are we spoiled?

[ladelfina]

Rockon.. It's just based on current terms.. and some numbers in my head from various sources among which:
The Big Picture | Joseph Stiglitz On The Economy
I agree with his assessment more than his solutions.

When you think about it... it just HAS to.
Median US household income is about $48k
Median house price is about $230k
That's about 4.8x income, when the historical norm for home affordability has been 2-3x income. You could adjust for larger homes but of course in many areas the factor is much higher even relative to local median wages. Conversely, there may be pockets of relative affordability. I think EVERYwhere may go down; are you not aware that new mortgages want 20% down once again? Stricter lending practices will reduce prices, absolutely. (All the crazy legislators are instead trying to prop home prices up!).

Here it claims the median US house price has appreciated 6%/year over the last 40 years. Not true for median wages, I think you'll agree.
The Real Returns: Median and Average House Prices in USA Since 2000

Anyway... there're a bunch of other links/graphs/etc. I could dredge up.. none of them particularly contrary in establishing more-or-less-get-to-"rational" home prices, all else being equal...

;-) you say "only"... yeah. with a real depression or some wierd hyperinflation, who knows? Ay!!! I have no idea what the nominal value could be.. $500?... $5,000,000?
I have no idea what to do.. since the real upshot of all this would be truly what's considered 'tin-foil hat" terrritory.. where you want gold, guns, ammo and a 10-yr. supply of MREs. A nominal home price figure would be kind of irrelevant. Either live in it or rent it; forget what it cost you, that's water under the bridge.

It is intense. I would never want to be Chicken Little ("the meltdown!" "the meltdown!")
But the more I read about certain facts and aspects, the less I could brush them off or ignore them.

I'm open to anyone who has a convincing opposing argument on any point, believe me!
I just couldn't see anything countermanding many elements of my previous post. I don't see where new US growth is now supposed to come from.

 

[DblDoc]

Yes we are spoiled, it could be much worse:

Iceland puts the freeze on krona speculators as economy boils over - Times Online

DD

 

[armor99]

To be honest.... I think that a lot of what is going on in the stock market (volotility wise) is being driven by two factors. 1. Acess to market and financial data almost instantly 24/7. 2. The rise of the internet and the ability for almost anyone to buy and sell stocks instantly anywhere in the world.
Obviously I cannot prove any of this, but it seems to make sense to me. Years ago before the rise of the internet, the vast majority of people could only check their stock prices at most, once a day. So small, temporary events on the market, I think would tend to blow over, more often than not. Now add the rise of online trading, and people can react to those temporary market dips almost as fast as they occur. I would think that if enought people start doing this sort of panic selling and buying, that it would have the net effect of causing the entire market to have more volotile swings up and down. Like the ones were have been seeing with more frequency.
I guess the analogy I would use is people that constantly weave in and out of traffic during rush hour, in the irrational expectation that they are actually going to get to their destination any faster. When the reality is that if enough people engage in that activity, it actually winds up slowing everyone down.
Not sure what to do about it... I am certainly not an advocate for any sort of govt regulation on this, just something to be aware of.

 

[unclemick]

The other day at the doughnut shop - a few ER's and not so early retiree's sitting around watching out the big window a late Kansas City snow flurry - but the snow was melting not sticking.

After a long discussion - the Kansas City Royals shall rise from Charlie Brown's Pumpkin Patch and make a run for the World Series after decades of somulance.

Some things can be overwatched. Worrier's worry and hope spring's eternal for the optimist.

For me - Bavarian creme filled and black coffee.

heh heh heh - stay balanced. Pssst Wellesley and all that rot. .

 

[ladelfina]

armor99.. agreed, but in some ways the instant info and access should make markets more "efficient" since people are in a constant process of valuation.

I guess in the traffic example people WOULD get there faster if their lane changes could be instantaneous and their reaction times didn't create a lag.

I think the current market problems are due to insecurity about the accuracy of the information. No One Knows what's on the books. No One Knows what's off the books. How are companies even ALLOWED to have "off balance sheet" items? That is where there have been failures in regulation.

Much is said about open-ended liabilities of SS and Medicare.. little on the open-ended and off-balance-sheet Iraq expenditures. That's just ONE aspect of the dollar's decline, if one thinks of the value of the dollar as being similar to the "stock market" price of shares in USA, Inc.

 

[P.S.]

Ladelfina:

Thanks for taking the time to write and post your really long post above. A really excellent, succinct synopsis.

 

[ladelfina]

Ha ha.. yeah, it's one of my more "succinct" posts!
One overriding aspect I didn't even emphasize is that all this talk by Bush and Paulson about "supporting a strong dollar" is OUT and OUT LIE. It's a way to finance the Iraq war and their other reckless spending on the cheap.

