Thursday, July 31, 2014

There is just something that bothers me about that GDP report.

I don't want to be a spoiled sport. I believe the bad reports, I should be consistent and believe the good ones too. But, as you can see above - California is having a pretty tough time. This is a park in my city. And frankly, it isn't alone in looking like that. The trees have started turning this dark olive green color I've never seen before. I'm kinda shocked the pines are having so much trouble. I thought they were the most native of all the trees in California. From here on out you will start to get a lot of these shots, because the drought has us by the nipples now.

So... back to that GDP report. You'd have to make me believe we not only grew faster than the whole Bush era - while experiencing a once in a life time weather event. I'm sure with the new drought monitor map every single county will be under a state of disaster declaration. All but one of them has been under it for a while now. It bears repeating because I'm not sure I've ever heard of that before. Every county in the State of California will be under a disaster declaration by the end of summer. If it hasn't happened already.

So this means we would've had to have grown at a much larger clip than 4%. California accounts for 13-17% of agricultural GDP for the whole nation. Depending on who you read. I'm choosing to believe this guy even thought the information is really old. Right now there is a lot of conflicting information about how much this is costing. There is an important election coming on soon ya know. You wouldn't want to wake the sheep up.

My city has already started cutting down trees that have died. I wouldn't be surprised if California just didn't give the government the GDP data for this period. It's not the first time they've helped unemployment numbers by not delivering the data.

I mean, it's weird. You can see people are not planting anything which equates to job loss. But no one is saying anything about it. Just look at the drought monitor! That's our whole growing area. I don't get it.

I guess when they look at inflation they never look at water data. Because that is costing the State a ton of money right now.

Wednesday, July 30, 2014

It's time to start warming up the popcorn machine.

News came today that we are a healthy growing economy. That is a relief if I do say so myself. /sarc I mean, during the Bush years we only grew around 3.8% depending on who you read. So a 4% reading means the world is going gangbusters.

Out will come all the analysts screaming we have to raise interest rates. Do it. Do it now. And I'm going to join the crowd. Why not do it? Lets get it over with already. I'm tired of waiting for this crash.  Plus, I want to see how that whole housing thing turns out with higher rates. I'm guessing not well. This will be the most terrifying entertainment I know of.

Behold why:

Mortgage applications continue fall with 2.2% drop. Refinancings drop 4% with purchases up 0.2%. Dated today.

Mortgage applications rise, but all on refis. Dated Wednesday July 23rd.

"Loan applications to purchase a home are still languishing, up just 0.3 percent week-to-week, on a seasonally adjusted basis, according to the MBA. They are down 15 percent from a year ago."

This is when rates where kissing 4%.

Mortgage volume tanks; Jamie Dimon bashes the FHA. Dates July 16th.

"Mortgage rates are barely moving, but demand among mortgage-dependent home buyers is weakening, data show.
Total mortgage application volume fell 3.6 percent on-week for the week ending July 11th on a seasonally adjusted basis, according to the Mortgage Bankers Association (MBA).

Applications to refinance were down 0.1 percent on week, while applications for home purchase loans dropped 8 percent to their lowest level since February 2014. Purchase applications are now 17 percent lower than the same week one year ago."


"Home prices unexpectedly fell by 0.3% month-over-month in May, missing economists' expectations for a 0.3% gain."

Let's get this party started already. Rip off the band aid. I guess we get to see if the Fed is printing money so people can buy houses, or printing money so people can buy stock. Because one side of this equation is not looking so healthy. Raising interest rates can only help that. Right? What could go wrong?

Normally by the end of the month people have snapped up the previous months price reduced houses in my city. This month we are going into August with a lot more than the previous month. It will be interesting to see how fast they clear as the month progresses.

Monday, July 28, 2014

I haven't talked about 3D printing in a while.

I've been pretty much sitting out the printer wars because it's unclear which type of printer will rise to the top. MakerBot is well funded, but some of the other technologies have better resolution.

A couple of weeks ago I read that MakerBot was going to start selling their printers in a select few Home Depots around the Bay Area. I was super happy they'd finally made it into a bricks and mortar store - but I was also super confused about their selection of stores and the roll-out generally. The stores are in Emeryville, East Palo Alto and San Carlos. None of these cities are tops on my list to drive to for any sort of technology. It's notable that Emeryville and East Palo Alto each have an Ikea. I go to San Carlos when I need granite or tile. And they have some pretty bad ass restaurants there.

