Thursday, March 30, 2006

Lenders Digging In

Two words; “lenders nervous.” Truth be told; lenders scared. Not coincidentally I had two friends call yesterday both complaining about their financing falling through. First one paid $5500 for the banks’ appraiser on a small commercial property and when it made the numbers the bank suddenly added new conditions. Conditions based upon the banls’ intimate knowledge of their position designed to make them balk. She told them straight out, you just don’t want to make this loan right? They admitted it off the record. Second in a house sharing arrangement for a dozen years, executor and a tragic roommate death. The bank just said no at the last minute. I told them both the banks are slowing the velocity of lending and building warchests against the flood of defaults. The agreed from their frontline observation points.

Tuesday, March 28, 2006

More On Affordable

One reason we are so very expensive is because we have stricter "anti-sprawl" rules than even Portland, Oregon. Our problem is that to relax the rules would flood the place until it looked like the San Fernando Valley or Orange County. In FAct 40 years ago Orange and Ventura Counties were nearly identical yet today Orange has 4 times the population, higher prices, and a clearly worse quality of life so i don't feel bad about our chosen path. I do feel bad for those that cannot afford to live here but I also own waaaay out in San Bernardino rental property that I lease at reasonable rates. The issue is building where there is already buildings. RPPI says in #320;
"The real problem is government restrictions on supply. Supply has not kept up with demand due to these artificial restrictions. One recent study found that 90 percent of the difference between physical construction costs and the market price of new homes can be attributed to land use regulation.
The solution is to allow more construction."
There already exists a market mechanism to address affordable housing. When housing becomes unaffordable, prices fall and time on market increases. What RPPI proposes -instead- is that government not only get out of the business of manipulating the market but that government also get out of their actions regulating for an orderly market abandoning supply and demand in exchange for demand only markets. This, in my opinion, ignores the reality that zoning and land use regulation needs to exist for the protection of -existing- land uses and land owners. Turning this on its' head to become a tool of potential owners or uses is antithetical to the usual positions of RPPI.
Housing is more affordable than ever since ownership is at all time highs and demand is the highest in two generations. Were housing unaffordable prices would be falling and vacancies high and ownership low.
There is a unique and transitory demographic effect that distorts the picture. Robert explains it all and then some: People living longer means taking longer to roll over -used- housing. I say -used- not -older- because the two are recently divorced. Trust me, there are 20 houses in Massachusetts, stretching from Pittsfield to P-town owned by friends and mostly family that have an average owners' age of 65 plus. In the past these would be on their way to the first time buyer market. Sorry, mom still plans on "commuting" twice a year between golf and tomatoes in Longmeadow, MA Memorial Day to Labor Day and golf with sailing the rest of the year in Venice, FL. Aunt Debby is tri-locating, Framingham, Maine, FL. Uncle Jimmy, Framingham, Newport, RI, extensive travel. Aunt Kathy, Worcester, Waterville Valley (NH), Falmouth, whim (I think). Uncle Dick, West Springfield and Venice FL.
Affordable housing initiatives have only one outcome; less, more expensive housing.
Planners will NEVER understand that people don't want to live and work in the same place.
"The quest for a strong regional authority has been the Holy Grail for planners." Says it all.
" As traffic gets worse, I would venture to say that closer in locations get better [more attractive]." Crap.
"The mortgage deduction certainly discourages renting." More crap.
Sometimes it seems to me that people don't want to understand these issues.
The American Dream is a constantly evolving ideal that in practice nearly always requires compromise. The premise of PTAD is that there be no structural impediments to those goals. A pure "free market" does not and should not exist in the public realm of community land use delineation.
"Affordable Housing" has become the bogeyman of the NUTSo and SmUGLers (New Urbanist/Transit Supporters, Smart Urban Growth Lovers) because sprawl has been effectively negated as a threatening term. Sprawl has been defanged in no small part by several members of this list.
"Affordable Housing" is going to be especially difficult to unmask as nothing more than the latest anti-suburban, high density, Pyonyang Transit scheme. There's a subtle tinge of racism that makes it the third rail of planning. Housing is seen as more of a right than transportation. "Affordable" is not as easily ridiculed as "Smart Growth" for instance. The secret worldwide urban cabal is also getting more sophisticated in their presentations. Every time we beat them back with logic and facts and democracy they try another tactic. They only need to slip one measure past us. Eternal vigilance is the burden of freedom.
