Jon Smirl's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/194793/comments http://seekingalpha.com/article/157769-improving-fundamentals-send-sirius-xm-radio-higher?source=feed#comment-641755 641755 Sun, 23 Aug 2009 10:51:28 -0400 http://seekingalpha.com/article/148727-intel-growth-has-been-formidable?source=feed#comment-587849 587849
Note that ARM chips power most cell phones. Which design is a better platform for the netbook? Trying to shrink Wintel or growing the very power efficient cell phone larger? Both can be done but my money is on the ARM CPU.

Intel may lose in both cases. They lose if ARM wins. They also lose if ARM causes the margins on their CPU chips to fall to zero. We won't know the outcome of the netbook war for another five years.]]> Tue, 14 Jul 2009 13:56:34 -0400
Note that ARM chips power most cell phones. Which design is a better platform for the netbook? Trying to shrink Wintel or growing the very power efficient cell phone larger? Both can be done but my money is on the ARM CPU.

Intel may lose in both cases. They lose if ARM wins. They also lose if ARM causes the margins on their CPU chips to fall to zero. We won't know the outcome of the netbook war for another five years.]]> http://seekingalpha.com/article/147657-more-on-the-benefits-of-smart-rail-transport-policy?source=feed#comment-578948 578948 Wed, 08 Jul 2009 11:40:04 -0400 http://seekingalpha.com/article/147044-what-really-caused-the-mortgage-crisis-and-what-to-do-now?source=feed#comment-574805 574805
Home owners should not have been given this chance to risklessly play with other people's money. The system broke down when these loans were made available, in a rational system you should not have been able to get zero down loans. Once these loans were available the sudden change in demand caused a feedback loop price spike (aka bubble).

The fraud occurred when these risky loans were obfuscated into AAA paper. It took very smart people to do that. Without this step the bubble could not have happened since there wouldn't have been a large supply of loans.

Did these obfuscators knowingly game the system and count on the "Fed put" to save everything after they had extracted billions in profits and retired?]]> Sun, 05 Jul 2009 17:08:51 -0400
Home owners should not have been given this chance to risklessly play with other people's money. The system broke down when these loans were made available, in a rational system you should not have been able to get zero down loans. Once these loans were available the sudden change in demand caused a feedback loop price spike (aka bubble).

The fraud occurred when these risky loans were obfuscated into AAA paper. It took very smart people to do that. Without this step the bubble could not have happened since there wouldn't have been a large supply of loans.

Did these obfuscators knowingly game the system and count on the "Fed put" to save everything after they had extracted billions in profits and retired?]]> http://seekingalpha.com/article/143060-the-unhappy-results-of-low-interest-rates?source=feed#comment-546157 546157
If the houses were in good shape why didn't the city take them for public housing? Cities have to pay for public housing, it would make no sense to turn down free housing. ]]> Sun, 14 Jun 2009 13:33:08 -0400
If the houses were in good shape why didn't the city take them for public housing? Cities have to pay for public housing, it would make no sense to turn down free housing. ]]> http://seekingalpha.com/article/142980-housing-chart-of-the-day?source=feed#comment-544595 544595 Fri, 12 Jun 2009 17:43:59 -0400 http://seekingalpha.com/article/142915-when-will-housing-prices-return-to-previous-highs?source=feed#comment-543851 543851
Also, a major of those 4M homes for sale are owned by people who will buy another property immediate upon sale.]]> Fri, 12 Jun 2009 10:31:58 -0400
Also, a major of those 4M homes for sale are owned by people who will buy another property immediate upon sale.]]> http://seekingalpha.com/article/128687-smallcaps-flush-with-cash?source=feed#comment-543217 543217
www.newegg.com/Product...
Available from many other vendors like Linksys, Netgear, etc.]]> Thu, 11 Jun 2009 21:00:58 -0400
www.newegg.com/Product...
Available from many other vendors like Linksys, Netgear, etc.]]> http://seekingalpha.com/article/128687-smallcaps-flush-with-cash?source=feed#comment-542680 542680
On Mar 31 10:58 AM Jon Smirl wrote:

> Intellon (seekingalpha.com/symbo...) - Mkt cap $57M, cash
> $54M]]> Thu, 11 Jun 2009 14:44:39 -0400
On Mar 31 10:58 AM Jon Smirl wrote:

> Intellon (seekingalpha.com/symbo...) - Mkt cap $57M, cash
> $54M]]> http://seekingalpha.com/article/141232-high-end-home-market-still-has-further-to-fall?source=feed#comment-531844 531844 Thu, 04 Jun 2009 11:35:13 -0400 http://seekingalpha.com/article/141232-high-end-home-market-still-has-further-to-fall?source=feed#comment-531766 531766
There is a core difference between a house being temporarily rented while buyers are being sought vs permanently putting the house into the rental market. Some people I know are paying a house sitter to live in their $10M houses that is on the market. Does that make the house worth a negative amount? If so, I want to buy it.

The floor under high end housing is set by replacement costs. It is impossible to replace Tim's house for under $1,000,000. Don't confuse liquidity with value.

There have been times in history where replacement cost didn't hold, but those times are rare. For example, after the initiation of the US income tax many wealthy people lost their mansions in the Northeast. During the Great Depression these mansions were even abandoned. There has not been sufficient personal wealth again to trigger building houses of the magnitude seen in the Gilded Age. But Tim's house is far from being a Gilded Age mansion. ]]> Thu, 04 Jun 2009 10:58:19 -0400
There is a core difference between a house being temporarily rented while buyers are being sought vs permanently putting the house into the rental market. Some people I know are paying a house sitter to live in their $10M houses that is on the market. Does that make the house worth a negative amount? If so, I want to buy it.

The floor under high end housing is set by replacement costs. It is impossible to replace Tim's house for under $1,000,000. Don't confuse liquidity with value.

There have been times in history where replacement cost didn't hold, but those times are rare. For example, after the initiation of the US income tax many wealthy people lost their mansions in the Northeast. During the Great Depression these mansions were even abandoned. There has not been sufficient personal wealth again to trigger building houses of the magnitude seen in the Gilded Age. But Tim's house is far from being a Gilded Age mansion. ]]> http://seekingalpha.com/article/141232-high-end-home-market-still-has-further-to-fall?source=feed#comment-531547 531547
His interest rate is much more likely to be at 6.5% or higher for the jumbo and a second. He also had the pay the realtor a month's rent as commission on the rental.

High end rental markets are not liquid. They should not be used as a proxy for value. How many people do you know who with throw away $90,000/yr on rent? I think he did quite well to rent the house at $7,500, it could have easily gone down to $5,000.

The high end housing market is extremely local, I don't think you can draw conclusions from this. Moving a high-end house a half mile can take a million off from it's value.]]> Thu, 04 Jun 2009 09:17:58 -0400
His interest rate is much more likely to be at 6.5% or higher for the jumbo and a second. He also had the pay the realtor a month's rent as commission on the rental.

High end rental markets are not liquid. They should not be used as a proxy for value. How many people do you know who with throw away $90,000/yr on rent? I think he did quite well to rent the house at $7,500, it could have easily gone down to $5,000.

The high end housing market is extremely local, I don't think you can draw conclusions from this. Moving a high-end house a half mile can take a million off from it's value.]]> http://seekingalpha.com/article/128687-smallcaps-flush-with-cash?source=feed#comment-446461 446461 ITLN) - Mkt cap $57M, cash $54M]]> Tue, 31 Mar 2009 10:58:33 -0400 ITLN) - Mkt cap $57M, cash $54M]]> http://seekingalpha.com/article/124680-semis-downturn-which-companies-will-survive-part-2?source=feed#comment-417888 417888
AMD's ATI is also showing a lot of smarts. ATI is licensing their GPU design to ARM chip manufacturers. That will shut off another outlet for Nvidia.

Nvidia may have a couple more profitable years, but it is dead in the long run if it can't come up with a solution for this trend.

