[vcguy_10]

Here’s the link.
A lot like real estate… as oil prices went up, many started to hoard it, even non-oil companies would buy to resell at a profit. This pushed prices even higher in the process, but now those specuvetors are trying to unload all that oil. It’s no surprise that prices had to peak and then drop.

[vcguy_10]

GF, that’s a good point. I think that we should take advantage of the coming crisis to press for legislation that mandates transparency and fully-disclosed property listing information online. I’m not saying that realtors should follow the fate of travel agents, but a lot of the business could be made online by sellers and buyers. There’s still a role for realtors assisting with legal and compliance issues. When things get ugly in the coming years we can’t let the NAR lobby for bailouts and/or more regulation to save their skin at the expense of the consumer.

Many articles in the press now are full of anecdotal evidence of sellers having a hard time, and they also include a couple of blurbs from ‘experts’. Unfortunaly, often such experts are nothing but spokepersons for the industry. What I like about the Fool.com article above is that it presents the whole picture in the proper context, and it shows Lereah and company for what they really are. And it’s written in a compelling language.

[vcguy_10]

Link to the original story.

[vcguy_10]

Huh?

(From Zillow:)
Sale History
06/02/2006: $115,000
01/16/2001: $1,156,400

[vcguy_10]

jg, are you kidding? Since when “lord” became an exclusively christian reference? It may refer to “god” in any monotheistic religion.

But I digress. What we have in “the year of our Lord one thousand seven hundred and eighty seven” is nothing more than 1787 AD. As I’m sure you learned in your public school, AD stands for anno domine, literally “year of the lord” and is simply a system for dating. You don’t need to be a christian to use the AD or BC nomenclature when referring to dates.

[vcguy_10]

ybc: the yuan doesn’t have to float for it to be convertible. You can convert it at the fixed exchange rate. The downside is the bid-ask spread in banks, which will eat a big chunk of your funds every time you get in and out. This spread may be higher than for european currencies.

Once you open a bank account in China, you can wire money to/from your US bank. China being a communist country, there may be added paperwork delaying the process.

[vcguy_10]

Stephan,
If you think the US will print copious amounts of money to avert a deep recession, that 50% of your portfolio in GRZZX and BEARX (both denominated in dollars) will be toast as the dollar devaluates! BTW, those two funds have expense ratios that are 10 times higher than those of low-cost funds such as those run by Vanguard. VERY expensive funds, and, even worse, denominated in dollars.

As for Au (gold, that is) your other 50%, it has more than doubled in five years. It may be argued that the same excess liquidity that doubled house prices in the US has caused the doubling in gold. Could there be a dotcom-like or RE-like bubble in gold? It’s now a bit over $600, but if you expect lots of money printing and dollar devaluation, and $1000 gold, then you should probably be upwards of 75% in gold.

Thanks for your posting. Whether one agrees with it or not, it is well thought out and thought provoking.

[vcguy_10]

Sdduuuude, I guess you do remember something from econ 102! Actually, Volcker’s Fed policies changed from targeting interest rates to targeting growth in the money supply. The objective at that time (1979) was to defeat inflation, which was out of control. The unfortunate downside was that interest rates shot up to extremely high levels. But high inflation was defeated once and for all.

[vcguy_10]

Check this website for reliable ratings. CUs and banks are rated separately. Your CU is fine. OTOH, World Savings is not so sound.

[vcguy_10]

That bureau is the Bureau of Labor Statistics (BLS), which is a unit of the Department of Labor.

The Federal Reserve Board (Fed), has no jurisdiction over the BLS. The change you report took place in 1983, when Alan was in the private sector. Only in 1987 was he named Fed chairman.

[vcguy_10]

The point here is that we don’t really know what the future will bring. Market timing is foolish. Other than that, we do know that today (2005-2006) is a bad time to buy a house. When will it be a good time? That’s anybody’s guess. The best I can do is buy when it makes sense to me, both financially and personally, and not expect to time the market so that I can make a killing.

It was misguided treating your house as an investment vehicle on the market’s way up (all those GFs inflating prices more and more). Now that the bubble has bursted and we have x years of depreciation ahead of us, it’s still not a good idea to think of your house as an investment.

PD made the point that perhaps houses were too undervalued in 1920-1945. Perhaps. But a similar argument could be made of 1980-1997: that high interest rates and a booming stock market had kept money away from housing, making house prices artificially low, and that only in 2002-2004 prices reached their “true” level. I don’t believe the latter is the case. The point is that making predictions is very difficult, especially predicting the future, as Yogi Berra said.

[vcguy_10]

A collection of myths (the same ones we heard in past booms and will hear again in the next boom many years from know):

Real estate bubble, the most common myths and misconceptions

[vcguy_10]

My guess is that prices in the less desirable areas will drop faster at the beginning. More established, nicer areas like La Jolla will have slower depreciation the first couple of years. However, when the market reaches bottom, cumulative depreciation will be about the same across all areas.

[vcguy_10]

Nor_La- Guy:
Greenspan (not Greenspand) had no jurisdiction whatsover over how the CPI was computed.

[vcguy_10]

This is an example from a developing country, but it may be illustrative. My dad had a big chunk of money in CDs (some in foreign currency), and his bank went belly up. There is something similar to the FDIC over there, but he was still worried about his money. Well, the end of the story is that all those accounts were absorbed by another bank, and there were absolutely no restrictions on withdrawals, etc.

The thing is, if people have a hard time getting their money from the FDIC (say, in case WAMU goes belly up), then people would panic and start withdrawing their deposits even from financially sound banks. This is something the gov’t won’t allow and can easily fix.

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