[temeculaguy]

It only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.

Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.

Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.

[temeculaguy]

It only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.

Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.

Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.

[temeculaguy]

It only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.

Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.

Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.

[temeculaguy]

It only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.

Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.

Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

DWCAP, nice post, bonus points for chris farley reference!!! Fretting over values is usually a sport for buyers and marginal owners. Most people buy and hold based on affordability and not profitability. Buy and hold is a poplular strategy, not a old fashioned and outdated philosiphy. Look at UCgal’s scenario, she’s not alone, today’s value is less important than her ability to pay the debt and more importantly, her ability to pay off the debt.

scardey, the market has stabilized to some degree, two years ago, it was moving faster than zillow or appraisers could keep up with. It has leveled off, if it goes up or down in the coming years, it will likely be in very small ways with a few exceptions, which is a good thing.

My own anectdote, after my much talked about (by me) purchase some 14 months ago, my place has appreciated about 30%. A model match just went pending for 30% more than I paid and should be valued lower as it lacks a view and has a smaller lot. Am I excited, do I feel excited that I properly guessed the overcorrection, actually I don’t. At this point, my home value is not too relevent. I’ve got a fixed 5% mortgage, my total housing costs (piti) are less than 25% of my income, over the next two decades, the mortgage will not go up, yet my income more than likely will. In time, the 25% number will decrease. If the value of my home goes too high in that time, there may be temptation to borrow from that equity, it will also impact my teenagers ability to buy when they reach that phase of their lives. The best scenario for me would be slow or no appreciation.

Scardey, you need to look at potential purchase of your primary home as fixed rent costs, not an investment strategy. Buy the house that you can afford and can suit your needs for the longest amount of time, not the one that you can make the most profit from. If it were to go up or down in value, the only thing that is really affected is your mind. If you made a fundamentally sound, long term financial decision, it really doesn’t matter.

[temeculaguy]

I especially like the closing credits, like an award speach, “I’d like to thank the guy who walked away from the house.” When you think about it, we owe the FB’s a lot of thanks for our good fortune. Without their complete lack of understanding market cycles and financial fundamentals, none of this would be possible.

You did good hawk. I think “formal T.V. room” is going to catch on.

[temeculaguy]

I especially like the closing credits, like an award speach, “I’d like to thank the guy who walked away from the house.” When you think about it, we owe the FB’s a lot of thanks for our good fortune. Without their complete lack of understanding market cycles and financial fundamentals, none of this would be possible.

You did good hawk. I think “formal T.V. room” is going to catch on.

[temeculaguy]

I especially like the closing credits, like an award speach, “I’d like to thank the guy who walked away from the house.” When you think about it, we owe the FB’s a lot of thanks for our good fortune. Without their complete lack of understanding market cycles and financial fundamentals, none of this would be possible.

You did good hawk. I think “formal T.V. room” is going to catch on.

[temeculaguy]

I especially like the closing credits, like an award speach, “I’d like to thank the guy who walked away from the house.” When you think about it, we owe the FB’s a lot of thanks for our good fortune. Without their complete lack of understanding market cycles and financial fundamentals, none of this would be possible.

You did good hawk. I think “formal T.V. room” is going to catch on.

[temeculaguy]

I especially like the closing credits, like an award speach, “I’d like to thank the guy who walked away from the house.” When you think about it, we owe the FB’s a lot of thanks for our good fortune. Without their complete lack of understanding market cycles and financial fundamentals, none of this would be possible.

You did good hawk. I think “formal T.V. room” is going to catch on.

[temeculaguy]

[quote=Cabal]My 2 cents…

HOUSING – Low and mid range SD homes in desirable areas with good schools will enjoy continued and steady appreciation. Entry level high end homes (defined as 800K to 1.3M) will fully stabilize by 3Q and remain flat. High end homes (above 1.5M) will continue to decline. The tsunami of foreclosures will not materialize. Fully indexed rates on resets and recasts will average 3.5% for the year.

JOBS – Unemployment rate for hourly workers will slightly worsen, while white collar jobs stabilize. Aggregate unemployment will increase negligibly hovering near 10%.

OIL – Demand will exceed worldwide capacity levels near 88M barrels/day. Price will fluctuate between $65 to $85 and trend towards $85 by end of year. TPTB will enforce this range to ensure continued recovery.

GOLD – Excellent electrical conductance and corrosion properties and ideal material for fine jewelry. Beyond that, it has no intrinsic value. Judging by the number of infomercials, we are well into the speculative phase. Look for the big crash once an inkling of confidence is established in the global monetary system. It’s just a matter of time with smart money leaving the flock as early as 2Q. You might as well buy Dutch tulips.

STOCK MARKET – The market will rebound to 9/2008 levels with the SP500 & DOW zigzagging ,but trending towards a peak of 1250 and 11300, respectively. Yes, it’s overvalued, but what does that have to do with anything.

INTEREST RATES – Federal funds rate will remain near zero for the year, perhaps increasing to .5% by year end as fiscal stimulus cascades into the economy. Regardless of M3 increase, inflation will remain non-existent. Still spooked, consumers and businesses will remain overly cautious applying excess money to pay down debt and cleanse balance sheets , and not slosh around in the economy.

DOLLAR – Will remain the preeminent reserve currency. Let’s review – oil is traded in dollars, dollar is decoupled from gold, we can print dollars to our hearts content, China and Japan own so much US treasuries they can’t divest without collapsing their investment and exports, and if push come to shove we have the baddest arm forces on earth. It’s a beautiful thing.

NEXT BUBBLE – I’ve been looking for the next emerging bubble to invest with a 5 year peak horizon for harvest. No clear winner so far. Clean energy, social networking enterprises, any suggestions ?

Our union continues to remain strong. Anytime we approach critical mass, the good people of this nation become engaged and quickly swing the pendulum back restoring order to the universe, as evidenced by the Massachusetts election result. So to all the Piggs living in underground bunkers, you can ease off on all the doomsday posts, come out and enjoy the sun.[/quote]

Instead of making my own predictions can I just jump on Cabal’s bandwagon? I agree with almost all of it, the only deviation and addition is that I think unemployment will tick down as the year progresses and interest rates will tick up toward the end of the year, these things will go hand in hand, nothing drastic, it will seem….boring. We will be in the meat of the “flat part.”

When the collective sigh of relief comes, be it 2011 or 2012 and the greatest economic contraction of our lifetime is over, we will be better for it. Most of the people who were adults during the great depression are no longer with us, they were better because of it and we will be better because of our lesson. When we are gone, this will happen again, is it too early for me to make my prediction of the great depression of 2060?

[Author]

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