tag:blogger.com,1999:blog-383501282024-03-05T10:18:31.039+00:00Blogger's BubbleDiscussions on housing and the economyVern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.comBlogger159125tag:blogger.com,1999:blog-38350128.post-88198850488674203512009-03-08T16:18:00.008+00:002009-03-08T16:53:27.898+00:00We know who you are and we saw what you did<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiE6sVP9FODnDbmFOuKREmy69CCWJfkIRYOuIpEk8jGAsoHAGJeP0DTEt9oa5-gzoCDwptuJqErJxhZrEv1XDZkSMBcbmJ1Lyb9H05Th_zGIkGQEmhnjrlG0TO1Q6qTGSgDhD5giA/s1600-h/Beach+front+condo.bmp"><img id="BLOGGER_PHOTO_ID_5310854046638016050" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 295px; CURSOR: hand; HEIGHT: 320px; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiE6sVP9FODnDbmFOuKREmy69CCWJfkIRYOuIpEk8jGAsoHAGJeP0DTEt9oa5-gzoCDwptuJqErJxhZrEv1XDZkSMBcbmJ1Lyb9H05Th_zGIkGQEmhnjrlG0TO1Q6qTGSgDhD5giA/s400/Beach+front+condo.bmp" border="0" /></a><br /><div><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAPEgmKa23QCN5cyiMftl-xq-pSU1AScC47wlj55TSMEGgznFVVq6a8c9IQp86jJlqGkPkFH2paM7T7BP48Nwy7HHBgvFAdZMKRQO5-zRIMfGhL3qOEdXaYMdEXBEPefz1aygTLw/s1600-h/Plazma+TV.bmp"><img id="BLOGGER_PHOTO_ID_5310853846952672690" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 310px; CURSOR: hand; HEIGHT: 334px; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjAPEgmKa23QCN5cyiMftl-xq-pSU1AScC47wlj55TSMEGgznFVVq6a8c9IQp86jJlqGkPkFH2paM7T7BP48Nwy7HHBgvFAdZMKRQO5-zRIMfGhL3qOEdXaYMdEXBEPefz1aygTLw/s400/Plazma+TV.bmp" border="0" /></a><br /><br /><div></div><br /><br /><div>The political world before the Internet was a world where corrupt leaders could spin the truth about what they were up to and grow fat on the spoils. I have two words for them: The Internet!<br /><br />The Internet is an alternate and relatively infinite source of information accessible by the masses. Think you have a secret hand shake for your secret society where you can keep inside secrets from the masses and dole out high priced expert knowledge like the stone masons of old? Guess what… someone will put your handshake on the net and we can all see it.<br /><br />It appears you; our leaders, are a little behind the curve on that reality and don’t realize your actions are now under scrutiny. Yah, we know who you are and we saw what you did! Like little kids who think mommy can’t see you, you cheat while we watch and lie to our faces, fully believing we can’t see what you’ve done. But for that fact alone you should all be swept from office. you are dinosaurs; the information age has passed you by.<br /><br />Mr. Obama, if there were ever a time in history when our government wanted to foment a tax revolt, it is now. Not only are you forcing people like myself who lived within our means, to buy a fabulous house for someone else, now you are going to extend that order to cover second mortgages; equity withdrawals that went for new swimming pools, fabulous vacations, Hummers, jet skis and the like. All things which I do not own but you are now forcing me to buy for Ass Hats who partied like the credit train would never end.<br /><br />They couldn’t afford any of it in the first place but the fabulous house they purchased by lying on their mortgage applications allowed them to take out huge equity loans to live like royalty, at least until they couldn’t service the debt anymore. Those irresponsible Ass Hats partied like they were celebrities and lived the ‘Good Life’ while more fiscally responsible types watched and ate oatmeal, safe in the knowledge that that sort of foolishness was bound to end badly.<br /><br />So now you propose to take away my oatmeal, so those Ass Hats can keep their Hum-Vs, marble countertops and speed boats? Are you out of you fucking mind? And do you really believe we don't know it is all an effort to maintain an income stream for the bankers and corperations who caused this mess?<br /><br />We fought one revolution for similar reasons, remember? Do you really think it won’t happen again? Do you really think people who saved their money will gladly hand it over to pay for the bad acts of the irresponsible so they can go on living the 'Good Life' at our expense?<br /><br />Mr. Obama, spit out your gum and pay attention in class, wake up and smell the coffee, hang up and drive, or all of the above. Honest responsible people do not want to live in a country where the lazy and unproductive, the dishonest and irresponsible are rewarded while those of us who know that it will take hard work and saving to become an economically viable nation again are forced against our will to hand over our money to fund the further destruction of our economy. This to keep the Ass Hats in the continued luxury they did not earn.<br /><br />I am outraged!</div></div><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com2tag:blogger.com,1999:blog-38350128.post-89122469870829529562009-02-28T17:22:00.004+00:002009-03-04T15:19:58.429+00:00Pray To God And Pass The AmmunitionAnyone try to buy a gun recently? How about ammunition?<br />I heard rumors from members of a small investment group I belong to, with members spread across the US, that gun shows in their local areas were jamb packed, and if you stood outside you would see folks carrying out cases of ammunition or cardboard boxes containing new rifles. The head of our group who is a fairly well know financial advisor and a generally conservative guy went to a gun show close to Del Rey Beach, FL and reported the same thing. He himself, not a gun guy, bought three guns, which now makes him technically a gun guy.<br /><br />Anyway, my point being that just like the sudden and quiet disappearance of gold from retail dealer shelves starting last August, guns and ammo are now becoming scarce. Many people are citing Obama’s anti-assault rifle sentiment and an expected Clinton-esqe style ban on assault rifles.<br /><br />It’s true; you will play havoc finding an AR-15 and the 5.56 NATO rounds they use or the AK 47 and corresponding ammunition. Go ahead, call around and check. But I don’t believe it is all Obama’s anti-gun sentiment behind this push.<br /><br />More to the point, people seem edgy and just a little jumpy, seemingly waiting for something that has yet to be defined. This could have something to do with the increase in the sale of all guns and ammo now taking place. You can still get many hand guns and other rifles but they are being bought up in record numbers. Also, all across the country there is a massive spike in carry permit applications, something not under threat by the Obama administration.<br /><br />I myself went to the gun show in Palmetto, Florida last month to see if the rumors were true about record crowds swooping down like locusts, buying everything in sight.<br /><br />I arrived to see a line of people snaking around the building, waiting to get in. It was Super bowl Sunday, what were they all doing here? I thought to myself. The show, much smaller than the Tampa show, was packed. There was a dealer building AR-15s from modular components to-order right there, so I stopped to ask questions. An older gentleman was purchasing a small AR-15 with all the trimmings, laser sight, optics and what have you. He was well dressed, didn’t question the price and had little or no clue about guns, or so I gathered from his questions to the vender. I later saw this man, who with the help of another was carrying two cases of 5.56 ammunition or about 2000 rounds.<br />So what gives?<br />Trouble says I…<br /><br />People are not only angry about the careless bailout gifts to the ultra rich classes of their yet to be, hard earned money, but are now dealing with a sharp increase in organized gang violence and other random acts of criminal behavior.<br /><br />Remember the Rodney King riots or Hurricane Katrina aftermath? Katrina was probably the ultimate lesson for average people, not only displaying what happens in a breakdown of the social system and the speed at which anarchy develops, but the impotence of their own, (once imagined) omnipotent government. The now looming breakdown, due to lack of funds, of our local governments promises to be very similar to New Orleans after Katrina. As with the Rodney King riots and the Katrina aftermath, simply being seen holding a gun was often enough to make you appear less like prey. This might account for some purchases, but not all. Some, like the individuals who shot at rescue helicopters might have other ideas.<br /><br />Given the chatter I’m hearing about outrage over the bailouts and the massive level of taxation people are bracing for to pay for them, I fear a more confrontational possibility. If you didn’t catch <a href="http://dailybail.com/home/2009/2/19/absolutely-must-see-cnbc-bailout-video-a-call-to-arms-from-y.html?ref=patrick.net" target="_blank">Rick Santelli</a> on CNBC from the trading floor of the NY Stock Exchange last week, he seemed angry and so did others on the floor within earshot who loudly proclaimed agreement with his rant. He half jokingly said he was organizing a Tea Party on Lake Michigan in July. I found that he is not the only one. There are other Tea Parties planned, which leads me to ask, what is planned that we don’t know about or aren’t yet hearing of?<br />Guns, anger, lost homes and jobs, hunger and dis-enfranchisement ad up to the possibility of bad things…very bad things.<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com1tag:blogger.com,1999:blog-38350128.post-81001470510478671332008-12-17T22:53:00.002+00:002008-12-17T22:56:59.284+00:00WTF?Has anyone been paying attention to the financial headlines the past few weeks?<br />Corporations missing their profit targets, still more declaring bankruptcy and many more announcing thousands upon thousands of layoffs! Add to this the strange story of Mr. Madoff (pronounced ‘made off’) who ‘made off’ with tens of $ Billions of investor’s money. As one person observed ‘There’s never just one cockroach… You know there is more of that sort of news coming.<br /><br />Under the weight of this avalanche of horrible financial news, U.S. markets continue to rally…WTF!<br /><br />China’s own major stock market, the HANG SENG continues to rise also, when in the face of China’s current economic crisis it should be falling like a fat man from a high dive. China is a communist country, its leaders can suppress information that they don’t particularly like, such as hundreds upon hundreds of factories shutting down leaving tens of thousands at a stroke unemployed with no safety net. Violence has ensued and there are rumors leaking out that more is brewing as the situation worsens. Conditions in China are deteriorating rapidly and their stock market is still rising…WTF?<br /><br />A few have pointed to manipulation, I rather think the game is over and the big boyz who once moved markets are feeding on one another in a last ditch effort to obtain one more fix before their stash runs dry. So addicted to $ Billions that they shake with withdrawal tremors at the mere mention of no more money. At this they threaten and cajole congress and the senate for handouts of the highly addictive substance - money. Just hand it over, go quietly and no one will declare martial law. That’s the real story. We (those of us who are not filthy rich) are the victims of unauthorized rear entry by those who gamed the system and became obese on the wealth they accumulated. Some, who became fabulously wealthy, like Mr. Madoff by simple fraud. Small investors are probably not being targeted by big investors so much as just getting caught in the crossfire as they resort to eating one another.<br /><br />Back to my point: The shear weight of horrible financial news is becoming too heavy to bear. Big players have been propping up the markets by cramming flimsy sticks under these boulders of bad news, hoping to buy just a little more time to play one more hand. There is nothing strong enough left to prop up the weight of bad news. It’s now far too heavy. The reality is, the economic damage is done, we have crossed the point of no return and we are now in a financial death spiral. When the spin doctors can no longer convince us the patient is just sleeping, world markets will come down with a deafening crack. How close are we? Closer than you think. <br /><br />In the mean time, while we watch world markets spit in the face of reality and rocket upward we can only ask ourselves, WTF?