", was a goooOOOOoood for the economy? That he hoped it would continue???!!! He was rooting for the economy and stomping the citizens of that economy?? No conscience THEN... so why would he have one now???
I'm enraged with this guy! He wrote a thesis back in the 60's about about how governments steal the wealth of its citizens through inflation, devaluation of the currency, & printing excessive supplies of money... that governments & politicians will always give into the call of the siren "printing presses". He ended his thesis saying that Gold was the only money that was real, valuable, & could not me manipulated. In 2003, a reporter nailed him & asked him if he would change ANYTHING in his 60's thesis, especially his view on gold. Greenspan answered "not one word". Now then...... did THAT hit the front page of WSJ???
I truly believe that he will leave in January with a great deal of relief... And won't those markets roll then? What's the next guy gonna do.. markets don't like uncertainty. And Greenspan?? Let's just call him Spam-man--> no blame 'ever' sticks. Too late: everything he has ever done has led him to this triumphant exit next January. And, he'll blame someone other than himself (ie: the American over-spending Congress; or, the American Public over-spending & not saving; yada yada yada).
I'm just disgusted. I sat on an airplane with some top dogs in the finance world. Their take? One man, whom I watched everyone glance at to get his approval as they spoke, said very little to anyone. He just watched. I asked him (directly) "What do you think of Greenspan?". He slammed his papers into the fold of the book, then slammed his book shut & said "he has SOLD our country; no one can recognize what he's doing."
Actually Nick,
I have to agree that it's decades before it "runs out". But, what the bell-curve has proven time & again is that once a field hits its peak, then everything changes.
For example, if it took 1/32 barrel of oil to extract 1 barrel of oil PRIOR to the peak, then the numbers begin changing AFTER the peak. The cost to extract begin to rise... (ie: 1/2 barrell to extract 1 barrel... then, 3/4 barrel to extract one barrel... then, gadddddddddds, 1 or 1+ barrel to extract 1 barrel.)
This occurance runs the gammit of all known fields. And, they are saying that Peak Oil worldwide is now. We are running the plateau of the peak, & the downward side is (arguably), 2-10 years globally.
That means... price moves up.. uhmmmmm... forever (or until supply/demand changes -- alternative fuels -- slow-up the rising cost process).
The knowledge of where we are, an industrial world dependent on fossil fuels, facing all the repercussions of increasing prices... this may very well mandate our investment decisions moving forward.
Nick, this one is for you & Alan. It's from the UK. I almost stopped reading on the opening paragraphs (thinking that it was another alarmist thing...), but found it interesting reading through the entire article. Thought you & Alan might too ...
http://www.guardian.co.uk/life/feature/story/0,13026,1464050,00.html
I see several problems with this whole situation.
The PBGC charges a "participation" fee to companies who have defined benefit plans. I believe it is a "headcount" fee, but could be wrong. However, it is minimal.
In exchange for that fee paid, a guaranty to participants to pony up defined pension allotments (if the company bellies up) is extended.
Embedded in this process is two fallacies:
First, the company makes minimum contributions based upon "projected earnings" from investments (sic: anywhere from 8% - 10% 'guess' on what investments will yield going forward). The downturn of 2000-2003 headlined all the errors in those assumptions, including the erasing of the investment BASE. Wasn't about 3/4 of the S&P 500 companies - who had defined benefit plans - underfunded????
Second, the PBGC set fees which are based upon "projected liabilities" going forward. The downturn of 2000-2003 caused the PBGC to report a near "collapse" of the agency. The solution? Increase MINIMALLY the fee going forward.
Corporations were wrong; the PBGC is wrong. Bethlehem Steel is a pitance compared to UAL with regard to the future effects on the PBGC. Instead of defending the agency and trying to find ways that 'it can all work to keep everyone happy', they should lay the cards out on the table. If you are right about GM, this UAL offer of notes to the PBGC is a wasted effort to get 'through the day' (because everyone would lose at the end of the day). The agency simply CAN NOT bear the weight of those benefits... even reduced. The PBGC, as of my last reading, is upside down. It cannot meet the obligations of the massive number of retirees who will look to it for a check. They will need the same printing press that SS needs.
We can say this about alot of things... especially about those agencies which buy risk for a fee. Can we not easily project that life insurance companies cannot pony up the huge cash promises they've made when the Grey's start fading away? Can we not say that the re-insurers will have the same fate?
