Sunday, January 18, 2009

The Five Myths of Undead Investing

Stanislaus County's 9 percent foreclosure rate brings joy, fear

Myth #1: Undead investing brings more joy than fear.

Little joy can come from ghosts, werewolves, zombies, and the like walking amid dying lawns, bushes, and trees. Fear, on the other hand, tends to rule the day. If someone tells you otherwise, they are probably trying to sell you something.

Myth #2: The era of undead investing continues.

Ditman is depressed that so many lawns, bushes and trees have died from neglect: "If I were more superstitious, I would think a ghost, werewolf or zombie would come walking out of these places, considering everything else about them appears dead."

This is a common mistake that many first time undead investors make. It is the confusion between the dead and the undead.

Death

Death is the permanent termination of the biological functions that define a living organism. It refers both to a particular event and to the continuing condition that results thereby.

Undead

Undead is a collective name for fictional or legendary beings that are deceased yet behave as if alive.

Nothing that Ditman has described leads one to think that the deceased are behaving as if alive. It seems much more likely that Ditman is depressed because the dead are behaving as if they are truly dead.

Myth #3: The LARP will bail us out.

In some stories and settings, such as the Lorien Trust LARP, the word "unliving" is used as a preferential synonym.

The time for a Legitimate Asset Relief Program (LARP) was when the dead assets were behaving as if they were alive (2002-2005). All it would have taken was sustainable interest rates. It wouldn't have solved our problems but it would have made investors think twice before building and buying millions of excess homes while simultaneously hoarding oil. That time has passed (away) though.

Myth #4: Dead assets are under the control of a necromancer.

In some cases, the undead, especially skeletons and zombies, are under the control of a necromancer.

Undead assets are under the control of a necromancer. However, dead assets are increasingly under the control of our central bankers. This distinction, although subtle perhaps, can cost investors billions, if not trillions, of dollars.

Myth #5: Dead assets can be passed on like a curse or disease.

In other cases, such as zombies as depicted in film, the undead existence is passed on like a curse or disease.

Undead assets can be passed on like a curse or disease. This is true. However, dead assets actually require a financial transaction and a willing buyer. This is why banks are having such a hard time selling the homes that they foreclosed.

This should not be considered undead investment advice and you should always consult with your own financial necromancer/advisor before investing.

10 comments:

Anonymous said...

"The average Joe now has an opportunity to become an investor and to add a rental home to their retirement portfolio," Alves said.
Stanislaus residents are hurting for money, judging by the dramatic increase in welfare rolls.

So who are they going to rent these to?

sdtfs (using my wife's url)

Stagflationary Mark said...

sdtfs,

So who are they going to rent these to?

It's so simple! There are at least two ways this can work.

1. If you rent to two unemployed friends, and they each subrent to two unemployed friends, and so on, and so on, and so on... well, just imagine the cash flow!

2. Lower the rental price. There has to be a price this can eventually work. For example, let's say you find an unemployed renter who needs $500 a month currently just to survive. No problem. Set the rent at negative $500 a month!

Anonymous said...

Mark, what we clearly have here is Vampzoms which are the offspring of a zombie and a vampire. Vampzoms are very ravenous more so then just an ordinary vampire which are just common bloodsuckers, Vampzoms not only consume the vampire but also have a love for Taxpiers.
Taxpiers have no defense against Vampzoms.

Kevin

Stagflationary Mark said...

Kevin,

Taxpiers have no defense against Vampzoms.

LOL!

The taxpiers don't even have an adequate defense against the wraith of the ghoulverment's mummy state as it continues to lich taxpier dollars to prop up the Vampzoms.

It is going to take more than the phantom of prosperity to prop up this skeleton economy. We're going to need to believe in the will o' the risk again.

What really concerns me though is using debt to solve a debt problem. That sure seems aswang backwards to me.

http://en.wikipedia.org/wiki/Aswang

Anonymous said...

Stag,

This concludes the inauguration of President Obama. We now return to the scheduled stock market crash and greater depression.

Enjoy.

Anonymous said...

Stag,

More and more people are realizing that our banking system is totally insolvent.

Wait until it dawns on them that we can't spend our way to prosperity - D'oh Boy!

Stagflationary Mark said...

mab,

More and more people are realizing that our banking system is totally insolvent.

The Titanic wasn't solvent either. When mixed with water, it merely sank.

High fructose corn syrup is solvent though. Some day they are going to figure out a way to mix it with some carbonated water and some tasty flavorings, then stick it in aluminum cans for consumption by the public.

Man, just imagine what the price of aluminum will do then!

http://www.kitcometals.com/charts/aluminum_historical_large.html#5years

Anonymous said...

Stag,

Here's another myth that I think needs to be debunked: The Japanese were/are savers.

Here's how I see it. The Japanese did save a decent portion of their incomes over the past two decades. That said, they also obligated themselves to pay for ridiculously overpriced real estate. Are you really a saver if all of your savings and future earnings are committed to paying off debts?

A recurring mistake is that many only look at the assets and ignore the liabilities. It's called a balance sheet for a reason. And it has to balance in the real world too, not just on paper.

I'm reasonably certain the value of our debts (liabilities) are accurate. It's the value (and distribution) of the assets that is scaring me.

Too many have too much debt.

Anonymous said...

Stag,

Here's another undead investment myth:

in the long run, we're all dead

With this eCONomy, we're all dead in the short run too.

It's a good thing American households have sizable savings socked away in safe and reliable investments. Otherwise this downturn would be downright scary.

Gotta run. I'm late for my weekly "Optimists Club" meeting. Today we're watching old reruns of "Kudlow & Cramer." Pre dot.com bust!

Stagflationary Mark said...

mab,

Here's another undead investment myth:

in the long run, we're all dead


Here's the reality.

In the long run, we're all undead.

Forget bailouts. What we need is a good old-fashioned banking reanimation.

I was busy pushing bodies around as you well know and what would a note say, Dan? "Cat dead, details later"? - Herbert West, Re-Animator, 1985

On that note, here's today's stock market commentary.

Cat bouncing, details later.

The market has a fast pace and a good deal of grisly vitality. It even has a sense of humor, albeit one that would be lost on 99.9 percent of any ordinary invsestor crowd.


Re-Animator
http://en.wikipedia.org/wiki/Re-Animator

In her review for the New York Times, Janet Maslin wrote, "Re-Animator has a fast pace and a good deal of grisly vitality. It even has a sense of humor, albeit one that would be lost on 99.9 percent of any ordinary moviegoing crowd".