There is a NUTSo -theory- that affordable housing reduces the need for poorer people to commute long distances to their jobs. Bull. If that's all that was necessary then mixed income housing would be able to have narrower streets and less parking and less transit service, etc. Lowering the price only causes people to buy as much as they can afford fueling the rise in larger homes. You will notice also that mixed income is never mentioned by the NUTSos. This is because Neo Trad/New Urb is very expensive and even at very expensive the municipal costs are not covered by the higher taxable basis. "Affordable Housing" for the SmUGler crowd means subsidized housing. Urban Planners want to do for housing what they did to transit. Transit was profitable and private until the affordable transit crowd tried to impose unrealistic pricing schemes borne on the back of the private industry and public purse. See the similarity? That's a real way to scare the crowd.
People deserve -a- place to live BUT people do not have a right to live -any- place.
We do this a lot. We select based on economics, safety, concern for the environment, and undue burden on other people. We are an empty nation and most of the nation is emptying out even more. The problem we face is that we cannot (yes, cannot) accommodate everyone who want to live in places like SoCal because the people who want to move here will not (yes, will not) pay their share of the costs of their accommodation. There is no affordable housing crisis for instance, there is a surplus of people who are unwilling to pay for the housing they think they deserve. There are similar parallels in transit and roads funding. I think we need to increase gas excise taxes to prepare for the upcomming round of urban highways that we've already filled up with demand before adding capacity.
Some on this list can tell stories about what I think of planning as a "profession." Planners are not familiar with the scientific process or if they are they reject it as too inconvienient. The word science is tacked on to lots of things like boxing and planning. In Boxing, where the word is appropriate, one can set up a hypothesis and perform experiments and enumerably compare results with known constants and variables and margins of error. Planning cannot do any of these things in a putatively free society so they revert to chicken guts and portents as interpreted by shamans. They have shown themselves to be resistant to introducing science into the processes so important to us all.
Real science starts with hypotheses and collects data and produces conclusions. Planning is the Church, professionalism is Gallileo.
Planning is to science what astrology is to astronomy.
Limiting housing can be neither onerous nor coercive. Zoning density restrictions enjoy a long acceptance in this country. Economic hurdles to more residences in a neighborhood than the existing owners are willing to accept are even more respected for both their legitimacy and efficacy.
We are not talking about buying an empty lot in a residential area and building a house. We are talking about public funds buying an empty lot in a residential area and allowing a zoning change and building an apartment building.
We are not talking about buying an empty lot in a residential area and building a house. We are talking about buying an empty lot in a residential area and being allowed a zoning change and building a an affordable house with public subsidies.
I fail to see why residence location should be any different from any other "investment." I use "investment" in quotes to highlight that this means far more than money. When one buys into any system there is a reasonable expectation that the rules that restrict will also protect. In the last 40 years that has changed so that now they only restrict.
I've mentioned before that my neighborhood is massively protected by money and many layers of interlocking laws. The population is most certainly limited and affordable housing is not going to happen here. The difference is that those constraints are neither onerous nor coercive nor arbitrary.
This is a case of swamping the lifeboat. What in the heck is wrong with saying "use the next boat." The answer is obvious and odious. "We don't want that -same- as what you've got, we want what you have. If we cannot have it at the price -we- like then -we- will drag you down." Of course I'm talking about Sec 8 and affordable housing and "fair share", upzoning, etc.
The largest threats to the US historically high homeownership rates are in the following order:
Government intervention. Bias towards urban solutions. Using housing to address social justice or social equity issues. The false assumption that sprawl is an anti-affordable factor.
Govt intervention, with all good intentions doesn't permit affordable and profitable housing anymore than it permits adequate but unencumbered roads or transit sited for apolitical technical reasons. We don't let safe, decent shelters be built. We insist on massive public dedications of land, very high construction standards, etc. There may be good reasons for these things, strict fire codes for instance, make a home cost more but saves the municipality fire dept expenses. Same thing when the front yard is "taken" for wide tertiary streets, greenstrips, sidewalk and now the new taking, underground utility rows that don't lay in the "public" row.
Affordable housing is easy. Lay down some streets and stand back. But like I said affordable housing is only the wedge issue urban agendaists are using to force social changes to their liking.

Equity Evaporation Phase I

The 42% of recent buyers who put no money down when buying their homes have no equity.

They wish. If they bought a used home they paid 7-11% in transaction costs. If they bought new they are facing new homes 60, 80, $120,000 cheaper. Taxes due in 2 weeks and their home is a year older. Upside down, underwater... pick your phrase. Personally I favor; Tango Uniform. [If you have to ask you don't want to know. If you already know you are laughing too hard to reply anyway.]