<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com2tag:blogger.com,1999:blog-38350128.post-2971198599957189652008-12-06T16:14:00.002+00:002008-12-06T16:21:45.751+00:00Welcome to the USSA<div align="center"><strong>Welcome to the USSA<br />(United Socialist States of America)<br /></strong><br />To become a citizen put your mark of indenture on the loan bailout application below and prepare for a new life of Soviet style luxury!<br /><br />The fiscally responsible need not apply.<br /><br />Any person from this point onward found to have personal savings in an amount greater than 1 months estimated living expenses shall be faced with confiscation of excess funds and sentenced to mandatory re-education. Confiscated funds will be redistributed to the needy and more deserving among us such as Ford Motor Company, General Motors, etc…, so that they may continue to build state of the art vehicles for the United Socialist Peoples of America. This will guarantee the Manufacturers future ability to demand appropriately high prices for the large SUVs so desperately needed by the proletariat I mean citizen.<br /><br />The resulting transactions will further guarantee the ability of banks to function normally offering generous financing to those of you who can barely afford it for the purchase of things you don’t need and can, in all reasonable circumstances, live without.<br /><br />Welcome to the dawn of the new Peoples Paradise, where workers will be rewarded for servitude with a roof over their heads as long as they continue to make the payments on the generous new 100 year mortgages that bankers in their infinite beneficence have structured for your family’s financial security. This all in consideration of your future motivation to work hard to guarantee your continued employment, at the end of which, upon your early retirement at 95 you will be converted to pill form and fed to younger party members so that they may continue the noble dream. </div><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-618172687119945342008-10-17T22:30:00.001+01:002008-10-17T22:30:49.161+01:00It’s the end if the world as we know it part II…Before I get to the end of the world let me comment on recent stock market events.<br />Mish Shedlock at <a href="http://globaleconomicanalysis.blogspot.com/">http://globaleconomicanalysis.blogspot.com/</a> wrote a post a day or two before the last DOW rally that a look at Elliot Wave theory would suggest another sharp move up on the DOW then another fall . Nice call Mish! That rise came right away.<br /><br />Gold:<br />Gold has been in a downward trend lately, erasing recent gains. It looks set to test its September lows which broke below $750. per once. We could see a major sell off down to the $500. level or lower if panic selling takes hold. I don’t like gold at these prices as they are historically high and jumping in here leaves little cushion for down- turns. Personally I’m on the sidelines waiting for a much lower entry point.<br /><br />The End of Civilized Society<br />What makes America unique is it is a group of united states or small countries, if you will. All working together in co-operation. It’s unprecedented in world history. The European Union is an attempt at duplicating this success and we are flattered.<br />Keep in mind though that co-operation of this sort is so rare that finding similar examples in history is practically impossible.<br /><br />We are on the cusp of letting it all go. Anyone who’s been divorced can tell you when it comes apart you can’t put it back together the way it was, if at all.<br /><br />Many states are facing shrinking tax revenues now which will only worsen. Property taxes were the first to dry up. Sales taxes are drying up now as are income taxes. The big three.<br /><br />You only have to dial 911 in an emergency to appreciate some of the critical services these taxes pay for. Police, fire, road maintenance, the list goes on. What happens when the police don’t come or your house burns and no fire fighters show up? Many would ask how schools would remain open or parks and community services for that matter. The basic perks of socio-economic co-operation. A rapid breakdown in the quality of life in your town, I answer.<br /><br />As police leave for better paying prospects or are let go due to shrinking budgets, less law enforcement results, less law enforcement more crime.<br />Something I remember from the 1970s is the quality of officers on the local police forces. Mostly I encountered small minded bullies and crooks with badges in the suburban Seattle neighborhood where I grew up. I could go on with examples but you get the picture. It promises to be worse this time.<br /><br />The most notable condition of the 70s I remember was crime in my neighborhood. We used to leave our keys in the car and our front door unlocked. Then the economic downturn came and we had our car stolen and more than one time we woke to find a stranger in our house. Drug sales became part of the scenery and the crime that followed it. This too will come again but a higher octane version this time around I’m afraid.<br /><br />Gangs are now much more prevalent than they were in the 70s. They proliferated through the 90s and as city dwellers can attest, they are a much larger threat now than before. In the absence of law enforcement, gangs will only get worse, carving out wider spheres of influence with the most criminally psychotic individuals rising to the top and controlling their fiefdoms as tyrants or warlords.<br /><br />A dark vision of the future?<br />Fiefdoms are the most common political structures in history. Mistrust of outsiders will always contribute to this kind of social structure. Gang style hierarchies built on brutality, greed and a lust for power over others, over generations will build to monarchies. These seldom grow into what we would call democracy. In fact the global co-operation we now enjoy is so fragile once broken it may go missing for many generations.<br />We are now facing a breakdown of our system and the loss of co-operation among countries, states cities businesses and individuals. And the road to Fascism is not much further.<br /><br />How will governments deal with the impending loss of tax income and social decay on the back of the largest public bailout of private firms in recorded history?<br />Raise taxes.<br /><br />During the Roosevelt administration the tax rate reached 73% leading to the largest black market in American history, and a Soviet style decay of domestic markets, workmanship and industry. Why work at all when your government takes it all away? <br /><br />If you thought the quality of 70s era cars and ‘made in America’ everything was horrible (and it was) wait and see what comes out of this mess.<br /><br />We are in for rough times. Don’t get me started on peak oil. Oil will probably drop to $50. per barrel but won’t stay there forever. Even with a pullback in demand driven by recession we are still close to peak production with Mexico and Canada dropping off as world suppliers fast. Petroleum is part of nearly everything we use in the modern world.<br /><br />How screwed are we now?<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-33954294826895813882008-10-12T16:53:00.000+01:002008-10-12T16:54:44.303+01:00It’s the end if the world as we know it…Congratulations, you are present to witness the end of the world, the end of the world as we know it.<br /><br />The stock market crash has started in earnest and world wide panic has set in as a result. Not that I didn’t expect this, but it came more suddenly and swiftly than I thought possible.<br /><br />In 1907 J.P. Morgan engineered a bail out of the U.S. banking system that was eerily similar to this event but on a smaller scale. History will show that the current crisis started 100 years later almost to the month (November 2007) from that narrowly averted, long ago event. But this time, no joy. We don’t have Mr. Morgan with us anymore, and we are in deep shit.<br /><br />Let’s take a look at our situation:<br /><br />Americans are on the hook for $850 Billon more than the massive debt that we already couldn’t pay due to the hastily cobbled together bailout. A new bailout proposal is taking shape at this moment that will reach the House and Senate in mid November 2008. Who cares how much it will be, we can’t afford it.<br /><br />Germany is working on a bail out that may reach $400 Billion. It seems world governments will soon own or control all commerce. The free market is dead, it will be sorely missed.<br /><br />Stock markets around the world plunged last week with the DOW shedding 22% in a week long orgy of panic selling. Gold rallied for a short time but then got caught up in the viral infection of fear. The gold market is opaque but I’m guessing much of the selling there is to raise fast cash to cover margin calls in the derivatives markets. There may be more of this to come as many shadow investments unwind to the tune of perhaps hundreds of trillions of dollars. No one can say how much for sure but the possibilities are frightening.<br /><br />UBS and Credit Suisse Banks, the two largest businesses in Switzerland are in big trouble due in part to their exposure to derivatives, and may not be around much longer. The implications for Switzerland and the Franc are bad. The two banks are together far lager than total Swiss GDP. Their failure will crush the Franc, historically the world’s most stable currency and formerly a safe haven in turbulent times.<br /><br />So where does one put his money? U.S. dollars for now. At least until the world notices the flood of spanking new printed greenbacks that will be printed and circulated faster than the ink can dry. The U.S economic fundamentals alone should knee-cap the dollar but for the moment it’s the hot game in town, but only for the moment. Sentiment here may turn on a dime.<br /><br />Anyone try to buy gold coins or bars at your local dealer lately? It can’t be done. Physical gold has been swept off of the shelves by frightened Americans since at least August and now is drying up globally. Paper gold will see deep selling in an effort to raise cash to cover stock and derivatives margin calls. Physical gold will most likely be swept up for a short time in this panic as spot gold falls bellow the mid $700 range or perhaps lower. <br /><br />Fear is rampant and physical gold demand is very high. For this reason gold will probably see a neck breaking reversal upward once the Margin calls have wiped out enough derivatives players and their corresponding margin calls.<br />From there the sky is the limit for gold. Timing this will be tricky though as things from here start to move faster.<br /><br />Watch for World governments to attempt to restrict trading or ownership of gold. As taxation suffocates Americans and other countries for that matter we will see a Soviet size Black Market emerge with citizens sheltering what little they have left from ‘The Man’ in the form of gold or silver.<br /><br />Prices for Major assets will sink for perhaps a decade due to the unwinding of derivatives (the bursting of the bubble if you will) and a resulting over printing of world currencies will undermine currency values resulting in inflation and simultaneous deflation world wide. Ultimately gold and silver may become the black market currency of choice and real estate will be over for a long time.<br /><br /><em>In Part II of The end of the world I will discuss the effects of evaporating tax revenues, black markets, and the coming social breakdown.</em><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-34948959267850824152008-05-03T01:14:00.001+01:002008-05-03T01:17:52.409+01:00Aliens in the desert and other scary storiesI’m sitting here in the southern desert wilderness of Arizona, parked in a 40 foot motor home contemplating my navel.<br />After passing through Roswell, NM and Meteor Crater, in Arizona I thought I might sit out under the stars and watch for aliens to land and pay us a visit.<br /><br />I’m here to say, the aliens have landed! I saw them. While inside Grand Canyon state park I suddenly found myself surrounded by aliens, some of the worst sort – French, you know, from France!<br />My wife is also an alien – from Norway, a much better sort if you ask me.<br /><br />Aliens exist and they have landed in the U.S. and are at this moment clogging our highways in their ‘Cruise America’ rental RVs, booking up all the available camping spaces and buying up everything that <span class="blsp-spelling-error" id="SPELLING_ERROR_0">isn</span>’t tied down. This while looking down upon us newly poor third world Americans with pity as they easily part with relatively small amounts of their superior currencies.