Thursday, January 31, 2008

Oppressed Christians part 2


Today on NPR, we got to listen to another first class assclown, US Senator Jim DeMint (R-SC) tell us how oppressed Christians are in America by the hostile, secular forces of the US Government. His current book, "Why We Whisper" details the hellish abuse suffered by Christians at the hands of a gay lifestyle promoting, God hating, premarital sex promoting, cat and dogs sleeping together and a whole pile of other things US government. Poor, poor oppressed Christians! They can't say anything about God, and goodness and puppies without being oppressed by a secular government. How sad for them and this poor country.

THESE TIGHTASSED BONEHEADS HAVE CONTROLLED ALL THREE BRANCHES OF THE FEDERAL GOVERNMENT AND THEIR STATE GOVERNMENTS FOR NEARLY A DECADE!!! WHO IS THE TROLL SUPPOSED TO BE WHO'S FUCKING WITH THEM!!! THEY ARE THE GOVERNMENT!!!

They have a tab that says "Blog" on their website, and apparently only publish blessed postings, so I couldn't ask them where exactly they get off. Somewhere, deep in the South some ignorant prick is having all his prejudices reinforced so he continues to follow DeMint and his ilk.

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Wednesday, January 30, 2008

Southern White Racists


Okay, so it's the last day of our 3 1/2 month continental ride (20 US states and 1 Mexican)
and we're listening to Talk of the Nation (of course) and this self-identified "Southern White Democrat" calls in to add his two cents worth on the presidential race. He say, "My friends and I who talk, and we're all Southern White Democrats, we think we could back Hillary, but it's a tough call if McCain runs. We couldn't vote Obama for a lot of reasons. We'd have to go with McCain."

Neil asks, "What would be one of the many reasons?"

SWD responds, "Well, race. People don't talk about it but you know it's there."

Neil (incredulous), "So you don't think America is ready for an African-American President?"

SWD says, "Hey it's not just me."

I look at my wife with my jaw on the floor. Maybe I should commend the SWD for being honest, but Holy Crap! It's 2008! I tend to be prejudiced and assume all White Southerners are racist. Very little in my experience would lead me to change that opinion. I just thought they had all moved to the Republican Party.

Tuesday, January 29, 2008

State of the Nation


Bush wants to stay the course in Iraq and make his tax cuts (for the rich) permanent. These are very, very expensive. When does he suggest we stop running up the debt? How are massive tax increases NOT inevitable?

We have a $9 trillion deficit. Two thirds of it has piled up since the Bush tax cuts were supposed to increase tax revenues, ala Laffer curve and all right wing ideological doctrine. IT DIDN'T WORK!

How high do you let it get before the grown ups take over and raise taxes to pay it off?

This has been a completely right wing economy, spending, tax and borrowing seven years. The Dems were overrun. Massive tax increases are inevitable, and it's the Republicans fault. When do we admit it didn't work?

Monday, January 28, 2008

So how bad can it get (again)?


My education in real estate investing came in my first buy. I bought a modest $150,000 house on a few acres 30 miles outside Boston in 1988. When the the bank seized it they sold it at auction in 1992 for less than $100,000, in spite of my $25,000 in improvements.

There's a house in the foothills in Santa Barbara, California, near where I got married that famously sold for $100,000 in 1929 and $5,000 in 1939. My Dad had been telling my that story since I was a kid growing up in nearby LA. I thought I was being cautious on my first house, but markets fluctuate.

My former UUNET employees (by then WorldCom) were literally laughing at me on the golf course one day in 1999, because I'd sold all my WorldCom stock, and it had continued to rise. I was investing in residential apartment buildings, gold, bonds and US waterfront older single family residences.

"I'm not stupid," I remember one saying, and he wasn't. But he bought into the conventional wisdom. He told me, "I can handle a drop of 10 or 20 percent in any one equity." I asked, "How about 90% How about 100%?"

It was a little embarrassing that they turned from me because obviously the old retired fool was off his game. And I had given them the stock option packages that had made them (oh so briefly) millionaires.

And WorldCom did go to zero. And 19 out of 20 lost everything to margin calls. And I'm still not working.

The moral of the story is to try to spread the story of the moral hazards of bubbles with those you care about, knowing full well they probably won't listen. That's why Eric started iTulip. It's still the right thing to do.

Sunday, January 27, 2008

Tax the rich? Disaster!


My bro brought up a question regarding Obama's economic plan which includes increasing the marginal tax rate on capital gains. "No!" shriek the usual suspects. "The wealthy will lose all motivation to invest or make money!"

