Tuesday, July 19, 2011


I don't owe any money on anything for the first time in my adult life. Feels odd. Almost un-American. Guess that means I need to go out and borrow a lot of money to buy a house or something, so I can be a debt slave like every red-blooded American is supposed to be ;).

-- Badtux the Naked Penguin


  1. Good shit Tux!! Make a point to feel real good about yourself.

  2. If penguins have pockets you can start a savings account. :)

  3. My mortgage is the only debt I have --- and I'm not under water.


  4. That makes you one of those rich bastards about whom you are frequently so vociferous. Well done, join the Rich Man's Club!

    David Duff

  5. Actually I've been in the top 20% for the past four years, Duffer, which makes me "rich" by some definition of the term. And you know what? No, I'm not overtaxed. If my income taxes went up by 5%, I'd shrug and deposit only $2900/month in savings, instead of $3,000 per month. Big flippin' deal, sheesh.

    JzB, good luck on getting an above-water mortgage on any new purchase, given that housing prices are shortly to be back in free fall again as the foreclosures pick up thanks to the resolution of the robo-signing scandal.

    MandT, yep, already done, already have a significant sum of money in it.

    One Fly, I was lucky enough to, fifteen years ago, get into something that's now in high demand. It's all pretty much luck. Feeling good about being lucky would be silly.

    - Badtux the Lucky Penguin

  6. You just need a ex-wife getting alimony and a high maintenance current wife to get you back into the debt slave trap. Go ahead live large and find that high maintenance trophy wife. Then report back to us. LOL

  7. Debt-free is a grand feeling and I'm happy that you are in that situation. Of course, it helps that you can do most of the mechanical work and routine upkeep on your vehicles. :) (Delays the absolute need to buy another car or pay out the equivalent of monthly payments in service and repair bills.)

    Cash is a wonderful thing!

  8. But, Tux! That few percent is Tyranny!! Slavery!! It won't just lead to the end of America, it will actually explode the Earth within 3 seconds!!

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  10. Purple, I wouldn't call 30 years "temporary" debt. I've owned a house before. I almost breathed a sigh of relief when I managed to dump the damned thing, because I got a job in another city and the damned house was just a money sink at that point, because renting it wouldn't have paid the mortgage plus the management fees (since I sure as hell couldn't manage renting it myself from a thousand miles away!).

    In other words, a house is a boat anchor, dragging you backwards. I move forwards. Long distances forwards, sometimes -- I've relaxed on Atlantic beaches, I've relaxed on Gulf Coast beaches, now I'm relaxing on West Coast beaches. Who knows, maybe next beaches I'll relax on will be Australian beaches. Hey, it could happen. There's no place for a house in any of this. It's just another *thing* to tie you down to one place.

    Regarding the "buying a house for cash" crack, a three bedroom home in my neighborhood will sell for $550,000 and the payments will be roughly $3,400 per month. My current rent is roughly half that. You do the math. You don't own a house here in the Silly Cone Valley, a house owns you. No thank you. I'll just save up money and, when I retire, buy an RV, and go mobile to wherever I want. Well, assuming that's still possible fifteen years from now -- given current trends I'll probably be living in a cardboard box alongside all the other old people kicked to the streets when we hit age 65...

    - Badtux the Migratory Penguin

  11. Oh yes you are in debt !

    US national debt/no. of US citizens
    is about $46,142 and growing :-(

  12. Stu, but a) that's a 30 year debt like a mortgage, so even if we wanted to pay it off (which we don't, it just rolls over because that's how the Federal Reserve prints money), you're talking about $100/month or so of debt, b) the Federal Government, unlike you or I, can legally PRINT MONEY to fulfill that debt if necessary, and c) the main reason the debt is growing is because rich bastards own 50% of America but are paying less than 35% of the taxes paid in America, so we know what's necessary to keep it from growing.

    So it turns out that the right-wing scare tactic you're repeating is just nonsense. People regularly have personal debt that's many times their income, it's called a HOUSE MORTGAGE, and as long as there are assets lying underneath the debt and sufficient income stream to service the debt that's not a problem. Plus, government debt simply doesn't work the same way as personal debt, and people who try to pretend they're equivalent are either a) ignorant of the fact that government has the PRINTING PRESS,yes, I know, a relatively new invention, only 500 years old, but there you are, or b) deliberately lying to you in service to some agenda or another, probably one that isn't to your advantage.

