December 31, 2007
Perspective on Real Estate
In reading these thoughts, please remember my feelings that when there is hardly any common sense in our society, there is little sense to our conclusions about what we think is happening!
When media decides what we’re interested in, then that is what we become interested in and what will dominate any national election. Religion, all of a sudden, is part of that, along with the economy and any candidate that parrots any of the above. The Republican candidates are essentially anti-intellectual, feeling that it is leftward. The Democrats are led by their intellectuals, who better comprehend drifting rightward is always dangerous to democracy.
Perspective should have switched from the economy to Bhutto’s assassination as the jungle that is Pakistan, bloodied to the world’s surface again. The problem is that a strongman who controls the military, where killing is the profession, can only control the violence that is just below the surface of a society. I have often been shocked by the willingness of the military to kill its own people as in Mexico, Philippines, South America and all parts of Africa—in fact almost everywhere.
In America we have been fortunate that the military has been under the control of civil society, until a man like Bush comes along, who preaches democracy but has no comprehension of what it means, certainly not in a domestic sense. He has divided the world; he especially accomplished the same between our military and our civil society; one more term or election of a Republican would have accomplished it, in a precious country in which his party shows a hatred of its own government—without what it preaches in foreign lands! Our military is always super-conservative and anti-democratic by its very nature—nurtured in a medium of the USSR/USA mutual suspicions.
The Pakistani/India/Afghanistan axis of religion, militancy, and tribalism will keep the pots boiling through our next election. We will need a President who can select her/his leadership with uncommon wisdom, free of vanity—nurturing parasites. This will not be simple as the press works against solutions; instead it focuses on perceived mistakes and human errors. Media is a gossip-loving Yenta, which seeks blame rather than solutions.
Sales of new homes plummeted to a 12-year low in November! The slide in home prices is now national, having nothing to do with location; rather it is timing that is the key to all of this!
The New Year will feature greater disclosure about mortgage products and fees. The consumer must still have a real estate attorney close-by to lessen risk and promote his understanding of what he is signing. Mortgage brokers will have more disclosure so that crooks and jerks can be curbed (at least better than they have been.) Beware of developers who are using private transfer fees to fund the acquisition or maintenance of “open spaces”.
TIPS FOR THE NEW YEAR!
Kathy Kristoff: “Spend cash on things that are truly valuable.” Don’t continue to spend on habit!
David Lazarus: "Here’s to your health, safety, privacy and sanity!”
“I will not give up hope for healthcare reform!” (It isn’t socialism, you fool!)
Tom Petruno: “Amid market turmoil (which will continue), seek right balance in investing.” This means not what you think is hot but equilibrium among stocks, bonds, real estate, taxable and tax-free bonds, foreign stocks, short-term cash accounts and other assets.
Between 1995 and 2003, the number of millionaire households doubled to more than 8 million, with many of these worth more than $10 million. Many find that managing that wealth is far from easy. In an environment of divided expectations to where we are heading, it is impossible to get into a consensus mode where the correct assumption of any expert will be taken into account by any administration. We have lost sight of what a recession is, instead of two consecutive Quarters of negative GDP; rather it is business confidence down, along with investments in plant and equipment, profits and cash flow. It is time to understand the meaning of investor and consumer psychology: the way we feel is the way we are and become.
A recession will arrive on wings of poor new job formation, tight credit markets and loss of trust in the FED.
Tourism is affected by this loss of confidence in the future. This illiquidity of ideas and confidence will produce recession.
Rising defaults will deepen the negative psychology building in our system. The election will do it no good as it seeks blame rather than solution. Payrolls in California will continue to deteriorate and as it goes, so will the nation.
It is time to remember that we have a cash-strapped consumer society. The ease of borrowing when lenders of various kinds make it possible for borrowing beyond our means. This we must control as we can’t seem to control what our governments (local or national) choose to do.
If you have the time, please read the Sunday LA Times column, by Andrew Bacevich, on “Bush’s Best-laid Plans”, showing Bush’s folly of his administration’s effort to manage history.
Ralph Waldo Anderson warned: “events are in the saddle and ride mankind.”
srg
