A new smell!!
Yay!
I walked outside this afternoon to a brand spanking new and delightfull smell. It was the smell of fresh mountain air, pine trees, and also that wonderfull smell of rain.
April 30, 2006
San Diego has first ever net population decline
According to this interesting article I found written by Signonsandiego.com,
“The major demographic dynamic here is a greater exodus from San Diego, as well as a smaller draw from the rest of the United States,” said William Frey, a visiting fellow with the Washington, D.C.-based Brookings Institution. “This is quite a change from San Diego’s image as a dream environment, but now 43,000 people are saying no. It’s the price of the housing that’s driving them away, so it’s time to pay attention.”
also
As much as Robin Nelson and boyfriend Herb Sturdyvin are enchanted with the San Diego lifestyle, they decided they could get a much larger, more extravagant home in Arizona than in San Diego for much less money. And that’s exactly what they did.
They’ve put their 2-bedroom, 1½-bath home in North Park up for sale and are asking $750,000 to $775,000 for the 1,500-square-foot house. They’ve bought a 2,000-square-foot home in Lake Havasu City that has a pool, spa and seven-car garage that will accommodate their hot-rod hobby.
The incredible number to note here is the $750,000 asking price. Only the greatest fool would buy for that amount, and a rich greatest fool at that. You would need to make at LEAST $150,000 a year in order to afford the payments on that house. Not only that, but North Park is not exactly San Diego’s nicest neightborhood *snicker*. Assuming a 30 year fixed rate mortgage at 6 percent and 0 down, your monthly payment would be nearly $4500 a month. Property tax would run you an additional $625 a month. Thinking about the tax savings of the mortage interest deduction? Think again. Anyone who makes that much money would probably be hit with the AMT (Alternative Minimum Tax) rendering the mortage interest deduction irrelevant.
A similar house here in Colorado Springs might go for $150,000 to $200,000 depending on the area. Have people gone batshit crazy in San Diego? I’m glad I flew the cookoo’s nest and you couldn’t pay me to come back.
To buy, or not to buy
A condo or a house. The enormity of such a purchase causes one to carefully consider the implications. Due to the highly leveraged nature of housing, it can either make you or break you. It appears that we are nearing the end of the largest asset bubble in history. <<-- not an exageration.
I was searching for information on the various aspects of housing cycles and I ran across a very interesting article. Here are some choice excerpts:
The revised Georgian business-cycle theory in this paper has the following premises: 1) real estate is a significant component of national wealth and national product; 2) real estate has been subject to wide fluctuations in price; 3) these fluctuations, facilitated by the money and credit markets, are in large measure induced by government expenditures and policies; 4) real estate speculative booms can raise the costs of business, and construction booms are a major portion of investment; 5) historically, real estate values and construction have peaked shortly before major depressions.
The last point is particularly interesting, as I am predicting a recession starting in the 4th quarter 06. Could the recession turn into the next depression? It’s a risk factor high enough that I’m not ignoring it.
The peak of the real estate cycle is characterized by a high volume of real estate transfers (Hoyt, 1933, p. 396) and the high tide of speculation by subdivision. The real-estate cycle peak can be defined as the interval between the peak of real estate prices and of the value of construction. By that time, the supply of new houses outstrips the number of new residents or occupants. Karl Pribam (1940, p. 65) points out that in the latter stages of a boom, rentals fail to adjust themselves to costs, rendering building activity unprofitable. Since land prices are slow to move downward, they contribute to the break of the building boom. William Newman (1935, p. 18), echoing George, wrote that “Excessive land values, reached after the boom has continued for some time, are eventually found to have no counterpart in increased earnings, and therefore contribute to the break of the building boom.“
Yes, we have certainly seen that the high cost of housing cannot be explained by a corresponding increase in wages. We have also seen that the cost of owning in San Diego is about DOUBLE the cost of rent. The cost of rent is determined by the availability of rental units and by the prevailing wages in the area.
Soon after its peak (of land values and construction), the real estate market enters a slow phase. It is observed that prices are no longer rapidly advancing. Nominal asking prices stay high, but there are now few buyers. Vacancies rise. Building declines. The sale of bare land drops rapidly, and prices level off. In some instances, a financial panic or crash shatters real estate optimism, though it does not cause an immediate real estate price crash. The commercial crisis and business depression usher in unemployment.