<br />I hate them!<br /><br />While traveling across the southern U.S. we had occasion to stop at a number of private and state parks only to find our neighbors were predominately from Europe. Nowhere so much as here, at the Grand Canyon. American tourist are solidly in the minority here as languages’ spoken around us seem to be mostly foreign (not English).<br /><br />America is on sale and foreigners are buying, at least for now. Many that I have visited with seem blissfully unaware that there own economies are approaching the abyss as we speak. Many countries in the E.U. are beginning to choke as America, (the largest consumer nation on Earth) has gone into vapor lock. Their currencies’ nominally higher values are actually helping to drag their foreign economies closer to the edge, threatening them with an economic ‘Smack Down’ of epic proportions.<br /><br />Some of these euphoric foreign spenders are even buying real estate in the US on the cheap, or so they think. This has the effect of temporarily arresting our current housing free-fall here but only fractionally.<br /><br />I predict more pain abroad as foreigners find it is not poor America crashing but the whole global economy. I foresee a stiffer downturn, here and abroad as these same foreign real estate investors discover that they tried to catch a falling knife, (purchasing American real estate in free-fall) and then try to liquidate their investments when they discover their mistake then find they are trying to exit at the same time everyone else is. It won’t be pretty.<br /><br />I see this beginning probably in July, as even now real estate values here and abroad are increasing their downward velocity and unemployment figures are on the rise in most industrialized nations. It’s only a matter of time before this affects their currencies. Lets face it, one fiat currency is as good as the next, because they have no real value except what the printers of said same claim they have.<br />Lets pause and think about that for a minute………..<br />Scary <span class="blsp-spelling-error" id="SPELLING_ERROR_1">isn</span>’t it?<br /><br />Many other countries have worse housing markets and shakier economies than we in the U.S., and derivatives are ubiquitous and far reaching, so far wreaking havoc as far away as a small town in northern Norway. Many foreign banks and fund managers invested in <span class="blsp-spelling-error" id="SPELLING_ERROR_2">CDOs</span> and the like, and the real damage will prove to be more vast and far reaching than anyone has told you. Many more banks will fail and some countries will as well!<br /><br />My advice to foreign visitors: Quit buying stuff you don’t need. Get back in your flying saucers, or whatever you flew here in and go home, save your Euros, (you’re going to need them soon) buy gold and quit taking so much malevolent glee in America’s pain. After all you won’t want us point and laughing as you loose an arm and a leg. It is wise to remember we are all in this together and for reasons too numerous to name things are going to get much, much worse, for all of us.<br />Vern<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com3tag:blogger.com,1999:blog-38350128.post-27188640083605245522008-03-05T19:57:00.003+00:002008-03-05T20:04:36.541+00:00Denial is not a river in EgyptI woke up today and realized we’re all freakin’ doomed!<br />I’ll explain…<br /><br />I’m currently sitting in a big diesel bus in the Florida Keys. It’s sunny, warm and pretty much all around pleasant. In the RV campground here there are French, Norwegian and Swedish campers on either side of me, having a gay old time living it up on the new found strength of their respective currencies. And that’s great except for the carefree attitude they exhibit. Don’t they know we’re all freakin’ doomed?!<br /><br />For instance, the French couple might go back to France after their sunny trip to Florida to find their country de-coupled from the European Monetary Union. They might very well find they have no jobs if they currently work in the aircraft, automobile, luxury goods or textiles industries.<br /><br />There are an abundance of American’s here as well, sunning themselves and riding their bicycles around without a care in the world. The ones I’ve talked with seem to know there is trouble on the horizon but speak as if it is not their problem and it won’t affect them.<br /><br />Housing went into a death spiral in ’07 while commercial construction put in one of the best years since the 1980’s, that is until the last quarter of ’07. Commercial construction lags residential by a year or more, now that party is over.<br /><br />Bernanke is talking about impending bank failures, something I suspect is going to be worse than forecast. Jobs are disappearing at an alarming rate, the dollar is dropping like a fat man off a high-dive and gold is touching $1,000. per ounce. Gold, it doesn’t pay dividends, has no real industrial value, but there it goes, to the moon, go figure. All in spite of whether the stock market rises or falls. This I count as a vote of no confidence in the U.S. dollar.<br /><br />All while families who probably really can’t afford to do so spend $71.00 a head per day to get their brood into Disney World. I was there last week and it was crowded, really- really crowded. You’d never guess from those crowds that there were economic troubles in the land of the free but you can’t be out of money if there are still checks in the check book right?<br /><br />Is it human nature to close our eyes and pretend we aren’t going over a cliff? Or is it just a childish trait we all possess to some degree that has us all living as if we will never run out of money until it’s too late?<br />I don’t know. I just know we better wake up and smell the coffee, get a clue, hang-up and drive or all of the above or we’re all freakin’ doomed!<br />Vern<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-77945108115595037462008-02-17T14:18:00.005+00:002008-12-09T05:15:53.933+00:00Norway: "We're special"<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgavCMv07V9h6fhBJ6KeRtIo7daCaqbPiZgGenrUJJQzojGn2-WrZkeBvfNyI3nPFzowKlFAnXHrDxffN_7MQmW6pq72pDI4JF1Tjl4rT4ergGId5gC5dG1c8fLVagt_JWsdAKO2A/s1600-h/Prosjektet_Frydenbe_690362h.jpg"><img id="BLOGGER_PHOTO_ID_5167955783845433682" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgavCMv07V9h6fhBJ6KeRtIo7daCaqbPiZgGenrUJJQzojGn2-WrZkeBvfNyI3nPFzowKlFAnXHrDxffN_7MQmW6pq72pDI4JF1Tjl4rT4ergGId5gC5dG1c8fLVagt_JWsdAKO2A/s400/Prosjektet_Frydenbe_690362h.jpg" border="0" /></a><br /><div></div><br /><div><a href="http://www.aftenposten.no/english/business/article2258556.ece">Rental Rates Soar in Oslo</a></div><br /><div></div><br /><div>OK, who doesn’t get what’s happening here? Residential and commercial construction has broken records in Norway in the past few years. The population however is still hovering at around 4.5 million. How could there possibly be a housing shortage with all those new units and no appreciable increase in population?<br /></div><br /><div>Speculators!<br />There, I said the ‘S’ word…<br />Yes, SPECULATORS.<br /><br />I know from a source in the real estate industry there that many R/E agents have bought up numerous condo units themselves expecting to get rich, many of which are held vacant.<br />This source did some speculating himself, in what was going to happen to the property speculators. In 2006 he predicted mass auctions of new condo units within a year or two as the modern day prospectors get caught in the down-draft that was sure to come, and here it is.<br /></div><br /><div>What Norway is currently seeing is the denial phase of their unwinding, with sellers still thinking that if they hold on long enough their investments will turn and again look profitable.<br />To them I say, ‘SNAP OUT OF IT’, drop your price; observe the first rule of panic: Panic before everyone else does.<br /><br />Will it happen? No… Norwegians are special, much smarter than Americans. Americans are fat and stupid. America became a superpower because France told us we could be, and now America is getting what is most assuredly deserves, a vicious economic recession, an historical destruction of wealth and the pain and suffering that comes with it. Norwegians are giddy with delight to see their assertions proved out and inferior Americans get what they finally deserve.<br /><br />To them I say, ’keep an eye on your stock market. As American stocks get pounded due to sub-prime losses so will yours’.<br />Will they listen? No…<br /><br />We saw rents rise in US cities late 2006 for reasons similar to what is taking place now in Norway. Look what is taking place in the US market now - rapidly decreasing rents as a flood of units hits the rental market and speculators throw in the towel and try to stay afloat or banks dump properties cheap and the new owners rent them out, or try to.<br /><br />Norway’s housing market has turned, it did so a year ago and the choking sounds are working their way from the outlying areas to the metro areas as sellers gag on the reality of few buyers. Oslo will follow the same track as US cities did a year ago. What a golden opportunity to learn and take action. What a waste that it will go unheeded… </div><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-14635606736910688472007-12-24T09:54:00.000+00:002007-12-24T10:04:07.042+00:00RETIREMENT PLANNING FOR 2008This was sent to me by a reader. It sounds like investment advise a lot of people will be employing soon, if for no other reason than to forget about losses in other areas of their portfolios.<br />Vern<br /><em><strong></strong></em><br /><em><strong>RETIREMENT PLANNING FOR 2008<br /></strong><br />If you had purchased $1000.00 of <span class="blsp-spelling-error" id="SPELLING_ERROR_0">Nortel</span> stock one year ago, it would <span class="blsp-spelling-error" id="SPELLING_ERROR_1">now be</span> worth $49.00.</em><br /><em></em><br /><em>With Enron, you would have had $16.50 left of the original $1000.00.</em><br /><em></em><br /><em>With <span class="blsp-spelling-error" id="SPELLING_ERROR_2">WorldCom</span>, you would have had less than $5.00 left.</em><br /><em></em><br /><em>If you had purchased $1000 of Delta Air Lines stock you would have$49.00 left.</em><br /><em></em><br /><em>But, if you had purchased $1,000.00 worth of beer one year ago, <span class="blsp-spelling-error" id="SPELLING_ERROR_3">drank all</span> the beer, then turned in the cans for the aluminum recycling - -REFUND, You would have had $214.00.</em><br /><em></em><br /><em>So, based on the above, the best current investment advice is to <span class="blsp-spelling-error" id="SPELLING_ERROR_4">drink heavily</span> and recycle.</em><br /><em></em><br /><em>It's called the <strong>401-Keg Plan</strong>.</em><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-76509784667662142922007-12-18T17:53:00.000+00:002007-12-18T18:39:44.259+00:00Walk away, and do it now!<strong><em></em><a href="http://walkaway.blog.com/"><em>Why you should walk away, now...</em></a></strong><br /><em>If you bought a house in 2005-2006 in the affected areas of the country, you must walk away from your house and the sooner the better. Its the only sane decision you can make as a human being. Sanity, meaning to make decisions which are in your best interest.</em><br /><br /><em></em><br /><em>Here's your situation:You bought with a 3-5 year outlook. No one pays principal or gains equity in the first 5 years, except through appreciation. There is none. The 3-5 year outlook is bust.OK, maybe you bought with a 10 year outlook. No one pays principal in the first 10 years, no one gains equity either except through appreciation. You are probably 100-150K in the hole on appreciation right now. You will have gained nothing by the end of 10 years.</em><br /><br /><em></em><br /><em>OK, so what about 10-15 years out? Well, many people have built in balloon payments between 50 and 100K at 15 years. This will negate any equity or appreciation that could be possible in the 10-15 year range.</em><br /><br /><em></em><br /><em>So the situation is this: you are making higher payments than necessary on a home which is not worth what you paid, and you have no real expectation of capitulation in the next 15 years. If you're really unlucky, your payments may be going up next year or the following one.