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dirtbag
climber
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May 12, 2006 - 06:30pm PT
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Thanks guys.
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caughtinside
Social climber
Davis, CA
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Topic Author's Reply - May 12, 2006 - 06:39pm PT
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Some good info. Hey dirtbag, where are you?
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Gene
climber
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May 12, 2006 - 07:08pm PT
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Fattrad states “I know one individual that owns six homes and all are owner occupied, how does that work in the statistics you get?”
So true.
I don’t understand some of the statistics that Todd and Fattrad toss around. But I have my own favorite RE measures.
The ADNSDT. This is the After Dark New Subdivision Drive Through. While the developer claims X number of sales, I find that driving through the tract after dark and looking for lights on and/or cars in driveways is a more valid indicator of new home sales activity. Almost always, people living in the new homes < X.
The DDR. This has never failed me. It takes a bit of local knowledge but it’s foolproof. DDR stands for the Developer Divorce Rate. In the early stages of a bull market, the Developer tends to dump the Old Lady of 20 year tenure in favor of the Trophy Babe. When the Developer sees purchase contracts lagging and inventory rising, he telepathically or otherwise transmits this to the TB. The TB is the most sensitive analyst of D’s business, cuz that’s how she got her 'position.' She always bails at or near the top of the market to maximize her return. When the DDR goes up, you know the market is heading down.
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Gene
climber
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May 12, 2006 - 07:15pm PT
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Down. Down. Down.
Central Valley.
Modesto.
I watch RE from Fresno County through San Joaquin County. Some foothill work occasionally.
Forgot to mention that the validity of DDR is enhanced if TB was D's former employee.
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Gene
climber
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May 23, 2006 - 07:01pm PT
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Latest statistics posted by the Central California Association of Realtors shows a 34% decline in the number of closed sales Jan - April 2006 versus same time period in 2005.
Repent. The end is near.
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rockermike
Mountain climber
Berkeley
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May 23, 2006 - 07:39pm PT
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Gene,
I love your analysis. But it seems there is a glitch in the system. Divorce up (old broad dumped) when market is good. Divorce up (old man dumped) when business is bad. It seems you need to factor in age dispersion of the couple. Old divorces old = good market; young divorces old= bad market.
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JuanDeFuca
Big Wall climber
Stoney Point
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May 23, 2006 - 07:41pm PT
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Are you guys figuring in the massive Death Toll from the Bird Flu and the coming Nuclear War in the Middle East.
SUV sales are down this year by like 500,000.
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MikeL
climber
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May 23, 2006 - 08:59pm PT
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Interesting conversations.
You do know, don't you, that the securities markets worldwide have some of the smartest people working in them who have access to far more data than you do. And there are at least 100,000+ of them (not to mention really big, fast computers).
I used to work for a primary government securities dealer in the 80s as an institutional broker. Discount Corporation of New York (created by JP Morgan in 1911 to make markets in banker acceptances) is a highly specialized broker-dealer at the short end of the yield curve.
So much in the market is social construction from what I could see. The job of our president (Buddy Hanlon) was talking to 100 cronies on direct lines to his little desk in the trading room. He'd call up and say, "so whadaythink?", and they'd say "I like them" or "I don't like them." Then we'd buy $5-10 billion worth of t-bills and long bonds and try to get rid of them (or vice versa).
All I'm trying to say (and maybe not very well) is that all the facny arguments with the fundamentals are simply hypotheses that a broker / dealer uses to generate a consensus with other players. For example, the data that Karl continues to argue about the deficit: it's just numbers, like M1 or M2 or M3. Those don't force or control the market. They do only if enough people believe in them.
The financial markets, especially the securities market, was the biggest con game I was ever a part of (and I've been a part of some others). You convince other people that things are going in one way or another, and then you get in front of it, when you can.
Wharton has had this 300+ variable model of the economy running now for years, patiently and gently tendered by leading financial academics from all over the world. The damned thing never works.
For what it's worth . . .
