While 651 27th Street is now in escrow (listed for 20% under its last close), 525 27th Street #2 is still active and available. As a reader notes, purchased for $1,349,000 in October of 2006, listed for $1,495,000 in September of 2008, and reduced four times since.
Currently asking $1,195,000 for this Noe Valley condominium with three bedrooms/baths and panoramic city views. Don’t buyers in Noe know that “prices” are up?
∙ Listing: 525 27th Street (3/3) – $1,195,000 [MLS]
∙ On The Market (But Not The Public Facing MLS): 651 27th Street [SocketSite]
odd.
I thought Noe can only go up.
This is getting tiresome. The economy is a mess, prices are falling. Nobody is exempt.
LMRiM has brought this place up in his posts a few times.
Looking at just these 2 27th street properties, Noe seems to be in a world of hurt.
Can anyone in the know summarize what’s been happening in Noe Valley? Also what’s been going on in Bernal?
Noe has been way overhyped, but can’t go wrong with big views even if they aren’t of GGB and bay. Kinda sucks that they didn’t extend that deck all the way out.
It’s an ok listing. The kitchen and bedrooms were really small compared to other listings at this $-point.
These guys guys are going to take a huge bath, of course. I’m knocked over by the fact that this one apparently sold for $1.1M in 2000. We might not have to wait too long before we see pre-2000 pricing 🙂
I agree, this bashing of certain areas in SF is tiresome. No place is exempt from an economic downturn. The price per square foot of homes in Noe was up in November, which, while an anonmaly and probably unsustainable, is interesting nonetheless.
SS continually bashing certain locations based on a somewhat personal editorial bias is not.
the view is great and seems worth quite a bit. the cherry floors are very nice, but otherwise, pulease…..
– “gourmet chef’s kitchen” – with GE and DCS appliances, no real hood and a small backsplash? no way.
– “upper level bedroom” – that thing doesn’t look like a useable bedroom.
– “new carpeting” – read: cheaper than hardwood.
– “marble tile” bathroom – cheap 12×12’s probably from home depot. ugly cheap bath lighting and a $10 shower curtain instead of a glass door.
– “a tub with overhead shower” – wow, that’s worth a premium.
sorry i can’t make an educated comment on noe pricing but overhyped remodels really get my blood boiling.
did 550 valley get sold?
Ahh this is a condo though…ha!
dont know about 550 Valley. But 565 Clipper just went into escrow.
You can get a 4/2 house in Noe for less – needs some work but livable now plus it’s got a view from the main and upper floors.
4216 26th St
Priced @ $1,159,000
I guess 4216 26th St went contingent.
“This is getting tiresome.”
I’ll say. Too much patting of one’s own back for pointing out the obvious.
Sloppy reporting too: The Chron’s article noted “rising prices” in 94114, not 94131, which is where this listing is located.
Yeah, the editorial snark (at this point) is absurd, and undermines credibility.
Also, that sfgate article talks about 94114, and this is 94131 (I think)!
I’m shocked that this place sold for 1.1 in 2000, though (I’ll take LMRiM’s word).
@My home: apologies, you beat me to it 🙂
Meanwhile the guys on “the other blog” are posting about 565 Clipper that just went into contract for $2.1M… So, pick your selection bias and you will get what you want out of the various blogs. The ones run by industry guys like to pick a majority of gems. SS on the other hand has mostly descended into picking a majority of turds (and now bashing neighborhoods, for some reason).
SS–correct me if I’m wrong–is written by a renter who has self-admitted obsession with SF real estate. (I will never understand why one person constantly refers to himself in posts as “we”, but that’s a different issue.) The idea that this individual wouldn’t “talk his own book” or allow bias to creep in (just like all the posters around here do), is a little naive.
If you read what passes for analysis around here, the main takeaway is “don’t buy a home three years ago and then try to sell it today”. Not terribly enlightening or actionable. Every day properties are sold in SF that were bought 10, 20, 30, 40 years ago but those don’t make for interesting banter or ROI calcs. (Lack of interesting banter would also mean lower ad revenue for SS, of course.)