San Diego has already seen sharp declines in sales volumes. However there has been no financial panic or crisis nor has there yet been any commercial crisis or business depression. The only thing I see coming is a decline in consumer spending, which will be the trigger for a recession.
The slackening of industry wears down land values. When the decline begins, it is longer than stock market crashes due to: a) the lack of short selling, b) the tenacity to which owners cling to mortgaged property, and c) the slow process of foreclosure (Hoyt, 1933, p. 407). During the downswing, the net income of real estate falls due to falling rents and increased vacancies, while mortgages and other operating costs remain rigid in the short term. There are widespread defaults on mortgages and other loans. The foreclosure rate increases. Unemployment and lower real wages further reduces demand for real estate. Some residents “double up.” To secure occupants, rents decrease. Many banks fail, having loaned large amounts to illiquid and fallen real estate, a phenomenon clearly evident in the recession of the early 1990s.
The low point of the cycle is characterized by high vacancies, low building rates, foreclosures, and an absence of speculation.
Ah, here we have the good stuff. I think the decline has just begun. The prices are holding for now (although they are off the peak values of summer 2005). Forclosure rates are skyrocketing. We don’t have unemployment, but we do have lower real wages. Real wages are wages in inflation adjusted dollars. Hmmm….
Real estate is a major component of the economy, and has historically been subject to large and widespread fluctuations. A rapid rise in real estate prices and rents based on future rather than current benefits (induced by public goods not offset by the public collection of rent) is bound to affect business profitability; the question of its extent is an empirical matter. Historical data from the U.S., Great Britain, Germany, and other countries have shown that real estate booms have preceded major depressions. The construction industry plays a major role in creating the boom and subsequent bust, and monetary, regulatory, and public-works accommodation by government have induced and accommodated the speculative booms. The theory that the major real estate cycles, accommodated by monetary inflation, have significantly contributed to the major depressions is consistent with the historical record.
So, should I buy or not buy?
April 28, 2006
That’s what I’m talking about…
I put a deposit down on a used motorcycle tonight. In a short time I will have posession of an almost new but VERY purty Suzuki SV650S. So, I was talking to the lady who was selling the bike. Not only does she ride a motorcycle, she ski’s, and has a masters degree. Wow, so she is edumacated AND loves extreme sports. wow, I was in love. It sure would be nice to hook up with a girl like that, but the odds are against me. Those types are few and far between. *sigh*
In other matters, as I was driving back from looking at my soon-to-be-new bike, I had this great feeling of absolutely loving where I was. At that moment in time you couldn’t have paid me enough to move back to that batshithole called San Diego. #@%#@# San Diego, long live Colorado!!!
Strong GDP numbers for first quarter 06
The GDP grew at an annual rate of 4.8 percent for the Jan-March period. A recession is defined as a decrease in the GDP. I have predicted that we will see a recession in late 06. The GDP numbers are pretty strong, so perhaps my prediction is early or wrong all together. We will see. The numbers for the 4th quarter 06 GDP will not be released until the end of January 07.
April 27, 2006
Wow, 180 degree attitude adjustment
Earlier in the week I actually subscribed to match.com. Perhaps I justified the expense because I am saving $$$ on rent here in Colorado. Perhaps it was fueled by my annoyance with eharmony. Whatever, at this exact moment I am wondering if I can’t get my money back. Online dating is not my thing and I don’t think it will ever be my thing. I am an internet expert, and in my expert opinion the internet is NOT FOR DATING!!!! DARPA invented the internet for blogging. Even if the word didn’t exist at the time, those researchers knew deep down what the internet was there for. The TCP/IP protocol was designed and perfected just so many people blogging at the same time would not bring down the internet. Why was wireless internet invented if not for sitting down in that coffee shop drinking some beverage while writing/reading blogs.
Ironic how this blog subject is about 180 degrees because the content in this post went horribly out of whack. The bottom line is that a better use of my time would be spent getting out and meeting people in the flesh. Regarding that match.com membership, my profile description is so whacky that I don’t think I will be bothered. Come to think of it, they haven’t yet approved my profile.