</em><br /><br /><em></em><br /><em>The only sane, rational, financial decision you can make for yourself and for your family, is to walk away. Your bank is walking away, Wall Street is walking away, its time for you to do the same. Put aside pride, ego, wishful thinking. The sooner you get this behind you the better off you will be.</em><br /><br /><em></em><br /><em>If you could rescue your financial position and be creditworthy in 4-7 years why would you (a sane person) continue to deplete your finite resources on a bad bet, and a diminished future?</em><br /><br /><em></em><br /><em>The answer is you wouldn't. No sane person would. Time to walk away. Just walk away and have your dream another day.</em><br /><br /><span class="blsp-spelling-error" id="SPELLING_ERROR_0">Hmmm</span>... Something to consider.<br /><br />It can be said that the banks and wall street are walking away from the housing bust they helped make in the sense that they are happy to fob the debt off onto someone else (the American tax payers) through the non-<span class="blsp-spelling-error" id="SPELLING_ERROR_1">sensical</span> bail out plan. It follows that if you walk away from a house you can't pay for you are simply doing the same thing.<br /><br />This mortgage bailout (thinly disguised bank bailout) only creates debt serfs out of unfortunate American home buyers while banks maintain an income stream from the continued payments. They may take lower payments but you can bet they will write off the paper loss, and Uncle Sam will forward that bill to the tax payers.<br /><br />It would also appear that if you choose to walk away you would not be the first. This is already taking place in the harder hit regions of the country like California, with moving trucks showing up suddenly and the former owners vanishing in a puff of U-Haul orange.<br /><br />It seems many are now choosing not to walk headlong into debt slavery but instead choosing freedom and walking away.<br />Vern<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-79495675966121504972007-11-27T10:45:00.000+00:002008-12-09T05:15:54.243+00:00After the Collapse<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhku_qYtJRGpZMIw5QPZ0RF3APz7SgL-lOF5TRKLCvUPpDTJFs5EgtqfEgD9NY_PJJN0iOf_MkjcBImO3ut7sP76WuBN2Mx5kqHJC93FiLKOs7iFlgahCGz5o5NQ5IKcapU0Dluhg/s1600-h/RUSSIA_SUBMARINE_M0_644148h.jpg"><img id="BLOGGER_PHOTO_ID_5137497175554807650" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhku_qYtJRGpZMIw5QPZ0RF3APz7SgL-lOF5TRKLCvUPpDTJFs5EgtqfEgD9NY_PJJN0iOf_MkjcBImO3ut7sP76WuBN2Mx5kqHJC93FiLKOs7iFlgahCGz5o5NQ5IKcapU0Dluhg/s400/RUSSIA_SUBMARINE_M0_644148h.jpg" border="0" /></a><br /><div><em><a href="http://www.aftenposten.no/english/local/article2120697.ece">Military tracks Russian subs off Norway's coast</a> </em><br /></div><div><em></em></div><br /><div><em></em></div><div><a accesskey="1" href="http://jameshowardkunstler.typepad.com/clusterfuck_nation/"><em>Clusterfuck Nation by Jim Kunstler</em></a>, author of "The Long Emergency"</div><div><em>But I must say, at the risk once again of sounding extreme, that the structural and systemic sickness in the finance realm is now so severe that it is hard to imagine we will get through the month of December without some major trauma in the markets. In fact, I'd go so far as to predict a thousand-point drop (or more) in the Dow just in this week after Thanksgiving. Real wealth "out there" is evaporating like popsicles dropped on the floor of Hell's fifth circle. It is coming out of the system whether the Big Boyz or anybody else likes it or not, and its absence will assert itself.</em> </div><br /><div></div><br /><div><em>At the risk of sounding even more extreme, I would be hard put to believe any reports that "consumer" spending in the days following Thanksgiving will match the hopes and wishes of economic officialdom. My own hunch is that average Americans are so maxed out on debt that they don't know whether to shit or go blind. Perhaps lot of them are willing to take a last step into fatal insolvency in order to put a plasma TV screen under the Christmas tree and appear as heroes to their families. If that's the case, it would only imply a greater bloodbath in credit card default thundering through the system in February and March, which would only deepen the carnage in collateralized debt instruments further up the food chain.</em> <em></em></div><br /><div><em></em></div><br /><div><em>That stuff probably has a long way to unwind, even as the "train" of losses hits the immovable obstacle of reality and the "boxcars" of consequence fly off the rails. The slow-motion train wreck could sweep away an awful lot of familiar things in its path -- <strong>banks, companies, government-sponsored enterprises, whole industries, whole economies, nations, up to and including the prospects for civilized existence, if severe hardship leads to war, which it often does.</strong></em></div><br /><div><strong><em></em></strong></div><br /><div>It's an extreme prediction.<br />Mr. kunstler is probably closer to the truth however than many of us would like to believe. When he says losses in world financial sectors due to derivatives are far worse then any report would indicate, I believe that to be the case and have suspected that for a while now.<br /><br />Where he postulates that the real after effects could wipe out banks, industries and possibly lead to war, he is, unfortunately, probably accurate. If one simply glances backward at history it's not hard to see how it might play out. After the banking panic of 1907, which had global consequences, it was not long before the world entered the Great War, (WWI) and the damage done to Mexico's economy during the panic is believed to have been the catalyst for their civil war in 1910.</div><div> </div><div></div><div>Where Mr. Kunstler mentions and impending "<em>global contest for remaining fossil fuel resources</em>", you can bet it won't be a friendly contest. You only have to remember what Japan did in 1941 when the US Navy blockaded much needed oils shipments from reaching Japanese ports. The Japanese got a little cranky and bombed one of our ports... Pearl Harbor.<br /><br />War? Ya...<br /><br />China, who's been engaged in an unparalleled military build up for most of a decade now, will probably want to see some return on that investment. I won't be surprised to read news reports of Chinese war ships parked in the arctic claiming resources up there for itself soon. Nor will I be surprised if I hear they are cruising the North sea oil fields leaning on Britain and Norway to 'share the love or else'.<br /><br />Then there is Russia. The former Soviet Union lost some of its' military might in the early 1990s but not all. Russia has been enjoying an economic boom recently and as a result has a few extra rubbles to poor into upgrading its' military machine. They have taken to showing off some of this modern hardware just off the coast of Norway as recently as last week, with Russian fighter jets making multiple incursions into Norwegian airspace earlier in the year, just in case there are doubters here.<br /><br />If America looks weak, it may be an invitation to the two remaining global military powers to make a grab for resources anywhere they choose with only each other to contend with.<br />As the global economy deteriorates look for increased crankiness around the globe and wars to follow as surely as testy drug addicts going through withdrawals.<br />Vern </div><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-78878673681507528882007-11-26T01:34:00.000+00:002007-11-26T11:42:24.164+00:00I recently returned from the U.S.I was on the road again recently to have a look around. I decided it was time to venture away from my desk here in Europe to have a closer view of what effects the U.S. housing market is having on American consumers. You know, a kind of view from the parking lot.<br /><br />I started my journey in Boston on a month long tour of the East coast and found things quieter than I expected. On a previous visit to Boston I was greeted by blaring horns, a veritable wall of sound, as soon as I walked out of the airport. (It’s how Bostonians communicate) This time however I heard none of the customary car horn communication as I exited Logan airport, it was down right subdued...<br /><br />I caught a shuttle to a nearby hotel and found it virtually empty. It was so quiet I felt like the last man on Earth in one of those science fiction flicks. I asked an employee if things were slow and was told confidentially that business was a little off. If that was a little off I wonder how a serious downturn looks.<br /><br />I spent more than a week in Massachusetts and visited a number of local chain stores including Wal-Mart, they were quiet. I haven’t spent much time in Wal-Mart’s but they are big stores and you would expect to see a fair number of people in them... not this time, or any other time I visited.<br /><br />I made a number of trips to Ace hardware as well for a little project I was working on. The lights were bright, the musak was playing and the shelves were nicely stocked, it took me a while to notice that I was the only one in the whole store besides the employees and this was the story on more than one occasion.<br /><br />Traveling around Boston and other areas I passed through, I noticed a lot of empty retail spaces, and businesses like Best Buy, Staples etc. were not populated with customers. All looked normal except for an extreme lack of people spending money. It all looked very sleepy.<br /><br />Traveling south to North Carolina in a 40 foot motor home I noticed there was not a lot of traffic, this was true all the way south on my journey. Maybe I shouldn’t be surprised with the economy slowing as it is and gas prices rising as they are, but I have been living in Europe for the past four years and things are not how I left them. This new reality is unsettling.<br /><br />****<br /><br />Down in North Carolina, things were quiet as well. As fate would have it, motor home maintenance brought me to Lowe's, (LOW: NYSE) a number of times, you know, the big hardware store. The situation was the similar down there - big store, no customers. There were a few but the parking lot is vast and so is the store and the best I can say is that it was quiet, very quiet.<br /><br />I’d gone into a number of establishments around Wilmington and had been the only person there on every occasion. Even the Post Office was quiet on a Monday! Anyone who tries to tell me there is no recession is full of crap.<br /><br />I had occasion to shop for some clothes at an Eddie Bauer store at the Mayfair Mall outside of Wilmington. Mayfair is an upscale area and home to the more affluent, the kind of people whose spending habits are said not to be affected by an economic slowdown.<br /><br />The mall is new and laid out like a walking village, a pleasure for even me; a guy who hates shopping, to go to. Eddie Bauer however was empty save for two employees who seemed very happy to see me. With little else to do they acted as my personal shopping assistants. Maybe it's because I live in Europe where if you ask for assistance you are liable to be slapped in the back of the head and shown the door. But it seemed like a lot of help for a guy who just wanted to buy a shirt. Not to mention the steep discounts I found there.<br /><br />Anyway, only two other people entered while I was there which was the better part of an hour. One wanted directions and the other was looking for a job. Sales were not brisk. This was consistent with most other stores in the mall.<br /><br />My overall impression on this trip was, things have slowed dramatically and if they stay this slow Christmas will be bleak.<br /><br /><br />*****<br /><br /><br />I will be hitting the road in the U.S. next year with my family, touring the bubble cities of America. I will be reporting what I see from my travels and keeping you informed on the meltdown from a more front line perspective. I will also be keeping a travel log and I'm currently planning a video blog of our year long journey across the States which I will link to from this blog. Keep me bookmarked or subscribe to my feed.