Having said all that, I like this blog. I find it entertaining, which is why I “plug in”. I also like what the guy at Curbed is doing and, as a resident/owner, I actually find his stuff more interesting/useful. If I was in the market for a condo in SOMA, I might find SS more useful, but I am not…
Note: I own a house in the overhyped, overpriced, crime-infested ghetto slum of Noe Valley so take all my comments with a grain of salt. I’m mostly just talking my book.
Dave – I’m pretty sure the reason that you don’t see 565 Clipper on SS is because it’s not an apples-to-apples comparison – it was totally rebuilt between the previous sale and the current sale. So we have no idea how much appreciation was due to changes in the structure and how much appreciation (or depreciation) was due to changes in the market.
That being said, if 565 Clipper went into contract at $2.1m, that means it’s going for $622/sf. At that price, 525 27th St would only go for $985k, which would put it at pre-2000 pricing and imply that the market declined 27% from 2006!
565 Clipper that just went into contract for $2.1M.
It hasn’t closed or even gone pending so we don’t know what the final sale price is, asking is $2.15M @ $637/sqft.
http://www.redfin.com/CA/San-Francisco/4251-4253-23rd-St-94114/home/17465323 has been sitting for 97 days; it’s larger, on a bigger lot, and on a much better street. Currently asking $2.275M or $623/sqft.
Just to add to 565 Clipper which now shows as Active-Cont after 35 DOM with a list price of $2.149M. At 3,374 square feet for this complete rebuild, this is $636 psf (if it actually sells at list). This property had a recent listing for $2.599M that expired on Oct 21 after 92 DOM. So if the actual selling price is a bit under list price, the $ psf could easily end up under $600.
As I noted in the other Noe thread, there has been just two SFH sales in Noe in Jan and their mean price psf was $599. Yes, the four SFH’s sold in Nov 08 did have an average of $863 psf – but maybe the new price is sub-$600 (ie back at 2003 levels).
525 27th Street #2 sold for $1.349M in Oct 2006, $1.100M in May 2000, and $627K in Jan 1998 per MLS. Pretty huge jump from 98 to 00.
suggestion:
what about having 1-2 “fun” posts every day? perhaps restrict those posts to fun and whimsical comments, or to factual data only about the property itself etc.
no side bantering of “it’s all going down!”, no personal attacks, none of that. Just ooing and ahhhing about a house/condo etc… if the posts deviate from the mandate of the post they could be deleted?
it could be like a “daily pron” respite.
as example, Naked Capitalism (an econ blog) does this. every day Yves puts a cute picture of a kitty cat or a snuggly puppy or something.
anyway, just a thought.
Wow…check out folks getting sensitive about one little pithy Noe jab. I don’t think anyone is “bashing neighborhoods” – editor was probably just pointing out the misinformation in the Chronicle’s selective use of stats. Prices are clearly coming down everywhere, even in Noe Valley. That’s all. But to credit the Chronicle, what better picture to use for Noe than some woman pushing a stroller across the street!
I love the fact that prices are coming down =)
Couldn’t make me happier.
Good idea, ex-SFer, however: I bought a snuggly puppy in 2003 for $400. Since then, I have spent $50/month on his food, $400 on a pet-hair vacuum cleaner, and countless dollars on vet bills. Today, I would probably have to pay someone to take him b/c he weighs over 90 lbs. Clearly I was suckered in by the late 1990s bubble in snuggly puppies. I have since concluded that snuggly puppies are terrible investments. If I’d only had the sense to purchase gold…
Sorry to hear that, “Dave.” You probably could have rented that snuggly puppy for half the cost and put the maintenance to somebody else, too! But then you wouldn’t have “pride of ownership,” nor could you paint the puppy any color you want. There are always trade-offs.
I have a question for you ex-SFer:
If you don’t live here, why do you post on this blog?
Seriously, am I missing something?
Maybe it’s time to go back to the crazy pills.
By the way, i would love a snuggly puppy 🙂
Instead of a kitty cat or a snuggly puppy how about a cute realtor in a funny hat, or…. Sorry!
How about a real estate listing from another country, a mas in the south of France or a grass shack in Tahiti or a soviet-era apartment in Tbilisi?
If you don’t live here, why do you post on this blog?
why not? is there a rule?
I’ve discussed this before, but I started posting here on accident a few years ago when I thought it was a Chicago blog!
