Re: [silk] Where is the US economy heading?
http://bullnotbull.com/archive/dow13k-1.html My personal prediction is that it's much easier for currency to inflate than for housing prices to significantly decline. Looking from the outside, much of the climb in the Dow has been a reaction to the decline of the dollar -- just for the value to hold steady, the former must goes up as the latter goes down. In the 70's (back when cheney was last in the white house), all the US inflation was blamed on those Ay-rabs and their oil. Assuming wars were financed then as they are now, I wonder how much of it was simply due to finally having to pay, for real, the bill on fighting in Vietnam? (belligerence and bonds never mixed well over c20) I can easily call the current US administration cheats and liars. I probably can't call them thieves. But I can say that, in real, or at least EUR vs. USD (not even barrels of oil) terms, they may have managed to chop more than 10 trillion USD off national wealth over the last 6 years. Everybody calls .-bomb a bubble, but at least all the stupidities of the new economy were committed by people trying to offer win-win games. This administration believes in playing lose-lose (at least as long as they can grab a bigger piece of a smaller pie) yet nobody calls bubble on them. That rant having been made, I'll point out that my parents remind me from time to time that the situation in the old country is never as bad as it might seem from reading the papers. I really don't expect the US to face an acute crash, especially if saner politics prevail, but wouldn't be at all surprised if the chronic adjustment to a world without throwaway energy proves more painful there than elsewhere. Structural adjustments are not generally so liquid as financial.* Neither my wife nor I have any need or intention to emigrate to the US. I am always amused when I follow google news links to parochial papers who seem to believe that because I have a non-US IP address I am going to be interested in clicking on green card ads. However I was weighing the educational opportunity options for my kids in the US. This article has firmed up my mind. How old are your kids? University-age? -Dave :: :: :: * I spoke with an argentine a little while ago who told me about how they could have bank deposits in pesos or dollars, and one day, the government said that all dollar deposits were to be converted 1:1 to peso deposits. At least there, people thought they'd had the option to have accounts in something other than pesos; try opening a non-dollar account in the states sometime!
Re: [silk] in the eye of the beholder
Having recently seen a number of Rothko's works up close at personal at the Tate. I now get him, and have to agree. You cannot (I could not) appreciate Rothko from reading about him, seeing his work reproduced in art books, or viewing reproductions of his work. However once I was actually *there* with them I was stunned. I sat down and didn't move for a good fifteen minutes. I was shocked at my reaction frankly. -- Charles On 4/24/07, Deepa Mohan [EMAIL PROTECTED] wrote: That was SUCH a good description of Rothko's work Danese. Deepa. On 4/24/07, Danese Cooper [EMAIL PROTECTED] wrote: $46 million is a ridiculous amount of money for a painting (any painting) but I'd hardly characterize a Rothko as stripes of color. The depth and texture Rothko's methods achieved are much more compelling than can be communicated by a reductionist description (or even a print or photo of the painting). You really have to see them in person, and see them up close and properly hung to get the whole effect. They are calming, soothing and sometimes deeply moving. They are interesting to experience from different perspectives; because most are quite large, you can surround your field of vision with color standing close and then stepping away the separation of different color fields resolves in your eye. Such a simple thing (paint on canvas) but carried off so beautifully. Impossible to cheaply copy (because of the surface texture and something about the layering of color that achieves the end result). You can actually see that it took some time to make each one. Again as architect Christopher Alexander coined the term, which Bill Joy later taught to me, there is a quality with no name that is deeply pleasing and that makes you sigh when you recognize it. Rothko was channeling that quality in paint and canvas, IMHO. Danese On Apr 24, 2007, at 1:32 AM, Rishab Aiyer Ghosh wrote: stripes of red, black, white and purple - how much is it [1] worth? apparently at least $46 million [2], guaranteed by sotheby's to david rockefeller who's selling it. -rishab 1. http://economist.com/images/columns/2007w16/Rothko.jpg 2. http://economist.com/daily/columns/artview/displaystory.cfm? story_id=9061031
Re: [silk] in the eye of the beholder
On 4/24/07, Lawnun [EMAIL PROTECTED] wrote: [...] On a side note, does anyone ever speculate that sometimes the price of these works of art are high both due to the artistic merit of the piece, and the status of the prior owner? When I read the economist piece, it struck me that part of the allure for both Sotheby's and to that extent, The Economist, was the fact that you had a consignment by one of the richest men in America. Sure, the artist only got paid $10,000 or less. Cheeni
Re: [silk] Where is the US economy heading?