At any rate I had to go to one of the stores and see it for myself. Because my first question is - how are you going to get Home Depot customers to buy a printer that forces you to learn CAD or MakerWare before you can use it. Has anyone at Makerbot ordered anything that had to be designed from a Home Depot store. Their computer system is kind dinsouric.

*Just this year* the tipping point finally came and all the contractors finally figured out that texting was extremely efficient and made their clients less pissed when they are late. Because they all are late. I about died earlier in the year when I booked a contractor via text only. I never once talked to the guy before he got to the rental. He showed up on time, and did a great job.

But may build things - but I'm pretty sure a lot of them are still on AOL. It's about the only time I remember AOL is still alive is when a contractor hands me a business card with his email address on it.

At any rate, the whole thing confuses me. Contractors aren't the most tech savvy in general. In my estimation. And Makerbot has to find a way to bridge the gap with the software portion of 3D printing. And Home Depot is a weird place to do that I think. It will be interesting to see how this turns out.

Zillow or the NSA? You be the judge

I've been meaning to post about this for a couple of weeks because the whole thing really pisses me off. I passively use the Zillow app to check housing and rental prices. Normally I do an "update all" for my apps because it takes a long time, but something happened a few weeks ago where I had to update Zillow by itself. This is where I became super pissed off about the information they were trying to snarf from my phone. I don't even have an account at Zillow.

I refused to update their app. There are other places to get the data I need.  And now they have taken over Trulia (which doesn't ask for this information) you will have no choice but let them NSA your information if you want to use their app.

They want to know about my identity. The GPS location thing is pretty standard but usually you get to opt out. Not through Zillow!

The biggest thing that pissed me off though is - they want access to the photos that are on my phone. They also want access to video OR AUDIO! Can you believe that shit? How effing creepy is that?

It wants to figure out where you are via Wifi. And Lastly, it wants to know if you are on the phone, and if you are who you are talking to.

Since it was announced today Zillow bought Trulia, which joins two companies that don't actually make any money. You can only conclude the way they are making money is through selling your data.

Sunday, July 27, 2014


I was at that Santana Row show again yesterday in San Jose. Last month they had the new Mclaren, and I got shots - but they weren't that great so I didn't post them. And to tell you the truth - even though Mr S. told me it was the latest model I couldn't figure out how the new one was different from the previous model. So I didn't even try to take good shots. When we got back to the house Mr S. showed me the last three models and now I can tell the difference. So, I wanted to go back and see if I could get better photos.

I couldn't stay very long this time, and this Fisker was the first car I took shots of last month too. Yesterday the McLaren wasn't there, but the Fisker was again. I have a real love hate with this car. I saw one in 2009 before I got better at photographing cars. And before most people had heard of them. They were at the Monterrey Concourse for a few years after that and I wouldn't even post shots because this company became so completely douche at that point. Then came the government loan. I mean, technically - shouldn't I get a bolt or something to comfort me for the money they burned up from me the taxpayer? I'm bitter.

Still... this car draws my eye whenever I see one. They are really rare after all. And I loved it back when I saw it was a concept car. It's only their politics that make me hate them. Even now.

Saturday, July 26, 2014

The great yuppie bull run of 2014.

When I saw this come around - I had to go. I knew there would be protesters there and that makes me laugh. Oh yes it does! Honestly I was surprised they even let them do this. This area is super douchey. I heard there was a lawsuit trying to stop them. It sounded like the city didn't even want it to happen. Which made me want to go even more. The whole thing just makes me laugh.

The city next to this one has a rodeo every single year. Never any protesters. But you let a bull run through a pen, and all the chicks get their panties in a wad. They weren't even protesting the right cause! They were chanting against animal testing, but the only testing going on here was how fast bulls can run thru a crowd of yuppies.  And they weren't even that dedicated to their protest since 20 minutes after we got there, the protesters bailed. Maybe I got there right before their permit expired. If they even had to pull one. It will be interesting to see how my local news covers it, because they don't even normally come out to the 'burbs even for murders. Three protesters though - they are on that right way. Oh and sometimes they come out here when it gets over 100 degrees. It's their go-to thing. Otherwise we don't exist.

I was pretty sure this was not going to be like Spain. We have happy cows here in California. How can the bulls be that pissed honestly?  You know it wasn't that hard core because I got one shot of two chicks taking selfies right as the bulls got to them.

In the background there is a Porsche SUV because people are actually playing golf on the other side. Which also makes me laugh for some reason.

Here are all the protesters in the stupid free speech zone.

Someone must have gotten tagged though because the ambulance came.

I don't know who this guy was, but apparently everyone thinks the speech zones are hilarious.