Monday, March 27, 2006

Theme Song 2007

That’s great, it starts with an earthquake, birds and
Mortgages, a housing bubble and David Leareh is not afraid
Eye of a hurricane, listen to your flip churn - world
Serves it’s own needs, dummy serve your own needs. feed
It off a HELOC, grunt, no, strength, climb the property ladder
Start to clatter with fear fight down from the heights. wire
In a fire, representing seven games, a government
For hire and a condo site. left of west and coming in
A hurry with the foreclosures breathing down your neck. team
By team realtors baffled, trumped, tethered cropped
Look at that huge inventory! fine, then. uh oh,
Overflow, population slows, common areas, but it’ll do. save
Yourself, serve yourself. world serves it’s own needs,
Listen to your equity bleed dummy with the rapture and
The revered and the right, right. you vitriolic,
Patriotic, slam, fight, bright light, feeling pretty

It’s the end of the world as we know it
It’s the end of the world as we know it
It’s the end of the world as we know it and I feel fine

Six o’clock - tv hour. don’t get caught in co-op
Towers. slash and burn, return, listen to your ARM
Churn. locking in, uniforming, book burning, blood
Letting. every motive escalate. automotive sales decimate
Light a candle, light a votive. step down, step down
Watch your heel crush, crushed, uh-oh, this means no
Fear cavalier. renegade steer clear! a spring pop,
Tournament, a tournament of lies. offer me solutions,
Offer me alternatives and I decline

It’s the end of the world as we know it (it’s time I had some time alone)
It’s the end of the world as we know it (it’s time I had some time alone)
It’s the end of the world as we know it and I feel fine (it’s time I had some time alone)

I feel fine

(repeat chorus)

An Administrative Solution

"Freeze! Police! You're under arrest for bank robbery."
"But officer, I'm merely making and undocumented withdrawl."
[perplexed] "Well, um... you are under arrest for that weapon. Put down the knife and put up your hands."
"But officer, this folding letter opener is necessary for self defense because I come from a poor neighborhood."
"Okay, wiseass then you are under arrest for tresspassing."
"You know better than to ask about my immigration status officer."
"Damn, you are correct. Is that your car in the handicap spot then?"
"Technically it isn't my car as I just borrowed it for an undocumented test drive but yes, I parked there."
"Then I'm gonna write one huge ticket."
"Unfortunately officer I have an undocumented disability..."

The Moral Imperative

It is profoundly immoral for the US to continue to tolerate the constant dimunition of the very best, brightest and most productive human capital our neighbors to the south can offer. By allowing these people to contribute their efforts to our quality of life we are condemning yet another generation in the lands they leave behind to lives of squallor and oppression. The only moral thing to do is to say no to these illegal activities and help prevent these people from making things worse in their homelands.

Allowing our neigbors to dump, excuse me, export, their social unrest institutionalizes their dysfunctional governance and economy. The only morally supportable course of action is stop out current exploitive worker policies and complicity in propping up corrupt international practices.

Our moral course is clear but there exist powerful undercurrents of racism that wish to allow the current situation to persist.

Got that? Not only is tacit support for the current illegal immigration situation a crime, it is immoral. Let the Cardinal excommunicate me.

Sunday, March 26, 2006

Illegal immigrants rights..

You have the right to remain silent and refuse to answer questions. Do you understand?
Anything you do say may be used against you in a court of law. Do you understand?
You have the right to consult an attorney before speaking to the police and to have an attorney present during questioning now or in the future. Do you understand?
If you cannot afford an attorney, one will be appointed for you before any questioning if you wish. Do you understand?
If you decide to answer questions now without an attorney present you will still have the right to stop answering at any time until you talk to an attorney. Do you understand?
Knowing and understanding your rights as I have explained them to you, are you willing to answer my questions without an attorney present?

Friday, March 24, 2006

Theme Song 2006

I can’t believe the news today
Oh, The NAR can't close our eyes and make it go away
How long...
How long before we sell this house?
How long? how long...

’cause tonight...we pay two mortgages for one

Broken promises at our children’s feet
HELOCs strewn across the dead end street
But I won’t heed the battle call
It puts my loan up
Puts my loan up against the wall

Sale day, bloody sales day
Sale day, bloody sales day
Sale day, bloody sell day (Sale day, bloody sell day...)
(allright lets sell!)

And the resets have just begun
There’s many lost, but tell me who has won
The trench is dug around our flips
And mothers, children, brothers, sisters torn apart

Sale day, bloody sale day
Sale day, bloody sale day

How long...
How long must we market this pig?
How long? how long...

’cause tonight...we can be as one

Sale day, $200k off sale day (tonight)
Sale day, $250k off sale day (tonight)
(come get some!)

