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post #106 of 157
esquire - an increase in the int rate by the fed leads to higher interest rates on loans, and has a large impact on home loans (and of course, auto loans). Generally, the housing market experiences the quickest, and sometimes greatest, impact from rising interest rates. This is the reason the Fed keeps an eye on the new housing index in relation to its interest policies. Everything is a fine balance in the American (and world) economy, and the housing indexes are considered a good indicator of the effectiveness of the current policy (on the short-term). If the housing markets experience strong growth (especially at a rate like +0.18), then the Fed will generally increase the interest rate (way overgeneralized statement here, I know), and continue until they see "stability" in the housing index. I'm leaving out some pretty crucial data here, but if I were to go into all the factors governing Fed policy, it would require a few hundred pages at least. The simplest way to put it is that when the Fed raises the interest rate, one of their goals is to stabilize the housing market (and discourage consumer debt spending). The general idea is to keep growth at a fairly fixed or stable rate, and prevent steep drops or climbs (unless that is the stated goal they are trying to achieve). So, drizz hits it pretty dead on when he states that rising interest rates should stabilize housing prices and prevent further "bubble". However, I've read some statements lately (I think it was the Philly Fed chairman) stating a concern about a UM study showing average household debt exceeding 400% of annual income, and what some view as a dangerous bubble trend in some major housing markets, and a consumer overspending trend that does not appear to be reacting to previous policies. If this is the case, many are asking: will we see an aggressive move by the Fed and a possible split from its stated policy regarding slow increase in the interest rate, in order to deter further debt spending and reduce the trade deficit (and strengthen the dollar, since Bush and Co. seem so obsessed with that lately)? If so, that would definitely have an impact on housing (at least on new housing and development), and might even cause a decrease in housing values. Anyway... I liked the HUD idea. I am going to investigate that immediately. There is a low-income area here in Seattle (the CD) that is somewhat like the SC-area of LA, and is becoming slowly gentrified, but yet still is fairly affordable, and near the heart of the urban center. I could see values increasing greatly in this area over the next 10 years, and to think that HUD assistance would cover even a portion of the cost of investment makes that a very interesting option. I had never thought of such a thing. Thanks for the input drizz. And if you are ever up here in Seattle (I am coming down to LA in a few months on business), I would love to treat you to a steak dinner or a good single-malt scotch or something. It'd be great to pick your brain for a few minutes, as most of the investors I work with view real estate as too low-growth to mess with, and so I rarely get good advice on it. Food and shelter are necessities (like health care), so I think they make great investments over the long-haul obviously.
post #107 of 157
linux, I think you are pretty much right on with your analysis of future housing price trends, although in some higher density areas, I think you may see growth regardless of the interest rates, as in the late 90s we saw an increase in silicon valley property values despite a ~3-4% increase in interest rates. I'd be happy to talk to you further about this, send me an PM when you're going to be in the LA/OC area and we can chat.
post #108 of 157
Yeah, I'll do that. I'm going to be taking a vacation down in San Diego and hanging out with an ex-girlfriend, sometime around March I think. The rain and clouds drive me nuts up here. I generally fly into OC (John Wayne airport) and hang out around Santa Monica and Malibu, there's a couple of restaurants I love down on the Pacific Coast Hwy - Beaurivage, and the Chart House (I think it's called that). Anyway, I generally grab a bite there before going anywhere else, because they have great calamari, and some excellent seafood (especially the Mahi Mahi). I'll tell ya one thing for sure... if I could afford a place in Malibu, I wouldn't think twice about buying down there. God, I love that area.
post #109 of 157
Thats not a bad area, Chart House is not a bad place to eat, although a bit touristy. Malibu is a good area, but I think I would rather buy in Newport Coast, the land lease stuff nonwithstanding... I like the Orange County environment a bit more. There are some really excellent restaurants in this area, some extremely affordable, real estate values, though, are another story.
