The Housing Bubble

Lots of Moms and Pops have found jobs by now, and are starting to get back on their feet, financially speaking.

And there’s never been a better time to buy stocks!

they have money to lose again? why not go to the indian casino and at least get some entertainment out of it?

“And there’s never been a better time to buy stocks!”

Fugg yeah! I’m going to leverage my paid for house to the hilt and buy shares, anyone else?

“why not go to the indian casino and at least get some entertainment out of it?”

For lots of folks, gambling is morally wrong, while investing is perfectly respectable. I know lots of wealth LDS Church members who would never set foot in a gambling establishment, yet see no contradiction in allocating their life savings to the Wall Street casino. Some of them also drink caffeine-laden Coke by the case.

I think they would have a better chance of increasing their principal at the casino.

When I worked in Nevada, I knew many an LDS to set foot in the gambling establishments. They had to since they were pit bosses and hotel managers etc.

Frankly, I see nothing morally wrong with gambling, whether in Vegas or on Wall Street, or even in the housing market, so long as you are happy to live with your losses and don’t expect others to bail you out.

As regards gambling on housing or stocks, you should recognize that investing amounts to a bet that the Fed will be able to continue its easy money policies indefinitely. I frankly see no reason this isn’t possible, so please gamble away…

More likely Redmond, WA. Think Microsoft, and the hordes who work there, who are filling those buildings/complexes.

Correct. WA it is.

And my neighbor paints apartments directly across from the Microsoft campus (which are filled with, among other people, many H1Bs who work there). He reports 3rd-world living conditions inside some (which makes one wonder - is the $ getting sent back home?).

No dollar shall be allowed to escape.

Slim, I hate when I hear NPR stories like this. They are just as susceptible to this one-sided reporting as anyone, unfortunately. Almost no one in the media looks critically at anything anymore. The ones that do get mentioned on HBB a lot, but they are a small fraction of journalists out there.

I wonder if they all are absolutely convinced we need Happy Talk to save the economy!1!!! and bolster Someone’s legacy.

I turn on CNBC every morning, mostly for a laugh as I listen to the shills. It was particularly revolting today, however, when some suit was pleading to those with cash on the sidelines to “come see us so we can help you.” Disgusting. This record run is on extremely thin volumes. The whole thing is going to collapse.

Kind of makes things easier to understand if you look for the partisan angle. Not being snarky, just is something I forget to think about as an explanation on how those egomaniacs play in their sandbox.

Frankly I am surprised at how well the stock market is doing this week. I figured there would be a no-sequester relief rally if an 11th-hour deal was worked out, or a yes-sequester correction if not. I could not foresee the rally to a new all-time high on the Dow in the first week of sequestration.

I guess this just goes to reaffirm that the market is fundamentally unpredictable.

Perhaps sequestration is being viewed as an indicator of a return to fiscal responsibility.

Nothing surprises me anymore.

I was surprised at how expensive it was to live even when I did live with my parents between college and law school
Since grade school I used to tag along with my parents when they went shopping for necessities. I was not surprised by the cost of moving out & living on my own.

OK,….now I’m getting confused. Are you suggesting that housing is a depreciating asset? Unconceivable.

What you talking about, girlfriend?

Suze used to have good financial education advice, especially for single women starting their careers. But when the white-collar jobs were outsourced and downsized, her listeners figured out that Suze’s money management isn’t much good if you have no money to manage. Suze’s a motivational speaker shill now. I recommend checking out one of her older 1990’s books from the library and spending 90¢ copying the checklist pages. That’s about all she’s worth.

suze orman is all about selling books and audio tapes.

As are many of those advice-giving types. It’s what they do.

Not where I come from. When were they going to teach it senior year? In my math class? BC calculus took up all of our time. Science? I was taking advanced physics. Gym? Nope, and besides a lot of high schools don’t teach gym anymore. There was no home ec class for the general population of the high school. We had basic cooking and basic sewing in junior high. Consumer math was a high school class that probably included some information about check books and interest. It was for kids who couldn’t pass algebra and had to have two years of math to get a diploma.

Financial management and wealth accumulation/management are taught within families - -either consciously or via habit (probably a combo of both). The absence of culture and financial literacy are a lesson just as much as if they were taught. Culture is underrated as a force for shaping individuals and society.

When the masses (and the elite) can put off pain until tomorrow to get what they want today, the financial culture you speak of is out the window.