Friday, July 25, 2014

I should have some funny stuff for you this weekend.

Wednesday, July 23, 2014

I guess I'm not the only one who thinks so.

Inflation is about to fall—and fall hard.

"I will make a bet with this country's leading inflationistas, who continue to warn that inflation is about to surge, that they are dead wrong.

I'll bet a truckload of scarce limes, or a couple bushels of wheat, that inflation is about to fall, and fall hard."
Read more.

I think we are all looking at interest rates declining and coming to the same conclusion. When interest rates fall like they are - it doesn't scream hyper inflation. It tells you the opposite. Today it was a little easier to get a mortgage under 4% or slightly above like 4.03%. This combined with earnings where tons of companies are trimming their outlooks, and store sales being dismal tells the story.

Outside of food, energy, and housing - there isn't much inflation as I wrote yesterday in Hello deflation. And the housing element - well...

Yesterday I swept through the price reductions in my town. Who can predict anything based on one town right? Well, one of the cities next to me was named the second fastest growing city in California in this year. There is a lot of spillover. Even when I was up in Tahoe I was actually pretty shocked the agent knew how crazy the prices had become.

Maybe I shouldn't be shocked. If I'm checking prices in their town - maybe they do the same. Almost every town I roll into I look at the prices. Sometimes I'm just charmed by the city and think I'm going to sell all of our crap and move there. Sometimes I see a ton of for sale signs and have to see what is going on. Sometimes I'm just curious.

I think housing is turning much quicker than people realize. Just one month ago I was finally able to get PMI off my rental. So, last night when I traveled the price reductions - one really stood out because it was two blocks from the rental. It was going at auction for 1/3rd of the price my rental just appraised for. Not really news. Auctions always list like that. But this house had a price reduction on the auction price. That's the thing that struck me. It's already at an amazing price without the price reduction. It will probably be a couple of weeks before I know what it actually sold for. But that isn't a good sign.

This house would be a new comp for my rental. Which made my eyes grow wide and I murmured - just in the nick on time.

Tuesday, July 22, 2014

Hello deflation.

Everything in your house is getting cheaper to buy. Opinion: Prices of consumer durables are falling rapidly.

"People tend to pay attention to the prices of things they buy all the time, like gasoline, milk and meat. But who can remember what it cost them the last time they bought a washing machine?"

To be honest, I can always tell when people don't actually own anything by the way they describe things. It's always somewhat frustrating because these people actually write about the economy. What gave this guy away? The average lifespan of a dishwasher or washing machine these days is seven years now. I've had many people who work in the industry tell me this. It's unbelievable but irritatingly true.

In the past 8 years I've had to buy two washers and three dishwashers. One was at my rental. They rarely make it to seven years. Even appliance repair men are up in arms about it. You might get slightly over the 5 year line if you are lucky. If you can't remember what a washing machine costs - you don't own anything or know anything about consumer items. The days of buying a washing machine that lasts a lifetime have been over for almost a decade. Especially with those front loaders. Normally this environment would be great for repair men - if they are actually able to repair them. Now the repair is about half the cost of replacement. Which makes replacement more attractive. You figure you only need two repairs to add up to a new machine.

Don't take my word for it though. Take Home Depots word. It used to be that front loaders were most of the market. Walk into a Home Depot now and top loaders are again pushing out the front loaders. That tells me that I'm not the only one who thinks they suck.

The other thing he says about people only paying attention to things they buy every day is true. I've been saying for months now the drought is causing people to think inflation is much more intense than it is. Because those are the items they buy every day. Just two weeks ago I said this:

"So.. here in lies the problem. I believe the drought is causing inflationary pressures that absent them, the picture would look very different. A couple of weeks ago when I said that deflation would probably return by the end of the year - it probably seemed crazy to most people. Some of the early same store sales only reinforce my belief."

Now - consumer items always fall in price over time. They get better at making stuff. They sell more which brings the price down. But not normally this sharp in such a short amount of time.

• Prices of major appliances are down 7.9% in the past year, the largest decline on record. Laundry-equipment prices are down 8.6%.

• Furniture and bedding prices are down 2.5% in the past year.

• Window coverings, rugs and other linens are down 2.1%.

• Clocks and lamps are down 6.9%.

• TVs are down 15%. Audio-equipment prices are down 2.4%.

• Telephone-equipment prices are down 7.7%.

• Camera prices are down 6.7%.

• Dishes and flatware are down 6.3%. Cookware prices are down 4.7%.

• Computers are down 6.3%.

• Tools and other hardware prices are down 1.5%.

