[temeculaguy]

Yes it is.

http://www.benstein.com/bio.html

[temeculaguy]

Yes it is.

http://www.benstein.com/bio.html

[temeculaguy]

I wonder what Ben would say today if you showed him this article? That article was great and from an interesting guy. He hosted a game show “win Ben Stein’s Money” was in a bunch of movies most memorable line still used today while as a teacher calling roll “Bueller, Bueller,” wrote nixon’s speaches, was valedictorian at Yale Law. In 1981 he was a different guy, a younger guy and I am afraid today he has become one of the “there’s nothing to worry about guys.”

Here he is on Katie Couric telling us in March of 2007 reacting to the new century failure saying that this is just a subprime problem and this will all blow over and won’t affect the economy, “Bueller, Bueller”.

http://www.cbsnews.com/stories/2007/03/18/sunday/main2581859.shtml

What happened Ben?

[temeculaguy]

I wonder what Ben would say today if you showed him this article? That article was great and from an interesting guy. He hosted a game show “win Ben Stein’s Money” was in a bunch of movies most memorable line still used today while as a teacher calling roll “Bueller, Bueller,” wrote nixon’s speaches, was valedictorian at Yale Law. In 1981 he was a different guy, a younger guy and I am afraid today he has become one of the “there’s nothing to worry about guys.”

Here he is on Katie Couric telling us in March of 2007 reacting to the new century failure saying that this is just a subprime problem and this will all blow over and won’t affect the economy, “Bueller, Bueller”.

http://www.cbsnews.com/stories/2007/03/18/sunday/main2581859.shtml

What happened Ben?

[temeculaguy]

Nice one Gary, The air mattress is there to show how you can have 10 people live in it without having to write the words “spacious living room for floor sleepers” or “central guest room.” I think the bathroom pic is to make you feel more comfortable about having two inches of sink counter because they managed to get twenty bottles of toiletries in that two inches. You just inspired me, I’m going on a quest for another one.

[temeculaguy]

Nice one Gary, The air mattress is there to show how you can have 10 people live in it without having to write the words “spacious living room for floor sleepers” or “central guest room.” I think the bathroom pic is to make you feel more comfortable about having two inches of sink counter because they managed to get twenty bottles of toiletries in that two inches. You just inspired me, I’m going on a quest for another one.

[temeculaguy]

I think there is an alterior motive to his comments and the comments of others. The builders association economist, the ceo’s of mortgage banks and builders have been putting out some overly negative statements in the last two weeks (maybe true but out of form for them). I am not sure if they are trying to pressure the fed or make people believe we have hit the bottom but I am dumbfounded as to why they would all find god at the same time and become honest.

I am also unsure if I truly believe they got caught with their pants down and that they didn’t see this coming. I discovered this site a year ago and in that year have attained a basic knowledge of a few market dynamics and I saw this coming. I am just some dude who thinks economics is a cool hobby, but the real players do this for a living and have better acccess to information, how did not see this coming? Read some 2006 threads, it’s all there, the subprime implosion, the credit crunch, the foreclosures, the arm re-sets, the must sell inventory driving prices down and thus trapping the arm resets and speculators. Even as early as February there were many on this site that said the end of the summer would be exciting because the spring sales bounce wouldn’t materialize and the mainstream media would pick up on it. All of it happened or is happening, right on schedule as predicted by collections of armchair quarterbacks on a few websites like this one and a few professors (Shiller and Roubini).

There are only a few hundred of us here and we figured it out, I believe they did too and they have an exit strategy. I think the current spin from the spokesholes and the analysts is part of that strategy, but I could be wrong.

[temeculaguy]

I think there is an alterior motive to his comments and the comments of others. The builders association economist, the ceo’s of mortgage banks and builders have been putting out some overly negative statements in the last two weeks (maybe true but out of form for them). I am not sure if they are trying to pressure the fed or make people believe we have hit the bottom but I am dumbfounded as to why they would all find god at the same time and become honest.

I am also unsure if I truly believe they got caught with their pants down and that they didn’t see this coming. I discovered this site a year ago and in that year have attained a basic knowledge of a few market dynamics and I saw this coming. I am just some dude who thinks economics is a cool hobby, but the real players do this for a living and have better acccess to information, how did not see this coming? Read some 2006 threads, it’s all there, the subprime implosion, the credit crunch, the foreclosures, the arm re-sets, the must sell inventory driving prices down and thus trapping the arm resets and speculators. Even as early as February there were many on this site that said the end of the summer would be exciting because the spring sales bounce wouldn’t materialize and the mainstream media would pick up on it. All of it happened or is happening, right on schedule as predicted by collections of armchair quarterbacks on a few websites like this one and a few professors (Shiller and Roubini).

There are only a few hundred of us here and we figured it out, I believe they did too and they have an exit strategy. I think the current spin from the spokesholes and the analysts is part of that strategy, but I could be wrong.

[temeculaguy]

Was it a bank short or did he come in with the 100k he lost? Was it a rental or his residence? If it was a rental and he had a 100k he could have covered a 1k loss per month for 8 years which would get him easily to the other side of the cycle. If he came in with a 100k to make it go away I wonder how many other speculators have that ability. When it falls another 100k we will declare him a genius and the queen will call him sir.

[temeculaguy]

Was it a bank short or did he come in with the 100k he lost? Was it a rental or his residence? If it was a rental and he had a 100k he could have covered a 1k loss per month for 8 years which would get him easily to the other side of the cycle. If he came in with a 100k to make it go away I wonder how many other speculators have that ability. When it falls another 100k we will declare him a genius and the queen will call him sir.