This is Moore's law at work. Each year Intel/AMD get more and more transistors to play with. That means that all of the chips around the CPU will get integrated into the CPU sooner or later. Remember the floating point coprocessor? It's pretty much extinct. GPU is on the same path.

Besides, it is way inefficient for GPU memory to be off on the PCIe bus, it belongs over on the main memory bus. Integrated GPUs will be better than the current standalone ones when this process reaches completion. ]]> Sun, 08 Mar 2009 10:52:31 -0400
AMD's ATI is also showing a lot of smarts. ATI is licensing their GPU design to ARM chip manufacturers. That will shut off another outlet for Nvidia.

Nvidia may have a couple more profitable years, but it is dead in the long run if it can't come up with a solution for this trend.

This is Moore's law at work. Each year Intel/AMD get more and more transistors to play with. That means that all of the chips around the CPU will get integrated into the CPU sooner or later. Remember the floating point coprocessor? It's pretty much extinct. GPU is on the same path.

Besides, it is way inefficient for GPU memory to be off on the PCIe bus, it belongs over on the main memory bus. Integrated GPUs will be better than the current standalone ones when this process reaches completion. ]]> http://seekingalpha.com/article/124689-how-about-adjustable-principal-mortgages-instead?source=feed#comment-417861 417861
Yes you could build this. It's not going to be a slightly higher rate. Either you buy a 30 year put (expensive) or multiple short term ones. The price of multiple short term ones is going to spike during a recession. Passing the cost of this on as a variable payment means that your payment will also spike upward in a recession.

You can't make the risk go away, somebody (lender, government, home owner) is paying a premium for it whether they know they are or not.

The perfect form of this is to put your down payment in a savings bond and rent. Now you don't have any capital risk.]]> Sun, 08 Mar 2009 10:33:20 -0400
Yes you could build this. It's not going to be a slightly higher rate. Either you buy a 30 year put (expensive) or multiple short term ones. The price of multiple short term ones is going to spike during a recession. Passing the cost of this on as a variable payment means that your payment will also spike upward in a recession.

You can't make the risk go away, somebody (lender, government, home owner) is paying a premium for it whether they know they are or not.

The perfect form of this is to put your down payment in a savings bond and rent. Now you don't have any capital risk.]]> http://seekingalpha.com/article/124245-government-s-new-5-year-arm-at-2?source=feed#comment-413904 413904
Mortgage deductions are capped so this doesn't help billionaires. People with fifteen year old mortgages are paying little interest, it is almost all principle repayment.

But wait, I know why they created this complex scheme - there's political power in picking who gets 'lucky' and who gets foreclosed.

The families really being hurt are the ones that put down large down payments and have lost all of it.

People who put little to nothing down are just renter equivalents being evicted, it happens every day. Where's the outcry over real renters being evicted and losing their homes? The only difference is the writing on the paperwork.]]> Thu, 05 Mar 2009 08:42:50 -0500
Mortgage deductions are capped so this doesn't help billionaires. People with fifteen year old mortgages are paying little interest, it is almost all principle repayment.

But wait, I know why they created this complex scheme - there's political power in picking who gets 'lucky' and who gets foreclosed.

The families really being hurt are the ones that put down large down payments and have lost all of it.

People who put little to nothing down are just renter equivalents being evicted, it happens every day. Where's the outcry over real renters being evicted and losing their homes? The only difference is the writing on the paperwork.]]> http://seekingalpha.com/article/123368-are-u-s-home-foreclosures-caught-in-a-never-ending-vicious-cycle?source=feed#comment-407819 407819
> The problem of housing is rather simple. At current prices there
> aren't enough buyers to clear the inventory.
>
> The solutions is rather simple as well. One can reduce the prices,
> reduce the inventory (by destruction, for instance), increase the
> purchasing power of the potential buyers, and/or increase the number
> of potential buyers.

I don't think that's what is happening here in Florida. There are plenty of buyers floating around. 95% of them are just waiting for the market to fall further.

There are brand new two bedroom, two bath condos with two car garages here for under $200,000 and no buyers. Same condos were $250,000 last year. Buyers think they will be $150,000 next year.