• Toys are down 6.5%. Sporting goods are down 1.3%.

• Jewelry prices are down 4.5%.

• Medical equipment prices are down 1.1%.

• New car prices are down 0.4%. Auto parts are down 1.2%. 

Just about the only thing that’s seen prices rise in the past year is new trucks, which are up 0.6%.

I'd wager that cars are still strong because the commercials offer 0% down, 0% at signing, and 0% financing for up to 72 months. This has not changed for five years. This doesn't tell me that car sales are especially strong.

The other thing that tells me things are not going well is I can find an interest rate under 4% today. It's not easy, but if you work at it you can. They have been bumping along the 4% dividing line for months, but are usually right over the line rather than under it. If they start staying under 4%...... well.

Monday, July 21, 2014

Don't tell me everything is wonderful now.

I don't think I could have picked a better weekend to take Mr S. to Tahoe so we could recharge our batteries and forget about the world. I always want to go to water when I feel bad. The ocean or a giant lake. Especially now. The drought is really getting to me. In the three days we were gone two lawns on my block went. They must have completely given up because I've never seen a lawn go so quick. It's starting to feel like you are living in Sepia everything is so brown.

We thought Tahoe would be struggling because they got so little snow this winter. And things are starting to look pretty sideways around here. We really thought we'd have the run of the place. How wrong we were. It would make your brain bleed how crushed Tahoe was with people. I've never seen anything like it. We couldn't even stay in the same place for all three days. Which I thought was a bonus in the end. I wanted to see how the economy was doing on both sides of lake and Mr S. had never been there. I'd only driven around the lake once. We stayed in the North for two days, and the South one day.

The first thing I do when I roll into any town these days is start watching for how many for sale signs you see per mile. For instance my city has super low inventory right now. Just not seeing signs everywhere is psychologically huge. Although in the three days we were away, the amount of houses under price reduction almost doubled. I'm betting they will start creeping back in.

Anyway - in Tahoe there were so many for sale signs we actually stopped into a realty office to see what the deal was. Oh yes I did. Just like here, the prices have been flattening.

We didn't wind up doing much more than swimming in the lake because there were so many people. But it didn't even matter to us because we got rain all three days with thunder. All three days people! Two days we got hard rain. You can't imagine how good it was. Even with the dry lightening if you weren't outside you could pretend it was raining. Hopefully that will hold me for the next couple of months. Because wow. I didn't think I'd pay to go to a place only for the rain, but this year I might.

The first couple of days I wanted to sell all our shit and move there. By the third day you could understand why they are living in such a reality distortion field. If you aren't pecking out for sale signs - the economy there actually seems pretty good. The signs are the only thing to give away things might not be completely right. I think it's because knowing about the world isn't a priority there. And even if you wanted to, who can get service anyway? It's like the beach where you kinda fall off the earth a little. In the South we couldn't get cell coverage to save our lives. The North wasn't that much better. Wifi was iffy. When you are on vacation, that is cool. You are trying to get away from all the things that stress you. But it's an uncertain world and just ignoring it doesn't make it go away.

It was easy there thought to pretend the world was awesome.

Friday, July 18, 2014

The government regulates the craziest shit.

When I walked by this I asked Mr S. - how many times must that have happened for it to warrant a sign!? I had to know the story behind this. You must know I'm a curious person.

Turns out - the State of California forces businesses with public pools to put them up. No foolies. It's embarrassing because people like me ask about it. And they will fine you if the sign is not up.

Sooooooo.... if you've had a runny stool  - don't go in the pool.

Thursday, July 17, 2014

Tuesday, July 15, 2014

Housing has hit a wall.

Last week we had great pending sales numbers. When I saw them I kinda laughed and said - we will see how many of those people get kicked out. Now, my gut feeling is quite a few.

A flip house came up a few months ago in arguably one of the nicest areas of my town. It isn't the richest part (or even close), but you do have to have money. I would have flipped this house if the world were different. Worst house on the nicest block is an understatement. You could tell an old lady lived there, and old people houses are the best flips. They just fall into disrepair on almost every level. The house actually sold very quickly. I think it took around two weeks.  Quick enough that it made me re-evaluate all my opinions on the market. Maybe there is still a pulse in certain areas I thought.

Today I drive past it and instead of a sale pending sign - it had an open house sign. I let out an audible doh. That house obviously fell out. I would not want to be that guy right now. I was that guy once. I mean, it's a pricey neighborhood and he only bought it a few months ago.

That made me whip over and check to see how many price reductions there were today. Which was not good at all.

