BMW i8 in the wild.

Look - you aren't always going to get great shots.

When Mr S. was leaving work he texted and me and said - you are never going to believe what I found in the parking deck. He only had his cell phone to take pictures. And they aren't great in low light.

Still, I was super excited. The first thing I asked was if the car had a plate indicating a person owned it. We didn't think they were selling those yet. But I guess they are. MSRP 137,000.

We were both super impressed because it's been raining for about 5 days here. I'm not driving a hundred and thirty seven grand in the rain. He didn't even have it parked by itself like I would if I'd just spent that much on a car.

There are better pictures here of when I saw this car a couple of months ago in the day time.

The Fed is trapped in a jagged box.

Mortgage refinancing falls despite rates at 18-month low.

"Applications to refinance a home loan fell 13 percent last week from the previous week, on a seasonally and holiday-adjusted basis, according to the Mortgage Bankers Association (MBA). That pushed overall application volume down 7.3 percent week-to-week"

I look at interest rates almost every day now. At the moment it isn't that hard to figure this economy. If things were getting better - rates would rise. Not keep falling. It's really that simple.

Yesterday I could find a rate at 3.64%. It was hard, but it could be done. It wasn't the lowest reading in the past few months, so I didn't blog about it. It has to be close though. I'd have to look back through the blog. The rest of the rates were split 50/50 over and under 4%. It seemed generally like rates had risen a tiny bit. Today around 80% of institutions were offering rates rates around 3.8ish% range.

It's a little murky to figure out what is going on in the market right now because I read prices are still going up. From trolling the MLS, I'd say they are generally flat in my city. Agents still think they are in the zone because the markdowns still range in the 10 grand level unless you have a really expensive property.

The article goes on to say,

"Interest rates dropped through the course of last week, but the holiday likely delayed homeowners from acting on that drop in rates to refinance. We would need rates to drop back below four percent to generate substantial refinance activity," said Michael Fratantoni, chief economist for the MBA. "

I think this is a completely bullshit statement. There are still roughly 17% of homeowners underwater. I am one of them on my primary. My rental is now above water. I don't really know how many of those 17% have a reset coming up - but I'd guess 100%. The reset on my house was in early 2016. In 2006 you could not get a mortgage without a reset no matter how good your credit was. It was all they offered. If you had good credit you could at least get a 10 year reset like I did.

There is only one guy I know left that stuck it out like I did. I write about him from time to time because I know when they refi him - the market will mostly be healed. As of a few weeks ago they were still refusing to refi him and he's paying 7% interest. He's been trying all year. I know for a fact he has a reset coming too, but honestly - rates are so low that he would probably be better off if his reset hit. The stress of not knowing when rates will rise will kill him inside, but for a while he will be better off than he is now.

Just because it hasn't hit yet, make no mistake, when you have a reset coming you know you are in the foot race of your life with the bank. The Holiday season isn't deterring you. The bank is deterring you. I mean, every one's resets are in sight now. It focuses the mind. I bought my house about a year into the correction. So their resets have to be triggering super soon.

So what's next? Prices are rising so slowly now that this group is going to feel a lot of pressure. Enormous pressure. Everyone had been telling them rates will rise. If the economy was healthier they would. But most people are just living their lives and not tracking stupid stuff like interest rates. They get their information from the news. I've been saying since at least summer that the Fed would not increase rates because they couldn't. Activity in the housing market was so anemic it would send us immediately into a recession. It's only in the past few weeks the annalists are starting to understand rates probably were not going to rise until much later. The decline in oil has helped that along.

If you can't pull some of those 17% off the fence when rates are around 3.8%, you've got some serious problems. People know rates will not get that much lower. Let me tell you - when you are still paying around 7% and the rates are in the 4% range - it burns like the surface of the sun. All the deadbeats have been refi'd, and you just feel like a sucker for doing the right thing.

At any rate - lower rates are not not an option to stimulate the economy now. That tool is pretty well played out.

Now that I think about it, the fact that refi's have fallen off a cliff are probably part of the reason deflation is starting to be talked about a lot more. For the past 6 months that 17% has been pretty consistent. Likely some of the bump in inflation in 2013/14 was due to how many people they had crammed into the refi pipeline. When you have a reset - you don't spend normally. Even if you have the money to spend. That reset shapes everything you do. When that reset comes off - it's like a breath of life.