Here's the simple answer:

The average hedge fund manager made $363,000,000 in 2005.
The average American household made $48,201 in 2005.

The hedge fund manager pays a "capital gains" rate of 15%.
The average American household pays a "marginal tax" of 31%.

Republicans argue that taxing the hedge fund manager like the average taxpayer would make them work less hard.

Here's the (conservative) National Review's take on it:

"Investment capital is the lifeblood of business expansion and job creation, and the idea that Congress can’t find offsets in the bloated federal budget and must raid Wall Street for more money is preposterous. I know — no one deserves to have their taxes raised quite like these extremely well-compensated benefactors of the party that seeks to destroy them. However, as usual, it’s up to conservatives to know better."

I'm serious. This is actual doctrine and policy of the Republican party. When the sheeple figure this out, do you suppose we'll be trading recipes for "Hedge Fund Manager Au Gratin"?

Saturday, January 26, 2008

Three philosophies

Bush haters. Such irrational haters!


This has really eaten my shorts. The RightTM like to complain that the LeftTM hates George so much and so personally that they end up opposing his perfectly rational and positive policies. "Can't these people just choke down the blind fury and be practical?"

Okay, moron, I'm going to explain this once. His policies SUCK. Pretty much ALL of them. Clean Skies Initiative is a free to pollute card for industry. No Child Left Behind is a blatant attack on publi schools, so the RightTM can get vouchers to send little Tucker and Bailey to Liberty Baptist Academy, where they won't have to mix with them nigra children.

Here's Charles Krauthammer on it in 2003:

"The puzzle is where this depth of feeling comes from. Bush's manner is not particularly aggressive. He has been involved in no great scandals, Watergate or otherwise. He is, indeed, not the kind of politician who radiates heat. Yet his every word and gesture generate heat — a fury and bitterness that animate the Democratic primary electorate and explain precisely why Howard Dean has had such an explosive rise. More than any other candidate, Dean has understood the depth of this primal anti-Bush feeling and has tapped into it."

My wife likes to quote my niece Anna and say, "Hate don't live in this house" so I'll say I INTENSELY dislike Mr. Bush because of his policies and especially the effect it has on the Americans who've shared the least in the American success story.

Comments?


So I sometimes feel like I'm shouting into the closet. I guess it's therapeutic, but I was hoping for more of a dialog at some point. Please feel free to comment and tell me I'm right or I'm wrong or I'm an assclown who needs a life or what are my thoughts on the Fair Tax or how does the internet work or anything else interesting or stupid or profound let me know. If it wasn't for StatCounter, I'd assume no one reads this but they do, so let me know? Okay?

Thursday, January 24, 2008

If facing foreclosure

There is a lot of really bad advice out there about what to do if you face foreclosure. This includes things like giving the key to the bank and walking away, hoping you get to keep your credit cards. If you were talked into a house you couldn't afford and a mortgage you couldn't afford and the shit is hitting the fan, don't snivel, don't beg forgiveness. A vicious heartless form of the free market, unregulated by the Right has hit you between the eyes.

Fight back.

I lost my house in 1991 after a startup effort failed. Everything the bank and finance people are telling you is a lie. You won't get to keep the car. You won't get to keep the furniture. They will take your last dime.

What to do? Fight back. If you make less than the median income, bankruptcy is your best option. Chapter 7 bankruptcy will remove all debt, except student loans and taxes. Over the median is more complicated.

Stop paying the mortgage. Now. No partials, no nothing. Stop.

Stop paying the credit card bills, even minimum. Use the cards to buy a 6-12 month supply of food. Store it in your free house. Use the cards for everything.

Cash your paycheck. Don't deposit it. Cash it. Save as much cash as you can. Stockpile it somewhere safe like a safe deposit box.

It took 9 months from my last mortgage payment for them to physically get us out of the house. Hoard cash.

When you get your bankruptcy docket number, use it on pesky creditor calls. The companies are forbidden from ever contacting you again once they hear that number.

Hopefully, you can afford the down payment on a modest apartment, and begin a life lived with cash.

You have been hoodwinked by government and industry that sucked you into this trap. A couple of the techniques here are technically illegal, but very justifiable as a form of civil disobedience.

Tattoos


Maybe I'm showing my age here, but Whiskey Tango Foxtrot! I just saw the most inane tat, and I'm thinking the moron hosting it hadn't thought about what he'd tell his grandkids when they ask what it means . In bold uppercase letters, the bagger at the grocery store had this on his forearm:

HATE REVOLVES
AROUND ME
Eddy

The idea of a tat that only your significant other can see is relatively cute, but the rule used to be, "Never get a tattoo that the judge can see." In New Orleans, I ran into a guy with obviously home (or prison) made FACIAL tats. Unless you're a New Zealand Maori, facial tats are a really dumb idea.

