Prices for personal consumption, excluding food and energy
Source: Federal Reserve
While the Fed has been raising short-term rates, long-term rates --
the ones of importance to real estate financing -- have been declining. Why
and what's their future? From today's Journal:
"The Fed chief dwelt at length on the unusual decline in long-term bond
yields since the Fed began raising short-term rates, which "contrasts
with most experience." He played down technical explanations such as
purchases of Treasury bonds by Asian central banks, mortgage hedging, and
even confidence in low inflation.
concluded the drop is "a conundrum," which may prove to
be a "short-term aberration." He noted that measures of
risk are unusually low across many markets, and, in a remark reminiscent
of his warning about "irrational exuberance" in 1996, warned:
"People experiencing long periods of relative stability are prone
to excess. We must thus remain vigilant against complacency."
Greenspan didn't talk about a "bubble" in real estate.
He talked about "complacency." Same thing. Latest numbers
show that in some parts of the country home prices last year jumped 30%-plus.
Prices in the Washington, DC area rose 24% last year. That's
the implication for us? In three words: Play it conservatively. Sell
a little if you have too much and you owe too much. Don't make ridiculous
assumptions about future price hikes. Don't plan the success of your real
estate project on continued strong price hikes. Always ask yourself, if
it doesn't grow at 20% next year, if I can't raise my rents, where will
interest rates for real estate: I've added
two neat tools in the left hand column. One is "Financial calculators."
You can do the same calculations in Excel or on a HP calculator, but these
are easier. The second is called "Weekly Interest Rates."
They give the key interest rates -- from T-bills, to Swap rates, Libor and
US Prime and US discount. The
rates come courtesy Chuck Cronin, president of Axiom Capital. Chuck is one
of the smartest mortgage brokers I've met in a while. If you need money
for your big project, call Chuck at Axiom.
More takeover possibilities:
from Stephen J Campbell.
possibilities in no particular order: NYB New York Comm bank-reminds me
of Fleet Bank pre BAC good dividend, worth 25-30; UVN Univision largest
Hispanic broadcaster in U.S., down from 37 and in the middle of boardroom
disagreements; CYBX Cyberonics, medical device maker- just received FDA
approval for severe depression along with Epilepsy approval previously-
3 cos. own 15% each, BSX, ANSI and STJ; LGF Lionsgate-film producer and
distributor (including Michael Moore's film); and last CL Colgate-Palmolive,
needs to compete with PG/G, UN, CHD- everyone has to get bigger. Thanks,
top brokerage firms gave their CEOs an average raise of 33% last
year, while the firms' stocks rose only an average of 4.7%. The firms
are Merrill Lynch & Co., Morgan Stanley, Goldman Sachs Group Inc. and
Lehman Brothers Holdings Inc.. Makes you wonder what their boards were thinking.
Everyone is coming to New York to the see the Gates:
Including Laura Bush.
on The Gates, click
Saver: Radio Shack sells these wireless headphones for $59.99.
Now you can hear at your volume (loud). And she can hear at her volume (imperceptible).
To buy them, Click
You'll find your TV doesn't have enough output jacks to accommodate your
headset and her speakers. So you'll need this also:
iPod connector. The press is full of expensive
gadgets to connect your iPod to and hear great sound. A cheaper, better
way is to connect your iPod to your existing sound system. To do that you'll
need this $7 cable. Just plug the white and red cords into one of your aux
inputs. Plug the other end into the headphone plug on your iPod.
where's the inflation? I paid $1500 for my Nikon D100 a year
ago. Now it's $1099 at J&R World. Click
here. A one gigabyte memory card costs $99.88. I paid three times
that. I really recommend this camera. You will not believe the quality of
the photos. I bought the 85 mm portrait lens. It's fabulous.
Ode To Spam: From an actual email yesterday: "We have the
cure for every ailment u have."
Jim and Edna were both patients in a mental hospital. One day while they
were walking past the hospital swimming pool, Jim suddenly jumped into the
deep end. He sank to the bottom of the pool and stayed there. Edna promptly
jumped in to save him. She swam to the bottom and pulled Jim out.
the Director of Nursing became aware of Edna's heroic act, she immediately
ordered Edna to be discharged from the hospital, as she now considered her
to be mentally stable.
she went to tell Edna the news she said, "Edna, I have good news and
bad news. The good news is you're being discharged; since you were able
to rationally respond to a crisis by jumping in and saving the life of another
patient, I have concluded that your act displays sound mindedness.
bad news is that Jim, the patient you saved, hung himself in his bathroom
with the belt to his robe right after you saved him. I am so sorry, but
replied "He didn't hang himself, I put him there to dry. How soon can
I go home"?
THE OLD COUNTRY
small town in the Old Country, the Rabbi died.
widow, the Rebbetzin, was so disconsolate that the people of the town decided
that she ought to get married again. But the town was so small that the
only eligible bachelor was the town butcher.
poor Rebbetzin was somewhat dismayed because she had been wed to a scholar,
and the butcher had no great formal education.
she was lonely, so she agreed, and they were married. After the marriage,
Friday came. She went to the mikvah (a Jewish ritual bath to get rid of
impurities). Then, she went home to prepare to light the candles.
butcher leaned over to her and said, "My mother told me that after
the mikvah and before lighting the candles, it's a mitzvah to have sex."
So they did.
lit the candles. He leaned over again and said, "My father told me
that after lighting the candles it's good to have sex." So they did.
went to bed after prayers to get ready for Shabbos. When they awoke he said
to her, "My grandmother said that before you go to the synagogue it's
a mitzvah to have sex." So they did.
praying all morning, they came home to rest; and again he whispers in her
ear, "My grandfather says after praying it's a mitzvah to have sex."
So they did.
she went out to shop for food and met a friend who asked, "Nu, so how
is the new husband?"
replied, "Well, he is no scholar; but he comes from such a wonderful
This column is about my personal search for the perfect investment.
I don't give investment advice. For that you have to be registered with
regulatory authorities, which I am not. I am a reporter and an investor.
I make my daily column -- Monday through Friday -- freely available for
three reasons: Writing is good for sorting things out in my brain. Second,
the column is research for a book I'm writing called "In Search
of the Perfect Investment." Third, I encourage my readers to send
me their ideas, concerns and experiences. That way we can all learn together.
My email address is .
You can't click on my email address. You have to re-type it . This protects
me from software scanning the Internet for email addresses to spam. I have
no role in choosing the Google ads. Thus I cannot endorse any, though some
look mighty interesting. If you click on a link, Google may send me money.
That money will help pay Claire's law school tuition. Read more about Google
here and here.