Saturday, February 28, 2015


The plan for today was to drive to Sebastipol to check out Patrick Amiots junk art. There is a block in Sebastopol where almost every house has one of his pieces in front.

Then try to do some architectural salvage. We knew it was suppose to rain today, but while we were at lunch all these reports of hail started coming in from San Jose. You try to leave your twitter feed, but it's impossible to never look. I figured it would take two hours for the storm to pass the hill into my suburb, so we hightailed it back. We get back home and the dirt is barely damp. San Jose got some impressive hail though.  Gallery here.

Friday, February 27, 2015

Whatever gets you through the night...

This morning all the news outlets are telling me that we are in the "good" kind of deflation and this is nothing to worry about. In fact - this kind of deflation is awesome for consumers.

On the other hand they are also fawning all over themselves about how wage inflation is on the cusp of exploding.

These two things can not exist at the same time. Period!

If deflation was so awesome - why doesn't the Fed make that the benchmark instead of 2%? Answer me that batman?

I already know the answer to this. This is of course is not the good kind of deflation. This is the kind of deflation where wages get cut. I've only experienced actual deflation one other time and my life, and it emphatically wasn't the good kind of deflation. Half of the Valley was on wage reduction. And you sucked it up because the alternative was worse.

Thursday, February 26, 2015

She drops the Mic and walks out.

It's official: America has deflation.

Good news? After this time - I'm likely done banging the deflation drum. More businesses are dying then being created. By the time President Money Bags leaves he will have killed enough industry to cause inflationary pressure.

Sadly, I think it will take the rest of his Presidency to achieve the Fed goals. Once a new administration takes office and people start to feel more comfortable - they start doing what comes naturally. Spending money. Then inflation becomes nervous making.

The housing market is already showing cracks of seven years of far below normal building activity. That will be a huge inflationary pressure in coming years. It's the longest spread of time of recession level building activity.

Wednesday, February 25, 2015

There's gold on those hills.

I don't know how much of this kinda thing you are going to get because I don't know how long it will last. It's the first time the wildflowers have been so thick you could see them from town.. This time last year the rain stopped.  And there is a reasonable possibility that we don't  get any rain the rest of the year.

It's a real treat after looking at brown hills for about 10 months. In a normal rainy year the hills never look like this. I didn't even know the hills could look like this. Maybe I'll post these pictures every single day until I burn out or they burn out because right now it makes me happy. Although they are kinda a bitch to get. Mountains have no sense of symmetry. There is a lot of private property out there, and those flowers are challengingly patchy. It's such a good display if you don't have to fit it into a frame.

I think the poppies are next though and I'm pretty excited. If the field wildflowers are like this, I expect the poppies to be bangin. The pictures might be mediocre - I can't control the symmetry of mountains or locations.

Tuesday, February 24, 2015

On account of my shitty attitude.

Listen, interest rates were kissing 4% today. That should pretty much kill all the refi's, and put  a pretty good dent in new and existing home sales. I suspect the rise in rates is due more to other countries dumping our bonds, but I have to admit I'm not sure how that flows through the system. We all know a rocking housing market is not causing this. Sales everywhere are down. Prices are still up though. Even the rental market is extremely locked up. Even if renters wanted to move - where would they go?

We will get to see the result of rising interest rates without the Fed having to do anything. It should be a good fun time I'm sure.

The other thing pissing me off today is all this talk that we are on the cusp of inflation because Walmart is giving their employees raises. Seriously? I don't understand how people can believe this shit. You're telling me that low/no skilled labor is going to cause wage inflation? It would be the first time I've ever seen that.

I will go on record to say we will fight deflationary pressure for the rest of President Money Bags time in office. There are a million reasons I think this way that I don't want to go into now. But it nothing convinces you - take a look at the oil build at Cushing OK for 2015. That is going to take a long time to unwind. I read storage there was around 80% full so I had to go Googling. That is a scary moonshot chart.

When you look at the chart it doesn't seem as alarming as it is because it says Cushing can hold 60,000 barrels. But most articles I read say this place can only store around 46,000 commercial barrels. Which makes us very close to full right now at 46,261 barrels. If not overflowing. Just as a side note - Cushing held 19,645 million barrels on 10/2/2014. In four months storage has gone up more than 100%. It's really a staggering chart. All of these shutdowns and strikes are just theater.

Now what happens when oil prices resume their plunge? All those Walmart employees with raises but very few skills will get laid off and that wage inflation will disappear in a puff of dust.

Google it.

Saturday, February 21, 2015

She ran calling wildflowers.

