jcrash

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    • Thu May 1st 16:43 PM | Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis: Part Two
      Makes no sense? So, if I can buy something at 0%, do you think I might pay a bit more than if I can buy one at 20%?

      At some point it makes a difference. Your SAYING it makes no sense, makes no sense.

      At 0%, I personally can afford say a much nicer car than I could at say 20%. His whole argument is based on affordability. If you want to base an argument on affordability then don't throw up a graph that isn't based on what someone actually pays - not what they pay FOR.

      If you instead, want to base an argument on the tightening of credit standards and increased downpayments, then gimme a graph on that.

      Sure, you had a housing bubble in Schiller's 20 markets. But I don't live there, and many people don't. That's why his first graph is actually pretty tame compared to the second one.

      A good house is more afforable now than at many times within the last 20 yrs, although he would have you not believe that.
      View article »
    • Thu May 1st 15:08 PM | Rating: 0 0
      Commented on:
      Gas Tax Holiday Is Populist, But Pointless
      I don't understand why people aren't laughing at McCain and Clinton for supporting this Tax Holiday. $.18 per gallon less when you are already paying over $3.50 per gallon is pointless. It's not like people are going to say, WOW gas is JUST $3.32, let's drive a lot more.

      They need to fix the problem...MANDATE higher fuel standards and possibly RAISE taxes on gas. Definitely, they should remove any and all tax credits for oil production.
      View article »
    • Thu May 1st 14:44 PM | Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis: Part Two
      Normalized your graph, once again to payments instead of price.

      2007 1.397857594
      2006 1.478314538
      2005 1.432964409
      2004 1.325094098
      2003 1.232645673
      2002 1.244852812
      2001 1.240424748
      2000 1.348800449
      1999 1.285290782
      1998 1.222953977
      1997 1.297901204
      1996 1.323260469
      1995 1.336008158
      1994 1.387439202
      1993 1.260211257
      1992 1.400404179
      1991 1.497202082
      1990 1.580267027
      1989 1.583155393
      1988 1.559526208
      1987 1.546642267
      1986 1.546642267
      1985 1.808460137
      1984 2.008946707
      1983 1.973803225
      1982 2.365982548
      1981 2.487876013
      1980 2.134449551
      1979 1.702172503
      1978 1.447718253
      1977 1.340200308
      1976 1.256437789
      1975 1.279111413
      1974 1.204463997
      1973 1.059771781
      1972 1


      Not nearly so bad as your graph makes it look, and your graph actually doesn't even make it look awful.
      View article »
    • Tue Apr 29th 09:32 AM | Rating: 0 0
      Commented on:
      Are US Inflationary Concerns Inflated?
      A) Less inflation is still inflation. Just because gas went up LESS, doesn't mean things are good.
      .
      B) Shadowstats is a web site built to MAKE MONEY. Of course it is going to be sensationalist. Ignore it until he makes his newsletter free.
      View article »
    • Mon Apr 28th 10:14 AM | Rating: 0 0
      Commented on:
      9 Reasonably Priced Momentum Stocks
      Everything is listed as X% below its 52-week low. You might want to correct that.
      View article »
    • Fri Apr 25th 13:42 PM | Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      This is incorrect "regarding the interest rate discussion jcrash started:
      Simply put, a 6% interest rate will pay 50% more interest than a 4% interest rate- and will effectively increase the house payment by 50%."

      If you used simple ratios based on interest rates, your numbers are all off. Obviously a 1% rate loan does not have half the payment of a 2% rate loan. Bad math, my friend.
      View article »
    • Thu Apr 24th 10:10 AM | Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      ...I can tell you that even in midwest markets, rents are significantly lower than mortgage payments for equivalant houses. "

      "One need only play with a mortgage payment calculator to figure out how screwed up rents vs. asking prices are: Find a single family home for rent. Enter the market rent as the payment, use a market 30 yr fixed interest rate, and solve for present value. THAT is the breakeven point for the owner and the actual value of the home (don't forget to allow some room for taxes and insurance etc.)"

      Profit <> Positive Cash Flow.

      If I buy something and have payments of X...then I rent it to you for X, I have no cash flow. But, at the end of the payments, I have a paid for asset and you have a rent payment of X.

      Rent does not need to equal payments. At the limit of interest rates going to infinity, rent does need to closely equal payments. At the limit of interest rates going to zero, this need is at its minimum.
      View article »
    • Wed Apr 23rd 14:55 PM | Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      No, I'm not saying ignore the price, dolt. I said normalize on PAYMENT. Obviously, price is a factor in payment, right? So, if your price was higher, your payment would be higher.