Wipe the buyers fears from your eyes
Wipe your FICA fears away
Wipe your bubble tears away
I wipe your fears away
(Sell day, bloody sell day)
I wipe your blood shot eyes
(Sell day, bloody sell day)

Sell day, bloody sell day (Sell day, bloody sales day)
Sell day, bloody sell day (Sell day, bloody sales day)
(here I come!)

And it’s true we are immune
When fact is fiction and tv reality
And today the millions cry
We flip and flop while tomorrow they die

The real battle yet begun (Sell day, bloody sales day)
To claim the victory Lereah has won (Sell day, bloody sell day)

Saturday, March 18, 2006

Blockbuster Movie Title 2006

"I Know What You paid Last Summer."

It's Discount Transit Month!

Here's how it works. All infrastructure investment/expansion and
operating subsides (if any) are suspended on the first day of this
theoretical month. Likewise operating charges are adjusted to
accurately reflect operating costs only. There are, of course, a
few "gray areas." This is only a thought experiment so we can wing
it. Feel free to make changes and rerun the test if you wish.
Examples: The electricity to run traffic signals is a cost outside
of strict operating costs. So are police services that patrol
highways, etc. For bus comparison this is a wash, but for a subway
or airport/airline or private r-o-w rail system they generally pay
for the electricity and the security as part of their operating

What would happen? Well, for one thing every transit ticket price
in the US increases anywhere from 13% to 1000%. For another, the
cost of fuel drops from $1.50/gal to around $0.95/gal. Tolls drop to
essentially zero. It would probably be more expensive to collect
most tolls than to just "eat" that miniscule portion that goes to
operating costs. For ferry boats and critical path bridges, etc. it is
probably still a good idea.
Oh, by the way, that car payment? Skip it. After all in this
experiment we aren't going to pay capital costs for the month.
Transit riders? Sorry, you don't pay for your train/LR/Bus/whatever
-now- so you don't get anything in the experiment either. Remember
this is a theoretical attempt to compares apples-apples. Wait for
the other 11 months in the year when the current system returns and
you get your free trains/LR/buses/whatever.
So, day two. How are we doing? Well the NY subway system shouldn't be
too badly affected. Its only raised fares 13%. But wait, all the
feeder systems from busses to commuter rail have raised ticket
prices. Let's guess that greater NYC transit operates at twice the
national average farebox recovery? That is 2 x 20% or 40% farebox
of operating costs. Their fares are raised 150%. Any guesses as to
systemwide ridership? Down, way down and only the second day. The
much vaunted 87% farebox recovery of NYC subways relies on far less
financially solvent sources for its ridership. Besides almost 2 billion of
NYCTAs farebox revenue is bridge tolls. Oh, and for auto
drivers, the tolls are free and the car payment is in their pocket
and gas is at 95cents/gal. [They're going to Disneyworld!] Actually
they are clogging the streets. Regionwide gridlock. You thought
this was going to be a one-sided experiment. Obviously, even those
who don't use transit benefit from the subsidy they pay to support
it. The point of this experiment is to make is absolutely obvious
to anyone that beyond question private surface road travelers pay
MORE than their operating costs AND subsidize the operating costs of
public transit.
What about government? Very interesting. Since we aren't working
on any infrastructure, using the county roads employees as overpass
footings is out of the question. I'll let someone else
prognosticate. Tax revenues will shift dramatically but so will
What about marginalized transit users? Well for one there will be
a lot of people who can (this month only) afford private auto travel
without the expense of car payments and with 95 cent gas and minimal
tolls and of course the much cheaper cost of goods delivered by
truck. Goods delivered by truck is just about everything so the
consumer price index should look pretty good this month. What about
the others? Tremendous inconvenience at the very least. Luckily
this is only an experiment. We owe it to the least advantaged in
society to provide a minimum of services and currently public
transit is how we provide mobility. Same goes for ADA riders. At
first I thought of charging them the breakout cost of their portion
of public transit operating cost but reconsidered. One, disability
is not a criteria for separate treatment anymore than race or gender
is. Second, this is an operating cost experiment. If anything
disabled ridership, although an expensive capital investment, is
probably cheaper to serve because of their time and destination
Air travel? Again a gray area appears, air traffic controllers are
their version of traffic signals. But again their portion of
operating cost is vanishingly small. Some 40% of aircraft total
expenses is fuel. Their taxes are not as high as at the pump but
still considerable. I'd guess that removing fuel taxes would
translate to 8% ticket price reductions, if passed on. Oh, and that
nasty little ticket tax? Score another 10% for the air traveler.
Would these be passed on? In a month when the airlines can skip
their purchase payments and lease payments, I suspect they would
feel at least that generous. Don't forget the hated PFC charges,
they all go to infrastructure so this month they are gone.
Obviously this cannot go on very long. Air travel has tremendous
capital costs and unlike transit, the government doesn't pick up the
airlines' tab for new vehicles. Autos, busses and trucks are very
hard on their r-o-ws. The need for ongoing capital maintenance and
investment is a necessity for every mode to remain at peak
effectiveness, indeed operational.
The point of the experiment, however, should stay around for good
reasons. I know it won't be but it should be clear that it is a
canard to talk about operating costs when discussing transit. The
honest number is total cost. After all, it should be clear from
this experiment that the operating cost of personal autos is vastly
cheaper and more efficient. Operating costs vs. operating costs
comparisons that is...
And remember a month without transit subsidies is a month without

