but, the idea that there is a ‘World Labor Market’, is a canard. Simply, if it were so, we’d be Importing Machine Tools from Bangladesh, not Germany, or Robotics from Sri Lanka, not Japan. Simply, Labor Cost is but one component of the, multi-variate, expression of Value.

and, to encapsulate ‘fsl’’s post, future ‘valuations’ will be, even moreso, predicated by the fiat of the Fiat boys.

The only thing I would bet on is: Higher costs of Inputs, and, not necessarily Wages rising as fast..

Though, with this: “much more acute folks with a better handle on this”, I’m not so sure I’d belong in that grouping..that said, I do think, though, we’re travelling in some, seriously, different days, and with that, it’d behoove us all to 2X the hatches and overstock the Galley..
http://www.thefreedictionary.com/galley

Your reasoning for RXD sounds good, but when I checked the chart, it’s amazingly thinly traded. Only 150k shares outstanding. Doesn’t smell good.

Hoping this rally continues so I can get back into SRS. Have a buy set at 82.

What we need to know is why they refuse market oriented solutions.

The specter of world wide economic catastrophe is the usual mantra that is offered up as to why they insist that they vmust interfere.

I don’t believe a single syllable let alone one word from D.C. There is something else going on in those backrooms where they plot and scheme.

But it it not ignorance of the speediest and most effective solution. If we follow the money, we will likely know the why markets are not being permitted to operate.

@ Leftback, Dead Hobo, Mac E., Mark Hoffer and/or any of the rest of you much more acute folks with a better handle on this, critique this, please:

We are in a world labor market with our wages headed down toward the median wage level?
The only way U.S. wages become more competitive will be a weaker dollar?
Which we’ll see, after intermediate term deflation, when all the re-flating TARP, alphabet soup facilities, etc dollars come back in (runaway?) inflation?
Then cheaper dollar = higher oil and other commodities?
Along about the time the C-o-L takes off, then “rising” wages will meet falling housing prices at the magic 3 – to – 1 price to income ratio?

or not?

You may have missed my point. Excessive leverage in real estate is clearly the problem, which is why I am approaching this as a way of minimizing acquisition leverage by making down payments more accessible to first time home buyers. Housing equilibrium has to be about more than lower prices, it has to involve increasing effective demand.

Right now, besides the psychological burden of buying in a falling market, it’s extraordinarily difficult for any “normal” owner occupied buyer to finance property, partly because of the recent 50 bp uptick in mortgage rates, and even more so because of the paucity of affordable and economically sustainable low down payment financing. Housing prices have to do more than come down to the level a willing buyer wants to pay, it has to come to a level he can QUALIFY to pay, and a big part of qualifying to pay in the current financial market involves the size of your down payment.

Most current plans involve taxing renters (and others) to support housing prices, in part by having the government guarantee high risk low down payment loan programs (like FHA loans). This means that from a renters perspective they are paying to keep housing unaffordable, a deeply unfair arrangement. My thought would not contribute to that, and would in the long run have minimal tax costs, at least as I see it.

Thanks for your comments, anyway.

Anecdotal: Last weekend we drove through the eastern LA basin (Riverside, one of the hardest hit foreclosure areas). Saw many brown lawns, hallmark of vacancy, in the nice upper-middle class subdivision where inlaws live. A few for sale signs. MIL casually asks SIL: “So, did ____ let the house go into foreclosure?” Must happen all the time these days around there.

ron32: Already happening. We saw several large new developments further out in the desert north of San Bernardino (cheap land), with prices in the mid-100K range and even one developer offering BRAND NEW RENTAL HOMES for $995 a month. These homes were obviously not getting any purchase offers and the developer decided to just rent them out.