[PerryChase]

While I’m not on the same page with you on politics, I’m with you on economics. Yes, there’ll be blood in La Jolla around 2010? So true what you said about venture capital.

I do, however, think that Chris is right. The bull will last another several months.

[PerryChase]

While I’m not on the same page with you on politics, I’m with you on economics. Yes, there’ll be blood in La Jolla around 2010? So true what you said about venture capital.

I do, however, think that Chris is right. The bull will last another several months.

[PerryChase]

Capeman, I totally agree with you about the economy and skill sets.

When interest rates are too low, investors will fund any kind of hair-brained business plans in search for return. Innovation and discovery are great, but but pie-in-the-sky is something else.

There are plenty of venture capitalists drinking the cool-aid too.

——-

Jeeman, yeah, you can get rich following the herd, but if you then believe the hype too much, you’re liable to lose everything. I know some people who reinvested their real estate gains into more real estate. They think the market will turn around in 2008. Who knows, they might be right.

But you have the right idea as far as going for the kill is concerned. I’m gonna do that too.

——-

stansd, that’s what a RE broker friend told me also. He said buy now. He’s not a close friend so I didn’t direct him to Piggington. I just said “wow interesting” and changed topic. Not sure if he believes what he said or was just full of hot air.

[PerryChase]

Capeman, I totally agree with you about the economy and skill sets.

When interest rates are too low, investors will fund any kind of hair-brained business plans in search for return. Innovation and discovery are great, but but pie-in-the-sky is something else.

There are plenty of venture capitalists drinking the cool-aid too.

——-

Jeeman, yeah, you can get rich following the herd, but if you then believe the hype too much, you’re liable to lose everything. I know some people who reinvested their real estate gains into more real estate. They think the market will turn around in 2008. Who knows, they might be right.

But you have the right idea as far as going for the kill is concerned. I’m gonna do that too.

——-

stansd, that’s what a RE broker friend told me also. He said buy now. He’s not a close friend so I didn’t direct him to Piggington. I just said “wow interesting” and changed topic. Not sure if he believes what he said or was just full of hot air.

[PerryChase]

France just had legislative elections and they are going the American way, right now.
——–
Politics aside, I think that our free market has caused serious mis-allocation of resources. When money is cheap, it’s easy to spend other people’s money on pie-in-the-sky projects. High tech is mostly fluff.

Let me give you an example. I know of a company that spent a bundle bringing fiber to the desktop of every employee a few years back. They complete the project and gigabit ethernet is available over copper at 1/10th the price. Money down the drain, but that’s OK because, there’s more money coming.

Biotech is another dot-con waiting to happen. All those drugs don’t cure anything and aren’t anymore effective than the existing medication.

We have lots of “hope” industries and fewer “real” industries. When we run out of hope then the values will come crashing.

Sure, higher rates will hurt a lot of people as the market adjusts. But that’s the reality of a free market. Higher rates will cause us to invest more in Warren Buffet stuff instead of dot-con industries — selling overvalued stocks and houses to each other, the value of which is only what the next buyer is willing to pay.

[PerryChase]

France just had legislative elections and they are going the American way, right now.
——–
Politics aside, I think that our free market has caused serious mis-allocation of resources. When money is cheap, it’s easy to spend other people’s money on pie-in-the-sky projects. High tech is mostly fluff.

Let me give you an example. I know of a company that spent a bundle bringing fiber to the desktop of every employee a few years back. They complete the project and gigabit ethernet is available over copper at 1/10th the price. Money down the drain, but that’s OK because, there’s more money coming.

Biotech is another dot-con waiting to happen. All those drugs don’t cure anything and aren’t anymore effective than the existing medication.

We have lots of “hope” industries and fewer “real” industries. When we run out of hope then the values will come crashing.

Sure, higher rates will hurt a lot of people as the market adjusts. But that’s the reality of a free market. Higher rates will cause us to invest more in Warren Buffet stuff instead of dot-con industries — selling overvalued stocks and houses to each other, the value of which is only what the next buyer is willing to pay.

[PerryChase]

Rustico, you’re the ideal American.

I haven’t seen the mural you’re talking about yet but I’ll stop by one day.

When I was in Mexico City, I went to see the Diego Rivera murals. I had a wonderful Spanish speaking guide (they are volunteers at the National Palace) who was very patient with me as my Spanish is not the best. I was emotionally drawn into the murals and I could feel the struggles of the people through history. It was a very visceral and touching experience for me.

Then in the afternoon, on the Zocalo, there was some political protests. Older leftist activists were giving the standard speeches on the struggles of the proletariat. Suddenly, a young student in the audience asked if he could come up and talk. That “joven” spoke so beautifully that I had tears to my eyes.

[PerryChase]

Rustico, you’re the ideal American.

I haven’t seen the mural you’re talking about yet but I’ll stop by one day.

