[CA renter]

Barnaby,

Does this chart look like we are closer to the top or the bottom in the S&P:

1960 – Present Weekly

http://stockcharts.com/charts/historical/spx1960.html

Or the Dow:

http://stockcharts.com/charts/historical/djia1960.html

Now, I’ll admit to being a bear, so my bias is showing… But we look much closer to a top than a bottom to me.

The Dow is very near it’s peak during the “stock market bubble” in 2000.

The last time we saw these levels was in 2006 — the go-go days of “trees growing to the sky”. Does the future look better or worse for the bulls in 2008? Remember how the CNBC cheerleaders were rejoicing when the market broke through 10,000 on the way up? Better or worse now?

I think there is significant downward pressure in all markets, but that’s just deflationary ol’ me. 🙂

[CA renter]

Hard to believe this was 2005 (seems more recent):

Spitzer Claims ‘Powerful’ Evidence Against AIG; Stresses Today’s Witness Buffett Not Subject of Probes

April 10, 2005

…Spitzer, the New York State Insurance Department and the SEC have been investigating AIG’s accounting practices primarily related to a reinsurance transaction with General Reinsurance and dealings with other offshore reinsurance companies. AIG’s relationship with Starr International Co. is also under scrutiny.

http://www.insurancejournal.com/news/national/2005/04/10/53619.htm

————————-

Whatever one thinks of Spitzer, I firmly believe he was on the right track with many of these financial corporations. I have no doubt that his “indiscretions” were used against him because he was so tenacious in his investigations. He was too close to the fire.

AIG was having “accounting” problems back then, and I thought at the time that they were unwinding some of their derivatives exposure (as Buffett was doing after this investigation).

(correction to above post…FRE, not FMC)

[CA renter]

Hard to believe this was 2005 (seems more recent):

Spitzer Claims ‘Powerful’ Evidence Against AIG; Stresses Today’s Witness Buffett Not Subject of Probes

April 10, 2005

…Spitzer, the New York State Insurance Department and the SEC have been investigating AIG’s accounting practices primarily related to a reinsurance transaction with General Reinsurance and dealings with other offshore reinsurance companies. AIG’s relationship with Starr International Co. is also under scrutiny.

http://www.insurancejournal.com/news/national/2005/04/10/53619.htm

————————-

Whatever one thinks of Spitzer, I firmly believe he was on the right track with many of these financial corporations. I have no doubt that his “indiscretions” were used against him because he was so tenacious in his investigations. He was too close to the fire.

AIG was having “accounting” problems back then, and I thought at the time that they were unwinding some of their derivatives exposure (as Buffett was doing after this investigation).

(correction to above post…FRE, not FMC)

[CA renter]

Hard to believe this was 2005 (seems more recent):

Spitzer Claims ‘Powerful’ Evidence Against AIG; Stresses Today’s Witness Buffett Not Subject of Probes

April 10, 2005

…Spitzer, the New York State Insurance Department and the SEC have been investigating AIG’s accounting practices primarily related to a reinsurance transaction with General Reinsurance and dealings with other offshore reinsurance companies. AIG’s relationship with Starr International Co. is also under scrutiny.

http://www.insurancejournal.com/news/national/2005/04/10/53619.htm

————————-

Whatever one thinks of Spitzer, I firmly believe he was on the right track with many of these financial corporations. I have no doubt that his “indiscretions” were used against him because he was so tenacious in his investigations. He was too close to the fire.

AIG was having “accounting” problems back then, and I thought at the time that they were unwinding some of their derivatives exposure (as Buffett was doing after this investigation).

(correction to above post…FRE, not FMC)

[CA renter]

Hard to believe this was 2005 (seems more recent):

Spitzer Claims ‘Powerful’ Evidence Against AIG; Stresses Today’s Witness Buffett Not Subject of Probes

April 10, 2005

…Spitzer, the New York State Insurance Department and the SEC have been investigating AIG’s accounting practices primarily related to a reinsurance transaction with General Reinsurance and dealings with other offshore reinsurance companies. AIG’s relationship with Starr International Co. is also under scrutiny.

http://www.insurancejournal.com/news/national/2005/04/10/53619.htm

————————-

Whatever one thinks of Spitzer, I firmly believe he was on the right track with many of these financial corporations. I have no doubt that his “indiscretions” were used against him because he was so tenacious in his investigations. He was too close to the fire.

AIG was having “accounting” problems back then, and I thought at the time that they were unwinding some of their derivatives exposure (as Buffett was doing after this investigation).

(correction to above post…FRE, not FMC)

[CA renter]

Hard to believe this was 2005 (seems more recent):

Spitzer Claims ‘Powerful’ Evidence Against AIG; Stresses Today’s Witness Buffett Not Subject of Probes

April 10, 2005

…Spitzer, the New York State Insurance Department and the SEC have been investigating AIG’s accounting practices primarily related to a reinsurance transaction with General Reinsurance and dealings with other offshore reinsurance companies. AIG’s relationship with Starr International Co. is also under scrutiny.

http://www.insurancejournal.com/news/national/2005/04/10/53619.htm

————————-

Whatever one thinks of Spitzer, I firmly believe he was on the right track with many of these financial corporations. I have no doubt that his “indiscretions” were used against him because he was so tenacious in his investigations. He was too close to the fire.

AIG was having “accounting” problems back then, and I thought at the time that they were unwinding some of their derivatives exposure (as Buffett was doing after this investigation).

(correction to above post…FRE, not FMC)

[CA renter]

Add my name to the chorus of 50bps cut this week (they’d probably do 75-100bps if they had more ammo).

