jcrash

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257 Comments

    • Thu Apr 24th 10:10 AM
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      Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      ...I can tell you that even in midwest markets, rents are significantly lower than mortgage payments for equivalant houses. "

      "One need only play with a mortgage payment calculator to figure out how screwed up rents vs. asking prices are: Find a single family home for rent. Enter the market rent as the payment, use a market 30 yr fixed interest rate, and solve for present value. THAT is the breakeven point for the owner and the actual value of the home (don't forget to allow some room for taxes and insurance etc.)"

      Profit <> Positive Cash Flow.

      If I buy something and have payments of X...then I rent it to you for X, I have no cash flow. But, at the end of the payments, I have a paid for asset and you have a rent payment of X.

      Rent does not need to equal payments. At the limit of interest rates going to infinity, rent does need to closely equal payments. At the limit of interest rates going to zero, this need is at its minimum.
      View article »
    • Wed Apr 23rd 14:55 PM
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      Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      No, I'm not saying ignore the price, dolt. I said normalize on PAYMENT. Obviously, price is a factor in payment, right? So, if your price was higher, your payment would be higher.

      You don't get what I am saying. Normalizing on payment takes into account BOTH price and interest rates - both of which are key when deciding affordability. If rates went to zero, affordability would be higher than if rates went to 20%.

      So, if you truly want to account for affordability, which the author implies is what he is doing with his graph, then he should not be plotting price versus income.

      Just taking 5 points on his graph and normalizing for interest rates,
      1976 Payment on $100k is $ 800 (base point)
      1981 Payment on $100k is $1400 (a "peak" in his graph)
      1984 Payment on $100k is $1059 (a "low" in his graph)
      1991 Payment on $100k is $ 826 (a "peak" in his graph)
      1995 Payment on $100k is $ 665 (a "low" in his graph)
      2005 Payment on $100k is $ 593 (a peak in his graph)

      So, his first high in 1981 should be much higher (14/8 * value), or about 200%
      His first low point should be higher also, or about 125%

      So, these are the equivalents:
      1976 100
      1981 200
      1984 125
      1991 140
      1995 80
      2005 140

      As you can see, the parabolic number he shows in his graph is much reduced and suddenly falls well within range of the past values.
      View article »
    • Wed Apr 23rd 13:46 PM
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      Rating: 0 0
      Commented on:
      Does Ethanol Deserve the Blame for Rising Food Prices?
      All American...I get a tax DEDUCTION for my mortgage interest not a tax credit. If it were a credit, I would be paying ZERO taxes...I'd love that.
      View article »
    • Wed Apr 23rd 13:34 PM
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      Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      One LARGE thing your historic price to income graph is missing is interest rates. Here are the average interest rates over the period:

      2007 6.3
      2006 6.4
      2005 5.9
      2004 5.8
      2003 5.8
      2002 6.5
      2001 7.0
      2000 8.0
      1999 7.5
      1998 7.0
      1997 7.6
      1996 7.8
      1995 7.9
      1994 8.3
      1993 7.3
      1992 8.4
      1991 9.3
      1990 10.1
      1989 10.3
      1988 10.3
      1987 10.2
      1986 10.2
      1985 12.4
      1984 13.9
      1983 13.2
      1982 16
      1981 16.6
      1980 13.7
      1979 11.2
      1978 9.6
      1977 8.9
      1976 8.9
      1975 9.1
      1974 9.2
      1973 8.0
      1972 7.4

      See those nice low points on your graph? A $100,000 at 6% has a payment of $600 a month. The same loan at 13.8 % in the 1980's? The payment at 13.8% is $1200 or so. At "just" 9% like in 1991 the payment is $800 or 25% more.

      So, if you normalize your graph with respect to HOUSE PAYMENTS, not HOUSE PRICES, you will get a MUCH different graph. One that is more appropriate when calculating affordability of housing.

      View article »
    • Wed Apr 23rd 13:04 PM
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      Rating: 0 0
      Commented on:
      WSJ Shake-Up: The Morning After
      Fox Street Journal...do people still read that?
      View article »
    • Wed Apr 23rd 11:58 AM
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      Rating: 0 0
      Commented on:
      Are Central Banks Out of Their Minds?
      If you guys would get back to your jobs instead of posting useless prattle, we might get a bump in US productivity.
      View article »
    • Tue Apr 22nd 11:47 AM
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      Rating: 0 0
      Commented on:
      The Death of Gold?
      dieuwer....

      "FOLKS: remember the news items on TV regarding the madness in front of the Apple stores to buy the iPhone? Few weeks after that Apple stock topped... "

      Huh? The phone went on sale in June...if "a few" weeks means 30, then you are right. Otherwise, not a good analogy.
      View article »
    • Thu Apr 17th 14:49 PM
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      Rating: 0 0
      Commented on:
      The Great Television Price Inflation Scam
      Yeah, I can't find a betamax at Walmart either. But this DVD player thing they have is cool.