Did Greenspan not JUST say "The approaching surge of American retirees was adding urgency to the need to deal with budget constraints in light of uncertainty about the scale of looming medical and retirement costs..." The KEY is "Scale of Looming".
Bethlehem Steels' pension actuaries got it wrong; the PBGC's actuaries & accountants got it wrong; the market downturn of 2000-2003 proved MOST corporations/accountants/governments/actuaries/insurance agencies ALL got it wrong.
And, they are "right" now? Nothing has changed: they are STILL wrong... and folks STILL rely on their findings... and folks STILL reel at the slightest HINT that the outcome they relied upon does not pan out as planned.
The best laid plans of mice & men oft' gang agley... (sp)
Remember that Bethlehem Steel is not a done deal... there is no 'etch in stone' that they will be paid in the event that the PBGC can not pay OTHER participants (UAL & previous obligations). In the event of a default, they all collectively sink with the ship. Collectively.
Now then, the PBGC has been clear about its instability (and, with this UAL deal they are merely trimming the potential pot of losses... not eliminating... just 'trimming'). What have we read about the Governments' stability in its OWN pension system? This will be a biggy for taxpayers... my guess is that (like all other things), they have not considered the REAL "Scale of looming" liabilities.
Try as I may, Eric, I cannot bring up these charts at home. They just won't load. I will try on Monday at work. Thanks in advance!
Somber (or sober?) reading.. and, what exactly is "or worse"? It's probably best to read the entire article.
Economy at risk of stagnation: Greenspan
--------------------------------------------------------------------------------
Friday, April 22, 2005 (New York):
Federal Reserve Chairman Alan Greenspan warned on Thursday that unless lawmakers come to grips with spiraling US deficits, the economy was at risk of stagnation "or worse."
"Under existing tax rates and reasonable assumptions about other spending, these projections make clear that the federal budget is on an unsustainable path, in which large deficits result in rising interest rates and ever-growing interest payments that augment deficits in future years," Greenspan said in testimony prepared for a Senate Budget Committee hearing.
He said the danger was that deficits would keep rising as a percentage of total national output.
"Unless that trend is reversed, at some point these deficits would cause the economy to stagnate or worse," said Greenspan.
The approaching surge of American retirees was adding urgency to the need to deal with budget constraints in light of uncertainty about the scale of looming medical and retirement costs, according to Greenspan.
He emphasized that the United States may already be in a position where it cannot meet commitments made to the baby boom generation and urged benefit cuts, if needed, be made as soon as possible. 3
On the subject of China's currency, Greenspan said that growing economic pressure will most likely compel China to alter its policy of pegging its currency to the dollar.
"Holding their exchange rate where they are is preventing the growth in the terms that will be most valuable for China in the decades ahead," said Greenspan.
His warning about the budget comes as high oil prices weigh on growth and huge trade and fiscal deficits cause worry at home and abroad.
President Bush has pledged to cut the budget gap in half by 2009.
The Congressional Budget Office has estimated the 2005 budget shortfall will be around $400 billion, including funding for military operations in Iraq and Afghanistan.
Greenspan plans to leave his post next January after 18 years at the helm of the Fed. (Reuters)
You are getting to be quite the proverbial guy with the Dow index!!! Here we are @ 10,000!
I thought so too!
Hey Nick, here's a scarey article. Read beyond the Ameritrade section... more info toward the end.
Wouldn't this (for a thief) be utilized broadly during a downturn???
http://moneycentral.msn.com/content/invest/extra/P115621.asp
Thank you! I'll be looking forward to that!
A sign should be made & placed in the most visual place in the home, AND on top of every cash register in America... better yet, on EVERY "shopping cart" checkout on the internet. Like the mandates for caution on cigarettes (Caution: they can kill you), a mandate should be on debt (Caution: it can enslave you)....
Better yet, make the sign read "Debt is mortgaging your future for the pleasures of today".
....... I like that sign........
Don't forget "S-Y-N-E-R-G-I-E-S" !!!!