The ban on financial shorts is probably a given. One has to wonder why, seeing how “successful” the last ban was (note what’s subsequently happened to FRE, FMC, LEH, MER, etc.). But they will still try…

[CA renter]

Add my name to the chorus of 50bps cut this week (they’d probably do 75-100bps if they had more ammo).

The ban on financial shorts is probably a given. One has to wonder why, seeing how “successful” the last ban was (note what’s subsequently happened to FRE, FMC, LEH, MER, etc.). But they will still try…

[CA renter]

Add my name to the chorus of 50bps cut this week (they’d probably do 75-100bps if they had more ammo).

The ban on financial shorts is probably a given. One has to wonder why, seeing how “successful” the last ban was (note what’s subsequently happened to FRE, FMC, LEH, MER, etc.). But they will still try…

[CA renter]

Add my name to the chorus of 50bps cut this week (they’d probably do 75-100bps if they had more ammo).

The ban on financial shorts is probably a given. One has to wonder why, seeing how “successful” the last ban was (note what’s subsequently happened to FRE, FMC, LEH, MER, etc.). But they will still try…

[CA renter]

Add my name to the chorus of 50bps cut this week (they’d probably do 75-100bps if they had more ammo).

The ban on financial shorts is probably a given. One has to wonder why, seeing how “successful” the last ban was (note what’s subsequently happened to FRE, FMC, LEH, MER, etc.). But they will still try…

[CA renter]

If yo put it to the builder then he is going to add it to his purchase price. If the purchase price which includes MR is not in line with the market and his profit motive then he is going to walk and the project does not move forward.
——————–

However, this argument is like saying higher interest rates will make housing less affordable. I couldn’t disagree more. There is a certain price/payment threshold beyond which buyers cannot afford to pay. If that threshold is already reached (like now), then PRICES will have to correct if rates go up, it should not mean higher monthly payments.

Developers need to work backward, not forward, when considering new developments.

Instead of saying “cost of land” + development costs + profits = retail price, they need to say “market price” – [cost to develop (including all infrastructure fees/costs) + required profits] = what I will pay for this land.

Buyers determine price, not sellers. Developers determine what they will pay for land, and it is their responsibility not to overpay.

Mello-Roos allows developers to overpay for the land and shift this burden onto the buyers. Ultimately, it is the land sellers who are making all the money, although the developers benefit indirectly because they can more easily acquire land and not have to concern themselves with these development costs…and they are DEVELOPMENT costs.

[CA renter]

If yo put it to the builder then he is going to add it to his purchase price. If the purchase price which includes MR is not in line with the market and his profit motive then he is going to walk and the project does not move forward.
——————–

However, this argument is like saying higher interest rates will make housing less affordable. I couldn’t disagree more. There is a certain price/payment threshold beyond which buyers cannot afford to pay. If that threshold is already reached (like now), then PRICES will have to correct if rates go up, it should not mean higher monthly payments.

Developers need to work backward, not forward, when considering new developments.

Instead of saying “cost of land” + development costs + profits = retail price, they need to say “market price” – [cost to develop (including all infrastructure fees/costs) + required profits] = what I will pay for this land.

Buyers determine price, not sellers. Developers determine what they will pay for land, and it is their responsibility not to overpay.

Mello-Roos allows developers to overpay for the land and shift this burden onto the buyers. Ultimately, it is the land sellers who are making all the money, although the developers benefit indirectly because they can more easily acquire land and not have to concern themselves with these development costs…and they are DEVELOPMENT costs.

[CA renter]

If yo put it to the builder then he is going to add it to his purchase price. If the purchase price which includes MR is not in line with the market and his profit motive then he is going to walk and the project does not move forward.
——————–

However, this argument is like saying higher interest rates will make housing less affordable. I couldn’t disagree more. There is a certain price/payment threshold beyond which buyers cannot afford to pay. If that threshold is already reached (like now), then PRICES will have to correct if rates go up, it should not mean higher monthly payments.

Developers need to work backward, not forward, when considering new developments.

Instead of saying “cost of land” + development costs + profits = retail price, they need to say “market price” – [cost to develop (including all infrastructure fees/costs) + required profits] = what I will pay for this land.

Buyers determine price, not sellers. Developers determine what they will pay for land, and it is their responsibility not to overpay.

Mello-Roos allows developers to overpay for the land and shift this burden onto the buyers. Ultimately, it is the land sellers who are making all the money, although the developers benefit indirectly because they can more easily acquire land and not have to concern themselves with these development costs…and they are DEVELOPMENT costs.

[CA renter]

If yo put it to the builder then he is going to add it to his purchase price. If the purchase price which includes MR is not in line with the market and his profit motive then he is going to walk and the project does not move forward.
——————–

However, this argument is like saying higher interest rates will make housing less affordable. I couldn’t disagree more. There is a certain price/payment threshold beyond which buyers cannot afford to pay. If that threshold is already reached (like now), then PRICES will have to correct if rates go up, it should not mean higher monthly payments.

Developers need to work backward, not forward, when considering new developments.

Instead of saying “cost of land” + development costs + profits = retail price, they need to say “market price” – [cost to develop (including all infrastructure fees/costs) + required profits] = what I will pay for this land.

Buyers determine price, not sellers. Developers determine what they will pay for land, and it is their responsibility not to overpay.

Mello-Roos allows developers to overpay for the land and shift this burden onto the buyers. Ultimately, it is the land sellers who are making all the money, although the developers benefit indirectly because they can more easily acquire land and not have to concern themselves with these development costs…and they are DEVELOPMENT costs.

[Author]

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