A 40% drop in purchasing power is money stolen directly from your pocket and mine. Doubly from mine because since I buy in euros, everything is an "import"; American residents have a bit of a buffer with local products and services.

The savings of what seem to be lower taxes are FAR outweighed by this.
Would you rather be taxed at a 35% rate .. or be taxed at a 15% rate and have your money buy 40% less, putting you 55% in the hole? The Republicans have faked everyone out with their false framing.

 

[Notmuchlonger]

Must suck to live over seas with the falling dollar. So how do you manage? Just cut back? Get a job?

 

[ladelfina]

Cutting back on expectations.. not eating out at all or touring the countryside much. Thinking twice before driving down to Rome (gas now $85-90; tolls now $24; it's 2 hours away). Plans for a kitchen re-do pretty much dead for now (and the kitchen is a bear to work in, on top of being almost 40 years old). Ditto the systemization of the crumbing blue cement "pool"/rainwater catchment (our gutters are supposed to drain into it but we'd have to dig up and replace those pipes since there's no collection happening; old cement/jointed pipes probably invaded by roots). We'd hoped to do one of 3 things: cheapest= underground tank, fill in the "pool" with earth/plantings; medium= re-do the piping along with the minimum to landscape and turn it into a nicer little pond area; $$$$$= excavate (rock) further (3ft. now -> 9ft. min. needed), expand and make it into a real "bio-lago", a natural swimming pool with special plants, depth and circulation pumps to keep the water clean and algae to a minimum.

Those 2 things would have been nice but we can do without them. I don't feel good about commiting the funds with the future so uncertain. House is paid for, so the biggest costs are (roughly in order) heat, food, car insurance/gas, prop. tax, other utilities. If the dollar drops as much again as it has already then we will be in pain mode.

Always have the option of moving back to the US.. it would just take some time and money: starting over w/DH's green card and selling the house. Not at the point yet of offering English lessons but I'm starting to think about it. We could also sell one of the cars for a couple thousand/year in savings in insurance, registration and excise tax. We don't feel poor.. for now!

 

[Notmuchlonger]

I suspect it will rebound eventually. Good to know you are not in pain mode yet.

 

[clifp]

Some things can be overwatched. Worrier's worry and hope spring's eternal for the optimist.

For me - Bavarian creme filled and black coffee.

heh heh heh - stay balanced. Pssst Wellesley and all that rot. .

Ladelfina thought provoking post yup, succinct not so much.

Although I could quibble with a number of your points, I guess I fall into Uncle Micks camp, I am basically an optimist.

So rather than using logic to make you feel less worried how about a Bobby Mcfeerins classic song

 

[ladelfina]

ARRRRRRR
I HATED that song from the first time I heard it!

1988.. I was in more of a Jane's Addiction / Leonard Cohen / Nick Cave / They Might be Giants groove.


Funny.. haven't listened to this album in a few years:

LEONARD COHEN
Everybody Knows
(co-written by Sharon Robinson)

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows
Everybody knows that the boat is leaking
Everybody knows that the captain lied
Everybody got this broken feeling
Like their father or their dog just died

Everybody talking to their pockets
Everybody wants a box of chocolates
And a long stem rose
Everybody knows

Everybody knows that you love me baby
Everybody knows that you really do
Everybody knows that you've been faithful
Ah give or take a night or two
Everybody knows you've been discreet
But there were so many people you just had to meet
Without your clothes
And everybody knows

Everybody knows, everybody knows
That's how it goes
Everybody knows

Everybody knows, everybody knows
That's how it goes
Everybody knows

And everybody knows that it's now or never
Everybody knows that it's me or you
And everybody knows that you live forever
Ah when you've done a line or two
Everybody knows the deal is rotten
Old Black Joe's still pickin' cotton
For your ribbons and bows
And everybody knows

And everybody knows that the Plague is coming
Everybody knows that it's moving fast
Everybody knows that the naked man and woman
Are just a shining artifact of the past
Everybody knows the scene is dead
But there's gonna be a meter on your bed
That will disclose
What everybody knows

And everybody knows that you're in trouble
Everybody knows what you've been through
From the bloody cross on top of Calvary
To the beach of Malibu
Everybody knows it's coming apart
Take one last look at this Sacred Heart
Before it blows
And everybody knows

Everybody knows, everybody knows
That's how it goes
Everybody knows

Oh everybody knows, everybody knows
That's how it goes
Everybody knows
-----------


20 years on and more relevant than ever.

(but I appreciate the thought, clif!!!)

 

[Notmuchlonger]

ARRRRRRR
I HATED that song from the first time I heard it!

1988.. I was in more of a Jane's Addiction / Leonard Cohen / Nick Cave / They Might be Giants groove.

Have you? YouTube - Jane's Addiction - Been Caught Stealing (Video)

Since the dollar has fallen?