I keep an interest in SF Real Estate because I’m a born and raised San Franciscan, I love the city, many of my family and friends are there, I’m in SF often, and I may eventually move back. A long time ago I thought I’d move back for sure, but as time goes on that idea is somewhat less appealing to me.
That said, I’m a doctor and my other half is in a very specialized version of business/tech. there are a few jobs that exist in the Bay Area and not many other places which would force us to move back there (I’m not interested in the other areas that the jobs exist: boston, NYC specifically). but we’ve toggled on whether or not it would be good for our lives to take those kind of jobs.
I would personally love living in SF if we made 7 figures, as we would if that job still exists. (If we moved back I would probably quit medicine since being a doctor in San Francisco sucks. I’d go into venture capital or something similar)
so it was a big question: leave our current careers/lives that we love and both go to an ultra high paying job that we may hate so that we can live the ultra-high life? or stay in the midwest where are lives are truly awesome except the winters suck big ass? (especially this winter).
but all things change with the credit crisis. I foresaw the credit crisis (perhaps by luck) and so decided to hunker down and stay in the midwest until this blows over and we see what kind of financial system is in place at the end. And thus those high paying options are off the table for now (in my mind anyway).
I may be ambivalent about LIVING in SF, but I still love the city.
People have a hard time understanding how I can love SF, but still see all of its numerous faults. but still love it. I would call myself objective. they call me negative. sort of like the optimist who calls the pessimist a “negative” when the pessimist feels they’re being practical.
Of course that’s not a rule.
I’m just curous.
Of course that’s not a rule.
I’m just curous.
Jessop you posted that comment twice.
Does that make you bi-curious?
I remember back in about 1998 or so when Noe homes first started consistently selling for around a half million or more. Locals were shocked, as the premium values were a distinct departure. Noe is nice and everything, but it was never a gay mecca like Castro or a serious neighborhood like Pacific Heights. It was clear even then that even with the real improvements going on in and around the neighborhood this would all end in tears. Even now a measure of humility could serve as salve, but as with real cash there is precious little of what is needed to be had. Prices reached obscene levels, and that is not something to be patting oneself on the back about.
This place goes for $850k. Mark it.
“Also, that sfgate article talks about 94114, and this is 94131 (I think)!”
Hooray! The bulls have gotten to the level of “this isn’t the real Noe!”
Yes, we Noe residents cry ourselves to sleep nightly. If only we could live in a “real neighborhood”, whatever that means…
The reason Noe has done well over the last 20 years is pretty simple: one can live in the City and work in the Valley. It’s not rocket science. The Valley is where things called “jobs” are located (for now, at least). 20 or 30 years ago you didn’t have that phenomenon. Hence: gentrification/strollers.
Today your odds of being knifed in Noe are much lower than they were 30 years ago, so naturally prices would have risen by 1998. Unless you think the whole area is going to unwind back into the seventies, then the trail of tears prognostication is kind of silly.
Um, and Noe is not a “gay mecca” like Castro? Where do you think all those boys and girls go live when they grow up and get tired of the all night raves?
@ “Dave”
“SS–correct me if I’m wrong–is written by a renter who has self-admitted obsession with SF real estate. (I will never understand why one person constantly refers to himself in posts as “we”, but that’s a different issue.)”
Unlike some other asset classes, the dude’s at least doubled by now 😉
Wrong, tipster. The 94114/94131 point is that SS’s straw man (a weak type of argument in any event) was sloppy and so even weaker.
actually I’m gay, not bi-curious.
Next slander please.
jessep:
it’s funny, I never even considered that your handle could be “jesse p” until you wrote a post with just jesse.
odd how life is sometimes.
depending on your daily life, I highly recommend a snuggly puppy. especially in times like these. I wish I could have a snuggly puppy, but as it is I have too much on my plate.
One thing I’ll add to my last post: the chief reason why I don’t move back right now to SF is because my goal is to retire early (by 45 if possible) and never NEED to work again. that way anything I do I’ll do because I want to. I hate doing things just to pay my monthly nut.
the high COL of SF makes early retirement difficult, unless I join the aforementioned zillionaires club, which I’m not sure I want to do.
