We have no where to go but down

For those of you who received my recent email, “We have no where to go but down“, I wish I was wrong about all the doom and gloom talk lately…  Really…

I wasn’t going to write a blog again until there was something positive to write about.  In fact a friend had a suggestion:

Go buy a copy of The Power of Positive Thinking. 
I almost did it! 
But then I thought, what good would that do?

As I’ve written numerous times, we won’t get out of this, until everyone stops thinking so positively!

However, I saw a little ray of hope today.  Even the White House is telling us to give up hope of a speedy recovery!

As President Obama prepares to sign the $787 billion stimulus bill, administration officials sought to temper expectations, warning that the economy has not yet reached bottom and that increased economic activity as a result of the legislation would “take time to show up in the statistics.”  … “The president has said it’s likely to get worse before it gets better.”

White House Says Stimulus Won’t Be a Quick Fix
N.Y. Times
By J. DAVID GOODMAN
Published: February 15, 2009

Great News!  Give up hope!  It’s our only hope!

I might have something to write about tomorrow!  🙂

 

photos by St Stev

Is it over, yet? Is this the "Big One"?

Been reading a lot of negative news about the economy in general, and specifically the real estate market.  I told people to watch for this.  It’s a sure sign we’ve hit bottom when everyone’s given up hope.  Greenspan started talking about this being “the big one” – the once in a lifetime crash.

I thought this might be the bottom, until:

• Two friends thought it was a good time to go out and buy houses.  They did,  and have no regrets.
• My wife suggested we buy a ski condo.  And I had to think about whether it was a good idea, or not.
• Then the financial firms behind all those bad mortgages came crashing down around us, but before the dust settled, the government came in and promised 100’s of billions to bailout for the Wall Street bankers.

then look what happened

With that kind of good news, I know we haven’t hit bottom yet. 

But its coming soon.  I can feel it.

Like the groundhog that comes out to check on Spring and goes back in when he see’s too many bright things around, there’s still too much good news around — I’m going back in the hold for another 6 weeks.  Check back then.

How Far to the Bottom?

There’s still more bad news coming in the real estate market.  Unfortunately the bad news is that there’s still too much “good news”.  There are still people who think the government should bail us out of this “mess”.  And there are nearly as many people who think the government will bail us out.

A report published by Homes for Working Families earlier this month forecast home prices could hit bottom in less than a year, ending up around 2004 levels.

But “even after the market bottoms, you’re still not going to have quite the affordability that you had before the housing bubble took place.”

There are still many people on the sidelines waiting to jump into the market as soon as prices become affordable again.  But there’s another group of homeowners and investors that want government to artificially hold up prices.  History tells us the wise thing to do in the long-run is let the market run its course, however painful this may be in the short-run.  

The laws of nature, and the laws of economics, are immutable.  In the 70’s, the Army Corps of Engineers dumped millions of truckloads of sand to save a beach.  It  didn’t work!  Those millions of truckloads washed away.  Nature wanted a smaller beach.  And nature gets what it wants.  So it is with the market.

By supporting home prices, the government is short-circuiting a correction in home values that some say is necessary to bring prices closer in line with incomes for most working-class families.

We still haven’t hit bottom in real estate prices.  And many homeowners and investors still think the government will rescue them before it happens.  As cruel as it sounds, we won’t hit bottom until everyone gives up hope – when people stop praying for the government calvary to rescue them.  The reality is that the government can’t fix the real estate market.  The government manipulation of the real estate market may produce some short-term benefits for some people, but this will only “mess it up” more in the long-run.  The right thing is to let the market run it’s course. 

It’s better to build on stable ground.  This is not an economic “mess” to be fixed.  It’s the normal economic cycle that we have seen over and over again throughout history.  We have to wait for real estate prices in the sales and rental markets to equilibrate.  All the government can do is come in and mess it up for a while.  Or save a few people while the rest of us “drown”.  The real estate market will come back to normal.

Just wait…

From: At housing’s bottom, many will be priced out

Photo by: clickykbd

Housing prices drop at fastest pace ever

Housing prices dropped in February at the fastest rate ever … reflecting that the housing slump is gaining momentum and showing no signs of letting up.

“There is no sign of a bottom in the numbers.”

Miami saw home values plunge by 21.7 percent.  The Florida Keys and Key West are a different real estate market, even though they’re just a short drive away.  The demand for vacation homes and vacation rentals should keep the bottom of the Keys real estate from dropping out like other South Florida markets.

Still more bad news needs to come before things will get better.

More at http://123FloridaKeys.com 

From: Housing prices drop at fastest pace ever

Housing Prices Must Go Down, or Rents Go Up

Housing prices have been out of whack with rental prices for years.  For a decade it has been virtually impossible to find any house which is a good investment relative to the rental income it can produce.  In Key West and most of the Florida Keys it has been off by a factor of two.  House prices would have to fall by 50% to make it attractive to investors!  It’s been “cheaper” to rent than to buy.

