Market Commentary
What's left to say? Everyone knows that things are a scam but no one wants to miss a move in the magic show. Take this post by Barry Ritholtz over at The Big Picture:
Accounting Fraud, Short Sellers, and the SEC
Mr. Ritholtz lays out the worst of the Lehman collapse fraud and hits all the big points. Final summary thought offered:
All in all, the entire system failed. The situation is utterly disgusting, and if the investing public pulls its money out of the completely corrupt public markets for a generation or more, it would not surprise me . . .Of course Mr. Ritholtz was clear that he was buying the market last March (right on the lows, amazing!) so I guess a rigged market full of fraud is too juicy to leave alone. In fairness it is his job to manage stocks but this is the central issue why nothing ever changes. Asset markets are too important (going up only that is) to leave alone and if that is true it will also be true that rampant fraud will occur because it can.
With this in mind, next week I will lay out a "bullish Enabler of Fraud" portfolio that I may well try out to get a seat at the casino. My proprietary trading software (my mind) targets the S&P at 1250 in the next month or two so there will be ways to jump on that ride.
Living Life on a Friday
I spilled quite a few pixels this week on things economic. In honor of my birthday I am going to have an all around fun post with slices from all over the world of interesting. I hope you enjoy!
Real Estate's Favorite Line in Jeopardy
When asked why buying real estate is a good idea no matter what, the most often cited reply is "they are not making more of it". Well that may not be the case.
What about Waterscapers?:
At least they are not making any more ocean, are they?
Eerie March 12 Factoid
Long time readers know how much I really hate The Beatles. In a swing of cosmic irony not lost on me I noticed on the Wikipedia page for March 12th the following factoid:
Born March 12, 1914, Julia Lennon, mother of musician John Lennon.
Unreal.
Things You Should Know About
Inquisitive minds will like:
-How the Moon was formed. Wild.
-Aerogel. Amazing.
-Early Picture taking. Stay still!
-What happened to the USS Scorpion?
-Telomeres are strange.
Enjoy.
FailBlog, an Odyssey
Today was a huge day for FailBlogs. Two samples:
Really?:
"Wendy, I'm Home!"
Not quite the help group one may think:
Nice!
Rock Blogging
Some musical selections to start the weekend.
Of course I go out in Boston like twice a year and it is going to rain big time. Reader Anon says they have been swamped with rain for a while so Karen Carpenter's "Rainy Days and Monday's" will fit:
What a voice.
We can get a little nasty with White Zombie and "Thunderkiss 65":
Great guitar chords.
Another great tune on the "Zombieland" soundtrack is "For Whom the Bell Tolls" via Metallica:
Great live version of "The Thunder Rolls" from Garth Brooks:
One more? Two more? Ok, two more.
Take a ride with the Rolling Stones and "Paint it Black":
Last Call! Grab a drink, the mouse and load the tunes!
I get one for my birthday and I once again play the intro (Ride of the Valkyries!) and first song from the greatest live album ever made, "I Don't Know" by Ozzy with Randy on the Tribute album. "ROCK AND ROOOLLLL!!!":
Always a real treat.
Have a good night.
11 comments:
My goal for the weekend...rent Zombieland and check out the music in it.
Happy Birthday Connected!
Best wishes & many happy returns
Watchtoer,
great film and the tunes are rock out.
Tom,
Thank you sir. Congrats on the NK hattip!
Waterscrapers? That's the most stupid thing I've ever seen.
It is true that they're not making any more land, but that's not why people invest in real estate. People who are successful at investing in real estate, that is. It's not the land itself, it's what you do with it.
This is the difference between real estate and real property. The estate is the land and its improvements. The property is the rights associated with the estate--the right to sell, to transfer, to build, to destroy, to do nothing, etc. The estate without the property is essentially worthless.
Which is why, a couple of years ago, when a friend of mine wanted to buy this apartment in a complex--it had four units and was on two lots, one of which was vacant, and he was thinking he could fix up the unit and build a second complex on the vacant lot--I told him not to. Because the real property did not transfer with the sale. It was in fact shared by the other owners. So in order to improve a unit or build another complex, he would have to get all the other owners to agree in writing, which would be difficult to say the least. If you can't do what you want with it, what's the point of owning it?