<br /><br />Vern<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-19637045230914222612007-11-22T14:34:00.000+00:002008-12-09T05:15:54.514+00:00The Coming Suburban Calamity<div align="center"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCyCIe7lH9W3NA9lyt-8IvzxV2jRqvrAB-PW4fP_vG9aw2EVVqHD93n97mLVgdKObbiHSOU_0YumkAIaHnKXYNlKgO6o9EJO2LSwxgNfX3ljwgiWyOZypei6QJ9SPnW1QZiPbY2g/s1600-h/foreclosure_house_03.jpg"><img id="BLOGGER_PHOTO_ID_5135701883520046930" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjCyCIe7lH9W3NA9lyt-8IvzxV2jRqvrAB-PW4fP_vG9aw2EVVqHD93n97mLVgdKObbiHSOU_0YumkAIaHnKXYNlKgO6o9EJO2LSwxgNfX3ljwgiWyOZypei6QJ9SPnW1QZiPbY2g/s400/foreclosure_house_03.jpg" border="0" /></a> <span style="font-size:78%;"><a href="http://money.cnn.com/2007/11/09/real_estate/foreclosure_prevention_grassroots/index.htm">CNNMoney.com</a></span></div><br /><br />It is estimated that 2 two million homes will enter foreclosure next year. ‘So what’ you say. The United States is a country of 300 million people. Two million families is not a large percentage of the population. How much could it really affect the economy?<br /><br />From my point of view it’s not so much the foreclosures as the psychological effect it has on property owners. Credit is drying up, builders are still completing projects and putting still more supply into a saturated market and two million more properties are set to hit the market in this near perfect storm.<br /><br />All of this will have real effects, but it also is an undeniable sign that the housing party is over. That simple fact alone should scare the living crap out of any speculator who still holds property. It’s over and you are screwed! Let me count the ways…<br /><br />Now here is another developing problem that is beginning to manifest; the effect a foreclosure property has on neighboring houses. Copper seeking looters, aluminum siding scavengers, drug dealers and gangs can all have a bad effect on an abandoned house and the surrounding neighborhood. If a home owner who is not in trouble finds his property value going negative due to the destruction of a neighboring property, he will have to decide if he can live with the increasing decline into chaos. If so, he may find very soon that the value of his property has gone to zero. This can be a problem for even those who own their houses outright. One look at a residential neighborhood that has degenerated into an abandoned no-mans’ land and most potential buyers will turn tail and run.<br /><br />This is a problem that is already happening. Some formerly nice suburban areas in Ohio for instance are now behind a red line where real estate agents no longer tread, police presence is scarce and criminals have free reign. This situation is enough to persuade anyone to walk away from their investment, especially if they have little or no equity.<br /><br /><a href="http://money.cnn.com/2007/11/16/real_estate/suprime_and_crime/index.htm?postversion=2007111908">Crime scene: foreclosure</a><br /><br /><br /><a href="http://www.oftwominds.com/blognov07/degentrification.html?">The Great Fall: How Suburbs De-gentrify to Ghettos</a><br /><br />As foreclosures increase look for this problem to spread like an airborne virus. Each foreclosed house that sits abandoned for even a month attracts criminals of various sorts and soon looks like hell or worse. This has a direct effect on neighboring properties and can even affect a whole block of properties! Consider that there are typically 12 to 14 houses on any suburban street. One bad house can affect them all! I think it may be more accurate to take the 2 million potential foreclosures next year and multiply them by 14! In other words a possible 28 million abandoned or worthless properties.<br /><br />As the effects of looting and crime drive owners away, the cancer will spread to even more properties until it reaches some sort of impedance. But tens of millions of properties could be abandoned or rendered unsellable before it all ends.<br /><br />Vern<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-55366532036327052412007-11-22T11:47:00.000+00:002007-11-22T12:54:17.018+00:00Now is not the time to buy, but if you must...Many savvy people have become 'Bubble Sitters', those who sold near the top and are now renting, waiting for the market to bottom before jumping back in. Many are settling in for a long wait.<br /><br />For those who simply want to be property owners I can tell you, now is not the time to buy! Some people in the U.S. find themselves in the position where they, for what ever reason, need to buy. If you must buy property, here is some common sense advice from Down-Under.<br />As a former real estate investor myself I can tell you it really is this simple.<br />Vern<br /><em></em><br /><a href="http://www.jenman.com.au/news_alert.php?id=90">By Neil Jenman</a><br /><em>Take the 'property doubling every seven years' statistic, the one that's supposedly chiselled in stone. It's garbage. To prove it all you need is a ten dollar calculator. </em><br /><em></em><br /><em>Take the city of Sydney – the Mecca of property investing. (In Australia)<br />In 1890, the average Sydney home price was $1,446 (£723). If property really does double every seven years then, in 2009, the average Sydney home will be worth <strong>$189,530,112.00.</strong> (There must be one helluva boom coming in the next 14 months).</em><br /><em></em><br /><em>Most inexperienced investors do not realise that investing in property – the right way – is relatively simple. The respected financial expert Noel Whittaker says something like this when it comes to smart property investing, "All you have to do is buy a well located property from a seller who urgently needs to sell and is prepared to accept a discount for a quick sale."</em><br /><em></em><br /><em>I have a very close friend of Italian descent. His name, of course, is Tony. He has the best definition I have ever heard for investing the right way in property.<br />Tony says, "I never invest in a property unless I know there are plenty of people who would line-up to buy it from me for more than I paid for it as soon as I have bought it."<br />In other words, Tony only buys high-demand property. He never buys from a Selling Machine company.</em><br /><em></em><br /><em>I have seen plenty of people make plenty of money by doing what people like my friend Tony do – they stay away from Selling Machines, they learn about the property market by doing their own time-consuming research (which, when you work it out is probably worth hundreds of dollars an hour to them) and then they buy a good property in a good area at a good price.</em><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-51156971984276542182007-11-19T10:58:00.000+00:002007-11-19T11:11:30.777+00:00Cutting in on Bernanke's racketThis story came across my desk this morning and though I don’t venture often into discussions about currencies, I have to comment on this one.<br /><em></em><br /><strong><em>As part of a nationwide investigation, <a href="http://www.spokesmanreview.com/breaking/story.asp?ID=12398">FBI agents raided</a> three Coeur d'Alene business locations on Thursday, seizing records and dies used to make the so-called silver "Liberty Dollar" sold throughout the United States by anti-government patriot groups.<br /></em><br /></strong>I’ve never heard of NORFED – (the National Organization for the Repeal of the Federal Reserve Act & Internal Revenue Code) before today nor have I heard of Mr. von NotHaus and his liberty dollar.<br /><br />At first glance NORFED looked like one of those survivalist ‘anti-government’ patriot groups to me. After reading on I changed my mind.<br /><br />Minting silver commemoratives or ‘coins’ if you will, and printing redemption notes for same silver commemoritives or ‘coins’ seems like a good start after what our own government and the Federal Reserve have done to our money.<br /><br />Since 2001 that $1.bill In your wallet has lost nearly 40% of its value due to the Federal Reserve under Greenspan printing and circulating ever more of them whenever they got the itch. (By the way, Bernanke has the plates now and he’s not afraid to use them). If you do the same, the boys running the printing racket will pay you a visit. They don’t need to break your kneecaps. They have guns and cages to put you in and will inflict more permanent harm on you than lesser organizations might.<br /><br />Crossing Mr. Bernanke’s business in this way is called ‘counterfeiting’ and only his boys are allowed to do it. That is, print and place into circulation any form of credit note redeemable by the bearer. It should be noted that it is expressly forbidden by the US constitution for our government or anyone else to do the same. Who’s going to call Bernanke on it though? Not me, he has a large group of enforcers – the SS (Secret Service) and others with various acronyms who have guns.<br /><br />As an investor in currencies as well as gold and silver, I find Mr. von Nothaus’ idea intriguing. – Paper certificates like money backed by a tangible asset: silver, the price of which is dictated by broad market forces, not by an elite group of wealthy men who tell us a piece of paper they print with green ink on it is worth $100.<br /><br />If you hold certificates valued at $100. in silver, you at least have a benchmark to measure them by instead of a man in an expensive suit puffing out his chest to project his authority as he declares the same about his greenback notes backed by… well, nothing!<br /><br />When NORFED gets their offices, records and precious metals back from Bernanke’s boys I think I am going to pick up a few of his Liberty commemoratives as an investment. It looks like they could outperform the U.S. dollar, of course a can of mixed nut can do that right now. Don’t believe me? Just check the price of mixed nuts!<br />Vern<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-36516063490557914312007-11-16T10:18:00.000+00:002007-11-16T11:48:00.996+00:00Will foreigners save Hawaiian real estate?More from Peter Slate at Haiku Properties.<br /><em></em><br /><em>From: "Peter Slate" <</em><a onclick="onClickUnsafeLink(event);" href="mailto:SA7@PeterSlate.com"><em>SA7@PeterSlate.com</em></a><em>><br />Date: November 14, 2007 1:07:05 PM HST<br />To: <</em><a onclick="onClickUnsafeLink(event);" href="mailto:sa7@PeterSlate.com"><em>sa7@PeterSlate.com</em></a><em>><br />Subject: Maui - 10 / 2007<br />Aloha,<br /><br />Thanks for your comments and feedback.<br /><br />Instead of analyzing the October sales figures, I’ve attached the Real Estate Association of Maui’s sales summary. Particularly interesting are the sales figures on page 4, which show the total number of sales month to month, and year to year, dating back to 2002. By looking at these figures, you’ll see there were many more sales, month to month, and year to year in 2003, 2004 and 2005 than in 2006 and 2007. I’ve often wondered about the mental tug of war between buyers and sellers, and now I get to see the transition in action. Considering the large number of new developments that have come on line in the last three years, combined with the growing number of people listing their properties, its no surprise Maui’s real estate market is anxious. Listed in Maui County, today, any buyer has the choice of 1086 homes, 1333 condos and 519 pieces of vacant land. There are 153 homes (14 %) in escrow, 116 condos (9 %) in escrow and 50 pieces of land (9.7%). These escrow numbers are sobering, no question.<br /><br />More rate cuts are expected when the Fed meets on 11 December. Should this happen, it will total three rate cuts in four months. Sound familiar ? Remember April of 2002 ? Given that real estate movement lags rate cuts anywhere between three to six months, we anticipate buyers to return soon (Dec/ Jan) based on the half point September rate cut. Interestingly enough, I recently spoke with a Canadian couple this weekend who bought on Maui a year ago. They wanted to know the current state of market. After a short explanation, the wife, head in hands, said “Oh s…t, now is the time we should have bought!’ With a weak dollar, “very motivated” sellers, and excessive inventory on the market, foreign money could very well turn this market this winter. Now is the time to do your due diligence and position yourself to buy. Looking forward the next six months, we could see one of the great buying opportunities for years to come.<br /><br />Please note, if you’d like to opt out of this letter, simply reply to this mail telling me so.