On 4/28/07, Venkat Mangudi [EMAIL PROTECTED] wrote: http://bullnotbull.com/archive/dow13k-1.html This is a description that would fit the current state of the Indian economy rather well. In an inflation ridden India of first time frivolous consumers and debtors, it seems difficult to afford a decent urban home and a primary school education on an honest income. The US maybe headed for a fall, but a similar fall in India will have rather more pronounced and dire consequences. The banking and financial system in India is weak, without being backed in any serious measure by economic or military might. A fall in property prices, the US economy or foreign investment is sure to bring doom both to the foolish debtors and the wise who stayed away from debt. I don't have much confidence in our TV reporters, but one statistic I heard yesterday of 9 out of 10 car buyers taking out a loan to finance their purchase strikes me as about right. I am currently shopping for a car, I have been so for the past several months. It has never been an urgent necessity for us, since my wife and I are rather content to make our way around on public transport after we sold our last car. Nevertheless, having made up my mind to put an end to procrastination, I visited the local Tata showroom for a looksie, intent on getting a cheap set of wheels. I was amazed at the number of new cars being bought on a rather ordinary and not particularly auspicious and god-friendly Sunday. The sales personnel took a good 20 minutes to notice that I had entered the premises, which left me rather happy since I could wander around and inspect the vehicles without a nosy, ignorant salesman hindering my progress. The salesman who finally accosted me was more interested in selling me a car loan, than in selling me the car. This to my mind strikes the most discordant note of all, the financial industry is so heavily leveraged on foolish property and consumable debts that it risks the economic stability of India. The salesman was rather crest fallen when I announced that I had no need for a loan. The fall in his interest levels was rather dramatic as he abandoned me for yet another 15 or so minutes as he wrapped up some potentially cozy loan deal. In the end my visit turned out to be in vain since I was rather definitely told that they had a policy against allowing test drives in the dangerous evening traffic. By any measure the value that Indian cities seem to offer in lifestyle benefits, living space, property ownership and civilization seems rather scarce. On an idle Saturday afternoon I must have done some thinking for the idea that I pay more than half of my income in taxes has come to be rather firmly implanted in my mind. It's not hard to get at such a figure when you compute my basket of direct and indirect taxes - namely, income tax at 33.33%, sales tax on anything I consume at 12.5%, miscellaneous upstream taxes such as excise and customs, and property and road taxes. For this I don't get medical insurance, nor do I get the right to live in a strife and peril free country. I have bad traffic, chaotic infrastructure, inadequate supplies of dirty water and a corrupt government that beggars contempt. Were I to be rash enough to splurge on a house of my own at the present moment, it would cost me a rather large fortune, financed no doubt by usurious debt. Debt which I would possibly find hard to repay if the Indian economy were to hit murky waters. Debt that would be in vain were I to lose my land to some fancy record keeping at the land records office, no doubt inspired by the invisible and sometimes all too thoroughly visible hands of the land mafia. Debt that would make me look like a fool when the property price like water finds its true level. Wise men have observed land is always a good investment for they don't make more of it any more! Under ordinary circumstances that would hold, but what we have in India is a spiraling inflation of urban land prices while rural land continues to lie untouched by the Indian economic miracle unless it has some potential of touching the margins of our ever expanding urban zones. Cities unlike our planet with its arguably finite quota of land can be created by mere men in rather short time spans with a stroke of a pen. All that an Indian city seems to need is a good road or two, meager quantities of civic infrastructure and power and a legislation declaring some lands as urban and the rest as SEZs (special economic zones). Which kind of brings me to the final note of doom that I think about during the summer power cuts since I don't own a car or I'd have those thoughts at the fuel pumps as well. Energy is central to our existence, and the smart economies have squirreled away these essential resources through a combination of forethought and action, whether it be through wars or industrial take overs backed by military might. India on the other hand has a rather tenuous grasp over a vaporware
Re: [silk] Where is the US economy heading?
On 4/30/07, Srini Ramakrishnan [EMAIL PROTECTED] wrote: Were I to be rash enough to splurge on a house of my own at the present moment, it would cost me a rather large fortune, financed no doubt by usurious debt. Debt which I would possibly find hard to repay if the Indian economy were to hit murky waters. Debt that would be in vain were I to lose my land to some fancy record keeping at the land records office, no doubt inspired by the invisible and sometimes all too thoroughly visible hands of the land mafia. Debt that would make me look like a fool when the property price like water finds its true level. Can someone point me to a couple of examples of instances where the real estate market went belly up? I am more interested in examples where investments lost value over a large period of time rather than short-term losses. I ask because I keep hearing dire warnings of real estate meltdown, but have personally only seen short-term losses. Long-term, real estate investment (like investment in the stock market) seems to increase in value. S. -- Homer: He has all the money in the world, but there's one thing he can't buy. Marge: What's that? Homer: (pause) A dinosaur. -- Homer J. Simpson Sudhakar ChandraSlacker Without Borders
Re: [silk] Where is the US economy heading?