When I was in Mexico City, I went to see the Diego Rivera murals. I had a wonderful Spanish speaking guide (they are volunteers at the National Palace) who was very patient with me as my Spanish is not the best. I was emotionally drawn into the murals and I could feel the struggles of the people through history. It was a very visceral and touching experience for me.

Then in the afternoon, on the Zocalo, there was some political protests. Older leftist activists were giving the standard speeches on the struggles of the proletariat. Suddenly, a young student in the audience asked if he could come up and talk. That “joven” spoke so beautifully that I had tears to my eyes.

[PerryChase]

The early Reagan years were different in that credit was not as widely available. People still paid cash back then and an Amex card was only for the business exec.

Since then we’ve moved to a monthly payment type mentality so everything is now priced according to what monthly payments consumers can afford. Hear a wife ask her husband “Honey, can we afford $20/month for that TV?”

Contrary to popular opinion, I don’t believe that the credit industry will shrink. Using computer models, the finance companies will just price-in the rise in defaults. If you’re willing to pay through the nose, you’ll still be able to get credit.

BTW, people don’t realize it but usury laws have been done away, first to allow the Paul Volcker interest rates hikes then to allow the finance companies to charge whatever the hell they want. People want to consume so they continue to borrow.

http://www.cashcall.com/General/Rates.aspx

Actually, I think high interest rates is good for the careful consumers. It encourages savings and not speculation. The housing payments will remain the same, but a stagnant housing market will be rid of all the specuvestors. The reason people were gambling to begin with is because they were searching for higher return than what their savings accounts could provide.

[PerryChase]

The early Reagan years were different in that credit was not as widely available. People still paid cash back then and an Amex card was only for the business exec.

Since then we’ve moved to a monthly payment type mentality so everything is now priced according to what monthly payments consumers can afford. Hear a wife ask her husband “Honey, can we afford $20/month for that TV?”

Contrary to popular opinion, I don’t believe that the credit industry will shrink. Using computer models, the finance companies will just price-in the rise in defaults. If you’re willing to pay through the nose, you’ll still be able to get credit.

BTW, people don’t realize it but usury laws have been done away, first to allow the Paul Volcker interest rates hikes then to allow the finance companies to charge whatever the hell they want. People want to consume so they continue to borrow.

http://www.cashcall.com/General/Rates.aspx

Actually, I think high interest rates is good for the careful consumers. It encourages savings and not speculation. The housing payments will remain the same, but a stagnant housing market will be rid of all the specuvestors. The reason people were gambling to begin with is because they were searching for higher return than what their savings accounts could provide.

[PerryChase]

Let’s make it clear. Higher rate is bad for housing as an industry. But not for us Piggingtons who have the ability to buy.

We are now a credit based society and housing is tied to monthly payments. Higher interest rates result in lower housing price to achieve the same monthly payments that people can “afford.”

If you’re a long term buyer, you want ultra high rates + ultra low prices. Buy that cheap house at very high rates. Hold it until the next cycle then refinance into low rates. You win because you end up with property that’s almost paid for with a low principal balance.

Seller should worry at higher rates, but Piggingtons should celebrate.

———-

The free market causes yields to go higher or lower. If you perceive higher risks, you want a higher yield.

For example if the Japanese and Chinese are lending us money, and they are worried about foreclosures, they’ll ask for higher yields to price-in those non-payers. Kinda like a store charging more to make up for the losses due to shoplifters.

[PerryChase]

Let’s make it clear. Higher rate is bad for housing as an industry. But not for us Piggingtons who have the ability to buy.

We are now a credit based society and housing is tied to monthly payments. Higher interest rates result in lower housing price to achieve the same monthly payments that people can “afford.”

If you’re a long term buyer, you want ultra high rates + ultra low prices. Buy that cheap house at very high rates. Hold it until the next cycle then refinance into low rates. You win because you end up with property that’s almost paid for with a low principal balance.

Seller should worry at higher rates, but Piggingtons should celebrate.

———-

The free market causes yields to go higher or lower. If you perceive higher risks, you want a higher yield.

For example if the Japanese and Chinese are lending us money, and they are worried about foreclosures, they’ll ask for higher yields to price-in those non-payers. Kinda like a store charging more to make up for the losses due to shoplifters.

[PerryChase]

Bonds are sold with a coupon rate (fixed rate on the bond). Buyers bid prices of the bond up or down, to achieve their desired return rates.

[PerryChase]

Bonds are sold with a coupon rate (fixed rate on the bond). Buyers bid prices of the bond up or down, to achieve their desired return rates.

[PerryChase]

Rustico, do what I do. Get a wireless notebook computer and carry it around the house and use it as your online magazine/newspaper. I even use my computer to listen to foreign radio and television programming, or to such show as Charlie Rose. No need for cable.

Staples and Office Depot sell good notebooks of $429. That’s all you need.

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