<br /><br />Thank you,<br /><br />John Papazian R(B) Peter Slate R(S) <br />Haiku Properties Haiku Properties <br />808 878 6800 808 276 4017</em><br /><em><br /></em><br />I detect a bit of wishful thinking from Peter on this e-newsletter. The hope that foreigners, on the strength of their currencies over the dollar will come in and save Hawaii real estate is probably a nice warm dream. Careful not to wet the bed...<br /><br />While it is true, Canadians, for instance, find their currency reaching parity against the U.S. dollar. Good on them... <br />Some Canadian cities are still experiencing rising real estate values. The secret is out though Peter, American real estate is doomed and getting doomeder. O.K., I made that word up.<br />Anyway most savvy Canadians won't run outside while it's raining knives. Sure, I know they talk funny but that doesn't mean they're stupid.<br /><br />While foreigners are thrilled about their currencies' nominal rise against the Greenback, it will most likely manifest as consumer spending. People still like shiny stuff. It's a D.N.A. thing...<br /><br />I just came back from a month long trip to the East coast of the U.S. There were angry passengers on my way back to Europe when many could find no room left in the overheads to put any of their four or more bags. Judging from the conversations, I was the only American on the flight.<br /><br />Maybe foreigners will save Christmas, hopefully before the realization that that their own currencies are merely fiat and of no more real value than ours. I doubt however that they will save our real estate market. keep in mind that the R/E bubble and the free-for-all credit that made it possible is a global phenomenon and many foreigners would have to liberate equity in their own homes, many of those homes falling in value as I write this.<br /><br />Canada is behind the curve and some crazies still think that real estate prices never go down. But no one is immune. $400-trillion tied to failing credit derivatives tells me that's so. The U.S. is a $14-trillion economy; you do the math... $400 trillion, that's a lot of clams.<br /><br />Also your wishful thought that dropping interest rates will spur sales is just that, wishful. Global financers are skittish, they are seeing derivative write-downs (re-pricing downward of massive investments) every day now. Liquidity is getting pinched off. It doesn't matter how low the borrowing rate goes if no one will loan the money.<br /><br />Look for the real financial fits to come from institutions, not at the consumer level. As banks and brokerages begin to show cracks, interbank relations will break down, that's when the real hurt will begin and contagion will spread from there rapidly.<br />Vern<div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-71921150272259671502007-10-07T10:34:00.000+01:002007-10-07T10:45:46.852+01:00The Definition of GlobalizationI’ve said it before, the world is economically flat, which puts us all squarely in the same boat when it comes to other peoples’ economies.<br /><br />Here is a copy of an amusing but insightful email sent in by a reader.<br />It is a great tongue in cheek illustration of how close we all really are. <br />Vern<br /><br />By anonymous:<br /><em></em><br /><em>Finally, here is a definition of globalization I can understand and to which I can relate. <br /><br />Question : What is the truest definition of Globalization? <br /><br />Answer : Princess Diana's death. <br /><br />Question : How come? <br /><br />Answer : An English princess with an Egyptian boyfriend<br />crashes in a French tunnel, driving a German car with a Dutch engine, driven by a Belgian who was drunk on Scottish whisky,<br /> (check the bottle before you change the spelling), followed closely by<br />Italian Paparazzi, on Japanese motorcycles; treated by an American doctor, using Brazilian medicines.<br /><br />This is sent to you by a Canadian, using Bill Gates's technology, and you're probably reading this on your computer, that uses Taiwanese chips, and a<br />Korean monitor, assembled by Bangladeshi workers in a Singapore plant,<br />transported by Indian lorry-drivers, hijacked by Indonesians, unloaded by Sicilian longshoremen and trucked to you by Mexican illegals.....<br /><br />That, my friends, is Globalization!</em><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-49679960213326776492007-10-03T12:45:00.000+01:002007-10-03T13:14:24.528+01:00The Ghost of October, 1929Is it me or is anybody else getting that funny prickly feeling on the back of your neck, the one you get when the shoe is about to drop?<br /><br />I have that feeling now...<br /><br />Maybe it’s the ghost of October, 1929, or maybe I’m just superstitious, but I’ve got a bad feeling about this month…<br /><br />In the spirit of the times here are some headlines from 1929 provided by <a href="http://www.itulip.com/forums/showthread.php?t=1797">itulip</a>. You might notice some similarities to current news reports.<br />Vern<br /><br /><a href="http://www.pbs.org/wgbh/amex/crash/sfeature/sf_headlines.html" target="_blank"><strong><em>1929 Headlines</em></strong></a><em> </em><br /><br /><strong><em>Wave of Buying Sweeps Over Market as Stocks Swing Upward</em></strong><br /><em>Radio Flashes High; General Motors and Steels Soar</em><br /><em>By </em><a id="amzn_cl_link_2" href="http://amazon.com/gp/product/0813013860?ie=UTF8&tag=wwwitulipcom-20&link_code=em1&camp=212341&creative=384049&creativeASIN=0813013860&adid=534119ff-dd42-4938-8667-1bef514ec68f" target="_blank"><em>Laurence Stern</em></a><br /><em></em><br /><em>The atmosphere of doubt and caution which </em><a id="amzn_cl_link_3" href="http://amazon.com/gp/product/B000RW3VD4?ie=UTF8&tag=wwwitulipcom-20&link_code=em1&camp=212341&creative=384049&creativeASIN=B000RW3VD4&adid=6f32e8c4-f6cf-4964-98c0-5e54e9225821" target="_blank"><em>Wall Street</em></a><em> in recent weeks has come to regard almost as habitual on Thursdays was swept away yesterday in a rush of buying...</em><br /><em></em><br /><em>Perhaps the market's own strength weighed as heavily with speculative minds as the logic of the situation, since the tape is the one institution Wall Street does not argue with. At any rate, the market appeared entirely confident from the opening gong. It was a firm, almost buoyant, opening, many initial transactions involving large blocks at sizable price advances...</em><br /><em></em><br /><em>The advance was one of the most vigorous of the year, amounting to a net gain of 6.97 points in the Dow Jones "average" of thirty representative industrial issues...</em><br /><em></em><br /><em>- The World, March 15, 1929</em><br /><em>_____</em><br /><em></em><br /><strong><em>Stocks Soar As Bank Aid Ends Fear of Money Panic</em></strong><br /><em>By W. A. Lyon</em><br /><em></em><br /><em>The stock market strode out from under the shadow of a panic in call money that so lately threatened, revived in all its old strength yesterday. Assured that the New York banks were ready with their boundless resources to prevent a money crisis, the public and the professional trader set out to repair the damage done to prices on Monday and the major part of Tuesday.</em><br /><em></em><br /><em>Stocks in the aggregate, though bucking a 15 per cent rate for loans, enjoyed the greatest advance they have known in a single day in the last two years. Not even the surging bull markets of the memorable year 1928 saw such a day of heavy buying.</em><br /><em></em><br /><em>- </em><a id="amzn_cl_link_4" href="http://amazon.com/gp/product/B000I8X90M?ie=UTF8&tag=wwwitulipcom-20&link_code=em1&camp=212341&creative=384049&creativeASIN=B000I8X90M&adid=6bb1756f-a388-470f-ba9c-7e456aaaa222" target="_blank"><em>New York Herald Tribune</em></a><em>, March 28, 1929</em><br /><em>_____</em><br /><em></em><br /><strong><em>Banker Says Boom Will Run Into 1930</em></strong><br /><strong><em></em></strong><br /><em>That at least a part of the great amount of money in the securities market may represent temporary employment of funds eventually finding their way into business uses, and that the prosperity of the present business cycle will probably not end in 1929, is the belief expressed by the J. Henry Schroder Banking Corporation in the quarterly review of the London house of Schroder.</em><br /><em></em><br /><em>- The World, March 30, 1929</em><br /><em>_____</em><br /><em></em><br /><strong><em>Public Liquidation Spurred by Bears, Hits Low Market Scare Orders From All Over Country Halt Ticker an Hour in Feverish Day</em></strong><br /><em>By Laurence Stern</em><br /><em></em><br /><em>With speculative nerves rubbed raw under the persistent hammering of bearish traders, a renewed wave of public liquidation swept over the stock market yesterday, depressing prices severely and hopelessly clogging the quotation ticker......</em><br /><em></em><br /><em>To the majority of the market's followers, who now must be counted in millions, the most significant aspect of the decline is that it has carried the average level of the list to a lower point than was reached on Oct. 4 in the sharp break that climaxed a month of gradual recession.</em><br /><em></em><br /><em>This raises a pertinent question, whether the bull movement of the last five years has definitely given way to a liquidating market...</em><br /><em></em><br /><em>-The World, October 20, 1929</em><br /><em>_____</em><br /><em></em><br /><strong><em>Brokers Believe Worst Is Over and Recommend Buying of Real Bargains</em></strong><br /><em></em><br /><em>Wall Street in looking over the wreckage of the week, has come generally to the opinion that high grade investment issues can be bought now, without fear of a drastic decline. There is some difference of opinion as to whether not the correction must go further, but everyone realizes that the worst is over, and that there are bargains for those who are willing to buy conservatively and live through the immediate irregularity.</em><br /><em></em><br /><em>-New York Herald Tribune, October 27, 1929</em><br /><em>_____</em><br /><em></em><br /><strong><em>Gigantic Bank Pool Pledged To Avert Disaster as Second Big Crash Stuns Wall StreetLargest Financial Powers in the City Meet After Day of Hysterical Liquidation Sinking Prices Below Thursday's</em></strong><br /><em>By Laurence Stern</em><br /><em></em><br /><em>After the stock market had come crashing down again in a veritable deluge of forced and hysterical liquidation, word sped through the financial district last evening that the largest banks in the city were prepared to exert their organized power this morning to prevent further disaster.</em><br /><em></em><br /><em>Arrangements described as "fully adequate" were completed at a conference at the offices of J. P. Morgan & Co. at Broad and Wall Streets...</em><br /><em></em><br /><em>Although no formal statement was issued, it was the consensus of those at the meeting that the worst of the liquidation is over and that a natural demand for investment stocks now available on the bargain counter should go far toward an immediate restoration of trading stability.</em><br /><em></em><br /><em>-The World, October 29, 1929</em><br /><em>_____</em><br /><em></em><br /><strong><em>Stocks Up in Strong Rally; Rockefellers Big Buyers; Exchanges Close 2-1/2 Days</em></strong><br /><em>By Ferdinand Lundberg</em><br /><em></em><br /><em>Revived by spontaneous investment buying and declarations of large extra cash dividends by leading companies, and free of the delirium that has recently gripped share owners, the stock market yesterday received a fresh start and scored a record comeback. Volume on the Stock Exchange totaled 10,727,320 shares, the third largest day on record.</em><br /><em></em><br /><em>The high spot of the day from a stock market viewpoint was the statement by John D. Rockefeller that there was no need to destroy values and that he and his son, John D. Rockefeller Jr., had been heavy buyers of stocks for investment in the last few days, and would continue to buy at present prices...</em><br /><em></em><br /><em>-- New York Herald Tribune, October 31, 1929</em><br /><em>_____</em><br /><em></em><br /><strong><em>Very Prosperous Year Is ForecastGuenther Analyzes the Report of Mellon Covering 1929</em></strong><br /><em></em><br /><em>That 1930 may be a very prosperous year, industrially and otherwise, without the peak conditions that made 1929 and exceptional year for business prosperity, is an observation made by Louis Guenther, publisher of the Financial World, in a statement based upon Secretary Mellon's fiscal report...