I don't know how this is going to play out. People are not going to give up their houses like last time. First - if you can't afford a house at 3-4.5% - you can't afford a house. Second - greed drives everything in life. Since prices have come back to some degree - walking away willy nilly will not come as easily. And lastly, those people still underwater might have the option of low interest rates for a while. The fear of a reset will kill them from the inside, but rates are much lower then they are paying. It gonna be a real nail biter.

Monday, July 14, 2014

Liberals say the stupidest shit.

I've been waiting all weekend to tell this story.

Every since my neighbor to the back and I replaced our fence together - we have been "neighbor friendly". We make casual conversation when we run into each other, and trade whatever we are growing in our gardens. He sends me lemons during the summer because my tree only produces in winter for some stupid reason. I decided I was going to send him back some garden grown strawberries this time.

We've never really talked politics. But quickly after they invited me in -  it's where the conversation went at break neck speed. I don't remember what started it, but before I knew she had to tell me that she thought everyone should pay more. And to emphasis the point she thought there should be a 90% tax rate.

I think people who do this are helpful because right away you can roll your eyes and prepare for the next stupid shit they are going to tell you. They set your expectations right away. Evil? Check? Don't understand math? Check. Phony? Check. Lairs? Check, check!

She then went on to prop 13. The law that protects seniors from having to pay market rate on their property taxes. She thought they should do away with prop 13. It wasn't fair that businesses got to keep paying the same tax rate on a building they have owned for years even though tenants move in and out all the time.

Now this particular neighbor was a huge psychological help for me through the darkest parts of the recession. They'd bought their house for either 30 or 40 grand. They helped me hold on without even knowing it. But it also made me aware of what their tax rate might be. Roughly. Sooooo...the conversation turned a little like this.

Her - what do you think about prop 13?

Me - Well, I don't care one way or the other. I just bought my house 7/8 years ago. I'm paying close to top of the market. The question is - how would you feel if they got rid of prop 13? If you knew how much I was paying, and I knew how much you were paying - you would not be happy paying what I am.

This is where she had to start back peddling and fast. Well...... we wouldn't want to pay that much more. And we haven't even moved!

(I will give you a second to let that sink in)

She went on to say they don't even use their house that much and they'd like to move to a smaller place.

Me - so why don't you sell this place. You get like a half a million dollars tax free. Why not just pay cash on a smaller place?

This is where she turns to her husband and asks him if they can transfer their prop 13 status to a new house.

Some days I want to sell all my stuff and start voting yes on all these stupid things these liberal want just to watch them suffer at their own hands.

It's just so mind boggling that these people are more invested in the PC echo chamber than what is best for their own interests. Which is probably why Ocare got voted in. These people are a direct beneficiary of prop 13! But of course when you say stupid douchey stuff like this, you only expect the government to take things away from other people like a tried and true communist. And you know they don't mean a single word of it. That is the depressing part. But they will sure try and impose it on everyone else.

Sunday, July 13, 2014

You don't need rain for rainbows.

Just wispy clouds. This was over my neighbors house this morning around noon. Usually I see them later in the day like around 3:00. Here is better previous sighting with video embedded in the post.

Friday, July 11, 2014

Even the media idiots get it now.

Homeowners' low mortgage rates keeping them from selling.

" WASHINGTON -- Would-be home sellers across the country are grappling with a once-in-a-lifetime problem: They have mortgage rates so absurdly low it would hurt them financially to sell. 

Doing so would mean giving up an irresistible rate in exchange for a new mortgage carrying a rate up to a percentage point higher. Their monthly payments would be larger even for a house of the same price. That's discouraging some people from selling, thereby limiting the supply of available homes and contributing to slower home sales.

It's a significant shift from the way the U.S. housing market has worked for the past 30 years. For most of that time, whenever a homeowner decided to trade up to a better home, mortgage rates usually were lower than the last time they had bought. That helped make a new purchase seem more attractive.

More than one-third of homes with a mortgage now have rates below 4 percent, real estate data provider CoreLogic estimates. Yet mortgage rates now average 4.2 percent. That is still low by historical standards but up about three-quarters of a point from a year and a half ago. And should mortgage rates rise later this year and next, as many economists expect, even more homeowners will be affected. "

One third of houses is a very large section of the industry. Obviously.

Thursday, July 10, 2014

Nothing says happy Independence Day like an MRAP vehicle for your city.

The "gifting" of military vehicles has been raising eyebrows just about everywhere. So, I thought I was above getting worked up about this. Until Redwood City of all places just turned up with one. They got it on July 1st. They displayed it at their 4th of July parade. No foolies.

