Friday Lite

One of the critical elements that has been missing in our "return to stagflation" economy has been an oil shock resulting from the involvement of Israel in a large scale conflict with its neighbors, as in the 1973 Yom Kippur War. That all may be changing now.

Though it is Friday, things don't feel very lite today.

It's All About the Oil

Poor Ben Bernanke. During the eighteen-year term of former Fed Chairman Alan Greenspan, with the exception of a few brief periods, oil traded between $15 and $25 a barrel. Paul Volcker had to deal with oil between $25 and $40 a barrel for nearly his entire time at the Fed during the 1980s - that would be between $60 or $90 in today's dollars.

As the planning committed for the Greenspan retirement party began work early in 2005, the price of oil finally broke free from the $45 moorings that had restrained it for so many years and began an inexorable rise toward $80. By the looks of things in the Middle East, we may soon look back, longing for the days of $70 oil.
As Ben Bernanke is quickly finding out, monetary policy is a lot more difficult when the world's most important commodity is rising at annual rates well into the double digits with no end in sight.

What did Alan Greenspan do to deserve such stable oil prices?

It's All About a Big House

For sale: One 50,000+ square foot home with fifteen bedrooms and somewhere between one and two dozen bathrooms on 95 acres. Hardly used, $135 million or best offer.

Prince Bandar bin Sultan, the former Saudi Arabian ambassador to the United States, is selling his palatial home in Starwood Ranch for $135 million in what is likely the most expensive single-family residence listed in the nation.
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The listing of Bandar's lavish estate is expected to become the most expensive on the market, surpassing the $125 million price tag that, as Forbes.com reports, Donald Trump slapped on an 80,000-square-foot mansion in Palm Beach, Fla.

Bandar purchased his property above Aspen in 1989 and built the main residence in 1991. The Pitkin County assessor's office notes that the palace has 70,071 square feet of total floor area when decks and other features are included. The assessor values the main residence at $55,953,500, but deputy assessor Larry Fite said that estimate is "probably conservative."

It must be hard to determine property values when there are so few comparable home sales - even in tony Aspen, Colorado.

It's All About the Water

According to this report, just east of Aspen in Denver, beer company executive and spokesman for the Adolph Coors Company in Golden, Colorado, Peter Coors, made the mistake of a twenty-five year old after having too much to drink at a wedding party and then driving home.

Coors was driving a 2004 Jaguar when he was pulled over by a Colorado State Patrol trooper just before midnight May 29, according to officials in the Jefferson County District Court clerk's office.

He was arrested for suspicion of driving under the influence and cited for failing to obey a traffic control device.

Coors rolled through a stop sign a block from his home and was stopped by the officer in his driveway, company spokeswoman Kabira Hatland said. She said his blood-alcohol content following a breath test was 0.088 percent, above the legal limit of 0.08 percent.

The driveway was in sight - one last stop sign to heed and maybe all the beer executive would have gotten from the police officer was a friendly wave. There should be some consideration given to having made it safely into his own driveway - maybe the peace officer was a Bud man.

It's All About a (Housing) Hangover

This report from San Diego does not bode well for a summer real estate season that has barely gotten underway. The realtors seem to be much more optimistic than the sellers - John Karevoll of DataQuick had this to say:

“To me, this is just part of a plateauing of prices,” he said. “Between now and the fall, I'd say half the months will be slightly positive and half slightly negative, but I really don't read the drama in these numbers that most people will.”

Seller Pat Daugherty put it like this:

“At this point, we're willing to take a loss,” said Daugherty, who has two sons, ages 20 and 22, who will be moving with their parents. “We really need to get this off our back so we can get on with it. I'm obviously frustrated because we worked so long and hard on this, but sooner or later the prices had to back down.”

The Daugherty family is headed to Colorado or Texas and views "break-even" as about the best case scenario for unloading the home that they bought two years ago after spending $75,000 in improvements.

It's All About Bob Bighouse

From the looks of this next item, things in San Diego may be getting worse in July. From earlier in the week, local realtor Bob Casagrand commented on Realty Times about the grim look of the early July sales figures.

I did a rough check on July to date (July 9) to see where it stands, I debated about putting this in this writing because the numbers are scary and they will close somewhat by the end of the month. I decided to put it in so that we can see the mountain ahead to maintain some level of reasonable demand.

The first 9 days of July have 303 homes sold for an average price of $559,577 and an average size of 1781 sq ft; the first 9 days of July 2005 had sales of 933 and an average price of $629,168 and an average size of 1749 sq ft. Last July's 933 sales represented 25% of the month's sales, if that were to hold this year, well suffice it to say that would be a disaster.

I think this July will stay in the 30% to 35% down from last year region and that would put July sales at about 2,700 homes sold, keeping us a path to about 30,000 home sold for the year, down about 30% from last year.

You'd think that a realtor with a name like Casagrand ("big house") had to have made it up, but then you look at his picture, and you're not sure. Note that Bob's figures show an eleven percent year-over-year decline.

It's All About Meaningful Experiences

What does San Diego real estate have in common with the consumption of certain mushrooms? According to this study, two thirds of the participants felt intense joy and a "distance from ordinary reality", while one third had "harrowing experiences dominated by fear and paranoia".

In a study that could revive interest in researching the effects of psychedelic drugs, scientists said a substance in certain mushrooms induced powerful, mind-altering experiences among a group of well-educated, middle-age men and women.

Johns Hopkins Medical Institutions researchers conducted the study following carefully controlled, scientifically rigorous procedures. They said that the episodes generally led to positive changes in attitude and behavior among the 36 volunteer participants and that the changes appeared to last at least two months.

For the minority experiencing adverse reactions, researchers cautioned that in less-controlled settings, the experience could trigger panic in some participants, putting in danger those around them who were otherwise enjoying themselves.

It's All About Size

They must have a lot of edible garbage that has fallen to the river bottom in Thailand. According to this report, it will take two fisherman to describe to their wives just how big this one was.

Fishers in northern Thailand netted this huge catfish in the Mekong River on May 1, 2005. Nearly 9 feet (2.7 meters) long, the fish tipped the scales at 646 pounds (293 kilograms).
Last month more than 60 fishers in northern Thailand promised to stop catching the critically endangered giant fish, in honor of the King of Thailand's 60th year on the throne.

Lately, the Friday edition has been closed with a piece from the Onion, but they are apparently on a break or something - this story and photo are from The National Geographic and apparently are both real.