 

[ladelfina]

This video is not available in your country.

FASCISTS!!!!

(I have the CDs.. never watched music videos much)

 

[Notmuchlonger]

LOL cant imagine why they would block it!

 

[HFWR]

I watched a recent episode of Iconoclasts on Sundance channel, featuring Mario Batali and Michael Stipes.

Stipes commented that when listening to music, people create their own mental video based on how the music makes them feel. He felt that music videos deprived the listener of that experience.

 

[ladelfina]

LOL cant imagine why they would block it!

They've started doing that lately.. mucho crackdown on copyrights.. like the "region-coded" DVDs. It really sucks. So arrogant. The region-coding was so that they could release US movies and not have them avail. too early elsewhere, FINE.. BUT this meant that ALL foreign DVDs won't work in the US, even if they are ancient. I have one of those hacked "region-free" NTSC/PAL DVD players but it's hard to get around the Internet unless someone figures out how to hack your ISP id and mask where you are. Likely(?) there are workarounds already.. haven't looked into it, but then I'd imagine you get into not just territory but "terra"tory.

The weird thing is.. if someone is REALLY INTERESTED in a 20-year-old MTV clip.. why isn't there some legit way to view it? I don't understand how it helps (especially older bands) to be invisible on YouTube, even.

 

[rs0460a]

They've started doing that lately.. mucho crackdown on copyrights..

DW/me were on a Danube Riverboat cruise in September. I had my laptop using the ship's wireless net, and was unable to use Pandora (internet music) since I was outside the US.

I contacted Pandora (while on the boat) and there was no way around the problem since they did not have "licensing" for non-US use, even though I had a valid account and was signed on.

- Ron

 

[ladelfina]

-yowsa- and they wonder why the music biz is hurting.
For all they know there could be 10,000,000 potential world wide Jane's Addiction fans that will never even have a taste of their music via a crapola quality YouTube clip.

side note: I am so ancient and out-of-touch I had to look up "Pandora"!

Recent copyright developments

Due to recent Copyright Royalty Board rulings that increase fees and ask for licensing guarantees, the Pandora service is no longer available in countries other than the United States.[3][4] These rulings affect all Internet-based radio stations (terrestrial radio is not affected).
An email was sent out to all UK listeners explaining that UK IP addresses would be barred from 15 January 2008.[5]

Pandora (music service - Wikipedia, the free encyclopedia)


r, how was the cruise? Sounds nice!

 

[P.S.]

Ladefina:

I don't know how big your place is, but what about taking in some paying guests short term during the tourists' season. If you're 2 h from Rome then they must be swarming in the summer? And with the dollar so weak, plenty of people would still love to visit Italy but may be looking for cheaper options than 3 star hotels. Then you would earn income in euros.

I have a fantasy of one day having a little pensione in the countryside, except that check-in would only be for 1 h of the day, and everybody in bed by 11.

 

[ladelfina]

P.S. thanks for the thought. Too lazy 'n' slobby, frankly to make the place presentable! Crumbling cement pool not a draw, nor is the giant muddy dog. Again, we have options if worse comes to worst. I'd be more likely to rent a room to a fixed boarder if I were to get desperate.. more relaxing and steady.

An English lady I met has a big B&B/restaurant in the area.. I don't envy her; she's really tied to it, tho' she has her Italian husband and in-laws working at it, too.

My alarm is long-term: trying to figure out what to plan for and whither goes the US.

 

[haha]

ARRRRRRR
I HATED that song from the first time I heard it!

1988.. I was in more of a Jane's Addiction / Leonard Cohen / Nick Cave / They Might be Giants groove.


Funny.. haven't listened to this album in a few years:

LEONARD COHEN
Everybody Knows
(co-written by Sharon Robinson)

I discovered leonard Cohen recently. He is incredible. Here he is, young, singing your song... YouTube - Leonard Cohen - Everybody Knows

Ha

 

[ladelfina]

A tune for a world-weary urban bachelor:
YouTube - LEONARD COHEN - Closing Time

 

[haha]

Yeah, I love this. And the video is superb. I also really like Dance Me To the End Of Time, and Take This Waltz.

But this ol' boy is anything but world weary. I eagerly grab every day!

Ha

 

[rs0460a]

how was the cruise? Sounds nice!

Went north from Budapest. Stopped in Bratislava, Vienna, Melk (Wauchu), Passau, Regensberg, Nuremberg, Prague. Good thing about the tour is (unlimited ) wine served during dinner (all meals provided on the ship) with the local wine of the area we were touring.

Also, we're off to Amsterdam/Brussles next Friday (see the tulips). Unfortunately, this tour is by bus. Usually, we travel by car/train whenever we can, however we did the Danube by boat and the Med by ship (Venice to Barcolona with stops along the way).

- Ron