I would love to have a snuggly puppy… or perhaps raise kids again. or travel the world or learn Swahili, etc. If one lives in SF I’ve found that one spends a lot of time affording the “necessities”.
That said, I realize that you can live in SF cheaply since I’ve done it before… but I’d rather not live in SF cheaply. I’ve found my enjoyment of SF increases exponentially with disposible income. which is very different than my life in the midwest. (I’ve lived on $1100/month in SF and in Atlanta/Houston, and let me tell you it was a breeze to do in Atlanta/Houston and it was Ramen city in SF).
ex-SFer:
I don’t disagree with that. But that doesn’t mean the world is coming to an end. I came to SF from Phoenix, and obviously the COL is much lower in Phoenix. I still like living here.
If you like where you live and do not buy on leverage, I don’t think your life is bad despite what bloggers may say.
Sheesh, don’t make ex SF-er question why he posts here. He is 1/3 of the reason I visit this blog! The other 1/3 is LMRiM and the remaining 1/3 is just to read everything and spout my own crap.
And here is a bit of the latter. Noe is certainly a key indicator of the state of SF RE. That neighborhood has seen as tremendous a bubble run-up as anywhere in SF, and many have placed it in the category of “only goes up” along with Pac Heights and Marina. Thus, if Noe (and Pac Heights and the Marina) are now seeing such significant price hits, you can be pretty certain that every other neighborhood is also suffering. It is a good bellwether. With the bigger bubble in Noe, my guess is it will also suffer a bigger pop.
Thanks Trip (blushing)
Noe is a mystery to me. Many who’ve lived in the city for a long time marvel at the transformation. I still have a hard time believing it’s anything other than middle class and even working class. (again, I know intellectually that Noe is a prime nabe, but I emotionally cannot believe it).
I know I’m an outlyer, but I still don’t put Noe in the same league as Pac Heights. To me PH is THE quintessential nabe in the city.
this downturn will really show what Noe is made of. Will it remain exclusive? or fall back into the middle-class ranks?
I’ve seen many gentrified neihborhoods fall back a notch or two in RE downturns in my time.
===
If you like where you live and do not buy on leverage, I don’t think your life is bad
I agree. that said, most (not all) RE is bought on leverage since most people buy using mortgages.
“Will it [Noe] remain exclusive? or fall back into the middle-class ranks?”
My guess is that after the bottom Noe will fall somewhere between the two. It has ratcheted intractably up from its middle class roots (well much of city has too) so I doubt it will fall all the way back. But dropping prices WRT to Pac. Heights and other stable enclaves will cause it to lose some of its luster.
And keep in mind that there are plenty of old timer residents in Noe still paying
“I’m knocked over by the fact that this one apparently sold for $1.1M in 2000.”
2000 prices should not be that surprising. Pac Heights is heading in that direction. 2922 Sacramento, a redone SFR on a quiet street in one of the best parts of Pac Heights has been on and off the market at about 10% above what it sold for in 2000. (Sold for $2.9M in 2000, hasn’t sold at $3.195, after one reduction from $3.395)
It may have been redone AFTER it was sold in 2000, so it’s possible it has slipped under its 2000 price. And that’s in one of the nicest part of Pac Heights.
“Will it [Noe] remain exclusive? or fall back into the middle-class ranks?”
Is Noe now above middle-class then?
Is it upper-class??
This Noe owner wants to know what class he is – I was pretty sure it was middle, have I been underestimating myself???
I really like Noe Valley. It’s a great place for kids. I dont live there but I easily would.
Its definetly not working class, maybe mass affluent?
Now renting for a wishing price of $4500/month on craigslist…
525 27th St
cue copious buy-rent calculations!
keep the Noe posts coming! all spring and summer it was an example “the real SF” and it is a nice proxy for the better cities on the penisula as it chases the same google dollars that palo alto does.
Now renting for a wishing price of $4500/month on craigslist…
This is becoming a pattern with underwater owners. For example, here is 4545 25th, another Noe purchase that slipped under the waves:
http://www.sothebyshomes.com/norcal/rental/0084129
Here it was featured on SS:
https://socketsite.com/archives/2008/11/an_elegant_noe_valley_apple_still_on_the_tree_4545_25th.html
I am always surprised at how little loss these owners can stand. What’s $200-300K when you are talking about homes that cost $1.35M and $2.7M when purchased? The money’s gone. It’s just gone.