Wednesday, January 23, 2008

Ignorance



So we're passing through small town Florida and stop for lunch at a little middle of nowhere dive and I grab the little local weekly newsrag for the always amusing read. There's a "joke" in here that bothers me in several ways and demonstrates the ignorance that is so woven into the fabric of American discourse and policy. Here's the "joke".

Two Iraqi spies have successfully snuck into the US. The first one begins to congratulate the second on their success in Arabic. "Shut up!" says the second. "We're in America! Speak spanish!"

Where to start? What is an Iraqi spy? Are we at war with Iraq? What exactly would an Iraqi spy be in the US to learn? The allusions to racist anti Latinos is obvious and a little heavy handed, but basically those who would have written this or find it amusing would have a few things in common:

They assume we are at war with Iraq.
They assume immigrants are a bad thing.
They are assclowns.

That is all.

Tuesday, January 22, 2008

Don't do this!


There is a stretch of moral quicksand out there that you really want to avoid. This is the situation in which a good friend or family member comes to you and says they need help making a mortgage payment or refinancing. It's very easy to get sucked into what seems like a kind thing to do, but is actually a tragedy in the making.

If a friend or family member is in trouble on a house or condo they bought in the last 3 or 4 years, put little or no money down and have an adjustable rate mortgage, offer to help out on the nine hundred bucks or so that a bankruptcy attorney charges. Otherwise, they're just delaying the inevitable, and if you go down with them, you'll be in no position to help anyone, including yourself.

This is one of those cruel to be kind things that you know is the right thing to do, because it's so hard. You may get yelled at. There will be words. Take it. Be the grownup. You're doing them a favor.

After the dotcom collapse, there were a lot of whining 20 something former VP's of something at a startup having a hard time getting work as sub-junior-assistants. "How long do I have to wait for the recovery so I can get my real deserved level job, title and pay?" I'll bet I told dozens, if not hundreds of them,"No job title held from 1997 to 2000 means anything in 2001."

Similarly, the "price" of your house in 2005, if you didn't sell it is substantially lower. Get over it. It'll be close to a decade, if history serves as a guide before it even approaches those levels. 7 years and 10 months ago, the NASDAQ hit a high just over 5,000. Right now it's at 2,297. I took a lot of crap 7 1/2 years ago for suggesting we might not get it back for a decade instead of a few quarters. We're talking about some of the smartest, wealthiest people out there, including 2 billionaires.

I was right.

They were wrong.

Sound familiar?

Financial fallout


Anybody who's been around me the last 3 or 4 years has heard me rant about the absolute collapse of housing values coming due, and the brick wall the US economy is headed into because of securitized mortgages, liar loans, massive US borrowing and the vast spending on the alleged GWOT.

Well, I got called very bad things by a lot of people, many in the Real Estate biz, and all I can say is I TOLD YOU SO!

The assclowns like JJ Cramer are still calling it a buying opportunity, but this thing is called a depression. They are as inevitable in a market economy as tides in Nova Scotia.

Hope y'all are set for it. Put the plastic back in the wallet, or better yet, burn it. Here are some new truisms I've been laughed at for spouting:

The price of everything fluctuates. Stocks, real estate, everything.
Your credit score is bullshit. Money in the bank is important.
The market can be irrational longer than you can stay liquid.
Never finance a car. If you can't pay cash for it, get a bike.
You can afford something if you can pay cash for it. Just because you can make the minimum payment, doesn't mean you can afford it.
Minimize. People survived without Cable TV, cell phones, home broadband, new cars, vacations and plasma flat panel TV's for a long, long time.
If you have any debt, never eat out.
Buy real food and cook it. "Convenience foods" are hideously expensive in comparison.

Anyway, that's it for now from here at Smug Central.

Monday, January 21, 2008

Faith without works is apparently Methodist



You gotta love Christians. Just when I thought I'd give the hypocrisy a break, they throw this one right in my face. In an earlier post, I cited the destruction of the homes of a hell of a lot of poor black people in New Orlean's Ninth Ward two and a half years ago, and the almost total lack of effort to improve the lot and lots (sic) of these people. Christ, you will remember spent most of his utterances requesting assistance to the poor. I recall none in which he called for houses to be built, never mind enlarged for him, his Pop and the flock.