</em><br /><em></em><br /><em>"To grow too fast is often unhealthy because of the suddenness with which a readjustment must be met. By far and large the country would be better off were further progress made along more normal lines...</em><br /><em></em><br /><em>Fortunately, we have returned to a more normal mind in appraising prospects. We are not looking for the Midas touch on everything to which we turn. That makes us more satisfied with normal incomes and normal profit returns."</em><br /><em></em><br /><em>-The World, December 15, 1929</em><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-35409674458503785022007-10-02T18:18:00.000+01:002008-12-09T05:15:54.748+00:00Ka Boom!From The Washington Post:<br /><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYHema7F0m64IcuUKV6RbUGfJFClhyF469byGWMbYdOhY1n67hJw1L9SWpT2AgEFRbAQLK91mRh9lmqmig5Evv81MEwIhJjFutweD4RPDHKewgCX_jsl-wNG-lE3y64OZTa5QXcw/s1600-h/dA+bOMB.gif"><img id="BLOGGER_PHOTO_ID_5116790198844165698" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiYHema7F0m64IcuUKV6RbUGfJFClhyF469byGWMbYdOhY1n67hJw1L9SWpT2AgEFRbAQLK91mRh9lmqmig5Evv81MEwIhJjFutweD4RPDHKewgCX_jsl-wNG-lE3y64OZTa5QXcw/s400/dA+bOMB.gif" border="0" /></a><br /><div><strong>Enough said.</strong></div><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-39739453487470607332007-09-29T14:15:00.000+01:002007-09-29T14:45:26.213+01:00Little comfort in commercial construction figures<em><span style="font-size:130%;"><strong><blockquote><p><em><span style="font-size:130%;"><strong>Construction spending beats predictions</strong><br /></span><strong><span style="font-size:100%;"></span></strong></em></p><p><em><strong><span style="font-size:100%;">Total spending on <a href="http://money.cnn.com/2007/09/28/news/economy/bc.constructionspending.ap/index.htm?postversion=2007092810">construction</a> grew 0.2 percent as commercial projects offset home building losses. <a href="http://money.cnn.com/2007/09/28/news/economy/bc.constructionspending.ap/index.htm?postversion=2007092810"></a></span></strong></em></p></blockquote></strong></span></em><br /><em><blockquote><em>September 28 2007: 10:36 AM EDT</em><br /><br /><em>WASHINGTON (AP) -- Construction spending posted a bigger-than-expected 0.2 percent gain in August as strength in non-residential construction offset a continued plunge in home building.</em><br /><em></em><br /><em>The Commerce Department said Friday that the August increase pushed total construction spending to a seasonally adjusted annual rate of $1.166 trillion.</em><br /><em></em><br /><em>The gain reflected a 2.3 percent rise in spending on office buildings, shopping centers and other non-residential projects. That was the biggest increase in this category in six months.</em><br /><br /><p><em>Spending on home building fell by 1.5 percent, the 18th straight drop in this area, with more weakness expected in coming months as builders scramble to cut back production in the face of slumping sales and a record number of unsold homes.</em></p><br /><p><em>Analysts had been forecasting that the weakness in home building would be enough to pull down overall activity by about 0.2 percent. According to revised estimates, construction spending fell by 0.5 percent in July and 0.1 percent in June. </em><a href="http://money.cnn.com/2007/09/28/news/economy/bc.constructionspending.ap/index.htm?postversion=2007092810#TOP"><em><img height="7" alt="Top of page" src="http://i.cnn.net/money/images/bug.gif" width="7" border="0" /></em></a></p><br /></blockquote></em><br /><p>I’ve talked about this before. Commercial construction lags residential. This lag can be up to two years as commercial projects, especial if they are larger buildings, take more time to complete and usually start well after residential projects get underway.<br /><br />As new neighborhoods spring up, commercial interests begin to move in based on the quantity of housing, projected population density and their prospects for making a profit.<br /><br />First come the homes, then the dry cleaners, Pizza Huts, Car Dealerships, office buildings, etc...<br /><br />It follows as no surprise then that commercial construction still has a pulse, but touting it as good news is simply whistling past the graveyard. Once these commercial projects got funded and broke ground the probability of investors walking away from them diminished.<br /><br />Half completed they most likely will go the distance to completion but to what end? Sparsely populated neighborhoods, little local traffic and few prospects of business interests moving in to rent the available space.<br /><br />Compound this further by the fact that once the project ends, there go the jobs they supported and all the subcontractors and suppliers associated with their building.<br /><br />Increased commercial building numbers good news? No…<br />It just points out how much time we have left before those jobs dry up.<br />Vern</p><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-74716873048074839672007-09-26T13:16:00.000+01:002008-12-09T05:15:54.905+00:00Privatizing Profits, Socializing Risk<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu-2mfsBCcTbevWbTQToG7PKNVh8SYWeC6mpwc9WzQub-AzIoGoaCBp-ZRd5zm6b_ml29IMeju3g2meH7dUfGM6s3XtvT930_mpYfKSmMd587sdQ1lLokjNblSQOyGAZr-qarUzg/s1600-h/income_385x261.jpg"><img id="BLOGGER_PHOTO_ID_5114486066709141106" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiu-2mfsBCcTbevWbTQToG7PKNVh8SYWeC6mpwc9WzQub-AzIoGoaCBp-ZRd5zm6b_ml29IMeju3g2meH7dUfGM6s3XtvT930_mpYfKSmMd587sdQ1lLokjNblSQOyGAZr-qarUzg/s400/income_385x261.jpg" border="0" /></a><br /><div>Stop for a minute, and take a look around. You might notice some things about our great country that don’t look quite right. One being the proposed socialization of corporate risk in the form of bailouts for bankers thinly veiled as a bailout for mortgage holders at risk.<br /><br />If you haven’t noticed, the federal bailout of mortgage holders won’t really help them, it will only keep them chained down to a life of mortgage serfdom. It in turn helps the big money boyz who were involved in making those bad loans to keep their profits, foisting the bill for their grand mistake onto tax payers.<br /><br />If the bail out goes through the average American will have to bend over twice and hold still while wealthy bankers engage in multiple counts of unauthorized rear entrie: First for the mortgage, then for the taxes.<br /><br />The average home ownrer didn’t invent mortgage tranches, C.D.O.s or derivatives nor did he profit from their schemes, but he will get the bill for their failure. Bankers and brokerage firms will be rewarded for their wanton greed and careless business practices by these very bailouts.<br /><br />Many people think the banks will come and take their house if they default on their loans. Here’s the truth: Bankers don’t want your house. It’s a depreciating asset with a diminishing pool of buyers. They want you to stay in it guaranteeing an income stream. It will be far better to re-price the loan and send the bill for the paper loss to Uncle Sam who will forward it to you and me in the form of taxes or print more money devaluing each dollar we have stuffed in our mattresses. (I call that a back-door tax as it screws the average American saver.)<br /><br />Will John Q. Public put up with paying taxes to help retain the profits of bankers? Wealthy business men who profited when he got into the mess that left him a debt slave, or is our government asking too much?<br /><br />Privatizing profit for the rich but socializing the debt if it goes wrong is not just wrong, it’s dangerous. Mr. Average American will at some point look around and notice that he is no longer guaranteed privacy, The Patriot Act took that away along with a raft of other freedoms. He will start to wonder why he got the bill for someone else’s reckless behavior, while those ‘someones’ skated with the profits and did so with the blessing of his government. He will begin to see an America that is increasingly for the rich and the connected. A country that no longer represents him, and he will begin to simmer.<br /><br />The implications are not pleasant. As the average family is inevitably forced to deal with their new standard of living there is sure to emerge deep resentment. High oil prices coupled with rising grain prices hold the promise of increasing economic pressure on the average American family. A crumbling dollar, and a weakening economy promise more of the same. Something will have to give…<br /><br />Disenfranchising the Average citizen in this way will come at a price that we’ll all pay.<br />How long will it be before our government accomplishes what terrorist could not?<br /><br />Say NO! to bailouts.</div><br /><div>Vern</div><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-43403287818270139252007-09-25T12:16:00.000+01:002008-12-09T05:15:55.092+00:00Housing Market sentiment drops in Norway<div align="left"><strong><em><a href="http://www.aftenposten.no/english/business/article2011932.ece">Aftenposten</a></em></strong></div><div align="left"><strong><span style="font-size:130%;"><em>40% think home prices will fall</em></span></strong><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPu5JknLVKd7IcBYhTvXwxY7oqq_mfUSgiSxWd5uskOGYtRxJk0fbDuwJDSyCE-wQeaokktLS4UpFPVME8ThVBo-hICv8naZZglyXGuVByrgPvtQVRB133wQcuWYRJWovZ6ZqpmQ/s1600-h/__MG_7207_jpg_573960h.jpg"><em><img id="BLOGGER_PHOTO_ID_5114099665681389154" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgPu5JknLVKd7IcBYhTvXwxY7oqq_mfUSgiSxWd5uskOGYtRxJk0fbDuwJDSyCE-wQeaokktLS4UpFPVME8ThVBo-hICv8naZZglyXGuVByrgPvtQVRB133wQcuWYRJWovZ6ZqpmQ/s400/__MG_7207_jpg_573960h.jpg" border="0" /></em></a><strong><em> <strong><em>The days of rapidly rising housing prices may be over, at least for now.</em></strong></em></strong></div><br /><div align="left"><strong><em></em></strong></div><br /><em><blockquote><em>Four out of 10 Norwegians questioned think housing prices will fall during the next year. That compares to just one in 20 who believed the same a year ago.<strong> </strong></em><br /><br /><p><em>The startling turnaround in housing price outlook is revealed in a survey conducted by research firm Sentio for Fokus Bank.</em></p><p><em>Norwegian Broadcasting (NRK) reported Monday that the survey also indicates that there are more Norwegians who believe their homes will be worth less a year from now, than there are those who believe their homes will increase in value.</em></p><p><em>Frank Jullum, chief economist at Fokus Bank, called the survey "very bad news" for homeowners hoping to sell.</em></p><p><em>"Both sellers and buyers expect that prices will come down," Jullum said. "That means we'll probably go through a period where prices either remain stable, or fall."</em></p><p><em>Housing prices have skyrocketed in Norway during the past several years, and the country's economy remains strong. The prices, though, especially those for small flats, have risen too high, Jullum believes.</em></p><p><em>He didn't rule out a price decline of as much as 10 to 20 percent.</em></p></blockquote></em><br /><br /><p>I live in Norway and I can tell you, house prices here are HIGH. About on par with San Francisco housing prices when their market was still hot. Wages are generally higher here than in the U.S., but not enough to justify those kind of prices.</p><p>Easy money was not an American phenomenon, creative lending went world wide and spawned similar housing bubbles in many other countries.<br /></p><p>It's true, a year ago everybody here was sure the party would never end and Norwegians were liberating equity from their homes at similar rates to Americans, buying cars, boats, RVs and vacations.</p><br /><p>This in a country where cars and boats, or any other form of transport for that matter costs nearly three times what it does in the US. Everybody has to have a luxury SUV don’t ya know… </p><p>The party is over, but many here will refuse to see, and hold on for the price their neighbor sold for last year. It's already happening. Stock is increasing, sales are slowing but prices are still somewhat sticky. It's a pattern that started to play out last year in the US and you can see a clear pattern of it repeating here.<br /></p><p>Will Norwegians learn a lesson from the US housing market? Probably not. They would never compare themselves to Americans. That would be beneath them.<br />Vern</p><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-13874103475003512452007-09-21T15:57:00.000+01:002008-12-09T05:15:55.318+00:00Maui real estate: Bleak...