      Would you really say the functionality/design considerations are the same in a flat screen TV and a Tube? What about a TRS-80 and an Imac? You gotta account for it somehow.
      View article »
    • Thu Apr 17th 11:13 AM
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      Rating: 0 0
      Commented on:
      Mortgage Resets: Subprime May Be Ending, Option ARMs Have Just Begun
      Anyone got the breakdown - NATIONALLY - on the percentage of mortgages financed 30/20/15 yr fixed rates, 5/1 or 3/1 Arm, and these option arm things? I think it would be very enlightening as I can only guess that 80% of people go with the 30/20/10 fixed rate mortgages and all this prognosticating is about the other 20%.
      View article »
    • Wed Apr 16th 15:20 PM
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      Rating: 0 0
      Commented on:
      Why Bush Doesn't Like Cap-and-Trade
      Marinecorps Vet...your own link disproves you:

      igloo.atmos.uiuc.edu/c...

      that link is on your second post's site. Obviously, there is less ice. Plus, the ice you see if you pick a winter's date (like today's) is THINNER (which their picture cannot tell you, but it obvious when you realize that more ice is gone in the summer).
      View article »
    • Wed Apr 16th 15:16 PM
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      Rating: 0 0
      Commented on:
      Why Bush Doesn't Like Cap-and-Trade
      FYI...try this link..then say the caps aren't melting.

      www.keepwintercool.org...

      This one:

      irascibleprofessor.com...

      This one:

      www.csmonitor.com/2004...
      Christian Science Monitor No less...not exactly liberal media.


      There won't be an ice cap by the end of THIS century.
      View article »
    • Wed Apr 16th 15:11 PM
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      Rating: 0 0
      Commented on:
      Why Bush Doesn't Like Cap-and-Trade
      Marinecorps guy, you lost me right here "At least he's not one of the idiots..."

      No, he is the king of idiots.
      View article »
    • Tue Apr 15th 16:12 PM
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      Rating: 0 0
      Commented on:
      M3 Money Supply and Inflation: Got Gold?
      $12 was artifically low for oil. So $12 to $112 is a bit of a stretch as a comparison. $30 or so, yes.

      Inflation is not the rise in price of goods. The dollar is not the currency of the world. A large part of the price changes consists of 1) speculation and 2) scarcity. Neither has a relationship with inflation. If everyone gets $100 and there is enough food for everyone. Then you add some more people and use some food for box stuffing, some people aren't going to eat and the price of food is going to go up. So, some others are going to buy up extra food and make those that want it pay even more. That is what you see in oil and gold. All these ETFs etc specializing in commodities and short stock positions have created a whole new phenomena. The markets are fundamentally different because of it - that is part of the equation.

      30 years ago we made up 65% of the worlds GDP. Today, it is 25%. So, the FED doesn't create inflation in a global sense.

      That Shadowstat guy cracks me up. Look at his numbers for the 2000-2003 period...prices were not going up that much then.

      Groceries and gas may have gone up, but has your house payment/rent? Cars are still about what they were 15 years ago and they last longer.

      I own some gold stocks, but only enough so that I have a well balanced portfolio. When the commodities pop (which may be next week or next year), they will drop 50% in a quarter. At the same time interest rates will go up and your fixed income investments will be the place to move into.
      View article »
    • Tue Apr 15th 14:31 PM
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      Rating: 0 0
      Commented on:
      3 Problems with the NY Times's Take on Americans Without Jobs
      This is a very confusing article format. I'd suggest starting with something other than a quote, as the quote makes you think the article is about one thing then you introduce an opposing view and commence to critique both.
      View article »
    • Tue Apr 15th 14:24 PM
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      Rating: 0 0
      Commented on:
      The Great Television Price Inflation Scam
      Nickgo, while much of television is crap, you are definitely missing out on a lot of worthwhile things. I'd rather have HD view of Antartica and it's penguins, for example, than no view at all. I'd rather chill out to some entertaining TV in the evening than read a book night after night.

      As for the television, if you wanted a crappy old tv, there are plenty out there you could've bought. My 36" XBR cost me $2400 in 1996. Its successor, a 57" Hitachi cost me $2400 in 2002. I bought a 32" Tube in 2003 for $175 at Circuit City. And the latest addition is a 40" LCD for $1100 this last year. Now, if you are telling me that prices haven't come down, I gotta call BS. I get more for less everytime. Shoot, my latest TV has a tuner that works with a tiny little antenna to give me a perfect HD picture. Try that in 1995.

      Sure, the inflation numbers are all bogus. Oil is now 4 TIMES MORE than it was when GW came into office (and yes, it is mostly his fault) - we should've had a good severe recession in 2002-2004, but instead he took us to war and started spending money like all the previous republicans who sell us a bill of goods on small government and procede to outspend the previous administrations by large margins. Guess what, when interest rates go back up, we will be in a WORLD of financial distress as our interest payments quickly mount on new debt and repos. And I'm sure the democrats will get the blame at that point. Stupid system is all screwed up, but that's what you get with entrenched powers.

      But, the television is a crap example. So, the article falls flat on its face.
      View article »