Back in '99, the folks here used to frequent the Brass A Saloon. It was awesome there: perfect setting, Ms. Lilly dolled up singing at the piano, Nick eating banana bread with a Wall St Journal edition under his arm calmly listening to all of our ranting, Court pouring over charts & news with the best instinct for shorting a stock I have EVER come across, Alan trading profitably & fearlessly (even when hospitalized for a knee injury!)... Gaaaaaads..... So many people there.... So much fun!
Now then, Court helped build that place & NEVER paid $14.50 for a 1x4x10! His costs were a fraction of that! Freddie & Fannie pleaded with him throughout the ENTIRE year to borrow from them for every amenity inside the saloon... nahhhhhhhhh... he didn't like either one of them. Actually, he would rather that they had l-e-f-t the saloon... And... The day Alan installed the HVAC system, they both called Freddie & Fannie vultures of the American dream. We all watched Freddie & Fannie tense up when either Court or Alan came in. Scarey.
Ms. Lilly & I have always been close. She's soooooooooo like the Miss Kitty I grew up with. I asked her about all the walks she went on with Nick & why so many folks thought she was such a Lady. She answered somberly "because I shoot straight from the hip. No lies, no Pro Forma's, no "Synergies".
Synergies??? Dannnnnnnng! So many of the investments I made a-d-v-e-r-t-i-z-e-d their "synergies"! Court told me (time & again) that the companies within those synergies are merely selling to each other... same money going round and round... never disclosing their customer base...sales to each other mounting & indicating false demand & success ! They NEVER shot from the hip. They ALWAYS used Pro Forma. They ALWAYS promoted "synergies". Ms.Lilly had their number alllllllllll along...
I should have known... she doesn't get somber toooooooooooo much. She'd rather dance & sing. But I came to her position without resistance! We both will literally RUN (or hide behind the bar) when someone promotes their doggone 'synergies'!!!
Worse yet, they started up that hokus pokus "synergies" in 2004! And, I bet is comes AGAIN with the China craze!
Now then, Eric, Ms. Lilly at Lincoln Center??!! How'd you know??? It was a secret!
It's a Casey Jones day in the market.
I think I can... I think I won't... I think I can... I think I won't...
Can't watch this anymore! I'll check back later.
Good luck to all you brave souls!
Ahhhh-freee-kahh? (Oooooooops, the Meryl Streep in me just blurted out)!
Africa?? What will you do there? And, since it's "again", what did you do before?
Maybe I'm being redundant cuz I haven't read ALL the past posts, but I sure would like to know!
Elena
And the ripple effect of that??
GM must NOT declare bankruptcy. Head for the hills with your Fox Fire book if they do.
JMHO
In Los Angeles last October, I walked through a house that was $650,000... 1200sf... built circa 1952. Every board on every threshold is rotten; pipes clank; several 1'square holes were sawed into the hardwood floors. All windows were "stuck" & wouldn't open.
In March 2005, I walked through a brick home HERE which was built ... ohhhhh... maybe 1955. Nothing rotten. Everything sound. It was 1450sf, sells for $80,000, & is close to a multitude of blue collar jobs. Good neighborhood, too. The couple who was asking my opinion on it & wanted to know if I foresaw costly problems. Well, yeah... I found my little list. (and... I do mean LITTLE). I asked them if they would pay $650,000 for this house and, without hesitation, they bellowed a loud, clear "NO! Are you out of your mind??".
Well now... one must conclude that the Los Angeles property had a house value of "zero" and a land value of $650,000 cuz that house needs bulldozing. And, because 'that's the trend', folks will buy that house to go-with-the-flow. They have no alternative. IMHO, the flow is downhill. These are not the elite, have-more-money than thou crowd. These are hard working folks whose income (combined) is barely below 6 digits.
Bubble here? I don't think so. Bubble there? YES!
Here's the question of the day......
Freddie, Fannie, & Ms.Lilly all sit down at the saloon for a lengthy night of conversing & sippin' of the spirits....
At the end of the night, knowing they have all sipped the the juices from the Economic Plum, who do you think will stand up & walk away smiling????
My money (as ALWAYS) is on Ms. Lilly! Dannnnnnnnnnng, she moves through time without greying! And has no worry lines! And will prove her worth any day of the week against Freddie & Fannie who, bye the way, are sauced & out cold trying to clear there sauced heads!
Thanks Alan. And as for JW, the redder it got, the louder I shouted, the faster I talked, the wider his grin ! He loves it when I get my dander up! Makes for a lively life, no?