I’ve talked about my house hunting excurisions before … but this latest one takes the cake! And if you don’t believe that the housing bubble has more air to lose, well, you just aren’t out there shopping.

My wife and I had a few places on our list to check out, and the first two demonstrate it all …

House #1 was advertised as a beautiful 150-year-old main section with a 1995 architect addition. 2 acres, blah blah blah.

And from the outside, it was a very nice place. But inside?

The kitchen was completely gutted. The only fridge was one of those mini units sitting on a butcher’s block. The bathroom looked like the inside of a 1950s insane asylum. Many of the floors had been pulled up with just plywood left. The water heater had leaked everywhere. The basement was wet even though it hadn’t rained in four or five days. And on and on.

Suffice it to say that this thing will need to sell for half of the asking price if it’s ever gonna move.

And house #2? Well, I couldn’t tell you.

That’s because — despite confirming with the listing agent — the seller wouldn’t let us in. He was reportedly “a nice guy, very motivated, willing to make repairs necessary, and wanting an offer” but when he opened the door he told our agent — in a Lurch-like voice, “There are no showings today” and slammed the door in our faces.

So there you have it. Crappy homes — in need of massive repairs — listed at exorbitant prices and conflicted sellers who supposedly HAVE to sell but aren’t even willing to open the door to negotiation.

Interesting times!

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I found myself in a lot of airports this past week (which also explains the lack of posts) … and I have to say that people have certainly not stopped flying in the midst of this recession. The Philadelphia airport was particularly crowded, even at 6AM. Columbus and West Palm Beach, less so … but still showing signs of activity.

However, I also continue to hear stories of economic hardship from people close to me. The latest example comes from one relative who was just forced to take a leave of absence from his position as an architect. It seems as though the projects have been drying up, even though the firm is heavily skewed toward government contracts. 

As I have been saying all along, it’s hard to believe that all of our monetary excesses will be washed away in a few short months and that things will bounce right back where they were.

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I have written a lot about Warren Buffett’s Berkshire Hathaway, including details on the company’s own options positions.

And in Dividend Superstars, I have also been writing a lot about using options to generate additional income.

Now, the two subjects are colliding with a recent development in the Windy City.

The Chicago Board of Options Exchange recently began trading options Berkshire Hathaway’s ’B’ shares. The new options were intially listed with  strike prices of $2,800, $2,900, $3,000 and $3,100, and expirations in July, August, September and December. 

If you own shares of BRK, you can now consider writing covered calls against your positions. And if you always wanted to play the stock, but didn’t want to shell out $3,000 a share … you now have a cheaper “option.”

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I just got done reading this story from U.S. News … it’s an interview with a financial planner. Her advice on how much to save for retirement?

“If you have children in college or in private school you might aim to save 10 percent of your income. But in the time when the kids are out of the house and before you retire you may want to bump that up to between 20 and 25 percent. It really depends on your situation. You should always save in your 401(k) at least up to the company match. You certainly need to be saving enough money to have a cash reserve for emergencies.”

Now, I’m not singling her out here, and I actually agree with everything she said. But based on our little budegting breakdown we should also realize that it is virtually IMPOSSIBLE for most people to save 10% of their gross, let alone 20% or 25%!

It’s certainly a goal to aspire to. And with enough discipline, it can be accomplished. But let’s not pretend most people even have a chance in hell of doing it in this environment.

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Seems as though a panel of Federal investigators is now suggesting that we may need a second opinion on those stress tests!

According to a new report from the Congressional Oversight Panel, Washington’s initial assumptions might have been just a wee bit too optimistic.

Gee, really? You mean assumptions like an unemployment rate of 8.9% … when May’s rate just hit 9.4%. … might not be accurately conveying the potential for damage to our system?  

And let’s not forget that even under the original stress test, half of the banks needed more money! 

From the looks of it, Mr. Market is a bit upset with the news, as well as the TARP repayment plan.

Nilus

P.S. I also wanted to note that I recently revived my other slightly less formal blog, in case you’re interested in getting even MORE market commentary from me!

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I received an interesting stat the other day …

Based on Wednesday’s close, the S&P 500 was up 39.64% from its low and down the exact same percentage.

Initially, many investors might take that to mean that the market is exactly halfway between its bull and bear extremes. But that’s not the case at all.

Sure, if you’re mathematecially inclined you know that. But I can’t tell you how many people I talk to fail to understand the simple idea that on a real basis, the same percentage loss is far worse than the same percentage gained. 

In the case of the S&P 500, the 39.64% off the low represents a $2.36 billion gain.

But based on the high price, the index is still down $5.55 billion!

I’m not pointing this out to make anyone feel bad about the market’s rally. It’s certainly better to see you portfolio recover a good portion of money rather than none at all!

However, I think it’s important that everyone understand exactly how percentages work so they can properly analyze what’s happening in the markets and their own portfolios.

(And as a sidenote, I absolutely do believe percentages are the only way to measure performance. I can’t stand when someone tells me their stock is “up five points” since they bought it! But that’s a rant for another day …)  

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