      You don't get what I am saying. Normalizing on payment takes into account BOTH price and interest rates - both of which are key when deciding affordability. If rates went to zero, affordability would be higher than if rates went to 20%.

      So, if you truly want to account for affordability, which the author implies is what he is doing with his graph, then he should not be plotting price versus income.

      Just taking 5 points on his graph and normalizing for interest rates,
      1976 Payment on $100k is $ 800 (base point)
      1981 Payment on $100k is $1400 (a "peak" in his graph)
      1984 Payment on $100k is $1059 (a "low" in his graph)
      1991 Payment on $100k is $ 826 (a "peak" in his graph)
      1995 Payment on $100k is $ 665 (a "low" in his graph)
      2005 Payment on $100k is $ 593 (a peak in his graph)

      So, his first high in 1981 should be much higher (14/8 * value), or about 200%
      His first low point should be higher also, or about 125%

      So, these are the equivalents:
      1976 100
      1981 200
      1984 125
      1991 140
      1995 80
      2005 140

      As you can see, the parabolic number he shows in his graph is much reduced and suddenly falls well within range of the past values.
      View article »
    • Wed Apr 23rd 13:46 PM | Rating: 0 0
      Commented on:
      Does Ethanol Deserve the Blame for Rising Food Prices?
      All American...I get a tax DEDUCTION for my mortgage interest not a tax credit. If it were a credit, I would be paying ZERO taxes...I'd love that.
      View article »
    • Wed Apr 23rd 13:34 PM | Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      One LARGE thing your historic price to income graph is missing is interest rates. Here are the average interest rates over the period:

      2007 6.3
      2006 6.4
      2005 5.9
      2004 5.8
      2003 5.8
      2002 6.5
      2001 7.0
      2000 8.0
      1999 7.5
      1998 7.0
      1997 7.6
      1996 7.8
      1995 7.9
      1994 8.3
      1993 7.3
      1992 8.4
      1991 9.3
      1990 10.1
      1989 10.3
      1988 10.3
      1987 10.2
      1986 10.2
      1985 12.4
      1984 13.9
      1983 13.2
      1982 16
      1981 16.6
      1980 13.7
      1979 11.2
      1978 9.6
      1977 8.9
      1976 8.9
      1975 9.1
      1974 9.2
      1973 8.0
      1972 7.4

      See those nice low points on your graph? A $100,000 at 6% has a payment of $600 a month. The same loan at 13.8 % in the 1980's? The payment at 13.8% is $1200 or so. At "just" 9% like in 1991 the payment is $800 or 25% more.

      So, if you normalize your graph with respect to HOUSE PAYMENTS, not HOUSE PRICES, you will get a MUCH different graph. One that is more appropriate when calculating affordability of housing.

      View article »
    • Wed Apr 23rd 13:04 PM | Rating: 0 0
      Commented on:
      WSJ Shake-Up: The Morning After
      Fox Street Journal...do people still read that?
      View article »
    • Wed Apr 23rd 11:58 AM | Rating: 0 0
      Commented on:
      Are Central Banks Out of Their Minds?
      If you guys would get back to your jobs instead of posting useless prattle, we might get a bump in US productivity.
      View article »
    • Tue Apr 22nd 11:47 AM | Rating: 0 0
      Commented on:
      The Death of Gold?
      dieuwer....

      "FOLKS: remember the news items on TV regarding the madness in front of the Apple stores to buy the iPhone? Few weeks after that Apple stock topped... "

      Huh? The phone went on sale in June...if "a few" weeks means 30, then you are right. Otherwise, not a good analogy.
      View article »
    • Thu Apr 17th 14:49 PM | Rating: 0 0
      Commented on:
      The Great Television Price Inflation Scam
      Yeah, I can't find a betamax at Walmart either. But this DVD player thing they have is cool.

      Would you really say the functionality/design considerations are the same in a flat screen TV and a Tube? What about a TRS-80 and an Imac? You gotta account for it somehow.
      View article »
    • Thu Apr 17th 11:13 AM | Rating: 0 0
      Commented on:
      Mortgage Resets: Subprime May Be Ending, Option ARMs Have Just Begun
      Anyone got the breakdown - NATIONALLY - on the percentage of mortgages financed 30/20/15 yr fixed rates, 5/1 or 3/1 Arm, and these option arm things? I think it would be very enlightening as I can only guess that 80% of people go with the 30/20/10 fixed rate mortgages and all this prognosticating is about the other 20%.
      View article »
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