real estate rants, ramblings, and questions

awgee_IHB

awgee_IHB

New member
Here are a few questions, a few rants, and some nonsense that I want to get off my chest.<p>




lendingmaestro - Does the outflow of deposits from Countrywide Bank have any effect on Countrywide Finance's ability to make loans? Reserve requirements?<p>




On flippers - I resent the resentment toward flippers. Who is anyone else to say how one person should spend their money and/or credit? Some folk complain that flippers add nothing to the real estate market. So what? Since when did become a requirement to add value to a commodity in order to trade in that commodity. Is it immoral to trade a stock? I can not imagine somone can imagine they have added value to a stock as one trades it. I don't celebrate in in a flipper losing money on a transaction, nor do I feel burdened when a flipper makes some dough. I have never flipped a real estate property, not because I have anything against it. It just isn't my thing.<p>




On the present credit crunch - I find it incredulous that folks can say things like, there will always be mortgage money to lend, or the Fed can always fix a credit problem, or the credit problem is being blown out of proportion because subprime loans are only a small part of the overall economy, or a banking crisis is impossible because we are smarter now and there is the FDIC and the Fed and the (fill in the blank). When one understands where currency comes from, one knows the previous statements are relayed in complete and abject ignorance. Do the folk who spew such nonsense know the history of fiat currency in the world?<p>




Next, the federal reserve is not primarily concerned with inflation as helicopter Ben likes to pronounce. Central banks, including the federal reserve, are the source of all monetary inflation. Yes, all monetary inflation. Not price increases. Prices increases are not inflation, price increases are price increases and are the result of monetary inflation.<p>




Homes have not increased in value. Homes have increased in price. The value of a 3 bedroom, 2 bath, 1800 sq. ft. home was no different in 1980 than it is in 2007. I have heard it said that the present generation knows the price of everything and the value of nothing.<p>




When Cramer went on his rant, he expressed passionate concern for his broker buddies and expressed no concern for the folks losing their homes due to foreclosure. It is disingenuous for him to now backtrack and say he wants the Fed to lower rates so the little guy doesn't get hurt. I don't believe that for a second and based on his passionate outburst, I believe the opposite to be true.<p>




Lowering the Fed funds rate will not help folks who will lose their homes due to their ARMs adjusting. Trying to refi a property that is worth less than when the original loan was initiated is an exercise in futility. It is highly unlikely that home prices will reverse direction anytime soon if history is an accurate indicator. The only thing, and I mean <b>the only thing</b> lowering the Fed funds rate will do will be to increase the fees and commissions for the investment bankers as they find the next asset to inflate.<p>




Just as I have no resentment for flippers, I have little to no sympathy for those who overextended themselves to buy real estate. 99% of them knew exactly what they were doing and were trying to get in on the housing inflation boom. It was greed, pure and simple. Just because someone has a dream to owe on a mortgage does mean they can afford it nor are they owed that dream. There is nothing honorable about wanting to own your own home. It is just a want. I have been upside down on a mortage so I know how it feels, and the feeling is irrelevant to whether or not the overextended should be bailed out. There is no way to bail out anyone without costing those who save. The only way to bail out a person in trouble or an institution in trouble is to take from someone else. The most efficient and cost effective way to bail out the overextended mortgage debtors is to directly give them tax money or money printed by the Fed. But that would be perceived as immoral by the vast majority of the American people, ( as it is also perceived by me), so the Fed will lower rates or or find some other way to make it look like the Fed is doing something which is not obviously immoral. But, Fed intervention will only serve to steal from the majority through inflation and give to the rich and powerful, as always.<p>




Prices do not really increase, except in the case of specific commodities which become more rare. What looks like price increases are actually just currency devaluation. Ditto wages.<p>




On the profound saying, "They aren't making any more land." That is just plain stupid. There is a huge amount of land in this country and other countries and the fact that no more is being created is irrelevant to the price of land. The price of the land is determined by the cost to develop it and it's desireability.<p>
 
<p>I agree with everything but I'm a little less happy about the flippers. The libertarian in me will fight to the death for their right to flip houses. The economist in me sees it as a zero sum game where wealth is transferred but not created. Paper-pushing in the name of productivity.</p>

<p>I think it's great when distressed properties can be fixed up and sold at a profit. That's a legitimate arbitrage activity. Buying a house just to sell it a year later creates economic distortions which are ultimately damaging to society. </p>
 
<p>As to your question about Countrywide yes it would have an effect on how much they can borrow. Countrywide Bank is a federal thrift and as you know they can lend only a certain percentage of their assets. As of June they had about $60 billion on deposit. I wanted to start a thread on CW yesterday but things happen. Hopefully my weekend chores don't prevent me from getting to it today. </p>