Today Mr S. and I were going through our morning routine. I was still sucking down coffee and watching the morning headlines when he walked in from taking a shower.

Me - I guess today's meme on why sales for black Friday were so bad is because we don't want to buy things anymore. They are saying it's a cultural shift.

Him - He busts out laughing. People still like things just fine when they are free. I looked at him like "what". He continues. Look at Ferguson.

This of course made me laugh.

Me - Can I steal that from you?

Him - You can loot that from me.

Two weeks ago I kept having to remind myself that Atlanta was three months from running out of water in 2007.

It's the second of December and we finally just out our first really good rain here in California. So while I had faith the rains would come (eventually) - it's getting really late in the year and even I was starting to get nervous for next year. We've only had small storms so far. Getting through another year like we had this year might not be possible. We were starting to draw ground water like crazy towards the end of summer. No one even really knows how much ground water we have apparently.

One storm doesn't break a several year drought - but it just feels good to have things be moist again. I know that sounds really weird, but I was putting screw drivers into the cracks in my dirt so I could measure how deep they were.

When slinkies attack.

I had my girl Jasmine in yesterday to get her staples out from her slinky accident. Oh yes. You heard that right. Pets can be really imaginative when they screw themselves up. 12 staples. 10 the first time. Two the second. Oh yes. You also heard that right. Almost 700 bucks in vet visits from a toy that costs probably less than 5 bucks. Middle of the night vet visits are spendy Yo.

Bunnies have really thin skin which I didn't think I needed to know about since she is the only one I have now. She doesn't have anyone to fight with so I thought open wounds were almost a non issue. The wound opened up a second time needing two extra staples. Then actually a tiny third time that didn't need a vet visit or staples. Her staples were in for 21 days. If she hadn't opened up a second time it would have only been 10 days.

That's spooky.

A lot of people are starting to say that gas is going to fall to two bucks a gallon in some states. I should be happy. It is a big savings for the consumer. What isn't to love? I like when people spend money because I like capitalism.

A few years ago someone hit on one of my posts where I'd posted the price of gasoline at the time. I remember when I looked at the post I was was like "when the hell was gas so low"? A buck sixty nine.

It was December 10, 2008. In the summer of 2008 gasoline was well over four bucks gallon. This is what I wrote at the time in the post titled It was the worst of times.

"I couldn't help but reflect on how unimaginable the last 6 months have been. Not that there aren't daily opportunities for this kind of reflection. Never in my wildest dreams would I have imagined over 4 buck gas. And once that happened - I never thought I would see almost a buck fifty. I just sort of wanted to immortalize it on the blog."

I guarantee you - just because people are saving money on gas does not mean they will spend it. Says the years 2009,2010,2011, and 2012. I don't actually have any idea when gas started rising again. In my head it's been four bucks plus forever. I even thought the picture of the lower gas prices came before four dollar a gallon gas. But it didn't. It came after gas was already well over four bucks.

That has only happened twice in my life. I'm guessing this isn't going to turn out much better.

It's funny what a difference a week makes. Late last week all the oil producers were saying how they were completely fine even though the price was a lot lower. They could still make money. This week people don't seem so confident.

And we have nine days to go before December 10 2014. I doubt it will make it to a buck sixty nine. But at this rate - who knows?

Where it stops - no one knows. NO ONE.

Last week the oil freak out started in earnest. It was even making me nervous and I've been blogging about this since summer. Today it's almost all my news feed is talking about it. And the amount of stories talking about deflation are freaking me out even more. If we do in fact reach deflation rather than just disinflation - there are no tools to fight this. Sure we could print more money. But Japan is the example now. Right? Just printing money does not cause inflation if people just hoard that money.

You guys know I've been trying to figure out the oil thing for months. So when I read that an oil baron has lost half his 20 billion dollar fortune in this oil crash - it makes me think that low demand is more at play than the US producing more. There is no sane oil man in the country that would take his hedges off if we were just producing more. There has to be more at play.

It always makes me nervous when someone who built their whole fortune on one thing fails to see the market changing. It's all this guy knows! It makes you feel like no one knows exactly what is going on.

This blog always goes off the rails in Dec.

Blogging can be quite the grind sometimes. It is really a lot of work to get the content I do. Even though sometimes it might not seem like it.