<div align="left">I was last on Maui in February of 2007, (See <a href="http://bloggersbubble.blogspot.com/2007/03/more-thoughts-on-hawaii-housing.html">More thoughts on Hawaii housing</a>). I saw a sea of for sale signs then and it was not hard to see where things were going from there. In fact a monkey could have worked it out, but sometimes the obvious eludes us. <img id="BLOGGER_PHOTO_ID_5112714379814639186" style="DISPLAY: block; MARGIN: 0px auto 10px; CURSOR: hand; TEXT-ALIGN: center" alt="" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgzHkYt74xKRQGCCl97SAjpVcO4SNxrdR1mMuX_ZIBwWCb-Sj4l-O5ykAJNeGg3Z_tbacNMWY82fcoIJ-XIGxkfzWBnu2wZDQRM8ay3nCudYGnUyud0yxYElQRJK5pXV-vozVHHhA/s400/BeachHousingCrisis.jpg" border="0" />While on Maui I attended a party of old friends, most with real estate investments on the island. After the lubricating effects that a couple of glasses of wine had on me, I opened my mouth and spilled the beans about what I saw coming in the real estate market and what looked like a prelude to decline. I was met with stunned silence, then I was faced with turned backs. I was an instant pariah… Just add wine…<br />That is how I remained among my real estate invested friends for the rest of my stay. I can’t say that I blame then though. I can’t say that I <span class="blsp-spelling-error" id="SPELLING_ERROR_0">didn</span>’t know better.<br /><br />‘<span class="blsp-spelling-error" id="SPELLING_ERROR_1">Da</span>’Nile’, - it’s a warm river, a nice place to slip into when you’<span class="blsp-spelling-error" id="SPELLING_ERROR_2">ve</span> found you’<span class="blsp-spelling-error" id="SPELLING_ERROR_3">ve</span> made a wrong turn and you know you’re screwed. I’<span class="blsp-spelling-error" id="SPELLING_ERROR_4">ve</span> been guilty of that indulgence once or twice myself and I won’t hold it against my friends. If anything, I wish I could have saved them some grief, the inevitable loss that looms over their largest investment and security; their homes.<br /><br />*****<br /><br />The following is a copy of an e-mail-newsletter from ‘Haiku Properties’ on Maui, brought to my attention by good friend and long time Maui local, Eva <span class="blsp-spelling-error" id="SPELLING_ERROR_5">Bluminstein</span>.<br /><br />Thanks for the heads up Eva!<br /><br />I lived on Maui for close to ten years and never have I experienced forthrightness from a real estate agent on the island like what follows.<br />A big tip of the hat to Peter Slate for telling it like it is.</div><br /><blockquote><p><em>From: "Peter Slate"<br />Date: Wed, Sep 12, 2007 Sep 12, 2007 - 11:04AM<br />To </em></p><p><em>Subject: Maui Real Estate Overview<br /><br />Aloha,This newsletter serves a very objective perspective on Maui's real estate market. As most <span class="blsp-spelling-error" id="SPELLING_ERROR_6">realtors</span> will quickly tell you what you want to hear, we decided to <span class="blsp-spelling-error" id="SPELLING_ERROR_7">forego</span> the "sugar coating", and tell it "how it is". The newsletter will cover two parts: Maui in general, and our specialty: Upcountry<br /><br />Sales figures for Maui as a whole from the end of July 07 through the end of August 07 show a 5 % decrease in Single Family Residence (<span class="blsp-spelling-error" id="SPELLING_ERROR_8">SFR</span>) sales, 8 % increase in Condo sales and a 17 % decrease in land sales. Sales figures for Maui from August 06 compared to August 07 shows a 19 % decrease in <span class="blsp-spelling-error" id="SPELLING_ERROR_9">SFR</span>, 55 % increase in Condo and 50 % decrease in land sales.<br /><br />Digging a little deeper, I researched the number of <span class="blsp-spelling-error" id="SPELLING_ERROR_10">SFR</span> properties and vacant land parcels that are in escrow against those actively listed in the Upcountry area. The Upcountry area includes: <span class="blsp-spelling-error" id="SPELLING_ERROR_11">Makawao</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_12">Olinda</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_13">Pukalani</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_14">Kula</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_15">Keokea</span>. I found there are 162 <span class="blsp-spelling-error" id="SPELLING_ERROR_16">SFR</span> listings, 21 (13%) of which are in escrow. Similarly there are 62 parcels of vacant land listed, and only 4 (6%) in escrow! Over the last year 177 <span class="blsp-spelling-error" id="SPELLING_ERROR_17">SFR</span> and 17 vacant land parcels have sold Upcountry. This would indicate, with no new listings, it would take a little under a year to sell all the <span class="blsp-spelling-error" id="SPELLING_ERROR_18">SFR</span> listed, and 3.6 years to sell the vacant land currently available on the Upcountry market. Another aspect to consider: the average days on market before a <span class="blsp-spelling-error" id="SPELLING_ERROR_19">SFR</span> sells is 172 days, and 264 days for vacant land. In our opinion, a red hot market shows 45-50% of listings in escrow, a medium market<br />30% in escrow, and a cool market 20% in escrow * 15 % and below *. Down right bleak. You'll want to remember, not all escrows are successful.<br /><br />With my curiosity piqued, I decided to enter into the most volatile section of Maui's real estate: the <span class="blsp-spelling-error" id="SPELLING_ERROR_20">Kihei</span> Condo market. I broke it down into <span class="blsp-spelling-error" id="SPELLING_ERROR_21">Maalea</span>, <span class="blsp-spelling-error" id="SPELLING_ERROR_22">Kihei</span> and <span class="blsp-spelling-error" id="SPELLING_ERROR_23">Wailea</span>. I found:Of the 45 listed condos in <span class="blsp-spelling-error" id="SPELLING_ERROR_24">Maalea</span>, there are 0 in escrow. In the last year 20 sold. This indicates that with no new listings, it would take 2.25 years to sell off the inventory. <span class="blsp-spelling-error" id="SPELLING_ERROR_25">Kihei</span> has 376 active listings, 49 (13%) of which are escrow. There were 457 condo sales in the last year. <span class="blsp-spelling-error" id="SPELLING_ERROR_26">Wailea</span> has 152 active listing, 16 (11%) of which are escrow. There were 215 <span class="blsp-spelling-error" id="SPELLING_ERROR_27">Wailea</span> condo sales in the last year. Judging by these percentages, we have no other choice than to rate the <span class="blsp-spelling-error" id="SPELLING_ERROR_28">Kihei</span> / <span class="blsp-spelling-error" id="SPELLING_ERROR_29">Wailea</span> condo market as bleak.<br /><br />Expanding further, there are currently 812 active <span class="blsp-spelling-error" id="SPELLING_ERROR_30">SFR</span> listings, 1332 active Condo listings and 484 active vacant land listings on Maui.<br /><br />A couple reasons. With so many Banks and financial institutions going bankrupt (149 lenders in one year) over sketchy mortgage debt, the remaining banks and lenders have made it significantly more difficult for borrowers to get<br />financed, especially in the non- conforming, jumbo range, where most Hawaii loans are placed. Another reason, investors looking to the stock market for better returns.<br /><br />Our Conclusion:With the explosion of wealth worldwide, and the growing number of people who have a net worth of $ 5 million or more, we know there are very capable buyers, who are in a position to purchase real estate at any time. Given that Maui remains one of the worlds most desirable resort destinations, and that the population is ever increasing ** Maui is not the problem! We conclude investors need only overcome their psychological hurdle before returning in force. With investor confidence restored, we believe Maui real estate will experience a strong rebound. There are currently two Upcountry properties that we feel are exceptional buys.<br /><br />If you have any questions or comments regarding this newsletter please contact us directly at (808) 276 4017 or at the office (808) 878 6800. If you know of anyone who is thinking of buying or selling real estate on Maui, please refer them directly to the telephone numbers above.<br /><br />Thanks you for reading our Newsletter.<br /><br />Regards,John <span class="blsp-spelling-error" id="SPELLING_ERROR_31">Papazian</span> R (B)<br /><br />Peter Slate R(S)<br />Haiku Properties </em></p><p>Vern's Note: The increase in condo sales is most likely the product of steep price declines in that sector. Also before you go buying real estate, I have a bridge for sale.</p></blockquote><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0tag:blogger.com,1999:blog-38350128.post-40869263370492042007-09-18T10:29:00.000+01:002007-09-18T10:56:01.007+01:00A Cold Dose of RealityWhile at Blogger's Bubble we do not always agree with the viewpoints of other bloggers and their articles that are showcased here, we believe these voices have a right to be heard. Some even have something to say like Jim Kunstler, a man with a talent for not mincing words for soft palates. Here is a dose of reality worth reading.<br />Vern<br /><br />By Jim Kunstler at <a href="http://jameshowardkunstler.typepad.com/clusterfuck_nation/">Clusterfuck Nation</a><br />the author of "The Long Emergency"<br /><br /><em></em><br /> <a href="http://jameshowardkunstler.typepad.com/clusterfuck_nation/2007/09/shocked-shocked.html">Shocked, shocked!</a><br /><em><blockquote><em>"But the really funny part of all this is that the media columnists are acting as though the American public got hoodwinked by Al. Which raises the question: just what the fuck was the public thinking when they bought half-million dollar houses on salaries under 60-K, taking out no-money-down, interest-optional balloon mortgages and other tricked-up contracts? The answer is: they walked into these arrangements with their eyes open because they thought they could get something for nothing. They thought the trend of steeply rising house prices would continue indefinitely and enable them to wiggle free of any hazard by flipping their houses to an endless supply of greater fools who would be there waiting to turn the very same trick. And the smoothies downstream in the mortgage and banking rackets were no less guided by avarice when they cooked up their formulas for bundling half-baked mortgages into tranches of tradeable securities. Easy Al may have failed to notice what was going on here, but then so did everybody else from The Wall Street Journal to the Securities and Exchange Commission. </em><br /><em></em><br /><em>This, of course, represents an insidious psychology. It could<br />only happen in a culture that has come off the rails mentally, so to speak, as ours has in the sense that nobody has any sense of consequence, neither the leaders nor those who affect to follow the leaders. The leading religion in America is not evangelical Christianity, it is the worship of unearned riches,<br />and its golden rule is the belief that is is possible to get something for nothing. Its holy shrines are Las Vegas and Wall Street. (And, by the way, has anybody heard the evangelical Christians complain about Las Vegas? They complain about a lot of things, but are themselves among the greatest believers in unearned riches -- given their preference for prayer over earnest effort in the service of solving life's problems.) </em><br /><em></em><br /><em>No, the American public, including the cheerleaders in the media, have only themselves to blame for the bitter harvest now underway in the asset and credit markets. And thus it would be salutary thing for Baby Jeezus, or the forces of nature, or whatever powers guide the universe, to now kick the shit out of them, so to speak, financially, because that is exactly what the American public is full of, from top to bottom, from George W. Bush at his lonely desk on Pennsylvania Avenue to the pitiful, bankrupt householders of Orange County and Boca Raton."</em><br /></blockquote></em>The complete article at: <a href="http://jameshowardkunstler.typepad.com/clusterfuck_nation/">Clusterfuck Nation</a><div class="blogger-post-footer"><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml"><img src="http://www.feedburner.com/fb/images/pub/feed-icon32x32.png" alt="" style="border:0"/></a><a href="http://feeds.feedburner.com/blogspot/yAPb" title="Subscribe to my feed" rel="alternate" type="application/rss+xml">Subscribe in a reader</a></div>Vern Wichershttp://www.blogger.com/profile/00672779579270136913noreply@blogger.com0