I suspect those condos cost more that $150,000 to build. The market clearing prices here may be below construction costs.

Why do you want to buy now if you expect properties to be 25% lower next year? The rational thing to do it rent. The market is flooded with rentals and they are priced very attractively.]]> Sun, 01 Mar 2009 10:41:05 -0500
> The problem of housing is rather simple. At current prices there
> aren't enough buyers to clear the inventory.
>
> The solutions is rather simple as well. One can reduce the prices,
> reduce the inventory (by destruction, for instance), increase the
> purchasing power of the potential buyers, and/or increase the number
> of potential buyers.

I don't think that's what is happening here in Florida. There are plenty of buyers floating around. 95% of them are just waiting for the market to fall further.

There are brand new two bedroom, two bath condos with two car garages here for under $200,000 and no buyers. Same condos were $250,000 last year. Buyers think they will be $150,000 next year.

I suspect those condos cost more that $150,000 to build. The market clearing prices here may be below construction costs.

Why do you want to buy now if you expect properties to be 25% lower next year? The rational thing to do it rent. The market is flooded with rentals and they are priced very attractively.]]> http://seekingalpha.com/article/123368-are-u-s-home-foreclosures-caught-in-a-never-ending-vicious-cycle?source=feed#comment-407629 407629 1) Never could afford it. You are a renter equivalent, you don't pay your rent you get evicted.
2) Unexpected income loss. Temporary help should benefit these people. Aid them via increased unemployment benefits.
3) My house is underwater.

The last group is the one making me mad. I know of two couples that purposely triggered foreclosure because they were underwater. They were both able to make their payments, they just decided they didn't want to any more since they weren't making money.

To get a feedback loop there has to be a cause and effect. Declining house values do not impact the first group. Their payments were fixed when they signed the mortgage. This group can contribute to downward prices, but there's no feedback. Changes in neighborhood values don't change the initial fact that this group never could make their payments to begin with. This group was on a path to lose their home from the day they signed their mortgage.

The second group can also contribute to downward prices but again there's no feedback. For the most part the job loss that is getting this group in trouble is not related to the decline of house prices in their neighborhood. There's no feedback other than a weak one via the whole economy.

The third group has an extremely high feedback component. By purposely triggering foreclosure they send prices in their neighborhoods down further. They also talk to their neighbors and brag about how they beat the system and got out of underwater loans. They encourage their neighbors to do the same by telling them how stupid they are to continue making payments on underwater loans.

The problem in the diagram is the "more negative equity" linkage. That linkage only impacts group three. There are no margin calls on home loans, that link is a psychological one.

]]> Sun, 01 Mar 2009 08:44:16 -0500 1) Never could afford it. You are a renter equivalent, you don't pay your rent you get evicted.
2) Unexpected income loss. Temporary help should benefit these people. Aid them via increased unemployment benefits.
3) My house is underwater.

The last group is the one making me mad. I know of two couples that purposely triggered foreclosure because they were underwater. They were both able to make their payments, they just decided they didn't want to any more since they weren't making money.

To get a feedback loop there has to be a cause and effect. Declining house values do not impact the first group. Their payments were fixed when they signed the mortgage. This group can contribute to downward prices, but there's no feedback. Changes in neighborhood values don't change the initial fact that this group never could make their payments to begin with. This group was on a path to lose their home from the day they signed their mortgage.

The second group can also contribute to downward prices but again there's no feedback. For the most part the job loss that is getting this group in trouble is not related to the decline of house prices in their neighborhood. There's no feedback other than a weak one via the whole economy.

The third group has an extremely high feedback component. By purposely triggering foreclosure they send prices in their neighborhoods down further. They also talk to their neighbors and brag about how they beat the system and got out of underwater loans. They encourage their neighbors to do the same by telling them how stupid they are to continue making payments on underwater loans.

The problem in the diagram is the "more negative equity" linkage. That linkage only impacts group three. There are no margin calls on home loans, that link is a psychological one.