First I have to find the content then turn it into something readers might find interesting. Usually my days are full of half stories. Or - can I even make this into a story? Some days I have 20 half stories and I have to figure out if I can make a full story out of any of them. Lots of times I fail. At the end of the year I'm just over it because that process is harder. There is lots less interesting stuff to blog about.

When the rain finally comes it's like a gentle relief. You almost need an excuse in the Bay Area to lay around and do nothing. There is literally something going on all the time and the cursed sun is always shining. By the end of the year I'm just tired. Super tired. In January it's off to the races again and this process starts all over again.

At least the hills are finally greening up. I haven't seen that color in forever.

So far I haven't felt the need to beat up any old ladies at the supermarket. So maybe I'm going to make it through this holiday after all.

I get so funky around the holidays. Seriously.

I know it isn't seven feet of snow...

But it was nice to have three storms come in. Though I spent half the day in traffic because we don't know how to drive in rain.

Embracing lowered expectations. Said in the most sarcastic way.

I think we all are waiting with baited breath to see what the lower oil price does for the economy. Some think this will cause the economy to go gangbusters. Some like me think there are too many other factors going on for it to make much difference. But I still hope I am wrong. I want the economy to get better.

Sadly when I read stuff like the following - I think I am closer to right than wrong. It started out with an article from MarketWatch talking about the economy getting a boost from falling oil prices. Because this is what I really want to happen. I'm hopeful at this point. Then he spits out this:

"The good news is that lower oil prices are creating lower gasoline prices at the pump. This puts more discretionary-spending money into the hands of consumers. The latest retail sales figures reflected a nice jump in retail sales in October vs. September. Look at the nice jump in the retail sector recently, as seen through the Market Vectors Retail ETF RTH, +0.41%"

Now I didn't pay attention to the retail numbers that much, but if it had experienced "a nice jump" I think I would have noticed it. 

So I run over to the link Marketwatch provided me where I found this headline.  Retail sales up 0.3% in October, versus expectations for 0.2% gain.

"U.S. retailers reported strong sales in October, a sign American consumers were spending with more gusto and could help keep the economy growing at a brisk pace."

The article goes on to say...

"Retail sales account for about one-third of consumer spending, and overall they rose 0.3 percent, held back by a 1.5 percent drop in receipts at gasoline retailers. Economists polled by Reuters had expected a 0.2 percent gain."

These people have to be effing joking me. Those numbers are only slightly above stall speed. Without the gas bump, likely they would all be negative. Whatever,

At least this administration is consistent. They punish those who follow the rules in favor of those who don't. Kinda makes you feel like a sucker. Doesn't it?

Interest rates were down to 3.75% this morning. It's getting hard to find a rate over 4%. This combined with the 30% drop in oil are very ominous signs. If things were getting better - rates would be higher. It's just the bottom line. And most people finally seem to think there is going to be some disinflation. I've been saying for months - if higher oil prices bring inflation - what do lower oil prices bring? Now we get to see how low oil goes. Where it stops - no one knows.

You don't think the lied to us do you? (said in the most sarcastic way)

I've been a major critic of green energy.  For instance I don't understand how we are making our world better by getting rid of gas - and loading the world up on batteries. From what I understand batteries are made of tons more toxic things than oil or gasoline. But whatevs. The residents of the both battery recycling plants in southern California are constantly trying to have them shut down for shits shakes for having too much lead in the soil. The other - too much arsenic.

So.... this little solar farm in the middle of the California desert called the Ivanpah Solar Electric Generating System gives me endless things to laugh about. I try to forget how much taxpayer dollars were used. Now remember - this was an environmentalist idea. Right? Just so we are all clear on this. What I tell you next would not be my choice. Obviously.

Because this plant burns the shit out of birds. Usually they burn up mid flight and are "streamers".

Now, we learn it doesn't even put out as much energy as they said it would. I would think that as the system ages will only get worse. But hey - free fried crow. Or whatever bird they have out there.

"LOS ANGELES (AP) — The largest solar power plant of its type in the world — once promoted as a turning point in green energy — isn't producing as much energy as planned.

One of the reasons is as basic as it gets: The sun isn't shining as much as expected.