<p>As for the flippers I have to second oc's thoughts. I will add that there were the ones who knew what they were doing the whole time. You would be surprised how many of these "pros" were out there and how many new homes they were in contract for at the same time. That made the sheeple follow. I resent the ones who knew what they were doing and they disappeared in late 2005. No warning and nothing was said but they knew that there was going to be bunch of people holding the bag. Just not them. The only people who I resent more are the one who commit fraud. These two alone created a seriously potential economic disaster. </p>

<p>As for everything else I agree. The only thing is you would be surprised how many people do not understand monetary inflation. I didn't up until the last couple of years. That is one of the reasons why I am retaking econ courses to see if I missed it or whether it was even taught.</p>

<p>And allow me to add to your rant on a bit of an off topic subject. I have rabbits living in my neighborhood and they are ruining my front lawn. It is starting to get pretty bad and soon it will look like the foreclosure on the next street over. I think lapin may be on the menu this week.</p>
 
<p>Target loads in a Ruger 10/22 are pretty quiet. The lightest loads might not have enough recoil to consistently operate the action, though.</p>

<p>Maybe kill wabbit with wok? </p>
 
What is the difference between arbitrage, legitimate arbitrage, and illegitimate arbitrage?<p>


<i>"The economist in me sees it as a zero sum game where wealth is transferred but not created. Paper-pushing in the name of productivity."</i><p>


Agreed, it is a zero sum game. So? And wealth is transferred, but not created. So? Why is it not legitimate to make a profit unless one adds value? I don't know of anybody who fools themselves into thinking that flipping is productive. I would guess that it is just profitable, unless it isn't.<p>


But, I will disagree that flipping creates distortions that are damaging to society. Flipping would be close to non-existent without a federal reserve determining interest rates. If interest rates were determined by a free market. extremes in the business cycle would be quite small. And without extremes, flipping would not be profitable or perceptively profitable.<p>


The rabbits can destroy a lawn, eh? We also have deer. And mountain lions. The deer are pretty. The mountain lions are scary.
 
<p>Good point. It's easy to forget that centrally controlled interest rates are the root cause of such pronounced credit cycles.</p>

<p>You <strong>are</strong> throwing away your vote by voting for Ron Paul, I trust? I will. </p>
 
There are only 5-7 cougars left in the area, last I heard. One gets caught by security cams drinking out of the fountain at Dove Canyon on a regular basis.
 
awgee,





w00h00! get it out man, sing it, SING IT!





you forgot the /rant at the end. A valid rant and one I agree with as well. As for flipper resentment... I equate it to drug use. I'm a libertarian as well (nod oc_fliptrack). It's not that I have anything against them doing it; it's when what they do affects me. Is the guy robbing the neighborhood to feed his meth habit or just smoking a jay in his house? When a flipper's activities cause neighborhood blight or my friends move away to buy a home. I'm affected by the flipper who is just selling at a higher price, indirectly, but affected. The sooner the market acts more rationally, the sooner my friends can move back.








graphix,


I don't know if you're being cheeky or serious about the lapin, but rabbits are relatively high on the cootie carrying scale. Long story short, I'd advise against field-dressing them unless you know what you are doing. Also, if you do use poison, consider collateral damage, neighbor's dog (may be good or bad with subsequent lawsuit), squirrels, and cats. Good luck!
 
<p>Peregrine Falcon perhaps ?</p>

<p>


<img alt="Peregrine Falcon, adult" src="http://content.ornith.cornell.edu/UEWebApp/images/EPB_040403_100001_S.jpg" /></p>
 
<p>Awgee,</p>

<p>First, I want to say that I have the utmost respect for your well-reasoned opinions.</p>

<p>I do, however, want to ask you something:</p>

<p>The actions the fed took so far were liquidity injections & tweaking the discount rate, I don't know if your displeasure is stricly for these measures, or if you are also referring to likely future measures.</p>

<p>I quess what I would like to know is: how would you imagine the scenario being played-out absent these measures? In other words, how is it supposed to happen and what would the ramifications be? </p>

<p>I really don't know, so my question is not meant to be facetious.</p>

<p>May I add some perspective here?</p>

<p>I have been (until recently) in and around the mortgage business for many, many years. I know as much as anyone about it.</p>

<p>I know lots of people took advantage of high ltv financing. Generally speaking, the standard for many lenders for a 100% loan(s) was a 580 fico for full doc/620 for stated. I know some lenders were slightly more aggressive than this, but these were widely-used numbers at the height of the lax-standards time. So, even though this may seem very aggressive, it is not just a "fogging the mirror" standard.</p>

<p>I wrote about the role of, and resources available to, underwriters - so I won't re-hash it here. Suffice it to say, I think a good portion of the loans made during the last few years (of course not all) are perfectly good loans.</p>