Friday, March 17, 2006

California Gasoline

The BTS uses 124,700BTU/gallon of regular (unleaded) gasoline in its' national energy calculations. [N.B. Lead is immaterial
regards energy content.] Unfortunately, Kalifornia with our 13% of the entire population and over 15% transportation share doesn't get "real" gas. We get liberal gas. Pun intended. You know why Kalifornia gas generates 10% less pollution? Yep,
because Kalifornia gas has 13% less energy content. Rocket science. The difference is made up with oxygenates and nonenergy content additives. For the less technical, oxygenates are air. Yep, what grocery stores do to ice cream, Kalifornia does to gasoline; fluff it up with air. Do this with ice cream and the District Attorney prosecutes. Do this with gasoline and you get to charge EXTRA for the effort involved. This does reduce certain bad byproducts such as NOx but it also increases the two major greenhouse gases H2O and CO2. Diesel is not affected by the Kalifornia oxygenate regulations. The BTS does not prorate but uses the FTA, APTA, FHWA and other sources for diesel.

The result is; were we to prorate for actual Kalifornia efficiency rather than the assumed efficiency would be another 15% advantage to POV autos over others on specific energy consumption.

Tuesday, March 14, 2006

Cantrell II

There's no discussing this with peak oilers. They not only won't listen, they've been defensive about being so wrong for so long that they can't even keep a civil tongue. We've extracted more oil since 1975 than was known to exist in 1975 and still have as many years left as we had in 1975. Being wrong for three decades has done to them what slot machines do to gambling addicts. They think they are "due."

The peak oliers have been saying that there have been no significant discoveries for many years and just this morning we find out about the discovery of what might be the worlds second largest oil field and the reaction is "yeah, but..." There's just no pleasing them. It is a religion, their gods are Campbell and Hubbert. It's only been a half a day since the worlds supply of oil has been extended by more than the wildest maximum undiscovered oil possible according to the peak oilers and they are already calling everyone who has been absolutely correct since 1855 idiots. It's 2006. The die we toss once a year now has 152 sides and only on pip. Someday the peak oilers will be correct. When that time comes we may have a few as 75 years to move away from oil dependency. I'm not going to hold my breath waiting for that that day and I'm certainly not going to sell my SUVs and move back into a 4 story cold water walkup tenement high density crime crib rabbit warren when it does. Get real. Better yet, get civil.

Energy and the Built Environment

Kunstler the Hustler continues his march to the "long emergency" repeating the mantra that the suburbs are held together with subsides, secret zoning and most of all unsustainably low energy prices. I've always thought of hima as the crazy cousin who is fun to have over and listen to his wacky stories every once in a great while but lately he's become shrill and repetitive and increasingly immune to correction.

Rather than Kunstler's prediction of Ottoman Empire in decline, energy prices will collapse back to long term trends not with new capacity but with even a modest drop in demand. Right now the refineries are near capacity but there are massive structural impediments to expanding gapacity. The oil refiners know that the cartel can drop oil to $25 any time they wish so they have to base investment decisions, $10s of billions on that price. THe Us and other 1st world nations impose monster regulations as well. Several OPEC nations are getting into the business "upchain" building refineries themselves and planning to ship finished product instead of crude. Who would go up against that market? Besides when you are a refiner with capacity constrains you can charge more, much more. Regardless of the potential investment returns expanding capacity REDUCES your profitability. Nope, increases in renining capacity are not going to happen beyond the long term trend in demand and based on the economics of $25 oil. We need a demand side solution to this usurious sitituation.

This from a US Army Corps of Engineers report dated Sept 2005 "Domestic production of both oil and natural gas are past their peak and world petroleum production is nearing its peak."