[temeculaguy]

GN you are right, it usually overshoots and fear will play a role especially in my area where gas prices, traffic, distance to job centers, recent building (town doubled during the bubble), few established owners without a mortgage and the Murietta scandal/foreclosures are all serving to accelerate the local fear. The situation here is easily six months to a year ahead of San Diego.

But Rustico’s assertions about my strategy are spot on accurate probably because we have had discussions in the past about it. I am not trying to time the bottom, this is not my profession nor do I purport to be an expert. My strategy of waiting until rent/purchase ratios were inline as well as being inline with my own financial goals then it would be my time. It’s a simple way of approaching a complex market. A market that has often baffled experts and one that has way too many variables in it. My strategy has worked so far, I bowed out of the market in early 2006 and have been watching it fall without me. That was easy, the next part is hard. It is now where I wanted and expected it to be. If your chosen place had already fallen 20-25% you’d be in the same pickle. Do I decide on a target price or a target time. Does it matter if S.D. or O.C. hasn’t fallen yet? I will give it until the winter and re-evaluate but once the place you want hits the price you can comfortably afford the real confusion sets in.

Since this post just hit the official length of a diatribe, I’ll close with a Lao Tzu quote “There is nothing better than to know you don’t know”

[temeculaguy]

GN you are right, it usually overshoots and fear will play a role especially in my area where gas prices, traffic, distance to job centers, recent building (town doubled during the bubble), few established owners without a mortgage and the Murietta scandal/foreclosures are all serving to accelerate the local fear. The situation here is easily six months to a year ahead of San Diego.

But Rustico’s assertions about my strategy are spot on accurate probably because we have had discussions in the past about it. I am not trying to time the bottom, this is not my profession nor do I purport to be an expert. My strategy of waiting until rent/purchase ratios were inline as well as being inline with my own financial goals then it would be my time. It’s a simple way of approaching a complex market. A market that has often baffled experts and one that has way too many variables in it. My strategy has worked so far, I bowed out of the market in early 2006 and have been watching it fall without me. That was easy, the next part is hard. It is now where I wanted and expected it to be. If your chosen place had already fallen 20-25% you’d be in the same pickle. Do I decide on a target price or a target time. Does it matter if S.D. or O.C. hasn’t fallen yet? I will give it until the winter and re-evaluate but once the place you want hits the price you can comfortably afford the real confusion sets in.

Since this post just hit the official length of a diatribe, I’ll close with a Lao Tzu quote “There is nothing better than to know you don’t know”

[temeculaguy]

This has been perplexing me, how can they lose money with only a slight to moderate price reduction over the last two years despite still being priced higher than after inflation adjustments over the last ten years? Many of them secured the land before the bubble.

One development in my area of about 2000 homes and 10 builders had the land in 1998 when a 2500 sq ft house sold for 180-200k. They got hung up in some environmental concerns over a butterfly for a few years and then some nimby delays from the neighbors. They start building in about 2003 and as recently as 2005 when I looked at them they were selling for about 500k, plus or minus for larger or smaller. Now they are only about 2/3 done and are discounting to 350k to 450k and they are posting stock losses. Big builders that are represented there (lennar, centex, standard pacific, woodside, lyon, etc.) are posting stock losses and blaming Southern California as the reason they are losing money. How? In 8-9 from the time they managed to sell a home for a profit at 180k now they are losing money selling at 400k, normal appreciation and inflation of materials and labor did not rise at 10% a year and even if it did, 360k would be a profit. What other industry does this. In 1998 I bought a car for about 24k, today that car is 35k, that company wouldn’t lose money at 48k per unit. And if they had priced it at double what it was 8 years ago they could lower the price and the first 13k wouldn’t hurt them, just bring them in line with inflation.

I think I am missing something.

[temeculaguy]

This has been perplexing me, how can they lose money with only a slight to moderate price reduction over the last two years despite still being priced higher than after inflation adjustments over the last ten years? Many of them secured the land before the bubble.

One development in my area of about 2000 homes and 10 builders had the land in 1998 when a 2500 sq ft house sold for 180-200k. They got hung up in some environmental concerns over a butterfly for a few years and then some nimby delays from the neighbors. They start building in about 2003 and as recently as 2005 when I looked at them they were selling for about 500k, plus or minus for larger or smaller. Now they are only about 2/3 done and are discounting to 350k to 450k and they are posting stock losses. Big builders that are represented there (lennar, centex, standard pacific, woodside, lyon, etc.) are posting stock losses and blaming Southern California as the reason they are losing money. How? In 8-9 from the time they managed to sell a home for a profit at 180k now they are losing money selling at 400k, normal appreciation and inflation of materials and labor did not rise at 10% a year and even if it did, 360k would be a profit. What other industry does this. In 1998 I bought a car for about 24k, today that car is 35k, that company wouldn’t lose money at 48k per unit. And if they had priced it at double what it was 8 years ago they could lower the price and the first 13k wouldn’t hurt them, just bring them in line with inflation.

I think I am missing something.

[temeculaguy]

Former, all that you say is true, for me it is a matter of timing. Like alot of us on the sidelines I would be happier buying back in but even happier buying back in at the lowest price possible. I see many reasons to wait but I am also not blind to the fundamentals. I need to avoid being greedy and missing it. 18 months ago I told myself that I will buy back in when I can get a sfr over 2000 sq ft between 300 and 400k. My reasons were all about math. With 20% down I would be paying between 20 and 30% of my gross monthly income for PITI, income tax benefits just make it even better and things would be inline with rents. Well, it’s happening, so now what? I am about to re-adjust my goal prices again and I use this site like an alcoholic uses AA meetings. You forced me to run my numbers today using the houses I am looking at and I can honestly say they are inline with rent and it would be a wash for me to buy, I feel like that alcoholic who just got offered a free drink, I need to go to another meeting.

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