Just so you know - Redwood City is where Oracle has their huge headquarters. Here is a picture of the skyline. It would be safe to say there are no bad areas of town in Redwood city. For shits sakes - the crime rate is listed as half of what the other cities in California have. I had to go to Google and search to see if there were even any murders there last year, because I don't think I've ever heard of one.

I guess one homeless guy was murdered there this year. The next murder seems to be in 2010. By comparison, San Jose has had roughly 19. This is the last known crime data there.

The city says "The vehicle could also be used during "high-risk search warrant operations, such as those involving firearms, violent gang members, narcotics cases involving firearms, explosives, etc.," Kirby wrote in an email Tuesday."

They just put the explosives in there for cover. Right? This is what the average home looks like in Redwood City. Most of them, this thing could run right over. It's 13 feet tall ya know. I've never heard of gang activity there. I'm not saying it doesn't exist, but the city is mostly full of tech companies. Not exactly gang land central.

You don't say.

Bank profits looking gloomy, and here's why.

" Bank executives have been preparing investors, with warnings from JPMorgan Chase and Citigroup regarding substantial trading losses that will impact earnings. Whalen also cites lower mortgage lending, declines in interest earnings and rate uncertainty from the Fed as further challenges. "

Translation. Waaaaa. We don't know if the Fed is going to keep shoveling us money to keep us alive.

I think the Fed has painted itself into a very painful corner. The butt hurt kind. It wants to stop assert purchases. Allegedly. I think that is fantasy. Today you wouldn't have to work that hard at getting an interest rate just slightly above 4%. If you have super good credit. It's been bumping along these levels for a couple of weeks now. That tells me that housing demand is super weak. When housing demand had a pulse, it started ticking up to the 4.5% range. Rates tried to bump up into the 4.17 range yesterday, only to be back around 4.3% today.

During the recession Mr S. and I had countless conversations about the relationship of inflation and deflation had on people. I've never lived through deflation before, so it was hard to understand the psychology of how people would react. My feeling is that people will actually tolerate a lot of inflation because we are stupid monkeys. We are geared to desire things that are expensive. Given two equal choices, people will often pick the higher priced item if it gives them not much more than status. Mr S.'s feeling was I was probably right - until it came to items they used every day. Like food. And oh how right he was. It wasn't until food started spiking that people really started to become freaked about inflation. They didn't even seem to care that much about the way housing prices were spiking to the sky. I was fascinated by it a few months ago, because they were so complacent and I was running for the exits. Maybe I can dredge up where I blogged about it. Inflation seems to trick people into feeling things are better than they are. To a certain point I guess. I don't know if I've lived through more than 4% inflation, so I guess maybe one day I will get to see what happens when it's over 4%. In two or three years I'd guess. Normally I'd predict next year, but Obamacare has yet to suck the life out of the economy. Never fear though! Open enrollment for corporations is coming up fast and furious.

So.. here in lies the problem. I believe the drought is causing inflationary pressures that absent them, the picture would look very different. A couple of weeks ago when I said that deflation would probably return by the end of the year - it probably seemed crazy to most people. Some of the early same store sales only reinforce my belief. Lumber liquidators cut their earnings forecast by half! Which truth be told, if that store died, I wouldn't feel sad. That CEO was so up the butt of President Money Bags I vowed to never buy anything from them. This is the environment they voted for. I hope it burns like the surface of the sun.

But it isn't just them. Family dollar came out today and said their earning fell by a third which even made my eyes grow wide. Even Walmart had to admit the consumer was struggling. These are not things that shout inflation. These are things that shout deflation. And really IMO, all you have to do to figure out inflation it take the definition quite literally.

While there is too much money in the system now, there are not too few products and services. Both of those things have to trigger at the same time for there to be inflation. Example housing. Too much money chasing too few houses equal inflation in housing. Food - too much money chasing too few products and services equals inflation in food.

A few years ago people were freaked about hyperinflation. I was too. This is where is becomes super obvious that money printing isn't the only element in inflation. The other half of the equation has to trigger too. Too few products and services. Japan has been in deflation for a decade or more, and they devalued their currency by half! I've lost track now, but they print money every two days. I thought inflation might take hold there this year, but you have to pay for printing money - and people know that. So they don't spend. Or if they do - they spend to hoard like appears to be the case before the tax increase took affect there.

