
I watched Charlie and the Chocolate Factory last night and was subconsciously inspired by the capitalist undertones and hard working laborers from Loompaland to order a pair of Nike shoes. They flatter you by calling their customizable line iD, presumably for intelligent design. Maybe they’ll be deemed mandatory by the Kansas public school board for P.E. classes. Their you-are-god rhetoric worked and I ordered a pair, they’re supposed to simulate running barefoot which begs the question… Speaking of simulations, the Motorsport team is motivated again and work continues on the drive train physics and graphics. Here is some C++ code if you’re into that sort of thing…
Did some more thinking about real estate inspired by the essay “The Great Race”. I’m wondering about the effects of productivity on Real Estate. But first, here are the four possible outcomes when comparing productivity to Medicare. Moore’s law is basically synonymous with productivity here.
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Four Scenarios
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Moore‘s Law Fails
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Moore‘s Law Succeeds
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Medicare is Reformed
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Low Gear
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Capitalist Utopia
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Medicare is not Reformed
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Economic Implosion
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Affordable Welfare State
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So here is my modified version but for Real Estate:
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Four Scenarios
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Wealth Divide Grows
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Wealth Divide Stable
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Interest Rates Stay Low
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Mansions OK, Condo Conversions Tank
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No Bubble Pops
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Interest Rates Rise
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Housing Collapse
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All but wealthy take a beating
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I’m assuming productivity and therefore GDP will stay strong. The question is whether Joe Mortgage sees any of that new wealth. Median income is flat while GDP is booming. The Jobless Recovery isn’t an oxymoron. The Fed credits outsourcing for saving the economy over the last few years. In other words, we’re only seeing a recovery because we’re NOT getting jobs. So…
The arguments that the economy is strong doesn’t mean housing will be just fine because median worker is competing with a global workforce now. I absolutely think it’ll ultimately be good for America but transitions are painful and this transition is going to hit when we’re smack in the middle of $1 Trillion in ARMs kicking in circa 2007.
The question is how much productive slack remains in the minds of American workers. At some point the uneducated non-specialist workers can comfortably retire and live off of progressive tax revenue + wealth divide while foreigners and software do their old jobs. Wage inflation caused by adjustable rate mortgages could hasten offshore outsourcing. So the race is this. Can we become productive enough to soften the blow for our middle class before they’re faced with a half million dollar mortgage and a job shipped to India where mortgages are four score and seven dollars a month? Sarbanes Oxley promotes acquisition of small ventures by large corporations because everybody is supposedly afraid of being a CFO. Will that un-natural blanket on creativity hamper our ability to compete?