Well, a short drive from New Orleans we come upon a group of campers working on the addition to a church in the lovely tourist town Cedar Key. They've all got nice rigs, and all their tools, and I'm sure the folks back at the home church give them a big shout out and clap them on the back for doing the Lord's work. Do any of these people read the Bible past Leviticus? Sheesh.

Don't see no poor people 'round here. No sah. And none of them troubling darkies. I pondered and pondered but couldn't figure it out. So I went back to ask. Whoops! The site is deserted by 3:30 on a weekday. I never got to ask if they didn't think there should be housing for everyone before they start in on another one for the Big Guy? I mean, how many does he need?

WWJD? I think he'd choose to meet at the High School gym (remember- naked and drinking wine)and spend most of his time trying to figure out how to house and feed the poor.

Saturday, January 19, 2008

I made Harper's


Once more I'm the press whore. My good friend and former employee Eric Janszen gets the cover story in the current (February 2008) Harper’s. It’s a great analysis and discussion of just how badly things are about to become economically in the US. Oh yeah, I get mention and even get my very own footnote!

Eric and I met at Cayman Systems in Cambridge in the late 80’s. This was early internet. There are an estimated sixty five million dotcom domain names at present We were 96th.

Congrats, Eric! Keep up the good work! You can check him out at iTulip.

Jesusism


Okay, it’s always bugged me the weird way Christians cherry-pick the Bible to come up with their bizarre beliefs, and I thought it would be interesting to just take parts of the Bible, and create a religion around it. Since the name “Christianity” is already taken, I’m calling my new religion Jesusism.

All sacraments, beliefs and practices of Jesusism come directly from the Bible. Footnotes follow.

First, Jesusism is practiced naked. We were naked in the Garden of Eden before the fall, so we need to emulate that state of grace.

Second, the words and acts of Jesus are the basis of Jesusism, so personal property and possessions are forbidden. Furthermore, the miracles at the wedding at Cana and the feeding of the multitudes teach us that we should bake bread and cook fish and provide it to the poor. All of this should be done while drinking wine.

Needless to say, Jesusists are rabid Pacifists, decrying the need for a military at all. They seek to practice timidity, and would rather forgive than incarcerate. They value mercy overall, and strongly question the imprisonment of all but the most violent offenders.

Obviously they are strongly opposed to capital punishment, as that’s what did in the Big Guy himself. They practice thoughtful premarital sex, because they believe they should do unto others as they would have others do unto them. Contraception and abortion are of course legal and cheap, as it was for Jesus’ hooker pals.

Homosexual activity among consenting adults is repected and valued as it was long ago made obvious that obscure prohibitions in Leviticus are part of the ceremonial, rather than eternal law. Gay marrriage is available at any church, and usually performed by gay clergy.

Also obviously, wealth is a big no-no and businesspeople are reviled rather than revered (see overturning the moneylenders tables).

I changed my mind. No footnotes. Anybody want to call me on how Jesusism isn’t a logical result of belief in the infallibility of scripture?

WWJD indeed.

Friday, January 18, 2008

Tax relief. Uh huh.


I caught the Marketplace reporter on NPR this afternoon referring to Bush’s “tax relief” plan to jumpstart the economy. It’s only relief if it was wrong in the first place. Paying for what we buy used to be the American Way. What Bush has proposed for his “tax relief” plan is to borrow an additional $145,000,000,000 from China to spread around to the rich and corporations and hope they spend it and something happens.

Borrowing from the Chinese, Japanese and various Middle East governments isn’t “tax relief”. It’s absurd and wrong and will continue to cripple Americans finally taxed to pay for this nonsense.

Thursday, January 17, 2008

New Orleans 2 1/2 years after Katrina




We're here in the Big Easy, and all I can say is "Whoa". After all the aid promised and NOT delivered by the Federal government, it still looks like a war zone. Hard to believe we're in America. The state of this city shows the craven, self serving, delusional foolishness of an inept, incompetent and corrupt, ideological administration has abandoned hundreds of thousands of its' citizens to make the point that government doesn't work.

The top picture shows one of thousands of houses with the odd code- 2 humans and a dog were found dead here. The next is just the end of someone's previously pleasant life. The last is the lowernine.org house.

I'm too pissed to type.

Please consider giving to lowernine.org or volunteering at their web site.

Rick Prose and lowernine.org are among the groups working at rebuilding, but the scale of the destruction and the failure of the government to act is infuriating. We bought a shell of a house for them to have an HQ and got our first look at it today. Here are some of the scenes of a once great American city laid low by 2 disasters name Katrina and George. Following that is a reminder that conservative leadership has been ignoring poor people in the American South for a very long time.