So no.. I don't believe at all they will quit printing money this year. I could be wrong. I just don't see how it happens. The refi segment of banking is just torched. Unless the world ends you are not going to get a better rate than 3.5%. So everyone that refi'd in the last five years will probably never refi their mortgages again and they will also sit in these houses longer. This causes the market to be illiquid. It seems obvious now they are having a hard time pushing up the top end of people who are still underwater who might be inclined to sell. I'm even becoming doubtful of how many of those people there still are. I know a guy who is still paying 7%. I was shocked his refi hasn't gone through yet. He's been working on it most of the year. But he seems totally adapted now. Sure like everyone else, he's had to bust his ass harder. But he's held onto his shit and it looks like he's going to wait it out like I did.

And they say they are going to raise rates? Uuuuuuum. Okay. I say this party is just getting started.

Wednesday, July 09, 2014

Release the narcs!

Over the past few months when everyone was complaining about how the "weather" ruined the economy, in my head I chuckled and thought - you haven't seen anything yet baby. It's becoming (now) more obvious to everyone that weather was not the full picture. But even if it was - the snow had an effect for two months where people didn't go to work.

California however grows half of the stuff you eat - and we pretty much haven't had rain since January. We most likely will not get any rain until mid October. That is 10 months roughly with barely any rain at all. Baring any heavenly monsoon moisture like we got two days ago (pictures included). Yeah it was only a couple of drops, but when you are stranded in the desert - you will enjoy almost anything.

Our whole growing season was effed. I think the weather is actually part of the problem - just not the weather they were complaining about. In the coming weeks I predict this is going to gain huge steam and it's even going to affect the price of real estate. No foolies.

Every single day you can see people are giving up on watering their lawns. The dryness is so deep now that only the really dedicated persist. Which is me obviously because I'm writing about this. Yards actually add a significant amount to the price of a home. Which I have learned through trial and error. They are just a ton of work, and people do not want to put in that effort or money. People would just rather make that someone else's problem. Well, now that is every one's problem. It can shave 10-20 grand off your home. And don't even get me started on the price reductions. July is proving to be ugly already. This is without an ugly defect like a yard that looks like it could set itself on fire. But it's not just the lawns. The trees are starting to become really ragged. I know the Oaks can look completely dead at the end of summer and come back. Pine trees are getting that dead Christmas tree look, and the eucalyptus are really suffering and starting to look more like a match stick than the pines.

The drought has been trickling through the economy for roughly six months now. Farming towns are becoming ghost towns as people leave to find work in places like Texas or Washington. We are getting the stage now where gardeners have almost assuredly have started to lose work. Soon, it will be a LOT of work because it's just so hard to get any moisture at all into the soil. Even I feel like giving up. Nurseries will start not being able to turn over plants. Truck drivers will be affected because they are not hauling all the greenery we eat and plant. This is going to become much more noticeable to everyone in the coming weeks. I mean, we just don't normally get any rain this time of year. Unlike Texas who can at least count on one or two hurricanes. 

And then.... there are the fines that are getting more ugly by the week. Just to put a fine point on why so many gardeners are just going to lose their jobs, basically. The latest proposal? If water runs from your lawn to the street you could face a 500 dollar a day fine. And anyone that is tasked to enforce laws will be able to write you a ticket. So, I suppose in theory if a meter maid rolled up to your place and saw water in the street they could in fact write you a ticket for 500 bucks. A couple of days ago there was a golf course that was actually going to close because their water bill had gone up 50%! The city stepped in to help because golf courses bring them money and they can't do that if they are fined out of existence.

So yeah. It's going to get wild over the next few months. And when they blame the weather this quarter, it could actually be really true. 

I've actually already gotten past the fire part of this drought. (I think). Now I've actually started getting a little freaked at what will happen when it actually rains.

Tuesday, July 08, 2014

Banks are still committing suicide through death by a thousand cuts.

I've been feeling super gloomy about the world. As much as I try to distract myself, it's pretty obvious now that the excuse train is having an awfully tough time climbing that hill. And... I had to yell at my bank this morning. It was a couple of years into the recession that I fully came to understand why after the Great Depression some people never used banks again. Now I'm about as bitter as bitter comes regarding them.

I thought I was over yelling at them. I was finally able to get the PMI off my mortgage. The news came on the day those puke inducing GDP numbers came out. I murmured to myself - just in the nick of time.  I was done fighting them. It was all over.

