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Brief Notes

lulist

I've been in Utah a lot, enjoying the incredible powder this season, as well as a bit of a winter romance. Thus, I've been offline.

  • Noticed this one in the LA Times a few days ago. Trying to tap into home equity? We'll see The most incredible quote in the whole story was this one:
    "We didn't deserve this," Thaleia Georgiades, a real estate agent in El Dorado, Calif., said Thursday, two days after she and her husband, a builder, learned that their Countrywide credit line had been frozen.

    "When you are self-employed, that's the money you count on to bridge the gap during tough times. And this is a particularly tough time in both the building and housing industries," Georgiades said.

    I can remember when the advice to entrepreneurs was that you had to have a year of money in the bank to survive on when things were slow. To accomplish that you had to scrimp and save when times were good and not spend it all. Today, it seems that the word "money" has been confused with "debt." I mean, get real! Two people whose incomes are leveraged to real estate are counting on the equity in their real estate to bail them out during tough times, when real estate -- by definition! -- is screwed? Do people have brains anymore?

  • John Succo at Minyanville has been noting this same problem -- the confusion of debt for savings -- for some time. But I've never seen it quite so clearly called out by the statement of a random individual outside the government or Wall Street. This is actually fairly scary.

  • Mish commented on this same article more extensively.

  • It should be noted though, that this has been going on for months, with no official announcements until recently. New lines have not been extended and older ones have been killed off for even the slightest misdeed, missed payment, etc. Moving to cut off credit lines that are in good standing does ratchet things up a notch.

  • Kudos to Barry for pointing out that sometimes Cramer can be right, and that our government more often than not is wrong. For the record, Cramer was right on this from the beginning, and called out the obvious investment implications and socially negative consequences.

  • Being away as much as I have been has been quite nice, if for no better reason than that I have not been bombarded with quite so much information as I normally am. Working with one small notebook rather than four screens forces one to focus quite a bit more. Not surprisingly, my trading discipline and results improved significantly, despite having no more than an hour or two a day to devote to it.

  • Doing much of my work in the bar probably helped too. Isn't WiFi wonderful?

  • Casey Serin returned briefly to pump his penny gold stock. Then he published a disclaimer telling us all that he wasn't an investment advisor and to do our own research. While I've been bullish on gold for some time, finding myself on the same side of anything with Casey is quite disturbing. I can comfort myself by noting that I am not investing in penny anything, but instead own the actual metal and some high quality producers of it.

  • Going forward, I think silver is probably a better bet at these levels.

  • During one of the trips, I met up with Nigel Swaby, one of the major characters from the first round of the Casey mess. Nice guy. Had a fun time with him and the other local commenter who shall be known only as "WeWantTheFunk."

  • One of the things I like about Nigel is that he's willing to come clean. "I was wrong about real estate," was the exact quote.

  • D the bartender got me to finally do something with my facebook page. While I've been somewhat a skeptic of the usefulness of social networking sites and still think MySpace is an abomination, I must confess that I've reconnected with quite a few people in the past two weeks or so. And it's been fun.

  • Amazing how some people will ensure a "lose-lose" outcome out of spite. (I'll have more about this later.)

  • Finally, I don't often comment on politics, but must admit I'm at least a little bit excited about the fact that a Columbia grad has a pretty good chance this year. We've had 20 years of Yalies, and I really would prefer NOT to see another one. (Hillary, that means you!)

  • I'll be around for a week, then off to Utah again on Tuesday. Looking forward to Valentine's Day...

-btc

Posted on February 3, 2008 2:41 PM | Digg!

Comments (1)

Port Orange Homes For Sale:

I think all of the real estate mania has taught the American public to be informed consumers of how to get a mortgage and home buying and reading contracts and getting a real estate attorney to assist.

Some of the hardest lesson learned are being realized by many this last year and probably into this year. Hopefully by 2010 we will be in a better place.

Posted by Port Orange Homes For Sale | February 4, 2008 7:48 AM