Friday, May 23, 2008

With Housing's Bust, How Will People Exhibit Their "Success"

The warmer weather should arrive tonight, and the wild winds should diminish as well. 3 day weekend and I have a ton of stuff to do. I finally see some potato plant tops sprouting out of the ground at last. With a bit of warmth things should get growing in a good way.

Inflation Expectations Pulling Up Anchor and Sailing Away
One of the FED's favorite statements to make is the good old "inflation expectations remain well anchored". I have always hated that statement because it is clear that actual inflation makes zero difference to the FED, only the expectation of more of it scares them. Well Boom Boom Bernanke and company should start wearing their depends undergarments after the scare stories being run on all the major TV networks and throughout the mainstream media concerning gasoline and oil prices.

One segment talked to some "experts" about how bad things could get. One crazy guy was saying oil at $200 a barrel will mean $6-$7 dollar a gallon gasoline. I am not quibbling with the numbers, perhaps that is correct. The key here is that expectations of higher prices are starting to become ingrained, and they are starting to run a little out of control. If the FED has failed at basically every aspect of their job (they have) at least they could have done this one thing right!

I have no idea how high oil/gas can go. The move from reporting that things are ok and getting better is giving way to panic reports at an alarming rate. Going to be a long summer.

The Week After the Worst Was Behind Us
It was only just last week that the final touches on the whole "the worst is behind us" thought line were finished that the markets took another beating. Maybe the worst will be over next week? Here is this weeks DOW chart which clearly shows the end of the problems facing the markets:


If this happens after the worst is over, I am scared to see what happens if things get worse!

The housing numbers today were abysmal as usual and existing home inventory is at an all time high. HELOC's are going south faster than any models can predict. JP Morgan defrauded Jefferson County Alabama. Moody's was caught in a cover up. Yup, I'd say next week is a better bet for the worst being over. Until the next week after that.....

With Housing's Bust, How Will People Exhibit Their "Success"
Really owning one's own home used to mean so many things. It used to mean the buyers were able to put away 20% of the purchase price. It used to mean a bank went over the buyers finances with a microscope. It used to mean the buyer was committed to becoming a part of the neighborhood. It used to mean the buyers were in great financial shape. I think you know none of this applies anymore.

Expanded into the bubblemania, things like granite covering every surface was the exhibit of "wealth" and "success". Travertine tiles were also a big showoff item. Huge SUV's the size of small cities were a clear sign of a big penis, er wallet. You know the things I mean.

So what will replace these former wealth markers? How about T-Shirts with your actual net worth printed on them after being certified by a independent firm? No, that would not work as there is no way to lie. Will piling cans of gasoline in your front yard become the new status symbol? Maybe. Some guy will cheat and fill them with water though.

So what is it going to be? If a home may mean some sign of success, but it could also mean a subprime slime on your block, what will be the new showoff item(s)? Here are some ideas, but please leave some more in the comments section. I will put a bunch of the best ones up on Sunday for the new poll question.

New Status Symbols To Replace a Big Home
  • Huge outdoor grills made out of Granite powered by their own barrel of Oil
  • Car up on blocks left running for hours to show gas prices don't hurt this family
  • An all American citizen landscaping crew, no illegal immigrants
  • Travertine tile driveways

Make up your own!

It is indeed Friday night, and that means it is time for laughs, films, music, and whatever else I can think up.

Comic Relief

kitty
more cat pictures

Film Recommendation

If you have not seen the film "No Country for Old Men" then you have to. Soon. A new era classic that will be a timeless hit. In a scene that will become as remembered as any other classic, take a look at "The Coin Toss":

Music Time

Loyal reader Watchtower recommended The Smashing Pumpkins and the song "1979", which I confess I know the song well but had no idea the title was 1979!:

A little older tune, listen to Norman Greenbaum's "Spirit in the Sky":

One of my favorite Guns and Roses songs is "The Garden" and I thought in honor of Kevin's and my own garden I would play it, take a listen:

Have a good night.