Thinking that you’re not suffering a loss until you sell it is one of the basic psychological fallacies that any gambler/trader has to overcome immediately if he is ever to be sucessful. Unfortunately, bubble ponzinomics in SF over the past decade has forced every purchaser to be a housegambler. Many are just discovering this fact, apparently. The next lesson to be learned is not to throw good money after bad decisions.
“What’s $200-300K when you are talking about homes that cost $1.35M and $2.7M when purchased”
probably quite alot. possibly 100% of their investment, if it was bought with 10-20% down.
How do you know these owners are underwater by the way?
You can get something every bit as nice as anything you can buy for less money and without the downside risk (and there sure isn’t any upside right now!).
Why would anyone buy anything in SF right now?
How do you know these owners are underwater by the way?
Well, I don’t know for sure they are underwater in the sense that the sales price would be lower than their loan value, but I do know the houses are worth less than what they paid for them (from the listing prices). Perhaps much less? We won’t know unless they sell.
My general point is that if one wants to play in the $1.35 – $2.73M market (this condo and the 4545 25th avenue property I noted that was for rent as well), one should have been prepared to lose $200-300K. Commissions and selling expenses are huge in real estate, to say nothing of the inconvenence. A move in prices of just 5-10% would generate well in excess of these loss figures. I’m just surprised that people hold onto these albatrosses (when they would clearly want to sell) because they can’t take the losses that a mere 5 or 10% adverse move in the asset would generate. I think this is an important message to get out there.
@ Tipster: Q: “Why would anyone buy anything right now?”
A: Because not everyone shares your hyperbolic view that any home now, regardless of price point, would necessarily be available for less money next year.
One great thing about the current economy is that actions actually have consequences.
If someone wants to plan on housing prices not declining, they’ll need to put hundreds of thousands of dollars on the line, in the face of deteriorating financials, high unemployment and a bunch of loans going south.
Good luck to them!
LMRIM,
You were so right about the motives of Wall Street. 18.4 BILLION in bonuses for a year in which their companies were partly/mostly responsible for bringing down the US and global economy? R U kidding?
Wall Street has the world by the balls. Can’t let them go bankrupt. Can’t nationalize them. No matter how “shameful” or “irresponsible”, they will continue to buy 87K rugs and 35K johns.
I am hopeful that Obama can solve this riddle. More likely, he will cut costs everywhere else: health care payments (hospitals, docs, pharma), social security, gov’t salaries, etc — and Wall Street will laugh while the rest of us get pay cuts, suffer 401K losses, and get layed off..
ugh
r u kidding, you’ve completely missed the point. Obama isn’t going to change anything any more than Bush did. They all bow down to the same masters, the people who control the money. The political parties are just different marketing agencies for the same moneyed interests. They approach the same things from a different angle. That’s what you are missing. It doesn’t matter who is nominally in power: they are going to achieve the same result, they will simply justify it differently. The people really in power are the bankers. In the end, they win.
Jorge, your attacks are a bit too strong and a bit too personal, and everyone needs to cut the guy a break. Every Realtor in town is essentially unemployed for the time being, until volumes recover (which won’t happen until prices basically plunge), and like a lot of people who get laid off, they are looking at a 20-30% cut in pay by the time things come back.
I’m as happy about the price drops in progress as anyone, but a guy’s livelihood is no laughing matter. When volumes evaporate, big price drops are next. He’s staring at a much more difficult and uncertain future. Make your points, but cut the Realtors some slack for awhile. Their lives aren’t very fun right now. No need to kick someone when they are down. You’ll feel a lot better years from now if you let some of this stuff roll off your back.
Tipster, amen to that. This is an educational/entertainent blog and occasionally a place to vent off frustrations. Personal attacks shouldn’t go beyond the right-on-the-spot sting that tries to put someone in his place (got a few myself, and sent a few out as well). Whatever someone says, he doesn’t deserve insults.
Jessep,
If you like where you live and do not buy on leverage, I don’t think your life is bad
100% agreed. Overleveraging can take a toll on your personal well-being. I realized that when I had too many simultaneous mortgages/personal loans. I was starting to lose sleep after a few years. Now I’m off that debt train. Renting a place you like is great. So is owning a place you love if it doesn’t pull you down.