Gee, now where have we heard this before? Oh yes:

* "Hurry, before this wonderful product is depleted from Nature's
laboratory!"--advertisement for "Kier's Rock Oil," 1855

* ". . . the United States [has] enough petroleum to keep its kerosene
lamps burning for only four years . . . "
--Pennsylvania State Geologist Wrigley, 1874

* ". . . although an estimated two-thirds of our reserve is still
in the ground, . . . the peak of [U.S.] production will soon be
passed--possibly within three years."
--David White, Chief Geologist, USGS, 1919

* " . . . it is unsafe to rest in the assurance that plenty of
Petroleum will be found in the future merely because it has been in the
past." --L. Snider and B. Brooks, AAPG Bulletin, 1936

$60 oil has gone on this long because the consuming economies have been so strong that they haven't tipped into recession. That's all. No other reason. None. We aren't "running out of oil" and everyone who says that $60 oil is their evidence of scarcity had damn well better be ready to shout from the rooftops that trillions of barrels will be generated spontaneously should the price revert back to $40 because it is the same argument.

Fannie & Freddie; Give It a Rest, Let's Move On

“The Debt Securities, together with interest thereon,
are not guaranteed by the United States and do not
constitute a debt or obligation of the United States
or of any agency or instrumentality thereof other
than Fannie Mae.”

Fannie Mae, “Universal Debt Facility Offering Circular,” January 22, 2002.

Okay, can we deal with reality and not tinfoilhat stuff?

Realtor® Phrases in 2006

"The Sacramento Bee reports the worse numbers they can find."

"If you understood what you were saying the first time around, why didn’t you say it?"

"Lucky you, someone’s losing equity, and some of my colleagues are struggling in their business."

- John Lockwood, Realtor@, Buddhist®

Now, That's Just Not Right

'Landscraper' going up near Platte

...An ambitious, multiphase, 15-acre riverfront development that encompasses residential, office and retail in the emerging River North neighborhood. Heavy equipment operators are scraping the site to make way for a sleek, 550-foot-long, four-story "landscraper" that will hug the ground and play off the diagonal of the Platte River. Had it been built vertically as a skyscraper, the building would have climbed 55 stories. Read more at;

This is what happens when planner fads get out of control. Laugh? Cry? Throw up your hands or just plain old throw up?

Not Intended As Investment Advice ;-)

A fellow blogger at asks semi-rhetorically:
Pretend you inherited a laundry mat (a prosaic, non-glamorous, business) that was losing $6,000 per month and that couldn’t be fixed. How long would it be before YOU shut it down?

Shut it down!? Heck, this is a great investment opportunity. Everyone has to wash their clotes somewhere and they aren't making any more water you know. Laundos®! That's the ticket. Instead of renting each machine, I'll sell them individually to investors. Each machine owner will pay for the mechanism and I'll charge a monthly Laundo Associaton Fee (LAF) for common area expenses and management. Owners can optionally contract with me to sublease their machines, subject to blackout dates in a LaundoTel® type arrangement!

Wednesday, March 08, 2006

Realtor® Phrases in 2010

"Tell you what, you buy the fries AND the chili and I'll cover the cost of the cheese."

Future Realtor® Job Prospects

"I used to be a Las Vegas Realtor®... Now I'm a Private Party Hostess®." {giggle, giggle} "Wanna invest in some inflationary assets?" {giggle, giggle} "I know, you must be one of those guys that expects a Soft Landing. That's extra, you'll have to talk to my Broker®." {giggle, giggle} "Wanna go back to my place and go over some escrow papers?" {giggle, giggle} "Act now before the price goes up." {giggle, giggle} "There are other interested parties you know. Why just this morning there was a nice young couple that was very interested."


Repeat after me; "All energy is fungible." Is there any discussion on this point? Every joule that comes from nuclear or solar or gains in efficiency or deep sea hydrates or room temperature superconduction or regenerative interial recovery is a joule less of whatever is the most expensive energy alternative. When we stop using oil and natgas for super inefficient electric point source generation those geopetrol commodities are freed up to provide transportation fuels. Sempra Energy has a standby natgas powered peak load generator about 30km from my home. It only comes on line durring peak demand periods which in Southern California are also the brightest sunny summer days when my 50m^2 rooftop cells would be most useful. That's why I commented that it would be in the local electric companies' best interests to subsidize my solar array. Like I said, fungible. See Dilbert:

I think people miss the point of my tedious repetions of the timeworn examples of Maltus, Erlich, Club of Rome Hubbert, et al. Point being; THEY'VE ALWAYS BEEN WRONG. And every time it was because of events/circumstances they never envisioned. Given 3 centuries of uniformly unbroken failure of the limits crowd it is a suckers bet to think they finally got this one right. My personal bets for their "I never thought of that" excuses are RTSC, amorphous solar, monopoles and Fullerenes. Physics has no limits. I met Buckminster Fuller once, second or third smartest man I've ever met. They just don't operate on the same plane as we mere mortals. I've no doubt that were he around to comment on global warming he'd recommend patience.