This imbalance in the real estate market could not remain indefinitely in a free market.  Which simply means, unless the government starts mucking around with the market, either house prices must fall, or rents must rise.  A lot! 

It looks like both are happening.  Everyone knows that housing prices are falling in virtually every market.  But did you know: 

the median monthly rent for a New York apartment climbed nine percent to $1,751 and that Seattle’s rent rose 10.3 percent to $1,211 per month.

It’s about the same in the Florida Keys and Key West.  As rental prices climb, this will help stabilize the real estate market.  But it won’t happen over night.  And on the other side housing prices will fall and people will lose their homes to foreclosure.

This law of economics and the free market economy is immutable – and harsh.  Until the real estate market comes back into balance,  its painful for renters and owners alike.

From: Apartment rental costs are all over the map

Hey Vin! Happy Birthday!

 

Walgreens has $5 off $20 on your birthday tomorrow!

World economy slowing, U.S. near recession

Optimists keep telling me that we have hit bottom.  Nothing backs this up.  

Problems started in the United States with risky “subprime” mortgages made to people with blemished credit and quickly spread into other areas, hitting more creditworthy borrowers. Foreclosures in the U.S. hit record highs and financial companies racked up multibillion-dollar losses as mortgage-backed investments soured with the collapse of the U.S. housing market.

The fallout gripped investors on Wall Street and in other countries, creating a panicky atmosphere that threatened to paralyze financial markets in the United States and beyond.

Things will get better.  But we still have a ways to go… down.

World economy slowing, U.S. near recession – IMF – Apr. 9, 2008

“This is why we’re heading into a recession.”

The party is over, but the hangovers, and next day clean-up, is just beginning.  Things will get worse, before they get better. 

Risky bets on securities tied to subprime mortgages — loans given to customers with poor credit history — crippled Bear Stearns, the nations’ fifth-largest investment bank. So far, global banks have written down some $200 billion worth of securities slammed amid the credit crisis.

“This is about credit being overextended, and how bad it is for major financial institutions and for individuals. This is why we’re probably heading into a recession.” said Peter Dunay, a chief investment strategist.

But things will get better.  Just wait for the last optimist to stop jabbering.  There’s always “a morning after”.  But first people need to feel it’s “the end of the world”.

We’re not there yet…

 

JPMorgan to buy Bear Stearns for $2 a share – U.S. business- msnbc.com

Wall Street, photo by Michael Aston.

8 top traffic-ticket myths – MSN Money

 

That’s why, whenever an officer asks if you know why you’ve been pulled over, always answer “no” and just take the ticket.

8 top traffic-ticket myths – MSN Money

Comparing LINQ and Its Contemporaries

 

One such automated mapping that is taking the development world by storm is that of Rails, a Web-and-database framework written on top of Ruby, a dynamic object-oriented scripting language developed in the open source community. Basing itself on common-sense defaults and scaffolding, Rails enables a relatively straightforward mapping against the database by keying off of constructs in the types defined in code itself; for example, the following code defines a class that defines itself around the “Customer” table of the Northwind database:

Copy Code

require "rubygems"
require_gem "activerecord"

class Customer < ActiveRecord::Base
end

customer = Customer.find(123)
customer.ContactName = "Dave Thomas"
customer.save

Experienced developers will quickly notice the lack of anything resembling properties or methods in the Customer class (defined to inherit from the Rails ActiveRecord::Base class). Rails is able to provide all the columns of the table as fields on the object “customer” because of the highly dynamic nature of Ruby—when a method or property is accessed on an object where no such property exists, Ruby will call a base class method designed to trap all such “unknown” accesses. ActiveRecord::Base overrides that method to then examine the name of the method invoked, compare it against the metadata for the table retrieved from the database, and return that data from the row retrieved earlier.

While interesting, this highly dynamic approach faces two fundamental problems: it is highly sensitive to changes to the database schema definitions, and it exposes the schema to developers to deal with in a direct fashion. While Rails presents some ways around these two problems, fundamentally they are similar in nature to the other automated libraries already discussed.

What is perhaps most interesting to this discussion, however, is the ease by which Rails allows the introduction of new types into the system. Should a developer require some kind of “partial object result” of Customers for a particular query, such as is necessary for drilldown screens navigating through all Customers before displaying all data for a particular Customer? It is trivial (two lines of code) to create a Rails type that encompasses that particular data (which would likely have to be formulated as a database view, since Rails offers no such wrapping around arbitrary SQL statements).

_________________

 

To say that Project LINQ is “the answer” to the O-R mismatch challenge is clearly premature: in its current prerelease form, it only applies to C# 3.0 and Visual Basic 9.0, and will not be available until the next generation of Visual Studio—code-named “Orcas”—ships. And, while LINQ query constructs work the same regardless of where the data is persisted—a collection constructed manually, or mapped from an XML file, or from a database—the only relational database supported today is SQL Server. But by bringing relational operations and results directly into the language, LINQ offers an entirely new dynamic that’s worth getting excited about.

 

Comparing LINQ and Its Contemporaries