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NotARocketScientist
ParticipantRearranging — er, staging — the deck chairs on the Titanic comes to mind…
ParticipantVery cool. Thanks for posting.
ParticipantWhy not just put the Hummers up on blocks and convert them into low income housing? They’re bigger then the apartment I had in college…
ParticipantI agree, Powayseller.
In fact, from my point of view, 60 days worth of food, water, toiletries and medicine for the family is not unreasonable — and well less then a third of what I spend on property insurance in a year.
Furthermore, since I’m turning stock on all these items (except the water) they’re really not costing me anything at all except a little storage space in the garage.
We live in earthquake country anyway, so we’re used to keeping food, water, first aid kits and the like in the trunks of our cars and in the hall closet — right? — Right? — RIGHT???
How many Katrina victims last summer would have benefited from a bit more planning?
I’m not paranoid, but if I can cover my family and the elderly couple who live next door for less than one half of one percent of my net income, I’m a fool if I don’t.
ParticipantI have 1500 Tickle-Me-Elmos hidden in a vault in Escondido. My hedge against inflation and adversity. they’re like Krugerrands, you know.
ParticipantPoway, you and lendingbubble both have an encycolpedic grasp of the questions we all ask and attempt to answer for each other here. I’ll be interested in reading any reports youse guys make back to the group after hearing Thornberg and participating in the Q & A.
ParticipantGrandma rocks!
ParticipantIf I thought we were headed toward a full-on depression, I’d be inclined to pull enough money out of savings to pay off my mortgage so I was “free and clear” as my parents used to say.
Their parents learned the hard way when their savings were wiped out in the bank crash of ’29. Paper that could be used to buy tangible assets one day lost all value the next.
In that scenario you’d be better off pulling $250,000 in savings out of the bank today to pay off a house that was going to drop in value to $25,000 tomorrow if you knew the savings were going to be wiped out too. Value is relative. And Jim would probably tell you to buy a little gold. Not to make money, but to cover your taxes for a while until things blew over. At least you’d have a place to live.
I’m not saying we’re headed for a depression, but as long as we’re playing out various doomsday scenarios, I thought I’d throw in my 2 cents.
Other thoughts?
ParticipantI’ll tell you, Bugs, I was looking at a computer model of how sympathetic vibrations in certain structures cause them to resonate during earthquakes and amplify the destructive force of the shaking — and I kept thinking of your post on market psychology.
We know that at some point things will get ugly in RE, that the ugliness will make it’s way into the echo chamber of the media, that people will react to the reporting, the reporting will intensify, a vicious circle of reaction and amplification will occur that carries things far beyond the original event.
Wouldn’t you kill to see a model that managed to quantify that unraveling and graph it in some visually comprehensable way?
I think it might look something like that earthquake model I saw today.
ParticipantYes, I do, jeremys.
As my psychology professor used to say, “The observer of an experiment becomes one of the variables which acts upon to result.” (God, I miss college.)
Anyway, we’re all going to participate an a fascinating experiment which will affect the quality of our lives for decades to come, whether we like it or not. What I find most interesting is that every scenario laid out in this thread is plausible and reasoned.
Therefore, I will not let my children read from this site before they go to bed. I have enough issues to deal with without adding night terrors to the list.
ParticipantI will look into TIPS. Thanks, RightSide.
ParticipantYour posts on this subject are a warning light on the dashboard of my investment strategy.
In ’97-98 my wife and I saw the bottom of the last RE cycle but didn’t feel we had the financial wherewithal to invest quite yet. Our solution was to aggressively earn more and save more by working longer hours and deferring gratification. We parked the loot in CDs because with low inflation we were more interested in security than high yields.
We expected to see RE prices peak out by ’04 and thought by ’06 we’d be tracking the slow, sticky ride to the bottom of the market and investment time.
Instead, buyers downed a a few thousand fistfuls of low-interest ARM steroids and went crazy.
No problem, we thought, it buys us a few more years to save capital to invest when the time is right. Cash will be king when the low-interest hangover starts hitting the markets. A winning strategy.
But now you raise a much more fundamental question: if the financial structure takes a big enough hit from deflation, overleveraged debt, recession, insolvent retirement funds, shady accounting, etc., how and where do you preserve capital?
Can a government that is committed to funding an expensive war, preserving tax cuts, maintaining Social Security, bailing out insolvent retirement plans, etc., find the money to cover my little FDIC insured investments? Should I convert to T-bills? Bury gold in my backyard?
Dunno.
I’m certainly not convinced that the worst scenario is actually going to happen, but I am convinced that it could happen. Which means we’re all working without a net here. I’d certainly like to see other posts from people trying to figure out how to preserve capital.
We live in interesting times.
ParticipantMan, I owe everybody here a big apology.
This is what I learned today: my smart-alecky sense of humor works better at a dinner party where my wife can punch my shoulder and say “shut up” when I make a stupid joke than on a website post where friends are willing to take my words at face value and give me the benefit of the doubt.
What I’m trying to say is, the business about the secret signage warehouse and the bank holiday and the 4 dollar gas — it was me trying to be funny. But my wife wasn’t there to punch my shoulder.
Powayseller, Jim, sdduuuude — I’ve learned a lot from you guys over the months and didn’t mean to deceive. Sorry for the misdirected joke. I’ll do a better job policing myself in the future.
Apologies, NotARocketScientistOrABrainSurgeon
ParticipantA friend who works in a local sign company reports the following anecdotal information:
-Starting in August 2005 they began rehabbing “Sold” signs to read “Price Reduced”
-Starting December 2005 the begin replacing their inventory of “Taking Backup Offers” and “View Lot” signs with “Drastic Reduction” and “Foreclosure”
They have been working 14 hour days since January and the signs are stored in an undisclosed warehouse location in North County ready for immediate installation by crack signing teams as required on three hours notice.
As a side note, I have been told they are taking massive orders for “3”s and “4”s from gasoline retailers, and “Closed Due to Bank Holiday” banners from anonymous third party buyers but that is a different story…
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