8 comments:

Mentalic said...

Check this out:

From Yahoo:
15 bln dlrs in US Iraq spending unaccounted for

http://news.yahoo.com/s/afp/20080523/pl_afp/usiraqmilitarybudget

Anonymous said...

My garden is starting to take shape, harvested some radish today and some more spinach. I have a boat load of turnips planted and have been searching around for a few turnip green recipes, I have never eaten them but I grew collards last year and found I like them so why not. Only thing I have left to plant now until fall are the peppers, a tomato and water melon.

Don't know what the next status symbol will be, but for me it will be just not having to go back to work for a living. Making enough off investment to beat the inflation genie will prove difficult I fear.

Kevin

watchtower said...

Thanks for playing the "1979" video, it's the first time I have ever seen it.
It's got an early 70's Charger in it plus the kid is flipping off the "burbs" so I have to give it two thumbs up, kinda reminded me of my own teenage angst.

New Status Symbols To Replace a Big Home

1. Your own bunker custom designed by that "Roccman" guy. (a blogger that I've read over at Housing Panic)

2. Air rifle for semi-silent game procurement in places that you shouldn't be

3. McGarden (as opposed to a McMansion)

4. A spouse that knows how to clean fish, fry squirrel, and tell dirty jokes

watchtower said...

Question

When will we start to see wage inflation?

Will we even see wage inflation?

GawainsGhost said...

Well, GYC, I'll tell you how I demonstrate my success. I don't. Ostentatious displays of wealth are only for those who put on the facade of wealth, but have none.

Let's see, I have two bachelor's degrees, a master's degree, and a broker's license. The condo I live in is paid for. The vehicle I drive is paid for. Other than one student loan, I don't have any outstanding debt. I earned over $75,000 last year, and my living expenses weren't $25,000. I have cash in the bank, assets generating income, and my family owns one of the largest and most successful real estate coorporations in South Texas, the hottest market in the country. Our net worth is around $10 million.

So, yeah, I'd day that I, we, have been pretty damn successful. Not that anyone would know it by looking at where we live and what we drive, but what other people think is about as low on my list of concerns as worrying about stepping in a puddle of ant urine.

What concerns me is financial independence and security. I have that, so I couldn't care less what anyone's opinion of me is.

The real money is making money. The real secret to having money is in protecting it. Burying yourself in a mountain of debt so you can live in a big house or drive a nice car, fund your consumptive lifestyle, creates only the illusion of wealth and the absence of real money. But that is what passes for the American Dream these days. Oh, well.

Some of us, those who understand what money really is, are more American than others, and we're living the dream.

But, as to the housing crisis, here's my take on it. Some people get a little money and think they're smart. Because they're so smart, they should have a lot of money, but they don't. So they will believe any lie, any con, any scam that promises to make them a lot of money for nothing, such as by investing in real estate with no money down and rolling over closing costs. Mostly, they all go broke, but hey at least they got to live with the appearance of wealth for a short while.

By the way, for your next Friday night music selection, you might want to try this one.

http://www.youtube.com/watch?v=lRwKudE2Qdw

As they say, there was Dylan, then Hendrix, and everyone else.

Anonymous said...

Gawainsghost

Just for you sugar.

http://www.youtube.com/watch?v=ARktN_99kas&feature=related

Kevin

Anonymous said...

Was on the way home from work this morning. Monday morning 8am. There were absolutely no cars on the road. It was even less than a Sunday morning. Yeah it was the weekend and all but it's a holiday. It might be the $4/gal gas prices but I think this is just a hint of what's to come.

G

watchtower said...

Hey G I noticed reduced traffic around here too. Plus we have a decent sized lake about 40 miles from where I live and the local newscast was interviewing the marina dock owners (I guess that is what they are called, they sell gas and goodies on the lake) and getting their take on the gas situation.
To cut to the chase, boat traffic is down.