Tipster,
Apologies for the strong language, etc. No apologies for putting the buck back on the desks of the perpetrators of our current fiscal crisis, though. If anyone needs to be cut some slack right now, it’s the renters and savers who’ve had nothing to do with this disastrous bubble. Maybe I should show some restraint for brokers, ibankers, et al? Unfortunately my empathy lies with those who did not profit from the sham, rather than those who created and profited from it.
I understand your point regarding fluj though. I’ll be sure to provide him with the same respect he’s shown the rest of us.
I am hopeful that Obama can solve this riddle.
Lose that hope, r u kidding. The chances that Obama understands anything about how the economic system works and has been distorted are about 0. He’s a smart guy, but nothing in his background would indicate any interest in what lies at the root of this present crisis.
Therefore, he will rely on advisers who appear to him to be smart (in fact, they are – very smart, in fact; but their goals are not in consonance with the goals of the American people). Where do all these advisers come from? It’s the exact same gang of banksters we’ve had all along. These advisers (including the tax cheat who is now Secretary of the Treasury and his lobbyist Chief of Staff – ex-Goldman Sachs William Dudley) are hand picked by the banksters for advancement.
It’s not a “secret cabal” or organized conspiracy, as many lovers of straw men like to ridicule. It’s more that there is a consonance of interests, and at every fork in the road, the policy makers/string pullers will sacrifice the long term interests of the people in favor of themselves and their buddies. It’s akin to an organized crime cartel that has infiltrated the police and staffed the press with “their” reporters. All this nonsense about a $50M plane for Citi, and John Thain’s $1.2M office redo and $18B in bonuses being “shameful” is just pablum to feed and distract the sheeple. The real theft is going on in plain sight.
One thing I’d add to the above, as well. Taking on the banksters is a huge political risk, and would require expending tremendous plitical capital. At any moment, the Fed could literally torpedo Obama’s presidency in an instant. It is the monopoly supplier of currency, and no one in Congress has any idea of what’s going on (except for Ron Paul and maybe 2 or 3 others). Obama is no Andrew Jackson.
Obama’s goals are different from battling the banking establishment. First and foremost, he wants to create dependent voting blocks to ensure reelection and party power. His political advisers have studied the playbook of FDR (who intentionally set up social security in 1935 as an unfunded ponzi because he wanted to secure the votes of 20 million elderly in the 1936 elections). Obama is not going to rock the boat; he’ll reach an alliance with the banksters. In fact, I’m certain he already has 🙂
the list of perpetraters also includes the buyers. there was mass hysteria to buy. Sure realtors and bankers and the industry in general facilitate the process, but without the buyer they are nothing.
I’m impressed by how many posters appear to have Phd’s in Economics.
The certaintly by which people say that prices will plunge or rise reminds me of people screming to buy Webwan and pets.com in 1999 or that Google is a value at $747 per share.
The people who really have the best idea of the long term viability and trending of the market are too busy to post on a local real estate site.
Anybody who listens to any advise or predictions posted here, including mine, deserves to lose everything.
… Federal Reserve Chairmen, presidents of the united states, senators, representatives, bankers, appraisers, realtors, lenders, mortgage brokers, stockbrokers, hedge fund guys, buyers, sellers, doctors, migrant farm workers, lawyers, your friends, your neighbors, your family.
But save your self righteous personal attacks for realtors, please.
Read Jimmy C.’s 10:15am post again. It merits repeating.
LMRIM/tipster,
If the banks and investment companies could care less about their own shareholders (and taxpayers, of course), why would anyone hold their shares? Wish I would have realized this 2 years ago.
The best punishment for them paying out bonuses from taxpayer/shareholder money would be to sell their stock; not re-capitalize them with more good taxpayer $$
why would anyone hold their shares?
The bulk of shares is held by institutional holders, managers of others’ money, 401(k) plans, etc. What do they care? They buy the “market”. Market goes up, they get 0.5-2% of assets under management as a fee. Market goes down, they still get 0.5-2% of assets as a fee. Admittedly, it’s less than before (because assets have gone down), but it’s still a lot of money in the aggregate, and true market wipeouts are once in a generation things anyway, and you can always blame the “market”, and that “everyone was fooled”, lol. Heads I win, tails you lose.