Platinum or Palladium? I expect if we run short we'll whip up a few geneticaly modified blue-green algae to extract what we need from seawater. Problem is I don't think we have enough expertise to target valuable materials and there will most likely also be collected tons of junk metals like Gold and Wolfram.

Wide Open Vistas

Microsoft Windows Vista Enhanced Professional Edition 1.0 SP2 (2007 hopefully) equals OS X 10.1 (2001) except for security, ease of use, size, price and speed.

Amazingly, OS X with every new version (3) has become faster and faster and can run on smaller and smaller machines. Contrast that with the Cray-like computer that will be needed to run Vista.

Vista is just like OS X except for adding restrictive DRM, undocumented backdoors, propietary networking protocols, backwards compatibility, reduced documentation, administrative overhead. Oh, I give up. People either know this already or don't wish to know. My clients with mixed environments always make sure there is a machine running Windows 2000 Professional so that they can always be sure of at least one mission critical Windows workstation.

Alternative Energy

Phil asks; "Robert ...add up the arable land, give us your best efficiency of conversion from your best net primary productivity - does it add up?" I'm not sure why arable land is necessary to generate electricity from solar. Indeed, I'm more inclined to use wasted space. My rambling 1960s sunny Southern California home could go "off the grid," generate more than it consumes with about 50 M^2 of cells unfortunately that would also cost about 400 times what the typical monthly enegy bill runs so it doesn't make sense. I won't go into the egregious public policies that forbid one from going off the grid as well. At the current rate I expect the costs to halve in about a decade so I expect the crossover point for western residential energy installations to occur 6-8 years from now. Even sooner if source point electricity utilities get smart and agree to subsidies in exchange for peak demand capacity sharing. Then there's the future of GM crops and animals. Drought resistant corn that can be used to produce some plastics comes to mind as a way to both reduce oil dependency and increase the amount of arable land by putting marginal areas to better use. Fuel cells do indeed currently need special metals but I thought that complaint was dealt with decades ago with the famous bet. In 1980, economist Julian Simon and biologist Paul Ehrlich decided to put their money where their predictions were. Ehrlich had been predicting massive shortages in various natural resources for decades, while Simon claimed natural resources were infinite. Simon offered Ehrlich a bet centered on the market price of metals. Ehrlich would pick a quantity of any five metals he liked worth $1,000 in 1980. If the 1990 value of the metals, after adjusting for inflation, was more than $1,000 (i.e. the metals became more scarce), Ehrlich would win. If, however, the value of the metals after inflation was less than $1,000 (i.e. the metals became less scare), Simon would win. The loser would mail the winner a check for the change in price. Ehrlich agreed to the bet and chose copper, chrome, nickel, tin and tungsten. By 1990, all five metal were below their real price level in 1970. Ehrlich lost the bet and sent Simon a check for $576.07. Prices of the metals chosen fell so much that Simon would have won the bet even if the prices hadn't been adjusted for inflation. Remember when we were going to run out of platinum because of catylitic converters for automobiles? Does anyone remember that the Club of Rome in 1975 said in no uncertain terms that we would be absolutely out of gold by 1997? That was before they even knew about the explosion in commercial consumption for electronics. Phil, you are right that we don't have enough land to say grow material for bio-diesel to replace what we now extract from the ground but we don't need to, we just need to price alternatives at the margin. At current prices we have some 37 years of proven extractable worldwide reserves. At the low end of the 35-45 year range that we've maintained since 1920. Interesting eh? In 1920 we had exactly the same world oil supply balance we have today. We've consumed more oil since 1970 than was proven to exist at that time. Someday the peak oil theory might be right about finiteness of the resource but even then the theory will be completely wrong as to the consequences.

Tuesday, March 07, 2006

Sic Transit...

At the risk of starting an ideological war I'd like to pose a serious but hypothetical policy question:

Subsidies are not bad. They've done some great things. Velcro, Teflon, binary nerve agents. Okay, maybe not Velcro. Point being there's subsidies and there's investments. Some investments are surely not going to pay off and there are some that only collectively make sense, water and sewers as examples. The problem is transit has fallen far below sewers in public import and worse still it has entirely divorced itself from any prospect of ever having a payback. $6 gasoline isn't going to send people back to living in 6 story apartments and waiting for hand scheduled department store deliveries just so transit makes sense again.