]]> http://seekingalpha.com/article/122896-can-homeowners-arbitrage-the-mortgage-subsidy?source=feed#comment-404812 404812 Thu, 26 Feb 2009 14:13:21 -0500 http://seekingalpha.com/article/122536-a-simple-housing-fix-government-buy-down-of-mortgage-balances?source=feed#comment-403070 403070 Wed, 25 Feb 2009 11:29:46 -0500 http://seekingalpha.com/article/122536-a-simple-housing-fix-government-buy-down-of-mortgage-balances?source=feed#comment-402982 402982
Increasing this deduction would cause many low income home owners to pay no income tax. If eliminating your income tax liability isn't enough to save you, you really can't afford the house you are in.]]> Wed, 25 Feb 2009 10:48:48 -0500
Increasing this deduction would cause many low income home owners to pay no income tax. If eliminating your income tax liability isn't enough to save you, you really can't afford the house you are in.]]> http://seekingalpha.com/article/121930-you-want-to-save-the-housing-market-don-t-fight-foreclosures?source=feed#comment-398985 398985
Get a clue, if you " liquidated savings, 401k, credit cards, etc," to make payments on a thirty year mortgage you can't afford the property. Do yourself a favor and take a quick foreclosure; you'll be better off in the long run. Get out, save your cash, and buy something affordable.

]]> Sun, 22 Feb 2009 15:23:55 -0500
Get a clue, if you " liquidated savings, 401k, credit cards, etc," to make payments on a thirty year mortgage you can't afford the property. Do yourself a favor and take a quick foreclosure; you'll be better off in the long run. Get out, save your cash, and buy something affordable.

]]> http://seekingalpha.com/article/121930-you-want-to-save-the-housing-market-don-t-fight-foreclosures?source=feed#comment-398747 398747
People who put down little to nothing and are crying about being underwater need a quick and efficient foreclosure. If you have nothing down on the house you're just a renter. If you can't make your rent payment you get evicted. The government doesn't do cram downs on landlords when the renter can't pay, why should they do a cram down on a bank when a renter equivalent can't pay? The government evicts renters that can't pay. You have nothing invested in the house so you have nothing to lose except the fact that you are living in something that you can't pay for, go move into something that you can afford. You've probably made money from the process by living rent free during the foreclosure.

The people that need help are the ones that invested their own money in a large down payment. If you've lost your entire down payment and you're about to be foreclosed, then you've really been hurt. Temporary help to people in this class is a good thing. Because of the down payment this class is committed to the property. You can be sure that this class didn't lie to much about their ability to pay. After all, if they couldn't pay they were going to lose their down payment.

My favorite proposal helps both groups. Temporarily allow the tax deduction of 200% of interest paid. Congress could implement this tomorrow. The costs of it are known exactly from IRS data. It can be repealed or reduced at anytime. The greatest benefit from this automatically falls on to the people paying the high interest rate who recently bought their home. People who have 20 year old mortgages are mostly paying principle, not interest.

The key to this solution is that you have to pay the interest to get the double deduction. This will increase the payment flow to the banks and get them out of their mess. It will also sort of committed owners from renter equivalents. If you still can't hang on to your house with a 200% interest deduction, they you truly can't afford it.]]> Sun, 22 Feb 2009 12:47:49 -0500
People who put down little to nothing and are crying about being underwater need a quick and efficient foreclosure. If you have nothing down on the house you're just a renter. If you can't make your rent payment you get evicted. The government doesn't do cram downs on landlords when the renter can't pay, why should they do a cram down on a bank when a renter equivalent can't pay? The government evicts renters that can't pay. You have nothing invested in the house so you have nothing to lose except the fact that you are living in something that you can't pay for, go move into something that you can afford. You've probably made money from the process by living rent free during the foreclosure.

The people that need help are the ones that invested their own money in a large down payment. If you've lost your entire down payment and you're about to be foreclosed, then you've really been hurt. Temporary help to people in this class is a good thing. Because of the down payment this class is committed to the property. You can be sure that this class didn't lie to much about their ability to pay. After all, if they couldn't pay they were going to lose their down payment.

