Chart of the Day

This graph indexes the price of housing to the price of other goods over time. The Case-Schiller Index is weighted towards population centers, so the swing shown is exaggerated by, lets guess 20%.

But a price correction below the baseline ‘100’ value is logical, lets guess that this correction equals the 20% urban exaggeration. This modeling yields a national housing value drop of 40%, a bigger drop than our previous estimate of 30%.

This would indicate a banking loss of $4 trillion, plus the administrative costs of foreclosure and resale, pushing the number to probably $6 trillion.

Bill's Hierarchy of Human Interactions

9:29 Fight against such of those who have been given the Scripture and they believe not in Allah nor the Last Day, and forbid not that which Allah hath forbidden by His messenger, and follow not the Religion of Truth, until they pay the tribute readily, being brought low.

I’ve operated in all of these arenas, in descending order of pleasantness and productivity:

Honor
Trust
Respect
Contracts
Intimidation
Legal Action
Physical Threat
Force


Everybody makes money if you can operate in the top three tiers. This is not easy and requires restraint and compromise. Everybody loses money or worse in the bottom two. You are lucky to break even in the middle three.

This is why Christian nations did well in the 20th Century, while Muslims, other than royalty, remain dirt poor.

By the way, Ahmedinejad has given us the scripture.

Police Chief Isom Is Here to Help

Homicides are up 30% in St. Louis over the past year, and Alderman Charles Troupe tells his constituents to arm themselves because the police force is dysfunctional. The Alderman is concerned that things will get worse as the economy suffers.

Police Chief Isom is here to help though. And he has a blog. Funny, comments are not allowed. His advice:

Chief Dan Isom told the St. Louis Post-Dispatch he understands Troupe's frustration but doesn't support citizens arming themselves.

Carrying guns, he said, is not a "recipe for a less violent community."

Thanks Chief. So noted.

Central America

I am convinced that the Central American political model is the goal of our current political class. In this model, the masses elect one of two interchangeable parties, the leaders of which then cut a deal with the oligarchs. There is no middle class to speak of and the rich pay no income taxes, there is instead a national sales tax.

This is why I support limiting voting rights as our Founders did. Life isn’t fair, but things are more fair if 25% of the population call the shots, instead of four men. Wages in Central America are $3/day, rising to $9/day in Belize. That would be a change.

I believe that Belize is better off than its neighbors because of the impression of stability provided by access to the English legal system. The Queen is the official head of state. That and the fact that Belize is an oil exporting nation.

I was able to see some of the first light sweet crude to come out of Spanish Lookout (good story) a few years ago and have boozed it up with the oil execs’ private pilots. From what I hear there is a lot of oil down there. Farmers I know mix the stuff coming out of the ground directly into their diesel tanks.

As Americans continue to overeat and assume that a bankrupt government will take care of their futures, there is a greater sense of realism down there. There is what I believe (hope) to be a critical mass of investment that will maintain stability when the SHTF. Nobody expects anything from the Belizean government.

My loyalties will remain with the US and its Constitution, but note some real estate deals elsewhere. I’d recommend Placencia Peninsula if you are a water type and Stann Creek District if you are an agricultural-acreage type.

$4.5 Trillion

$4.5 trillion, the amount of these financial shakedowns, is a lot of money. A new Nimitz-class aircraft carrier, built in the US, costs $4.5 billion. India is not burdened by the EEOC and other layers of stupid rules, and can build an aircraft carrier for under a billion US dollars.

So these little games our elected leadership, our banking buddies, and our unelected Federal Reserve are playing have spent the amount of money equivalent to one thousand new Nimitz-class nuclear powered aircraft carriers, or five thousand very capable Indian aircraft carriers.

Not a big deal. In ten years, air superiority will be provided by unmanned drones, which are a fraction of the cost and be able to outperform manned aircraft. A man can only pull around 9gs. The only reason we are building new manned aircraft designs is because of the lobby of pilots.

The guys above cannot attract nearly the tail that Maverick and Goose did. But they will be able to control 15-20gs on a small, efficient platform. And we could probably buy one hundred billion UAVs for the price of this government fraud.

What do prison ships go for these days?

Ambassador Lagon, Ph.D.

American Ambassador Marc Lagon; B.A. Harvard University; Ph.D. Georgetown University

This guy is on TV talking with Greta on Fox (background noise, begin focus). They talk about human trafficking and some blonde who disappeared in Aruba a couple of years ago. Greta postulates that this blonde was sold into sex slavery in Aruba, and Lagon agrees with the possibility, although he notes that all sex trafficking moves south-to-north.

And then the bead of sweat on Lagon’s forehead emerges. I thought it was a mole at first, but it kept moving down. Greta was flattering Marc’s office the whole time. I wonder what Lagon’s armpits were doing.

They’ve got us surrounded. Those poor bastards.

Following Up: Real Estate Bottom?

On June 24th, Brick Oven declared a qualified housing bottom, based on Price Schiller’s April data.

Were we right?

Prices Up Since
Boston (1%)
Denver (2%)
Cleveland (<1%)
Dallas (1%)

Prices Down <5% Since
Atlanta (-1%)
Chicago (-2%)
Tampa (-4%)
Detroit (-4%)
Charlotte (-1%)
New York (-2%)
Portland (-3%)
Seattle (-4%)

Prices Down >5% Since
Phoenix (-15%)
Los Angeles (-10%)
San Diego (-10%)
San Francisco (-13%)
Washington DC (-6%)
Miami (-12%)
Las Vegas (-13%)

The Federal Reserve map appearing above indicates that there never was a significant housing bubble in lots of places. Our declaration appears to be fairly accurate in the majority of the American landmass. The Balkanization continues in high immigration areas.