The biggest risk to an institutional investor is that the market goes up, and he was NOT in it. This cannot be explained away to the sheeple. Since downturns are infrequent (historically), and it is extremely difficult to beat markets anyway, it becomes an asymmetric bet to refuse to hold a class of stock (financial companies) that had grown to somethinglike 30-40% of all corporate profit by 2007 (talk about structural misallocation as a result of foolish Fed policy!!). Most managers are “index+” type managers. They have a large index exposure, and just try to add or subtract exposure at the fringes.
The “experts” in financial management are not very expert, except at putting $$ in their pockets at low risk. At the highest levels of the game, there are some extraordinarily smart and ruthless people. They are the ones who control the politicians and ensure that thei gambling losses are borne by society.
Jimmy C at 1015am:
I hear what you are saying but let’s make it simple enough so that people without an Economics Ph.D can understand:
Home prices are falling (I think it’s safe to call this fact). This was happening in most places even before the economy hit the skids. Falling GDP, rising unemployment, and tighter credit has always caused home prices to drop. So wouldn’t you say that it’s a safe bet that home prices are going to fall until the rest of the economy recovers?
The people who really have the best idea of the long term viability and trending of the market are too busy to post on a local real estate site.
what makes you so sure?
It is known that the staff of the Federal Reserve itself is reading various blogs (it cited some of the blogs in its research papers), and it is also known that Paul Krugman reads AND POSTS various blogs, some of them with very low readership.
your argument is not very good.
Anybody who listens to any advise [sic] or predictions posted here, including mine, deserves to lose everything.
I will change this argument to:
Anybody who BLINDLY FOLLOWS any advice posted ANYWHERE deserves to lose everything.
I’ll tell you this: you would have made a lot more money had you listened to LMRiM/Satchel, me, cooper, diemos, Foolio, and others I’ve forgotten than if you listened to Ben Bernanke or Hank Paulson over the last 2 years. If you listened to them and their PhD’s you’d still think things are “contained”. ROFL.
Put up a good argument. I’d be happy to debate. I’ll back my arguments with facts and charts and logic all day. If you have better arguments, I’d be happy to change my mind.
@LMRiM
Just wanted to say hello and thank you for posting here. It’s funny — my daily read includes WSJ, Bloomberg, Dealbreaker (for comic relief?), and now a scroll through SS comments to see if you’ve written anything for the day.
I for one really appreciate your thoughts and insights.
and yours, too, ex SF-er 🙂
LMRiM
I am hopeful that Obama can solve this riddle.
Lose that hope, r u kidding. The chances that Obama understands anything about how the economic system works and has been distorted are about 0. He’s a smart guy, but nothing in his background would indicate any interest in what lies at the root of this present crisis.
Therefore, he will rely on advisers who appear to him to be smart (in fact, they are – very smart, in fact; but their goals are not in consonance with the goals of the American people). Where do all these advisers come from? It’s the exact same gang of banksters we’ve had all along. These advisers (including the tax cheat who is now Secretary of the Treasury and his lobbyist Chief of Staff – ex-Goldman Sachs William Dudley) are hand picked by the banksters for advancement.
It’s not a “secret cabal” or organized conspiracy, as many lovers of straw men like to ridicule. It’s more that there is a consonance of interests, and at every fork in the road, the policy makers/string pullers will sacrifice the long term interests of the people in favor of themselves and their buddies. It’s akin to an organized crime cartel that has infiltrated the police and staffed the press with “their” reporters. All this nonsense about a $50M plane for Citi, and John Thain’s $1.2M office redo and $18B in bonuses being “shameful” is just pablum to feed and distract the sheeple. The real theft is going on in plain sight.
———-
I forgot how good some of your posts can be. I have tired a bit of this site (mainly b/c our fearless editor has been seemingly otherwise occupied? – that outlook was like an elementary school book report), but then I remember that you post here, and post some incredibly well written and insightful analysis – and so I come back.
I may not agree with you always, or your tone, but that bit of yours I re-posted above is a gem.