Sprawling across roughly 5 square miles of federal desert near the California-Nevada border, the Ivanpah Solar Electric Generating System opened in February, with operators saying it would produce enough electricity to power a city of 140,000 homes.

So far, however, the plant is producing about half of its expected annual output for 2014, according to calculations by the California Energy Commission. "Source.

I'm pretty ADD today because we are suppose to get some rain. I'm trying to get a bunch of things done at the house to prepare. Cut tree branches. Mow and fertilize lawns. The boring stuff. And - I'm trying to figure out how to word my impression of Mendocino.

And oh! Interest rates are in an interesting range. They are going back down. Which I didn't expect after the end(allegedly) of QE.. The world must be worse off than I think. Today you could get a rate in the 3.87% range. Last week before I left it was getting pretty hard to get a rate under 4%. This week - not that hard.

Glass beach.

On the scale of beaches - glass beach has to be near the top. It's basically three coves. It used to be an old dump back in the day where they dumped bottles.

Five years ago when I visited it was one of those well kept secrets. This weekend I could not believe how many people were streaming out. We did manage to make it pretty close to low tide though. You aren't suppose to take the glass - but I don't think anyone follows the rules.











Go a hundred feet in either direction and it's back to sand only.

You were the ocean when I was just a stone.

The beach scratches a few itches for me. It's super frustrating to get cell coverage, and it gives me immense comfort. It's probably because I spent so much time being a beach bum growing up. And I mean that in the most literal sense. I don't get out there as often as I like these days. So when I take the time I want to go to pretty unusual ones.

I'd been wanting to visit this one called bowling ball beach for a while. Since it was my anniversary with Mr S. we thought we'd stay up in Mendocino to visit it. It has some of the most unusual geology I've ever seen. It's known for these sandstone concretion balls that lay on the beach. I imagine they use to rest on the ocean floor until the earth was tipped skyward.

We got there right at low tide, but the beach balls were nowhere to be seen. Mr S. was able to get some elevation and could see people on the other side of the cove we were in. So I set off to find a cliff path. The great thing about the beach is no matter what - someone has cut a cliff path.

By the time we found the area - the balls were pretty submerged but you can see beautiful photos of them here. You have to get there right at low tide to get the full effect. And there weren't that many,  They're all clustered in a small area. So the beach is a little oversold. It's still a really unusual beach to be sure. But if the tide is too high the cliffs are almost more interesting than the beach. You can see the balls in the cliff side.











This part looked like a boat ramp.



Modern cave art.



There were more full abalone shells on the beach I've seen since I was growing up. I thought they'd been harvested so much maybe you didn't see that as much anymore. You still find pieces, but this beach had the full shells everywhere.

Don't expect anything from me for the next couple  of days. I'm going to find a place with super sketch cell coverage so I can recharge my batteries.

The gears are coming off.

Mortgage volume stalls with rates.

"Mortgage rates—and applications—barely moved last week.

Total application volume fell 0.9 percent from the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association.

Applications to refinance, which saw a brief surge on lower rates in October and then a precipitous drop when rates rose again this month, fell 2 percent from the previous week. Mortgage applications to purchase a home rose 1 percent from the previous week but are still 11 percent below year-ago levels. "

I've actually been a little surprised rates didn't tick right up after the end of QE. Up until today it was still a 50/50 chance you'd get a rate under 4%. Although the rates on the other side of 4% were getting pretty high. You could either find a rate in the 3.87 range, or the 4.30ish range. For the past few months those numbers had been clustered closer together in the slightly over 4% range.

That made me feel like the economy was still severely weak. The banks payed their hands last summer when they started raising rates before the Fed did. If things were that great - rates would rise without the Fed. But.... people are going to want a higher yields for taking over the risk from the Fed. So rates will rise now.

There is almost zero appetite for this. You can see already there are going to be huge problems. And pretty soon. Anyone who can, has refi'd. Those who haven't, can't. This is still 17% of homeowners. These people likely will not move. They have a ton of skin in the game.

I got up the nerve to ask that guy I know if he'd made it through the process yet. It's a sensitive subject. He's still paying 7%. The last time I asked was over the summer. To my shock he said no. He's been trying all year. I mean literally since January. He's one of those 17%.

There is absolutely nowhere to go for the Fed. It isn't like they can make rates lower. It's almost a worse situation than 2008. Then, the banks just wouldn't lend. But all these people now are in pretty sweet low interest loans. They are going to camp out.