April 24, 2006
Dinner Difficulties
Today I started my new/old job at the BAE Systems office in Colorado Springs. As the day ended, my boss mentioned that I would make a most excellent fit into the team. That was nice. Since the job posting was originally for a SENIOR software engineer, perhaps I might negotiate a higher salary because I am one greedy bastard.
Anyways, back on topic. I got home a little late today and I was pretty hungry. I was planning on making beef stroganof, but I realized that I neglected to thaw the ground beef…. damn. Being really hungry I turned to the mac and cheese I had just bought. I started cooking the pasta and looked around for something else to do. Let’s see here, ah yes, the milk is at the end-of-life, so lets make pudding. So, 5 minutes later I use up ALL the milk for the pudding. Right on time, yay! well, pasta is done. I look at the box and … shit … 1/2 cup milk. *looks at pudding*. Damn. Now I’m really hungry. I’d better not quit my day job 
Here is my mail order bride!
Something caught my eye just before cleaning out all my spam mail. Jenn, if you read my blog, here are my mail order brides!
April 23, 2006
More on the Twelve Tribes
Because I am procrastinating today, I went over to look at the twelve tribes website. I can’t say that law is a hobby of mine, but I actually enjoy reading judicial opinions. If you click over to the controversies section, you will notice an judicial opinion regarding the 1984 Island Pond raid. It’s a good read.
Other than my differences about the twelve tribes being the ‘one true church’, I have nothing against their group. If anything I have nothing but respect for them because they appear to be living their lives with a very high degree of integrity according to scripture. That is more than I can say for myself and for the Christian church as a whole. It is interesting that there appears that you are free to be religious just so long as you don’t get too out of line with society in general. It’s funny, but I didn’t read that caveat anywhere in the Constitution. The raid was a disturbing abuse of power by well-intentioned individuals. I have news for you folks, the road to hell is paved with good intentions. It is interesting to me at the astounding lack of uproar about the blatent violations of the fourth admendment freedoms against unreasonable search and siezure perpertrated by the White House administration of George Bush. I find it astounding that the Christian conservatives got into an uproar about Clinton lying about a blow job, and yet justify an issue orders of magnitude greater on the basis of trusting the good intentions of the Executive branch. I wonder if my fellow Christians all got struck with the stupid stick somewhere along the way. I am not astounded at all at the lack of independence shown by Congress. The republican party is nothing more than a kiss-ass chorus and the democratic party is nothing more than a group of yes-men to the kiss-ass chorus who are shackled by the fear of terrorism. The bottom line is that the Legislative branch is abdicating its responsibility to check the abuse of power by the Executive branch.
It’s interesting how I am actually more in agreement with the Twelve Tribes group than I am with a whole lot of other groups. Oh yeah, read the judicial opinion. In general, reading the actual opinions are much more interesting than reading the summaries put in the news media.
The hatch of the quack
A long time I got into a discussion outside my church with a member of a group that believed that unity is the is-all and end-all of Christianity. I sent him an email a year or so ago and he just responded with this:
We believe that unity is actually vital to the survival of the church. If the church isn’t in complete unity, then it is no longer the church. The Holy Spirit doesn’t dwell in a divided church. You can see that in Revelation. The splitting of denominations is the acceptance of defeat not an attempt to maintain unity. Our Father cannot dwell in a divided, denominated church. The Holy Spirit departs when there is division. You are right in that people have disagreements, but not such that the church divides over it. We work out our differences as our Master instructed us to and continue on as one. Maintaining unity has nothing to do with the size of the church. If the Holy Spirit isn’t present, even the smallest group will divide. If it is present, then even Twelve Tribes can be perfectly one as the Father and Son are one, just as our Master prayed in John 17. Do you believe that is possible? Do you believe that our Father will answer His prayer? If so, then the size of the church is irrelevant. If this prayer is being answered, then the church will not have to divide into denominations to stay small in order to be in unity. I hope you understand my point. You can tell a tree by its fruit. If the fruit is division, the tree is bad. If the fruit is unity, the tree is good.
So I sent him a reply today, and the only reason I am blogging this is because of the utter irony. The last thing in my response was to tell him to use my other email address as I would be shortly killing my yahoo account due to Yahoo’s aid to the Chinese goverment in cracking down on political dissenters. Sometimes irony is just there when you need it.