I know the rest of you are suffering through the shittiest winter ever. I'd be going "The Shining" style crazy.

Here - it feels pretty much like spring. And it seems since the grass never got the chance to grow for the last year, it gave the wildflowers an opportunity to expand at an amazing rate making the hills of the East Bay really pretty amazing. From long distances you can see the yellow hillsides. I've never seen it like this before. The hills are always two colors, green and brown. Never yellow.

Normally these wildflowers are pretty isolated to pastures and the sides of roadways. This year, they've crawled up the side of whole mountains. This is the first time I've been in town and could see the wildflowers from the pasture lands on the outskirts.

These have a pretty high level of difficulty to get. Since they are far out in the pasture lands. If you go around a corner, your view or the light might change. It just really an impressive show this year though.

Thursday, February 19, 2015

Don't hold your breath.

There is an interesting dynamic shaping up in the Valley. Home sales keep dropping, and prices keep going up. Read: Bay Area home sales drop to lowest year-over-year rate since the recession.

Logic would tell you that this activity would have a limited life span. Yet the real life dynamic makes me ask - why do they think people are all of a sudden going to put their homes on the market?  Anyone who can, has, refi'd at rates they know they will never get again. AND the banks have put us through hell even trying to get that. Why would you put your house on the market when the world is so uncertain? It's probably a small victory you still have that house if you bought it before the recession in the first place. I know everyone else has moved on - but that scar runs deep. I'm not even above water in my house right now. My rental I could sell. But I'm locked in at a super low rate. And I don't even like being a landlord!

It's not rocket science why inventory is so low. The question is, prices don't keep going up. Right? I don't see the inventory thing getting any better. It's a huge chunk of the market locked in at rates at 4.25% or better. It's hard to figure out how this works out. It has the classic inflationary pressure though. To much money chasing too few products.

I do ask again though - how are banks making money?

Silicon Valley is gunning for Detroit.

For the past year I've been going to a lot of these connected car conferences. This encompasses self driving cars, and bleeds even slightly into drones. I haven't written much about it because I grew up in the Valley and I take more of a wait and see approach to new market sectors. Especially in the early stage.

Over the summer I noticed an interesting theme when it came to these conferences. It was almost a feeling of nostalgia for the return of a previous time.

What I remember about The Valley is that it used to be filled with orchards. And I don't even really remember it that well. Mostly just stories from old people reminiscing about the old days and how these buildings ruined all of their pristine orchards.

What I didn't know was California used to manufacture a lot of cars here as well as ship parts to the rest of the country. We used to be a car parts exporter after World War II. I didn't really realize this until at one conference a while back - one of the speakers said the Great Mall in Fremont actually used to be an old Ford Manufacturing plant in the 1950's. I was pretty surprised because I grew up here and it wasn't something I'd ever heard before. I never knew that mall used to be an auto plant. Nummi is the only plant I've ever known about. But it seems the tech guys know this and want to make Silicon Valley a parts hub again. Only in a new modern way. By turning your car into a computer.

Since I don't know anything about this part of California History I had to do a bit of googling to confirm the info. And as it turns out California does have a long history of manufacturing auto's and auto parts. I ran across a list of all the plants that have been closed in the past almost century. Here. I also ran across another article that shows the history. Here.

"The Ford Motor Company called its Richmond plant a branch plant, and it was one of many Ford branch plants throughout the U.S. and the world. Headquartered in Detroit (and later Dearborn), Ford manufactured most of it's auto parts there, and in the early years assembled it's autos there as well. But because it was more costly to ship fully assembled automobiles than it was to ship auto parts (auto parts can be packed in railroad cars or ships more densely than can assembled autos), Ford soon established a practice of assembling its autos at plants throughout North America to supply a geographically vast market."

The other thing I've been finding interesting is that Silicon Valley feels like your car is an untapped resource. It's one of the most costly purchases you make next to your house, but they estimate that most people only utilize it about 4% of the time. Unless you are a salesman or someone who drives a bunch. So you are basically buying a car to mostly park it. They are feverishly working on ways to fix that and tap that resource. Which is why the sharing economy is such a big theme right now.

I see the sharing economy as transitory. When you are 20, you don't mind lending your car or stuff to friends or other people who might screw it up. By the time you hit 30 you start to want to have nice things. I also see it as a side effect of the recession. I think some of it will live like Uber and ride sharing, but the other stuff I think will go away if the economy ever recovers. I could be wrong.

Wednesday, February 18, 2015

I'm not over them yet.