My favorite proposal helps both groups. Temporarily allow the tax deduction of 200% of interest paid. Congress could implement this tomorrow. The costs of it are known exactly from IRS data. It can be repealed or reduced at anytime. The greatest benefit from this automatically falls on to the people paying the high interest rate who recently bought their home. People who have 20 year old mortgages are mostly paying principle, not interest.

The key to this solution is that you have to pay the interest to get the double deduction. This will increase the payment flow to the banks and get them out of their mess. It will also sort of committed owners from renter equivalents. If you still can't hang on to your house with a 200% interest deduction, they you truly can't afford it.]]> http://seekingalpha.com/article/121547-the-mortgage-rescue-plan-needs-to-differentiate-between-types-of-borrower-trouble?source=feed#comment-395869 395869 Saving the Housing Market By Speeding Up Foreclosures

"It seems especially cruel to push foreclosures because no one wants people to lose their homes. But, at some point, the system must take into account the fact that many of these people cannot afford their houses. The irony of allowing current owners to stay where they are is that they will never really "own" a home. They will remain in houses where they are very unlikely to be able to pay off the principle."

www.time.com/time/busi...]]> Thu, 19 Feb 2009 20:31:23 -0500 Saving the Housing Market By Speeding Up Foreclosures

"It seems especially cruel to push foreclosures because no one wants people to lose their homes. But, at some point, the system must take into account the fact that many of these people cannot afford their houses. The irony of allowing current owners to stay where they are is that they will never really "own" a home. They will remain in houses where they are very unlikely to be able to pay off the principle."

www.time.com/time/busi...]]> http://seekingalpha.com/article/121547-the-mortgage-rescue-plan-needs-to-differentiate-between-types-of-borrower-trouble?source=feed#comment-395865 395865
Heck, I'd be rich of could eliminate half of my mortgage payment. Too bad I was stupid enough to put down 20% and now I've lost my entire down payment. I've obviously lost more cash than the person with the option ARM, that's why the government should take even more from me and give to that poor person who can't make their already too low payments.

All my stocks are way underwater, where's the government program to make me whole again?
]]> Thu, 19 Feb 2009 20:25:49 -0500
Heck, I'd be rich of could eliminate half of my mortgage payment. Too bad I was stupid enough to put down 20% and now I've lost my entire down payment. I've obviously lost more cash than the person with the option ARM, that's why the government should take even more from me and give to that poor person who can't make their already too low payments.

All my stocks are way underwater, where's the government program to make me whole again?
]]> http://seekingalpha.com/article/120698-foreclosure-moratoriums-it-s-time-to-get-real?source=feed#comment-389768 389768 Sun, 15 Feb 2009 18:11:04 -0500 http://seekingalpha.com/article/119379-stimulate-spending-with-no-mortgage-payments-for-a-year?source=feed#comment-381220 381220
Stimulus bill is a giant pile of wasted pork. Obviously Nancy Pelosi knows how to spend my money better than I do. We needed that $1T to fix Social Security.]]> Mon, 09 Feb 2009 12:49:08 -0500
Stimulus bill is a giant pile of wasted pork. Obviously Nancy Pelosi knows how to spend my money better than I do. We needed that $1T to fix Social Security.]]> http://seekingalpha.com/article/119181-a-housing-thought-experiment?source=feed#comment-379841 379841 Sun, 08 Feb 2009 10:33:03 -0500 http://seekingalpha.com/article/118423-better-to-rent-than-buy-a-home?source=feed#comment-375666 375666 Wed, 04 Feb 2009 12:46:51 -0500 http://seekingalpha.com/article/118051-how-to-fix-america-s-housing?source=feed#comment-374603 374603
It is the perfect formula for immediate and effective stimulus. Absolutely zero waste from friction.

Of course it doesn't let the politicians pick and choose who wins and who loses. And we know that's more important than helping the general public. ]]> Tue, 03 Feb 2009 13:12:16 -0500
It is the perfect formula for immediate and effective stimulus. Absolutely zero waste from friction.

Of course it doesn't let the politicians pick and choose who wins and who loses. And we know that's more important than helping the general public. ]]>