Louisiana 1927 by Randy Newman

What has happened down here is the wind have changed
Clouds roll in from the north and it started to rain
Rained real hard and rained for a real long time
Six feet of water in the streets of Evangeline

The river rose all day
The river rose all night
Some people got lost in the flood
Some people got away alright
The river have busted through cleard down to Plaquemines
Six feet of water in the streets of Evangelne

Louisiana, Louisiana
They're tyrin' to wash us away
They're tryin' to wash us away
Louisiana, Louisiana
They're tryin' to wash us away
They're tryin' to wash us away

President Coolidge came down in a railroad train
With a little fat man with a note-pad in his hand
The President say, "Little fat man isn't it a shame what the river has
done
To this poor crackers land."

Louisiana, Louisiana
They're tyrin' to wash us away
They're tryin' to wash us away
Louisiana, Louisiana
They're tryin' to wash us away
They're tryin' to wash us away

Wednesday, January 16, 2008

Abortion and an angry God


Okay, the whole abortion thing has always pissed me off, but it just occurred to me that there's another (yet another) huge disconnect in modern American Evangelical doctrine. They bemoan that "Abortion stops a beating heart" as if that was the most evil, horrible, degraded, nasty thing that could happen to the little clusters of cells. How could anyone send such innocents to a ghastly, moments long torture? What sick, depraved mind could put an innocent through moments of possible pain?

Here's the funny part. They believe since that blastocyst has a soul and is innately sinful, that after being aborted, it will go to hell for billions and billions of years.

Now THAT'S sick and depraved.

(BTW, my point is NOT that if you have an abortion, your fetus will go to hell for all eternity (and therefore abortion is to blame), it's just that I wanted to point out what these compassionate followers of Christ think will happen to aborted fetuses, Jews, Catholics, Mormons, Hindus, Muslims, Unitarians, Episcapalians, Zoarostrians, Buddhists and anyone else who doesn't ascribe to their particular, narrow definition of the saved. What a bunch of assholes.)

Tuesday, January 15, 2008

Debt and taxes


Okay, this is really, really simple and millions of Americans don't get it. The US will require a MASSIVE tax increase over the next decade to pay for Bush's "borrow and spend" madness and the absurd war in Iraq. The Republican candidates for President are falling all over themselves to take "no new tax" pledges and are missing out on the absolute necessity of paying down the national debt.

There's an interesting parallel with people supplementing their income by running up credit cards or refinancing their homes. This is not sustainable. As Stein's Law asserts, "If something can't go on forever, it will end." As rates have adjusted up, and credit tightened, we are seeing increasing home foreclosures and bankruptcy filings. The US is headed for the same thing.

The US government raises about $2 billion a day to pay for the war and other expenses, happily piling up debt. The Chinese, Japanese and Mideast countries continue to loan to us and we take it. When they decide we're not such a good risk, they'll stop and all hell will break loose. Interest rates we pay on the debt will soar as will inflation. I remember the 70's and this is going to get ugly.

Saturday, January 12, 2008

Missing children


Okay, this one may be controversial, but it burns my shorts when you see how much time, money and effort goes into “missing children”, the pictures on the postcard phenomenon that scares untold millions of parents into locking up their latchkey kids and teaching them to scream, “Stranger danger!” whenever they don’t recognize someone.

I got a phone call from a guy once raising money for the missing kids. I asked him why the hell I (or he for that matter) should waste time or money getting involved in somebody else’s child custody battle.

He was stumped.

He said 40 gazillion children were stolen last week.

Uh huh. How many by their own parent?

The first few he tried to document, turned out to be all about Dad taking the kids, when Mom had been awarded them or vice versa and I hung up. The most likely sexual molesters of kids are siblings, parents and other close relatives, so we are wildly overestimating a practically nonexistent threat while burying a real one. Ridiculous.

I also love the idea that everything is morally corrupt today, and was so much better, say, fifty years ago. The modern era is evil. How we have fallen morally. The Evangelicals love this one. What complete bullshit.

Ask anyone Black who lived below the Mason-Dixon line in the 50’s or 60’s how much better and more moral America was then. Ask a choir boy ass raped by a priest how much more moral it was then. Ask someone who became pregnant by sexual abuse from a loving, Christian family member how moral the homes they were sent to and abused in were.

I had a conversation with one of my sister-in-laws in which she tried to convince me how important it was to fingerprint and tattoo our kids, cuz so many of them are stolen.