post #110 of 157
Linux Pro...I do not know where to begin. First of all, I work on Wall St. and am a total trading junkie like yourself. I work 12 hours a day as an analyst at a hedge fund, then come home and trade Hang Seng Futures at night. I could not disagree with you more about the correlation between success and expensive clothing in New York. I can tell you from personal experience that the Wall St. community is home to many multi-multi-millionares who have no clue how to dress and wouldn't want to know even if you told them. In fact, for some I firmly believe that dressing poorly helps them, because it conveys a sense of down-home honesty and integrity. The guy who founded and runs my hedge fund has been known to entertain investors in the office in a t-shirt and flip-flops...and our investors are mostly Europeans who dress to the nines. It all comes down to who can make money and nothing more....dressing well is for fun. That said, many on Wall St. do dress very well and incorporate that into their persona, but it is not a neccesity. I am not suprised that you work in would not talk the way you do if you had ever spent any time working on a trading desk.
post #111 of 157
Your client's expectations, and level of commitment, is a different ballgame than what we are dealing with. Our clients are fully aware of the exponentially higher risk in investing with a firm like ours. They are not looking for "safe", and if they were, we would be the last investment option they chose. Our clients are looking for "the next Microsoft", although that sounds cheesy, it is generally true, and they want us to find a dozen of them a year. Also, we won't even consider a potential investment of less than $50-100m, and that is standard with every VC I have worked with and around. That places your average potential investor in a whole different class (and mindset) than the types you might encounter from the sound of it. With our investment interests, in most cases, we are assuming up to 75% interest in a company, and creating its directorship. Some of these companies have been in operation for over 10-20 years (although many are startups). If you had owned and run a successful business for 20 years, would you accept some 31-year-old kid in T-shirt and flip-flops reorganizing the entire management of your company, and telling you how to better run your business? Not a chance in hell. American, and especially foreign, investors do not perceive success as wearing a T-shirt and jeans. During the dot-com days, it was trendy for startups to be seen running around in pajamas, or blue jeans, and so on. But NEVER with VC, and actually those days are long over for companies looking for seed capital. And many of our foreign clients during that period would even inquire as to how many dot-com clients we had, because they disapproved of the sloppy habits of these types which they believed would inevitably affect their business discipline (and correctly so). I had a Japanese investor tell me personally that he would never invest capital in a business run by a child (which is how they view denim and t-shirts). It is also worth noting that our Japanese investors are so formal, we actually require an extremely high level of dress code of our entire employee base (including receptionists) when dealing with them, not to mention protocol training, and so on. I'm not sure what kind of foreign investment you work with, but it is commonly known in our industry that foreign investment as a whole requires a much higher level of professionalism than their simpler American counterparts. Also, I'm curious which firm you deal with, or in what sense, that you see what you do. I regularly meet with some of the larger firms out of NY, such as Smith Barney, Morgan Stanley, Goldman Sachs, and so on, and they (and their attorneys) are some of the best-dressed people I have met. We rarely meet anyone from those firms that appears to be wearing anything other than custom-tailored suits (although always in traditional navy or black). And that includes the analysts that always come with them. They are actually quite intimidating generally. Maybe there is something happening out there on the "ground level" that we don't see in our meetings. I have no idea. I can only speak from my own experience. The entire reason I even came to this forum is to attempt to keep up with it all. I am not some kind of fashion buff, I barely know anything about it, as is obvious by my novice questions posted to this board, and by the fact that I graduated with a math degree (a very low-fashion crowd as a rule). Before starting my current job, I just grabbed whatever suit looked good on the rack at the local department store, generally an Abboud or Boss, because I thought those were the best (I know I will probably get laughed at for that remark, but take it easy). I know almost nothing of various tailors, the various materials, what the heck all those terms everyone uses on here really mean, and I had no idea there were so many types of collars on shirts until I started trying to find a shirt that fit me a little better and some guy started blabbing to me about how my face was shaped and that should determine my collar type and so on and so forth. About the only thing I knew before taking my current job was that your belt should match your shoes, the bottom button on a suit-jacket should always remain unbuttoned, and you always wear a windsor knot with a silk tie (not sure where I picked that one up). Point being, it became obvious to me quickly that were I to succeed in my field, I would be required to learn a bit more about proper business attire and men's fashion, and hence I ended up on this board. I wish what you said was true for me too, it would save me much time and money. I would love to wear a comfy pair of trainers and some relaxed trousers to work. I jog every day after work, so it would be awesome if I didn't have to spend so much time changing my clothes before heading to the gym or the pool.