The problem these days, aside from all the financial shenanigans and fraud, is what developers have done with the land they purchased. I'm talking about cheap construction and shoddy development.
For example, I got an assignment for this fourplex two months ago. Two big 2-story buildings with 2 units in each, 2-bedroom, 2-bath, large living and dining, nice fully equipped kitchen with granite counters (naturally), and a washer/dryer utility room. So I'm walking through these apartments, taking pictures and notes, and I noticed there was something wrong with the tubs. I kept staring at them until it dawned on me. They were installed backwards! The faucet was on one end, but the drain was on the other. Who could make a mistake like that?
Anyway, surprisingly, this complex went under contract in the first week it was listed. But the buyer backed out after the inspection revealed plumbing problems. Small wonder that.
This is what I'm talking about. A lot of these new homes and apartments or condos that were built during the frenzy are poorly designed and cheaply constructed. Most require substantial repairs. Only a fool would invest in these properties.
In this area, the older homes that were built in the 70s and 80s are solid. Large lots with landscaped yards, wood fences, brick, plywood drywalls, hardwood floors, spacious but energy efficient rooms, nice. These are well-constructed homes in good neighborhoods. Of course, they don't get foreclosed on very often.
But these new homes are made out of cardboard. I'm talking real cheap. Small lots, fake brick, sheetrock drywalls, vinyl floors, crummy carpet, cookie-cutter construction all around. And they get foreclosed on all the time.
An older, well-built home in a nice neighborhood with good schools, that's gold in real estate. Everything else is crap.
Land will always have value. But it's what you do with it that determines whether it will appreciate or depreciate. You want to buy a house cheap? Buy a cheap house. If you want a return on your investment, you better know what you're doing. And have the money.
But then knowing money is what separates the men from the boys.
Gawains,
man you really ought to start writing a blog! Great stuff as usual. Maybe a collaboration, Economic Disconnect/Real Estate Front Line story, HA. Thanks again for the inside info.
A real estate blog, are you out of your mind? If my mother knew what I was writing in these comments, I'd be dead before morning.
You know, our partner is the head of the county appraisal district; he's a major developer. His brother was the county commissioner for the last twelve years, until the most recent election. This guy spent over $200,000 on his campaign, and lost to a newbie who only spent $50,000.
I told him, "Well, there is life after politics." But he wasn't very amused.
I suspect we're going to see a lot of this sort of thing in the mid-term elections. There is a very strong anti-incumbent, anti-Washington current flowing, and it's not restricted to the Tea Party movements. The American people have had enough.
It all goes back to what I was talking about above, cheap construction, shoddy development and fraudulent financing. No one wants to get ripped off. Everyone wants a fair deal.
But when the government fails in its explicit duty to protect the citizens from fraud, and is in fact complicit in defrauding the citizenry, all bets are off. All deals are speculative, and all transactions are suspect.
That's no way to run a country. It's certainly no way for the average person to grow wealth. The difference between now and back in the day is that then people only invested in quality, something that had value.
There's very little of that for sale these days.
Happy birthday...
GYSC said:
"man you really ought to start writing a blog!"
I'm thinking more along this line:
Gawains, Texas Real Estate'r
We'll have Chuck Norris play the part, which means the CEO's of these shoddy builders get a roundhouse kick to the face.
I watched 'Zombieland' last night...hells yeah!.
If you liked 'Shaun Of The Dead' (which I did), you'll love Zombieland, plus the soundtrack is high energy (good for rule #1, cardio)
Watchtower,
gald you liked Zombiland, it was great and yes the music rocks out. Everytime I get in the car now I am like "Rule #3; seatbelts!"
Nice dispatch and this fill someone in on helped me alot in my college assignement. Thank you for your information.
Where else can you get The Carpenters, Metallica and Garth Brooks all in one place?
Now that's what I call variety.
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