How much nonsense do people need to spread to keep Americans in fear? STOP IT!

Friday, January 11, 2008

Thanks to Charles Hugh Smith

Brain-Dead Predictions about Housing (January 2, 2008)


What would the New Year be without some predictions? Rather than strive for wild guesses from the edge, I'm going with predictions so obvious they qualify as brain-dead. Nonetheless--or perhaps because of their tremendous obviousness-- they carry profound implications for the U.S. economy and culture.

1. Housing prices will fall farther and longer than every guess being bandied about in the mainstream and financial media. You know the stories--expert #1 foresees a 15% drop, expert #2 says a 30% decline is possible in the frothiest markets, etc.

Why fuss around with namby-pamby numbers like 15-30%? I'd say it's absurdly obvious that 80% to 100% declines are already baked into some areas--yes, houses won't find buyers for a $1, i.e. the value will suffer a 100% decline to zero.

2. The housing market won't turn around in 2008--or 2009, 2010, 2011, either. The really smart folks will be saving their money for 2012 or maybe 2013, when years of grinding losses will have stripped the assets of everyone who bought real estate with the idea of retiring on the proceeds. At that bottom, everyone will be disgusted with real estate, both residential and commercial, and no one will be dumb enough to sink dead money into an asset class which continues to decline in value year after year.

At that point, say Q1 2013, then housing will again become a buy.

How can a house become worthless? Just ask residents in depopulated areas of Detroit. If people pull up stakes because jobs disappeared, then houses drop to zero value. This is not some bleak future--this has been the case in areas of Detroit for many years. (Note that the larger Detroit-Ann Arbor-Flint metropolitan area actually gained population in 1990-2000.)

Will this happen everywhere? Of course not. But four other easily predictable forces will trigger huge declines in areas which have been seen as "safe from price decline."

3. Exurban burnout and job losses will take a toll. Take two hideously long commutes to distant jobs, a centerless, lifeless suburb in the middle of nowhere, take away one job and presto, you get an empty subdivision of essentially worthless McMansions nobody wants at any price. Add a dash of decay which acts as a catalyst, and you speed up the abandonment of the exurb.

4. People will "double up" as the economy sours. As I have commented here many times, the population of San Francisco rose by 52,000 (7.6%) in the dot-com boom in 1995-2000, even though the number of new housing units increased by only 5.4% between 1990 and 2000. Take a look at these numbers, all courtesy of the U.S. Census Bureau:

housing units in S.F. 2003: 346,527
residents in S.F. 2003: 751,733

residents per unit: 2.17

housing units in S.F. 1990: 328,471
residents in S.F. 1990: 724,000

residents per unit: 2.20

Looks pretty stable, right? But the population was 776,733 in 2000--meaning 50,000 people moved into the city in the late 90s and 25,000 had left by 2003.

The city added 18,000 units in the full decade 1990-2000, which historically correlates to about 37,000 residents. Indeed, the number of residents per housing unit has actually declined since 1990.

So what's the point? Just this: 5% of a population can move in or out of a city regardless of how many housing units are present. Simply put: people double up in boom times when housing is in short supply and in recessions when money is short.

Many single people bought houses they couldn't afford in the bubble. So did families. So where are they moving? In with someone else is the answer for many. Some people who are trying to hang onto their homes are taking renters, who then leave vacant apartments or condos behind, while others who have bailed out are moving in with other family members or friends.

Take 75 million housing units nationally and 5% of the population doubling up, and you get 4 million empty residences. You think the inventory of empty homes is high now, look what happens when people start losing their jobs. They will get very creative about living quarters, and very creative about cutting expenses they can no longer afford like mortgages and rent.

Houses can't be moved (at least not cheaply), but people move all the time. And when they move away from places, the price of housing in that area declines. It's supply and demand, and as money gets tight the demand for housing drops. People take roommates, move back home, double up.

5. Houses built where they should not have been built will be abandoned. Large swaths of known floodplains are now covered with subdivisions in the Sacramento Delta region. No doubt the same can be said of certain stretches of the Mississippi River region and other coastal and riverine flood zones.

Back in the good old days of say, 2007, governments might have reckoned they had the funds to rebuild dikes and other engineering wonders to protect a few thousand new homes. But as the economy sours, governments are suddenly short of funds. And as people leave those distant suburbs, then the stark reality will become apparent: it isn't worth tens of millions of dollars to protect a few thousand homes (many standing empty) which should not have been permitted in the first place.