18 billion in bonuses – is this what we will cry about? Is it the democrats who will cry about it when they pushed the poorly written and even more poorly handled TARP legislation right down the the throats of a (rarely) protesting electorate? Is it the voters who believe in ‘change’ and all that nonsense?
Let’s cry about 700 billion wasted, about an entire generation (myself included) who will waste their most productive years paying a generational and occupational ponzi scheme. Try 18 trillion, maybe more. That’s what we need to cry about. Our children will.
ex-SFer
Sorry, no time to “debate” someone who claims a blog posting quoted by a Federal Reserve staffer makes the blog relevant.
As for following your advice… I’ll pass.
You weren’t willing to put your money behind your opinions otherwise you would have shorted Citi at $40, Bear Stearns at $80, etc.
I would say your argument is not very good.
Speaking about blogs and eminence grises of the econ world, I recently came across a “secret blog” of Dr. Paul Kurgman. It’s really a howl for people who understand what frauds these guys are:
http://www.thepeoplescube.com/red/viewforum.php?f=23
I especially like the primer on taxes (excerpt follows):
Taxes are best when they are egalitarian; i.e., everyone ends up with an equal income regardless of what they are initially paid. This is economically crucial because history has shown that people are happiest when they feel no envy — and the best tax is therefore one that leaves everyone with nothing.
http://www.thepeoplescube.com/red/viewtopic.php?t=348&sid=6a6e2657b1f46605d5501578110964b6
@ polip – Thanks for the kind words. We were all posting on SS when the first $700B bailout passed, and I think we recognized that that was the point of no return. In broad outlines, it’s unfolded pretty much as expected. Perhaps when the stimulus fails, the Republocrats can retake the House by pointing to their unified opposition to the bill and we’d get divided government again. Unlikely, and in any event it would just staunch the bleeding; the damage that is being done now looks irreparable to me on a 10- to 20-year horizon.
LMRiM – I was posting too – maybe a different name back then 🙂 – the TARP was an incredible bit of thievery and I called just that at the time. Amazingly, the ‘sheeple’ as you like to cal them, saw that the TARP was thievery too – a rare instance of a brazen heist of massive magnitude out in the open which the electorate actually noticed! Note to banksters – heists of 20 billion at a time are much more likely to go unnoticed.
I know who you are, polip 🙂 I think you were one of the few who said the TARP shouldn’t go ahead, and we all took so much abuse from people who supposedly “knew” that the market would crash, etc., if nothing was done. How’s that credit crisis coming along there, experts? I do have to admit I’m getting a good laugh out of watching these footry to plug all the holes in the dykes, while simultaneously trying to steal as much as possible while it all melts down. I saw a headline somewhere that 40% of the world’s “wealth” has evaporated, lol.
“I’ll back my arguments with facts”
Homer Simpson: Facts are meaningless. You could use facts to prove anything that’s even remotely true!
“You weren’t willing to put your money behind your opinions otherwise you would have shorted Citi at $40, Bear Stearns at $80, etc.”
Homer Simpson: doh
As far as i know the guy that called this best, Roubini himself, has had all his money in index funds. Even HE didnt short Bear etc.
To the point of the TARP, IMO it was the political timing more than anything that allowed it to pass – just b/f the elections – when few politicians, especially the presidential candidates – could say no when told by the Wall Street/Treasury dept fraternal templars that the economy would otherwise collapse.
While the roots of this financial calamity are deeper, the protracted two year long presidential campaign certainly kept us distracted from recognizing and addressing the crisis.
Not that it matters for a blog, but all this talk about what people who saw it coming did with their own money is sort of pointless. How does anyone know what people actually did?
Again, not that it really matters (it’s the ideas, not the person), but I for one took my own advice. It wasn’t the best year for trading (2003 through 2007 was effortless), but I’m more than happy how it turned out. I feel lucky (and a little smart) to have missed this second equities wipeout, having moved out of stocks the first time in 1999, and gotten progressively back in in mid-2002 through early 2003. Having traded a number of markets throughout the world in the 1990s, I never expected to see twin bubbles and crashes in the US in so short a period of time (less than 10 years). Bravo, Greenie!
(LOL. I’m always portrayed as a “permabear”. I retired from professional investment management in 1999. How many permanent bears would have been succesful in the 1990s??)