<p>It frustrates me tremendously to hear the constant refrain of "they used a 100%/subprime/stated-income/interest=only/option-ARM loan". I not only never worked on such a loan, but have never even seen one.</p>

<p>Stated income loans are made at all ltv levels. Subprime loans are made at all ltv levels. Option ARM loans are used by high fico (traditionally) and low fico (recently) borrowers. Not all ARMs are option- or short-term, many have 5-, 7- and 10- year fixed terms. FICO scores are a fluid proposition. Some people are earning more than they did 2-5 years ago, some are not.</p>

<p>The mortgage lending world is a very diverse world, in my experience. So I just get impatient with people who have never been in the business, and simply rely on anecdotes from the media.</p>

<p>I am not, for one minute, putting you into this group. </p>

<p>I am merely getting things off my chest - as you are</p>

<p>So I guess my feeling is that so much harm will come to so many innocent people by letting chaos reign, that I think it's worth the risks being taken. </p>
 
Aww... don't kill the bunnies. Repel them. I think most Ace Hardware stores sell <a href="http://www.critter-repellent.com/rabbit/rabbit-repellent.php">powdered fox and/or bobcat urine</a>. Alternately, <a href="http://www.pleasebekind.com/rabbit.html">you can install fencing or prep an organic repellent by boiling some spicy veggies</a>. There are also some <a href="http://www.natorp.com/STips-Rabbits&Gardens.pdf">other options</a>.
 
He lives in Villa Park, ya know. Those Up Town folk likely aren't allowed to publicly urinate - even if it's in their own foliage in the name of landscape protection.
 
<p>Yeah I can tell you my shake away or the one from Ace doesn't work. I will have to try the spicy veggies. If that doesn't work I know that I will have a <a href="http://www.gamousa.com//Catalog.aspx?Product=67">cleaning project</a> that needs to be done. If Coto can do it why can't VP?</p>

<p>What's ironic is a few hours ago I heard what sounded like shots from a 22. No sirens or screaching tires. I know that the rabbits are everywhere (thanks to someone who made the coyotes disappear) around here so maybe someone else read this thread.</p>
 
<p>Speaking of coyotes, would you believe that I saw one in Irvine south of the 5, near Jamboree and Walnut? I guess at least one learned where the tasty bunnies are. Or kitties. </p>
 
oc_fliptrack,





non-powder guns (NPG) have muzzle velocities from 500 feet per second (fps) up to 1200 fps. They are much less regulated. Oh, btw, takes about 350-400 fps to penetrate skin and go into bone. Yes, these are not the same things we had as kids.
 
<p>Yep we have had our fair share of coyotes in the past and I live in the low lands equivalent to Jamboree and Bryan in distance from the hills. I have lost a cat and when I was living up north my mom had to call her brother to come over and clean up what was left of the rabbit at their house. Too bad they also like small dogs and the guy who lost his took on the coyote problem regardless of city approval.</p>

<p>Yeah 1200 FPS is almost as powerful as a 22. It even has a bit of a kick and your neighbors will hear what you are doing. I'm actually glad I didn't have something like it as a kid. </p>

<p>Oh yes the high society of VP. Of course it is older and at one time (gulp) financially conservative blue collar workers could afford to live here and some still do. Also just because they have money doesn't mean they are the classiest of people. Next time you see a truck with a Ben's Asphalt sticker on it know that he lives around the way from me. Really cool guy but Curs Lite is his drink of choice. Plus we have no street lights so no one can see if I am doing my business in the bushes. Better yet we have 3 homes that received their NTS and if they go through this month it will be three times as many of the sales from last month. </p>

<p> </p>
 
Ya, I was just reading that they have a bi-directional recoil that destroys scopes. Dammit if I pick up another expensive hobby on account o' you I'm gonna be broke.
 
<p>Funny thing is at the time I bought it we had a crow bird problem. VP is a bird sanctuary and either the sheriff at the time would turn a blind eye or the fine was worth it because they were annoying as all hell. Fortunately bird-flu took care of that but it seems they are making a comeback. So I researched airguns and found out that there are some people who take it very seriously. So much so I determined I could buy a 12 gauge or five for less than what some of the prices for the airguns were. The 1200 and the 1000 were the two that had the highest ratings for the "affordable" range. Where can you find it? Wal-Mart. </p>

<p>I use boxes that are for car wheels for target practice which are five times as thick as normal boxes and they get destroyed. If you take a 2 liter plastic bottle filled with water and the right pellet the exit wound is rather large. </p>

<p>If you do take up the hobby just know that I have live target practice for you. The liquor store in VP has AB ale so I can compensate you per live target.</p>
 
You must log in or register to reply here.
Back
Top