Of course the homeowners will feel entitled to government protection; it is a natural assumption that if the county allowed the builder to build the homes, then it was "safe" to do so. New Orleans is not the only inhabited area with grave risks of flooding; the willy-nilly building boom saw thousands of houses tossed up on land which was rather clearly unsuitable due to heightened risks of flooding, etc.

Will government buy out beleaguered homeowners? No doubt there will be cries to do so, and other voices noting that governments are now broke or in deficit mode. Lawsuits will be filed and much money will be spent resolving a crisis which resulted from lax approval of questionable building sites.

6. Poorly built McMansions will be abandoned as the costs of repair exceed the value. Those of you not in the building trades may scoff at this, but go find a "new home" which has had the plumbing fixtures and copper piping ripped out (to be sold for the scrap value), a swimming pool filled with guck and leaky flashing around the chimney, not to mention broken windows, buckled hardwood veneer flooring and damp, rotten carpets. The cost of fixing all this is huge, especially if water has leaked into the framing or subfloor.

Although I can't locate the source, I remember reading that in the depths of the 1930s Depression a premiere commercial building in New York sold for less than the installation cost of its elevators in 1928, just before the Crash.

If you doubt that property can drop 80% or more in value, recall that real estate remains a business proposition: if you can't make money owning this asset as a business, not as a speculation, why buy it? If you can't rent the property for a profit, and keep it rented through thick and thin, then why risk buying it? Owning a property which sits empty for months or years is a very sure way to go broke. If you can't sell it, then you walk away and start over. That's Capitalism with a capital C, folks.

In honor of football season, let's trundle out a football metaphor: you can toss the ball in the end zone, but if there's nobody there to catch it, you still lose.

Thursday, January 10, 2008

Bubble Boy Bush in The Middle East Peace Miracle


Okay, the Imperial President (least popular world leader throughout Arab lands) meets with the least liked Israeli leader in a generation and a Palestinian head of state who doesn't even pretend to run half of Palestine and they are somehow going to make a breakthrough in a 60 year old conflict? With no political capital or good will anywhere in the region? Who the hell is directing foreign policy for this administration? Homer Simpson?

Honest to God, these people are so oblivious to the obvious and ideological to a fault, it makes me crazy. I genuinely believe Bush has brought an end to America's leadership position in the world a generation or two before it had to be. Thanks pal.

And all the happy talk about the economy? The investment banks (Merrill, UBS and all) are selling billions and billions and billions of shares of their stock to mostly countries which had citizens on board the planes on 9/11 (Saudi Arabia, UAE and Qatar to name a few).  At least they are all secular democracies. Oh wait... The US bank sector will probably lose $25 billion this quarter. The bets they made on mortgage backed securities went wrong, so the US is printing them more money, and suggesting they whore themselves to the Middle East as Bush and his family have for years.

Of course if your mortgage payments go up, they'll do the same for you. Whoops. No they won't.  Now Bush is promoting tax cuts for the rich to pump up the economy. Honestly, people, what's it going to take before people take up arms against these idiots?

Tuesday, January 8, 2008

Buy peace now!


One of the many fun things about being loaded is getting to think differently about money and what it can fix. There is no waiting time at a restaurant if you palm the maitre‘d a Benjamin. And there is a table with a view available if you pay that nice couple over there $200 to eat somewhere else. I used to get 20 something employees to do things they’d never thought possible when they were suddenly making 6 figures. It’s about thinking outside the box.

The current administration IS the box. So here’s my crazy idea.

Okay, there are an estimated 3.9 million Palestinians living in the West Bank and Gaza. Creating peace and a two state solution in Palestine and Israel goes a long way toward fixing global Arab animosity towards the US, and do more than attacking Iraq has to win the alleged WarOnTerrorTM.

Palestinian monthly median income in 2005 was about $385, let’s call it $5,000 a year. We could hire the entire nation of Palestine, man woman and child for about $19.5 billion a year. Think about it. Peace in the Middle East in our time for an annual price of 2 months in Iraq.

We hire them on the condition that they calm down, take a chill pill, feed the kids, think it all over, maybe take a vacation, see the uncle in Chicago. Maybe we keep them on payroll for 5 years. Maybe 10. How would the image of the US in the Arab world be if we hired the entire country?

I truly believe it would work, and I also believe it will never happen. George Soros? Warren Buffet? Bill Gates? Wanna make a big difference?

How do you explain bad behavior by "adults" to children?

My friend David wrote this. It was too good not to pass along.