post #112 of 157
linux_pro, There are a lot of different kinds of people on this board with a lot of different perspectives and obsessions. I find it best to come in here knowing what I want to get out of it. I read your Feb. 06 2005,13:32 post. What stands out for me is this very strict dress code you live by, and the way it can be intimidating. I hope you are not stressing too much over this. If you need some straight-up answers to questions about dealing with your wardrobe, I would refer you first to Manton, a regular member on this forum, who knows the rules of proper dress, and delivers them without pretense. To all SF members, Could we not find a good tailor for our new friend here and get him some duds to deal with his situation? I'm over here in Indianapolis and can't do shit, so it's gonna have to be one of you nearer to him.
post #113 of 157
 I am not some kind of fashion buff, I barely know anything about it, as is obvious by my novice questions posted to this board, and by the fact that I graduated with a math degree (a very low-fashion crowd as a rule).  
That's no excuse, I graduated with an Math/Econ degree from NYU; now I work in fashion. Regardless, this board is a great place to get some knowledge. Wait... remembering back on my math classes, ok those kids really did dress like crap.
post #114 of 157
I don't think it's fair to use the clothing example in regards to millionaires because clothing doesn't mean a lot fo many people.  Each person has things that they spend quite a bit of money on, and others will look upon them and not understand how they can do so.   For example, a millionaire might scoff at the idea of $300 shoes, but then spend $90,000 on a custom motorcycle.
Ditto on this point. I sell tailored clothing and can never guess the level of bank account by how the customer is dressing. Nor by how receptive the customer is to my suggestions of highlighting the face with clothes selections. Economics seems to have little to do with it. The natural process is to buy what you bought last time and the time before.
post #115 of 157
drizz - hope you get this... The EUR/USD pair is now trading at 1.2775, has (seriously) broken the 1.2920 previous support, and the dollar is making huge gains in every pair right now. Any non-USD forex positions should be reversed, as the USD is expected to make further gains at least until Monday when the Federal budget is released. I did extraordinarily well overnight with USD-favorable positions (+820 pips in one night. Yahooo.), so that might be a wise bet this next week at least. You could easily see 200-300 pip moves further in favor of the USD on the major pairs - CHF, JPY, EUR and GBP. Trend on EUR/USD pair definitely appears to be following predictions and statements made by EU and US. We might see that pair at 1.2000 by month's end (?). It's a wise time to hedge any non-USD interests, and according to all word I'm hearing, that trend should continue for the next 3-6 months if the economy continues slow growth and there are no nasty surprises from the Fed, or Bush & Co. If you want me PM you some signals we're trading, I can do that.
post #116 of 157
I should ammend that previous statement... the USD strength is expected to possibly continue until sometime near the end of the week as the trade balance data is expected. If USD trade balance is weak (as expected), USD will experience trend reversal on major pairs, so buying USD now is good... by Thursday, it would be wise to be selling USD most likely. Long-term (3 mo.) trends are expected to be slightly in favor of USD.
post #117 of 157
That's no excuse, I graduated with an Math/Econ degree from NYU; now I work in fashion. Regardless, this board is a great place to get some knowledge. Wait... remembering back on my math classes, ok those kids really did dress like crap.
My Bachelors was in engineering, and my PhD done at Caltech, during which time I did unofficial stints as a buyer's assistant and as a stylist. So no, no excuse at all. BTW, engineers are the sloppiest dressers. Math dudes the nerdiest. Pick your poison.
post #118 of 157
Allow me to demonstrate my ignorance: what's a 'pip' (or 'pips')?
post #119 of 157
Allow me to demonstrate my ignorance: what's a 'pip' (or 'pips')?
It's a ten-thousanth of a point, (.0001), the smallest incrament of measure in dealing with forex. A point is 1 unit of measure in a currency: $1 = 1 point in terms of USD. Geeezee man... I can't believe you didn't know that. Gosh, some people...
post #120 of 157
linux, Thanks for the notes, I have been out of Euros since late last week, and have really been holding a steady USD MM position, I'm going to close on another property so I think with how things are going I may just use cash to make downpayments and avoid leverage until I have a better handle on how interest rates are going to behave in the near/mid term. I'm also not entirely convinced it isn't a good time to go into equities, at least in a small way.
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