    - Badtux the Debt Penguin

  13. Thank you, 'Snarky' for an excellently concise description of Zimbabwean economics which, of course, they coppied from the Weimar Republic.

    By the way, what is it about the current price of gold you don't understand?

  14. The price of gold? Why should I care about speculative bubbles, other than the fact they always burst?

    Meanwhile, duffer dear Duffer, thank you for the laugh. There are approximately $100T of dollars or dollar-denominated assets outstanding in the world. If the U.S. raised taxes on the looter class to sufficiently close the difference between income and outtake then printed sufficient dollars over the next 30 years to completely pay off the U.S. debt, which would require printing approximately $1T per year, what would be the overall additional price inflation rate per year?

    a) 1%
    b) 10%
    c) 100%
    d) 1000%

    Hint: (a). :).

    In short, the U.S. public debt is pretty much a non-issue in the long term, because raising the inflation rate from the current 2% target to a new 3% target would hardly result in a Zimbabwe or Weimer situation. It's just math. I know you right-wing zealots think math is rather too hard for your feeble little pointy brains, but as a model of reality, mathematics works surprising well. Maybe not in *your* reality, where pink unicorns shit rainbows and cotton candy grows on trees, but (shrug). I live in *this* reality, so...

    - Badtux the Snarky Penguin

  15. Slavery is freedom. Shame on you!

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  17. Purple, rents are set by supply and demand, not by producer costs. That's a mistake that the right-wing always makes when they claim that an increase in taxes will result in an increase in prices -- uhm, no, the market, not costs, sets the price.

    So anyhow, there is an abundant supply of rental housing and a shortage of suburban-style detached housing in the San Francisco Bay area due to the simple fact that it's a basin ringed by mountains and you can't build in the mountains and it's all built out meaning that all that's left is infill (where the land is so precious and expensive that the only thing that makes sense to build there are condo towers or apartments, or at least townhouses), so the prices are set accordingly. So if I want to rent a 3 bedroom house I can rent it for $2,000 per month, whereas if I wanted to buy that same house, it'd be $550,000 or, at current interest rates (hmm, pulling up spreadsheet)... ah yes, around $3,000/month even taking into account the tax breaks for mortgage interest and property taxes. Because there are alternatives to renting that 3 bedroom house, I can rent a condo for example, but if you want to buy a house, you want to buy a house -- *NOT* a condo.

    Supply and demand. Funny how that works, eh?

    - Badtux the Market Penguin

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  19. Purple, some things to consider:

    1) Supply and demand works for widgets because if the price of widgets falls below the price to buy them from the manufacturer them (i.e., the retailer has to pay to get them off his shelves because the demand is not sufficient for the price he has to pay in order to make a profit), the retailer quits buying them. But when it comes to rental property, once it's built, it's built. You can't UN-build rental properties. It is a fact that during the commercial property construction bubble that happened during the Bush Regime, the same thing happened as happened in residential properties -- multi-family housing got seriously overbuilt. You can't make that oversupply go away by not buying any more, because those apartments are on the market, and are going to be there for decades driving down rents.

    2) You're forgetting INFLATION. A house that sells for $550,000 today sold for only $200,000 in 1990. So if the investor bought it for $200,000 in 1990, he still has positive cashflow today even if still paying on the mortgage (and remember, investment properties require 20% down, so his mortgage was only $160K to begin with).

    3) You're forgetting CASH BUYERS. They don't have a mortgage. They're wanting someplace to use their filthy lucre where they can generate cashflow for their retirement. $24,000/year cashflow on a $550K investment is a 4.3% return on your money, which is a pretty decent return on investment given that Treasuries are paying close to 0%, the stock market has been about as stable as Michele Bachmann on crack, and banks are paying 1% max. Granted, you won't actually see $24,000/year cashflow. Management fees will take a month's rent out of that ($2,000), and various maintenance will likely take another $6,000 or so over the course of the year. Still, rents will only go up in the future and rents jiggle around but are never negative, so at least you'll never have *negative* cashflow from your investment, unlike my 401k which has dropped in value by over 1/3rd since 2003 thanks to the grifters stealing all the money from it via stock market manipulations and insider info.

    - Badtux the Investment Penguin


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