Thaths [30/04/07 13:17 -0700]: Can someone point me to a couple of examples of instances where the real estate market went belly up? I am more interested in examples where investments lost value over a large period of time rather than short-term losses. I ask because I keep hearing dire warnings of real estate meltdown, but have personally only seen short-term losses. Real estate has a stable, gradually rising value. But there's periods of very high inflation followed by steep corrective drops once the bubble bursts. So if you buy during a period of inflation and then sell in a panic after the bubble bursts, more fool you. The bubble's getting fat, round and eminently burstable now, where my apartment, that I bought for Rs.2 million back in 2002 is worth something like 2.5..3x that thanks to soaring land prices (oh, and bank lending rates that have risen a full percentage point, at least, in the last 4 years). Still, its a very nice apartment in a nice neighborhood so I think I'm just going to hang onto it and live in it rather than sell it. If the house is not placed on the market it stays insulated from notional rises and falls in it .. srs
Re: [silk] Where is the US economy heading?
On Tuesday 01 May 2007 12:06 am, Srini Ramakrishnan wrote: but one statistic I heard yesterday of 9 out of 10 car buyers taking out a loan to finance their purchase strikes me as about right. Loans for cars make eminent sense for many reasons. A whole lot of people who run businesses (such as I do) get tax benefits from taking a car loan. My gross annual income is reduced by the amount of depreciation of the car, and my tax liability is reduced by the amount on interest I have paid on the loan. Besides, if I pay a lump sum on purchase of the car, I have to show exactly where and how I had that lump sum stashed up (which is a problem for some people, though not me :) ). In additiion, even if I had a lump sum to throw on a car, I would be better off investing it appropriately to recoup some of the loan interest losses, while I recouped more of the losses via tax advantages that I have mentioned above. However what I find amazing is the candour with which automobile financiers advertise cars with low estimated monthly instalments of Rs 20,000. For 20,000 Rupees a month you can get a driver, two domestic helps, an ayah for your kid and a watchman/gardener and still have money left over for monthly instalments on a less expensive non imported car from a fully depreciated Indian company. shiv
Re: [silk] Where is the US economy heading?
I suspect you credit authorities with more responsibility than they actually bear. May I recommend Robert Neuwirth's Shadow Cities? Here's a review: http://www.worldchanging.com/archives/002029.html Here's the author's blog: http://squattercity.blogspot.com/ Here's him giving a talk at TED (well worth watching): http://www.ted.com/index.php/talks/view/id/36 And here's the book itself: Hardcover: http://www.amazon.com/Shadow-Cities-Billion-Squatters- Urban/dp/0415933196 Paperback: http://www.amazon.com/Shadow-Cities-Billion-Squatters- Urban/dp/0415953618 J. On 01-May-07, at 12:06 AM, Srini Ramakrishnan wrote: By any measure the value that Indian cities seem to offer in lifestyle benefits, living space, property ownership and civilization seems rather scarce. On an idle Saturday afternoon I must have done some thinking for the idea that I pay more than half of my income in taxes has come to be rather firmly implanted in my mind. It's not hard to get at such a figure when you compute my basket of direct and indirect taxes - namely, income tax at 33.33%, sales tax on anything I consume at 12.5%, miscellaneous upstream taxes such as excise and customs, and property and road taxes.
Re: [silk] Where is the US economy heading?
On Tuesday 01 May 2007 12:06 am, Srini Ramakrishnan wrote: The US maybe headed for a fall, but a similar fall in India will have rather more pronounced and dire consequences. This may be a simplistic assessment. If you drive up towards Yelahanka past Mekhri circle you will see, on your left a grey ghost of a building that was supposed to have become the much vaunted Cauvery Medical Center financed by US based NRI's. That project died after there was a property value crash in the US about a decade or so ago that wiped several million dollars from the assets of the prime investors. However, it did nothing to other people and there are dozens of new corporate hospitals popping up around the ruins of Cauvery medical center. These new corporate hospitals are being built to cater to a very small and very wealthy group of Indians - and in keeping with the fact that these wealthy Indians are young and are beginning to have families, newer hospitals are coming equipped with birthing suites so that the wealthy young Indian can cough up a cool 1.5 lakhs (150,000 Rupees for the uninitiated) for luxury for 5 days while your wife delivers and brings home a baby. This is in addition to the 25,000 a month he pays for his Toyota Camry. These hospitals and facilities are aimed at less than one percent of the population and that one percent is greatly dependent on the US economy. For the rest, its business as usual whether the property market in the US goes up or down. The one lesson from all this is Make hay while the sun shines, and with any luck the sun won't stop shining, and new suckers will continue to be born inside or outside those birthing suites. PS - I have a garden with a lake for sale - about 240 acres in all. It's called Lalbagh. Anyone interested? I'm selling it cheap because I'm emigrating to the US shiv
