The Other US Housing Market

Suddenly the press in the U.S. has begun to change its tune. Housing Bubble, do we read (finally), irresponsible buying behaviour, quasi-criminal lending policies, doom and gloom ahead.
Sure, they should have mentioned all of the above some two years ago, and in doing so helping an overheated market to cool down a bit.
Sure, the people working for the press probably believed the hype themselves and happily piled up more holiday homes, time shares, investment rentals, etc. themselves, and are now beginning to realize what was obvious to anyone not partaking in the ponzi scheme of bidding up properties they didn't need, couldn't afford, and will most probably walk away from shortly.

But then, there are two fallacies in the overall picture the press is painting, and both of them are far more dangerous to the economy and what is left of the free market than a few million people loosing their homes.
Number one, the press is setting the stage for class actions against reckless lenders. Just like they helped investors after the dot.gone bust to sue advisors and analysts for billions.
Number two, the picture is slated heavily towards the situation in large cities and burbs, especially on the coasts, completely ignoring the heart lands and small town America (you know, the guys that make sure that the nation is overfed).

Setting the stage for more regulation, consumer protection and court approved hand outs to people who are too darn stupid to know what they need and how to save for it, will most probably ravish the entire industry if it is applied wholesale. The press ignores the fact that "the fat cat banks" don't hold the mortgages anymore. Pension funds, insurance companies and other corporate investors do hold the bulk. The press ignores the fact that the two largest lenders, Freddie and Fanny are quasi-government sponsored and would be bailed out by Washington.
The press ignores the fact that most people who bought themselves mansions on low to medium salaries won't be able to afford the upkeep and maintenance once the builing and construction companies and their suppliers raise prices to make up for the shortfall - which will increase the cost of construction for everyone, commercial buildings included.
And these are just the direct results. Add to that the fact that more regulation and protection will raise the cost of doing business, lead to losses of jobs and bankruptcies among smaller contracters, as unfree markets naturally do, and worse, that lenders will be discouraged to lend to non-commercial customers for years to come, and you start to get a hint of what is ahead.
Not to forget the negative message this all will send to people who are basicallybeing told that they should refuse to live up to their responsibilities and pay the price for their own stupidity.
Dire straights, indeed.

Point two is that small town America didn't partake in the boom, but might suffer from the bust. While property prices in rural areas didn't increase much during the past years, and supply and demand is fairly stable, increasing interest rates will force the rural population to rethink some of their holdings, often family farms, arable lands, medium cost dwellings, etc. This in turn will most probably lead to an increase in demand for lower cost dwellings (a real farmer sells the home before the acreage) and a collapse in the prices of up-market dwellings in small towns.
In other words, the standard of living, lower in the countryside to beginn with, will drop further, as the populace there will make do with what they can afford, or risk loosing the farm, literally.

And other people's misery is a splendid font of opportunity. We've picked a few smaller towns and are buying low cost, ramshackle houses as fast as we can get them ;o)
Because when everyone runs in circles and yells 'unfair', the country is headed for poverty. And during poverty cycles, cheap rentals rise in price exponentially.

Think about it.

The Devil Wears Prada

So my wife and I watched the vid, and both liked it, sort of, in a shallow way. Then I thought it over. Don't get me wrong, the script is light entertainment, the acting is very good (seasoned actors are usually reliable) and the story is by and large very believable.

But then, the movie distorts reality and passes judgement on what is esentially the day-to-day business of running a successful magazine. Sure the boss is seemingly way over the top, commanding around her poor overworked assistants, chewing them up and spitting them out.
Marryl does an excellent job at playing an over the top bitch for that, and one can't help but wonder if there is an underlying snipe at Martha Stewart somewhere in there.
Rethinking the message after a while, it appeared to me that basically the assitants were simply doing their jobs, running errands, making appointments, feeding and coffeeing their boss at any time of the day. Hello, that is what assitants are there for. Don't like the heat, work in a coolhouse.

The liberal arts friends of the heroine, see their friend change before their eyes, and seem not to like that change. Hello, that's called success. Nevertheless, they don't mind the lavish presents she bestows on them.

Overall, in order not to spoil the movie for people who haven't seen it yet, it's an envy flick that ridicules workaholics, pokes fun at the crowd who wear designer clothes, and belittles the Jet Set. And yet, there are several times when the truth oozes out, the truth that it is the fashion industry that decides what you wear, even you believe not to follow fashion, and that the seemingly dumb and shallow droids working in the business have a detailed understanding of one of the largest industries on the planet. Which basically makes them good looking, well dressed, geeks.

Go see it.

Back for good

It's hard to believe that almost 18 months have passed since I last blogged.
Whereever did the time go?

I got married again (amazing, I actually found another human being who seems to able to live with me 24/7; a scary thought, I know) in July, and the church wedding is scheduled for February next year, because the logistics involved are herculian. We are carting about two dozen family members from accross the world here, invite another four dozen of her friends and all four of mine, as well as a number of wanna-bes and prospective friends in case the need arises in the future. Getting hotels organised, plane tickets, pick-ups, venues, truck loads of booze, etc. is no mean task.

We also consolidated our far flung mini-ventures into a more coherent structure and moved into new premises with views to kill for. Well, you know, the kind of views I like, bridges, express ways, harbours, airports, shopping centers - the life blood of commerce and basis of civilization.
Other people go to nature to relax, I go and sit in a cafe in a shopping mall and enjoy the vibe of commerce, wheeling and dealing, as it were.
Okay, the views include the timbered hills, the Indian Ocean and lots of greenery, and we got pot plants (plants in pots, potted plants, not plants of pot) all over the place, but it's a highrise and I love to soak up the atmosphere of freighters in the harbour, busses carting workers to factories, movement, progress, commerce, hope for the future. Ka-ching.

Other than that, not much new to report; but I will resume regular ramblings after this glimpse into my personal life (yes, it IS a life, thank you very much), and hope to do so more frequently again.