It was a beautiful day in the park. I had just picked

up Nyan from skateboarding. As we were heading to the car, we ran

into a local ex politician walking the grounds. Somehow the exchange

of greetings and pleasantries became a stream of, ignorant and

bigoted comments from him, that I suppose were an attempt at humor.

Nyan looked at me quizzically and I just smiled as if to say I'd

explain it later.



I don't usually engage people who operate on this level. It's an

energy draining experience and usually unproductive. Unfortunately,

It's not the first time I had encountered bad behavior from this

individual, but I know that he does have a few good qualities that

emerge once in a while, so.....



Suzi always says that people get offended way too easily. And I

have always tried to see past the seemingly "offensive" remarks and

actions of folks that I encounter.



I view bad behavior as merely a symptom of personal issues or hang

ups. So I try to remember to stand sideways and let the sh*t fly by.

I've seen plenty of loudmouth bullies, especially in politics, behave

in ways that would have landed them in the corner in kindergarten. But

how do you explain this kind of socially retarded behavior to a child?





Here's the point of this letter:



I truly believe that no matter what the current mode of

existence someone is in, their basic spirit is good and true and in

harmony with the universe. When we remember this, all conflicts

become superficial and vanish in the really big picture.



"Namaste" The Sanskrit word meaning (I bow to you) says it all.



Namaste. "The Light of God in Me recognizes and honors The Light of

God in You and in that recognition is our Oneness."





So what do you tell the child?

I would say this: "Sometimes people become out of balance with their

true inner nature."

When they forget who they truly are, they can become needy, greedy,

seedy....(or worse yet, politicians)

Just kidding. I've known some righteous politicians in my time.

Unfortunately, in small towns (countries) like ours, often the

cream does not rise to the top.

So maybe it's best to teach the child to look past the behavior,

look past the words, and look for the spark that may be nurtured and

educated. We can all choose to focus our attention on the positive

aspects of any persons' behavior. Maybe that little spark of light

can overcome their darkness.



Don't get me wrong though, We have to be aware. Passive peace

mongering can be good to a point. But when an actual threat is

bearing down, sometimes a bloody nose (metaphoric or otherwise) is

the correct response.



I'm going to practice some Piano now, then walk the dogs,

look at the stars, and think about new ways to connect with and draw

out that divine spark. And I wish you all peace and happiness in the

new year.




I Bow to You..... Namaste



David

Recorded Music Industry


Okay, there's an aberation in history called the Recorded Music Industry. For a hundred years or so, it made sense to sell recorded wax cylinders, LP's or CD's and put most of the proceeds in the pockets of, not the artists, but the agents, producers and purveyors of the aforementioned media. This is ending, and it's not pretty.

The boneheads at RIAA have made suing little people into an artform. Many, many artists have written and performed great songs about what assclowns the record industry idiots are; my personal favorites are "Zanz Kant Danz" and "Mr. Greed" on Centerfield by John Fogerty.

Anyway, almost all recording artists make no money for themselves from recordings; the money is in performing. I'm hoping in 10 years there is no more recorded music for sale, it will be available online and traded and shared by all.

Wednesday, January 2, 2008

Screwing the poor again, like Jesus would


The sub-prime crisis has been in the news much of late, but I get the idea that the story and its’ repercussions are going over most people’s heads. There is a vast array of enterprises that arose in recent years to screw the poor out of yet another buck, which is really the broader world of sub-prime debt.

In 1990, there were no Starbucks. In 2002, there were no payday loan/check cashing-for-a-fee storefronts. Today there are about 8500 Starbucks. Today there are over 22,5000 payday loan stores. I entered a payday loan store today and asked a woman behind the counter how it worked.

She explained that if I couldn’t make it to payday next Monday, they could loan me up to 70% of my paycheck, after taxes and deductions. I asked what this would cost me, and apparently I’d pay them what they loaned me plus 16%. That’s not an annual rate of 16%. It’s for 5 days. That’s an annual rate of 1,168%. At that annual rate, if I borrowed $1,000 today and kept it for a year, I’d owe $12,680 at the end.

The joys of deregulation are responsible for the mortgage collapse, resulting skyrocketing foreclosure rates, and usurious payday loans. You can thank the small government, free markets rule, heartless bastards of the Republicans and their ReligiousRightTM syncophants. Did someone cut the red letters out of their Bibles?

How do they square it with this:

Matthew 19:21
Jesus answered, "If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me."

How can you promote laws and legislators that allow businesses to charge a poor person in a tight spot over 1000% annual interest and call yourself a Christian?

Tuesday, January 1, 2008

Had to post this


I already ranted about the war on drugs. Well, at least the War on the Middle Class is going well...