Then I got a notice in the mail regarding my impound account needed more money instead of less due to the removal of PMI. All of a sudden they started charging me for flood insurance. They didn't send me a notice or anything they were going to start doing this. Now my rental is two blocks from a creek, and once was deemed to be in a flood zone. This all started mid-way through the recession. People in my town started getting bills for like two grand for flood insurance premiums because they had re-drawn the flood plane. At the time I felt like I dodged a bullet because I'd already pulled a flood insurance plan on my rental because - it's a rental. I was paying less than 400 bucks a year. And as it turns out - banks were inflating the cost of these plans during the crisis.

For a few years I was deemed in the flood plain, then one day I got a notice that they'd re-accessed it and the property was no longer in the plane. I still kept my policy because I was afraid if the State changed it's mind I might get stuck with one of those two thousand dollar policies. And who really knows how renters are going to trash a place.

So when I called the bank, I just wanted them to stop trying to charge me for insurance I was already paying for. Insurance that was not even mandatory for the loan. Paid for by me privately. Which just adds to the bitterness because you keep getting dicked around by them even when you are doing the right thing.

Now - when you don't have PMI on your mortgage, you aren't required to have an impound account. But I was going to keep it because it just made it easier. They would still pay taxes and homeowners insurance. Well... that is the way I imagined it. But it didn't work out that way.

The bank rep started trying to convince me they had always been paying the premium. Which I blew up about. This is how stupid they think you are. I figured they had fetched the insurance information from my broker because they had the correct insurance amount and date of renewal. Which it turned out to be true according the the bank rep. He then went on to try to shove this off on my insurance broker saying it was their fault if I had double paid. Now if there is one thing I'm sure of - someone would have sent a notice if a policy had been double paid. I don't care who the eff it would be - but on one side of the equation - someone would send me a notice. Probably my broker and the insurance company would just spit out a check. It's one of the few industries the government hasn't gotten their grubby hands on and still operates like the old days. And besides - when I was in a flood plain I got notices from the government. Then the bank would send a notice saying - you need to have insurance. The bank was just trying to rob me if I let them.

Anyway - long story long - I ended up yanking my impound account. Now they don't even get to collect interest on the amount of money that sits there. They better hope the others who are trying to get PMI off don't get the same idea.  The whole thing just defys logic. I understand them fighting tooth and nail about the PMI, but the flood insurance was just a calculated error on their part. They could have salvaged that problem. But they still refuse to treat clients like they need them. Thanks to the Fed.

My rental was refi'd when rates were down in the 3.5% range. Housing prices have spiked so much in 14 months I was able to get PMI off, and now no sweet impound account interest. Sure I'm just one person. But you can see the earnings problem that banks are getting themselves into if I'm not just an individual and other people get fed up like I am. Those low rates are going to fuck the market for a very long time.

Saturday, July 05, 2014

Murcielago in the wild.

You can not go to Walnut Creek and not see something like this. The interesting thing about this car was the windows were tinted almost black. Get pulled over all the time, dark. Except maybe in Walnut Creek.

One eye on the sky season.

Everyone was super cool with the fireworks yesterday. It is deeply dry around here. It's so dry you are afraid to let your thighs rub together. Girl you might start a fire. I'm guessing around the beginning of August you will start getting a lot of freaked out posts from me with pictures. I was completely stunned last weekend when I was up in Marin. At least they get the ocean fog every night. But even the coast is crazy dry. In Emeryville there are places where it looks like the marshes could catch fire. It will be interesting (said in the most sarcastic way) to see how things look in a month.

So it wasn't surprising to see a smoke plume when I went out to get cheap gas. This was on the Fremont side of the Sunol Grade. The East Bay is probably the best at getting this stuff tamped down. They had a lot of air resources. They had a heli, and a few planes dropping retardant. Probably because the Fremont Water temple is right on the other side of that hill. Maybe it isn't a temple, but it's some huge water infrastructure thing. And there are town homes next to the freeway.

If we keep having fires like this, I"m going to start having to lug around my big camera. Point and clicks like mintberry do a really decent job these days. Not as well with fires though.

Then when I was up in Walnut Creek you could see this fire. I think it's the Yolo one, but I'm not sure.

Friday, July 04, 2014

Fireworks in IR.

I always feel regretful that I don't give you more stuff in IR. It just takes more time and usually I'm tired from the day. Like today - I didn't feel like dealing with the crowds. So I got you these shots from my deck. And I didn't even take the time to sync up my remote trigger. So they are a little blurry.

Same vantage - not in IR.

Wednesday, July 02, 2014

Random flat pink Audi.

I'm pretty sure I'm over the flat car colors now. They don't age as well as I expected. I thought this car might have started as Lexus Red. In person it just didn't look right. I was so into this trend a few years ago. Now... not so much. Here is a bright pink flat Audi TT.