It's no wonder new houses had a slight gain - what else are people are people going to buy when you have those two forces? This market is grinding to a halt.

Where are all those peak oil assholes now?

Texas oil production in August topped 3M barrels/day for the fourth month, as the Lone Star State produced 37% of all US oil.

I have to admit - I've been fairly obsessed with oil the past few months. Not that I want to be. The recession has made me have to learn about a lot of things I never thought I'd need to. Like oil. My general feeling is that the price of oil has done only one thing for the whole time I've been on this planet. Go up. You have to try and figure out if this period of time is an anomaly, or something different. Until today - I thought it was probably closer to an anomaly. But it's always good to question your beliefs. The world changes.

The main issue is trying to figure out if the lower oil prices are due to more production or less demand. It's obvious it is some combination. Since both of these things are happening at the same time it's hard to figure out the ratio is. Everyone seems to acknowledge we are producing more, but how much more verses the decreased global demand? There are a ton of smart minds who seem to be just as unsure as I am. Otherwise I wouldn't have to learn this crap.

Just a week ago Mr S. got into this discussion about the Keystone pipeline. I thought the Republicans should abandon their push for it. Which made him fairly frustrated.

My perspective was - if we really are producing that much more oil (and that was a very skeptical if) why not continue just doing more of that instead of pulling this pipeline down from Canada over government land that needs to have all sorts of kickbacks to be approved. If we were just getting so much better at producing here - it just seemed less expensive to keep doing that. The push for this pipeline just seemed tired.

Well..... now I know how much more we are producing relative to history. And it's quite impressive considering the short time frame. I'm always sort of nervous about charts that head to the moon. What goes up must come down. But if we can double production in three years you have to wonder what we can do in another three years. Maybe that pipeline is effectively obsolete even before it gets started.

My general belief is that low energy prices started the industrial revolution. Low energy prices are only good for consumers. But.... President Money Bags ideology runs completely contrary to that belief. I mean, low energy prices completely screw his green agenda because it makes it not cost effective again. I'm pretty sure he wanted gas to be around 7 bucks a gallon. If oil really is going to stay low for a really long time there are a lot of sectors that are going to be in turmoil at taxpayer expense.

I'm starting to lean towards thinking oil could stay lower for a good amount of time. Nobody knows how long because you can't predict behaviour or the future. No matter how much people think they can.

One last kiss before I go.

I would have thought the rain train would have started by now. I mean, it's almost the middle of November. So far we've gotten just enough to stop the decline in the trees. The Bay Area is starting to look like those pictures you see out of upstate NY in the fall.

Bunnies be trippin'.

I haven't done middle of the night vet visits in a while. Somehow we think she got sliced open from the sharp edge of a metal slinky. She's fine. But she's got a few staples. It was a bloodless injury so we didn't notice until we were snuggling around midnight.

So everyone - make sure your slinky's are up to code, because that is a pricey visit.

3D printing tips into the mainstream-ish.

This weekend I noticed Fry's Electronics now sells 3D printing filament. I don't know how long it's been there but it can't be long. I was trying to find the drone isle because when we were in there a week ago Mr S. said he was surprised just how much space the drone isle took up.

That's when I realized they also have a half an isle for 3D printing stuff. I asked one of the sales representative if they sold 3D printers which they said they did. But it was only for special order and they one had one locked up somewhere on site.

I don't have much for you today.

Not much is interesting me right now. I did see this van and took some shots because it had an interesting paint job. Then I found out it was a rentable camper van. Which all of a sudden made it a little creepy. Who rents a van with dead in the eyes children painted on it? Their name even made it worse. So I don't want to give it here. I will get sued.

If by worst they mean ridiculously liberal.

Marin Ranked As One Of The Worst Counties In America To Own A Home.

When I read this article I laughed and laughed and laughed. I'd love to have those problems. Marin county has to be some of the wealthiest communities in the Bay Area. During some of the worst of the recession it was the only place on earth that made me feel better because the world there seemed unaffected by what the rest of us were going through. It was like going on vacation every time I went up there. I mean seriously - they have happy cows. A permanent rainbow over the county (no-they do), and the air smells like perfume. Well, maybe that is pretty dramatic. But that is really what the cities in Marin feel like. I blogged about it here. And here.