-MikeL
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MikeL
climber
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May 24, 2006 - 01:39am PT
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One, those things happen regularly. It's called the business cycle. Two, business cycles are notoriously difficult to call, and no one does so consistently. Did you grok what I said about the Wharton model? It ain't day-trading, dude. Three, other than a broad market upswing or downswing, betting in the markets is a zero sum game, especially in commodities. That means R/E. Four, you must be rich, Fattrad. You're supremely confident. It's my professional experience both from working on the sell side of the markets and as an academic, that when you're in doubt, you're usually very close to the truth. It's when people are sure of themselves that I am most afraid.
Go get 'em tiger.
MikeL
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Gene
climber
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May 24, 2006 - 03:38pm PT
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Rockermike,
You are absolutely correct. The DDR has to be viewed in light of the stage of the RE cycle. Young dumps Old indicates downturn. Old dumps Old is a sign of rising market.
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Gene
climber
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Nov 13, 2006 - 10:55pm PT
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On Sept. 21, KB Home reported that its net home orders tanked by more than 40% during its fiscal third quarter.
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WoodySt
Trad climber
Riverside
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Nov 14, 2006 - 12:57am PT
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My equation to financial security: [12g + 3(BofA)+MiniS]C= fortune
You guys make life too complicated and booorrrrring!
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Karl Baba
Trad climber
Yosemite, Ca
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Nov 14, 2006 - 02:05am PT
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Todd wrote
"But if you think the US is one household, currently, Income (GDP) is growing faster than debt."
I've heard this argument from Fatty, but I don't think I buy it because the quality of our income is shaky. It's a lot of moving money around and Real Estate based money and seems pretty vulnerable to me. What does the US actually produce anymore?
If US debt is only marginally better than Chinese debt, aren't we looking at pressure for higher rates? Couldn't higher rates push the Zero interest and ARM spec crowd and highly leveraged buyers into forced sales? Seems like an avalanche waiting to happen.
The idea that Real Estate is finally falling in price because of excessive press is laughable to me. I had a friend who built a spec house a number of years back. We fantasized that, since it was a really awesome custom house, that somebody might fall in love with it and maybe offer the outrageous sum of $400,000 for it. Since then the market went so sky high that he put it for sale for $600,000 and turned down a $570,000 offer on it. Same house! Unfortunately, since the market has turned downwards, he's stuck with it for sale reduced to $500,000 and it ain't selling.
During this same time period when the house went from being worth from $300,000 to $600,000 and back down to below $500,000, the salary for a school teacher/fireman/police officer probably changed around 10%. Unsustainable and unaffordable prices were created by unsustainable financing equals bubble. Real people paying with conservative financing schemes can't afford this game and it's going to pop for that reason when the banks stop handing out free play money.
Just my opinion. I'm sure I'll be a bit to a lot wrong.
but I'd still bet that folks making 30 times more money will be more wrong than me.
peace
Karl
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Gene
climber
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Oct 24, 2007 - 07:29pm PT
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Bump
What up Zetedog?
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Gene
climber
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Oct 24, 2007 - 08:03pm PT
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Probably? I'm looking for another 20% locally.
GM
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Gene
climber
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Sep 17, 2008 - 04:58pm PT
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Bump for historic view of the future we call now.
The Dow closed at 11,283.25 the date of the OP. Today's close was 10,609.66.
GM
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klk
Trad climber
cali
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Sep 17, 2008 - 05:10pm PT
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west--
you can live in your car, but you can't drive your house.
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dirtineye
Trad climber
the south
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Sep 17, 2008 - 05:11pm PT
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karl, if you mean by 500k+ 1 mil, then OK. The little cracker box in Alamo (ouside SF) that my cali cousins grew up in is valued at a little over 1 mil, like all the other houses in that area.
Woodside, (another outlying suburb of SF) is probably a lot higher.
Cali housing has been out of sight since the mid 90s, when one of my unix programmer pals moved there from PA and was SHOCKED at the prices.
We need a bunch of cali liberals to sell and move to alabamy, where even after taking a loss in cali, they can still buy a lot of property and a nice house and have money left over, and we can get rid of the repugncants in power here.
Please.
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Mtnmun
Trad climber
Top of the Mountain Mun
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Sep 17, 2008 - 05:30pm PT
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Fannie Mae and Freddie Mac donated 111,000 to Obama. (Before the takeover) They know the dems butter the real estate bread.
It is unbelieveable what has transpired in the Real Estate market since this thread began.
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