This is probably the fourth time in as many months I've posted a picture of the BMW i8. I don't normally do that. I was up at a connected car conf on Sandhill and was stalking a Lotus Elise. (pictures at the end) I hadn't seen one in a while. While I was trolling the parking lot to try and find it I ran across this BMW i8 which I thought at the time was random. It wasn't. BMW had a speaker at the conf.

I was taking pictures of this car when a guy walked out and asked me if I wanted a ride. I'm not 15 - so I asked if it was his car. He asked again if I wanted a ride, and I asked again if it was his car. He finally said no. I told Mr S that if he would have said yes, I would have gotten into that car. I mean, he's probably not going to kill me. You wouldn't want to get blood on that interior. I had this whole running dialog with myself because when am I going to get another chance to ride in one of those cars? I would have had to take the chance!

This is sort of a running thing with me. Mr S. had me consensually lojacked for a while because I am apparently easily kidnapable. One time I texted him and said - hey... do you still have me lojacked because I'm about to get into a car with a stranger. Seriously. I don't think husbands like that, but I try not to do it very often. But if I wind up in a ditch one day - you know how it went down. Stranger danger.

Here is the Lotus.

Tuesday, February 17, 2015

The world according to Snarkolpesy.

When I read articles about the Fed raising rates I laugh and laugh and laugh. This is a complete fantasy and I will tell you why.

1. Rates have ticked up over the last two weeks or so. They were pretty solidly in the 3.50-ish range for a few weeks. Now rates are doing funny things. The aggregate now is about 3.80-ish, but every now and then you get these wild swings of banks asking for rates in the 8%-ish range.

Last week this caused refi's to cave 10%. Mortgage apps to cave 7%. Here. I expect a pretty bad housing number this week, If rates keep ticking up - refi's are absolutely dead.

2. The dollar will continue to strengthen because the rest of the world is having a really tough time due to the collapse in oil prices. "India catching deflation fever." China has started to slash prices due to deflation pressure. Canada .... on man Canada... I feel for you - homes sales are down roughly 40%  YOY I read this morning and people are starting to panic. These are all large economies.

3. The strength of the dollar will make oil prices go yet lower. Rinse, wash, repeat.

Last week about 10% of the articles I read said oil was going to 10 bucks a barrel. Which I thought was plausible. Everyone has to pump more oil now to make the same amount of money. Today, 90% of the articles I read said oil was going to 10 bucks a barrel. I don't know where it is going, but simple math tells me lower.

4. Retails sales are barely over stall speed. You might as well call it a stall.

With the whole world pretty much in deflation now, how exactly does the US think it's going to get enough inflation to raise rates?

Another fascinating thing not really related to this article is - usually this time of year companies start to shed their worker build up from Christmas. They have yet to start doing that which is unusual considering the really horrible retails sales over the Christmas season.

Autorama 2015.

I didn't really plan on this blog being so car heavy. It was really a side effect of the recession. This place used to be more of a consumer blog, but during the recession tech caved, and cars were the only thing I had to get my mind off my troubles.

Cars show American individualism at it's best. They are really an endless source of entertainment from the way the guys customize them - down to whether a personalized plate is funny enough to be worth paying for. Plus finding something people don't see that often is sort of a thrill.

Anyway... I started the article this way because I can't emphasise enough that during the recession, cars were my source of entertainment when the whole world sucked. Car guys always seemed to have enough money to come up with new ideas. Always. There is a lot of sweat equity in cars.

Now when the cars guys show strain, it really starts to worry me. And this is what happened this weekend when I was up in Sacramento at the Autorama. It's not a great car show. I'm usually in it for the super loud cars with audio systems that shred phone books. It's the only show I know of that the guys show these cars.

This weekend the Autorama was completely caved. The amount of cars being showed were way down. Which I thought was interesting since gas is also way down. They usually have has been celebs, but this weekend none were to be found. It's the first time I've ever seen that at this show. The whole show just made me feel horrible in general.

So, yesterday I just spent working in the garden to try and get my mind off the feeling of impending doom. I picked up a few cars I wasn't really excited about at all, but maybe people haven't seen them that much.

This car was sort of interesting only because the roof was made from glass and I'd never seen that before.

This Prowler I've seen a million times. I think it might actually live in my city. I didn't even care enough to make my shots straight. But I figure this car people don't get to see very often. So I'm posting it. I think they only made them one year.

Sunday, February 15, 2015

Polaris Slingshot in the wild-ish.

I know I just had one of these on the blog in January, but I was just surprised to see one at all. I thought I'd read they were all under recall. This car was at a show and had a dealer plate - but it was a street legal plate.