I was trying to find articles to describe Marin when I ran across this article. It describes the place really well. It's the kind of place that says fuck you to George Lucas. Seriously.

I'd forgotten about this until I read the article. This is the best quote from his post because that is exactly how the cities in Marin county feel like.

"Charles Murray, in his new book Coming Apart, points out that a new social class has been created due to the greater economic value of brains, a consequence of the impact of new technology. These workers tend to be in the high-tech industry or the financial industry. They have a privileged position and are isolated from the rest of America. They tend to marry each other, and they cluster in certain places like Marin County. Because their skills are in great demand, they are unacquainted with economic hardship. "

Back to the George Lucas thing - as I remember it, he wanted to build a LucasFilm movie production studio in Lucas Valley but the neighbors were super bitchy about it. They thought the place was too big. I thought - you people are effing crazy. This is going to do great things to your property values. They hassled him for so long (at least a decade) he eventually scrapped the movie studio and said look - I'm going to put affordable housing on this plot. Which I thought was funny. I mean, this is super liberal George Lucas. They didn't care, and that is why George Lucas took his shit and went to Chicago.

Well, that is how I remember it up until the Chicago part. I think SF also hassled him so much even he eventually gave up there too. I don't want to look through all of the old articles now.

They eat their own there. But it is a really amazing and beautiful place to live. If it's the 17th worst place to buy a house, maybe I should start looking at 1-17. Maybe those places are much more fabulous than I thought.

Additionally - how bad do things have to be at the weather channel that the only way you can get press is through making silly articles like that?

That totally looks "robust" to me.

Source for the above chart. How BusinessInsider covers the same data below.

"Service sector activity growth reflected robust new business gains in October," Markit noted. "Reports from survey respondents suggested that improving underlying demand and strengthening domestic economic conditions had supported sales volumes. However, the latest expansion of overall new business intakes was slower than the three-month high recorded in September."

For the past few months I've been reading articles about how the service sector has been slowing. Though you wouldn't know it if you listen to the news very much. Because everything is great. Just great. So I had to find a chart to show just how "robust" things are. Oh, and there is this article from last month that said this:

"WASHINGTON (AP) — Two days before the government's much-anticipated jobs report, a snapshot of employment trends in the service sector flashed an ominous sign. 

Hotels, restaurants, banks and other service companies, which employ 90 percent of Americans, reduced the size of their work forces in September, according to a survey of purchasing managers conducted by the Institute of Supply Management.". Read more here.

But just ignore it because did I mention how great things are?

Conversations with Mr S.

Last night I was generally bitching about how much I hate Vine and how I want them to starve to death along with anyone who uses Adsense on their site. Do these assholes even visit their own sites to figure out that most people can't even load the pages to read what they say because they are so loaded up with shit? I have to abort about half the sites I visit now. I know it's not only me - I see a lot of people bitching about it too.

At the end of my long rant I said - it occurs to me that Vine could kill youtube. Every site I visit now has three auto play Vine videos and then a youtube video at the end. But they have already stripped all the parts you might want to see into those three Vine video's. And you have to watch them if you want to or not. So... why would you ever click on the youtube link?

Mr S. replies - why.... it's so you can sit through the embedded ads of course.

I feel icky.

These are the choices we have in California. Jerry Brown, or crazy eyes Kashkari.

I hated everything about Kashkari. He was an architect of the bank bailout plan. And he wanted to give free college to Math and Science majors. This group in particular has the best chance for paying back their student loans. And it would be hands on training for their degrees. Right? ie, basic math.

But then there is that other "group" who also voted for bank bailouts and free education for everyone. So there is that.

What a stinkfest.

Meanwhile in California.....

Presented without comment.

"State Controller John Chiang dropped a political bomb the other day, although he was so quiet about it, one could say it was a stealth bomb.

Chiang added public pension systems to his already large fiscal database. One chart reveals that their “unfunded liabilities” – the gap between assets and liabilities for current and future pensions – exploded from $6.3 billion in 2003 to $198.2 billion in 2013.

Moreover, that startling number assumes that pension systems will see asset earnings of about 7.5 percent a year – a number that some are beginning to see as unattainable." Here.

Read more here: http://www.sacbee.com/news/politics-government/dan-walters/article3507521.html#storylink=cpy"