The question I pose:
Does anyone claim transit is more important than clean universally available water?
Why then do we subsidize the former and tax the later?

[the rest is just discussion about this question]

Transit can't seem to make up its' mind. Is it a public utility? Is it a public service? Is it assisting a right of mobility? Is it ...?

I know what a public utility looks like. How long would you keep the head of the Department of Water and Power if he acted like your transit chief?

I know what a social safety net looks like. How long would you keep the Director of Welfare Services if he operated like a transit agency?

I know what a public service looks like. How long would the fire chief keep his job if he answered alarms the way the buses operate?

I vociferously support, nee advocate for transit solutions. Mine is a difference of opinion as to what constitutes a solution.

I have said that transit is unique among the things that we as a society choose to subsidize in that it is not
means tested and is not a utility and is not a public service. Transit is not like highway travel because there is no massive subsidization. [There is probably a little but it isn't policy as it is in transit.] Highways are indeed means tested. Try
to drive on the freeway without paying the appropriate fees and taxes. If you cannot afford the registration and the gas tax, you cannot use the highway system. You can ride a bike for free because of the kind of piddling subsidy leakage I mentioned earlier as long as you have the means to get a safe bicycle and agree to operate it safely. If you lack the means to do this you are not allowed to use the roads even on a bicycle.

Transit as a transportation choice is not a public service of the same class as clean water, sanitary sewers or safe home heating. If you don't pay your water and sewer bill, the DWP will cut you off. They don't offer monthly passes and they don't do any means testing. Does anyone claim transit is more important than clean water and the public health issues of sewerage? When was transit promoted to greater importance? Was this a Proposition or Legislative law?

In the context of a public agency that loses money on every passenger, attempts to build ridership and foster dependency looks a lot like empire building by bureaucrats and social engineering by transit planners. We arrest peopple for fostering drug dependency on streetcorners and we subsidize people fostering mobility dependency on the very same corners.

Even welfare as a public service is based on demonstrated need. Transit does not require demonstrate need.

When I use the term transit math I am referring to practices such as calling maintenance a capital expense. The deliberate use of the term boarding to make service figures appear larger. The depreciation of capital assets that were acquired for free. Those kinds of things.

In as much as transit is an urban land use tool, it should not be funded by transportation funds. Second I think people try to vote with their feet (butts) and their dollars, I find it immoral to be an advocate for a transportation mode without demonstrating a willingness to "vote" with your seat, feet and your own money.

Thursday, March 02, 2006

Ask not for Whom the Bob Tolls he Tolls for Himself

Robert I Toll of Toll Brothers practices the time honored tradition of do what I say not what I do.

2003-06-18 14:43:49 100,000 $31.40 $3,139,930.00 5,534,760 14.78%
2005-07-13 09:54:03 70,000 $52.56 $3,679,400.00 5,290,710 4.80%
2005-07-12 10:02:51 165,080 $103.49 $1.70834E7 2,680,360 52.88%
2005-07-12 10:02:51 100,000 $103.49 $1.03486E7 0 52.88%
2005-07-08 14:34:13 110,820 $102.11 $1.13159E7 6,244,300 50.10%
2005-07-01 12:06:48 55,700 $102.68 $5,719,240.00 6,355,120 46.03%
2005-06-29 16:33:38 85,800 $102.11 $8,761,000.00 100,000 44.49%
2005-06-29 16:33:38 33,400 $102.11 $3,410,460.00 6,410,820 44.49%
2004-12-14 14:28:57 120,000 $64.17 $7,700,540.00 5,555,710 -9.04%
2004-12-14 14:28:57 868,700 $64.17 $5.57455E7 5,195,440 -9.04%
2004-12-14 14:28:57 250,000 $62.95 $1.57381E7 4,945,440 -15.40%
2005-02-28 13:18:59 777,500 $87.74 $6.82192E7 4,167,940 11.93%
2005-03-01 12:10:05 472,500 $88.60 $4.1863E7 3,695,440 12.79%
2005-06-24 15:03:11 100,000 $102.07 $1.02069E7 2,845,440 44.16%
2005-06-24 15:03:11 45,500 $102.07 $4,644,140.00 185,800 44.16%
2005-06-23 12:28:28 18,700 $101.02 $1,889,080.00 231,300 44.24%
2005-07-25 15:31:19 193,700 $57.09 $1.10582E7 5,097,010 15.50%
2005-07-25 15:31:19 673,300 $57.12 $3.84623E7 4,423,710 15.15%

Someone Recognizes a Risk Premium?

Who's right? Good question but as more and more people have opted away from the traditional 30 yr conforming loan the consumer advantage of the ARM appears to be eroding.