Financial literacy will return strongly once there is no other choice.

Until then, party on, dude! Buy those houses from government agencies with little money down!

@MacBeth - I disagree. Many of the “elites” you talk about have an entirely different frame of reference of finances than do J6P. Of course some of them spend foolishly, but the people at the top of the system generally want their nice things paid off and want lots of money set aside for their children and for themselves. Most of their assets are devised to be passed down or conserved in one way or another, vs J6P who generally can’t think more than 5 years into the future (often much less). The assurance of knowing they are “set” today and long into the future trumps the constant need to mortgage the future away to have something today. To the extent they do spend on nicer things, there is a certain list of things that show class and they tend to hold value for a long time. When they buy something like a boat (an even worse “investment” than a house) they aren’t breaking the bank by doing so.

Plenty of schools have been teaching something called Preparation for Life (lol) for decades now. But the kids just aren’t tuned in at that age.

A boat is not an investment, it is a comfy place to live under a bridge.

Kids are pretty heavily indoctrinated in a lot more than just reading, writing, ‘rithmetic nowadays.

It seems eminently prudent to teach some generally accepted principles about debt and personal finance. They’re going to get the information from somewhere. Better it come from the school system than from Wall Street advertisements.

I learned the word ‘bushido’ back in vocabulary class in my elementary school years
After TEOTWAWKI, ‘bushido’ may be far more useful than ‘financial literacy’.

The thing was, the kid who brought the word into class that day for his turn of vocabulary finds thought he was being cheeky. Kind of like being able to shih tzu on prime time TV or Lipschitz. Little did I know it would stay in my word rolodex, only maybe because it sounds so potent.

Little did I know it would stay in my word rolodex, only maybe because it sounds so potent.
I knew what ‘bushido’ was before I ever heard the word. My kind and usually mild-mannered uncle Cas told me about his Army experience on Oahu in the week after the Pearl Harbor attack. He lived in a foxhole on the perimeter of Wheeler Field, something he had enlisted specifically to avoid. Funny how fate works. His unit had lost all its airplanes and were forced to become infantrymen, waiting to repel a Japanese invasion that wouldn’t happen. They knew they were actually incapable of repelling an invasion of the islands.
He and his buddies were not ignorant men. They knew from following the news of the 1930’s how Imperial Japanese forces treated prisoners of war. He and his fox hole mate resolved to each save a bullet for themselves, rather than be taken prisoner. Bushido.

Good. Are you going to get to the not-for-profit colleges too?

The houses usually were sitting empty for an extended period of time. No air conditioning being turned on along with high humidity the houses had mold growth. Many Europeans who own homes in Florida have learned expensive lessons as their belongings in the house along with the interior wall etc all start growing mold in FL without air conditioning. It is an expense that most homeowner having second homes perhaps did not take into consideration while making their sunny purchases.

He didn’t say to Fannie and Freddie. He said not sell them at all. The fact that Fannie and Freddie are the current purchasers is an historical anomaly. Private mortgage bonds have been around for decades. Mortgage debt is primarily financed by bonds and has been for a very long time. Historical doesn’t meant what has been going on for the last three years.

The fact that our FIAT currency is functioning at all is an historical anomaly.

Personally, I think they should make it illegal to opine on the quality of mortgage securities if more than 5% of the mortgage pool is backed by loans without full income verification. By very definition, without verifying income, the ability for the borrower to repay is speculative at best.

All pools with liar loans would have been unrated, unsellable, and thus liar loans would have never existed except in select circumstances.

Read all of what he said, not just the stuff about Fannie/Freddie. The banks simply don’t have enough deposits to finance the first 5 years of all the mortgages they originate. And if by banks/investment companies as the only ones who can purchase after 5 years he really means just banks, then you are asking banks (possibly only deposit institutions) to have the money to finance all the mortgages in the country. It just doesn’t work that way anymore.

And his proposal does NOTHING to prevent non-bank loan originators from originating toxic waste and selling it to bond trusts the next day.

If you want government guarantees out of the mortgage business, then say that. Just that. But don’t pretend that is the same thing as saying that mortgages that are originated by banks have to be retained by the bank that originated it for 5 years. And then making up a rule that people who lead a bank and enough of their loans go bad that the bank fails go to jail? So, if you are a bank in an area that is very dependent on one employer, you never make any loans at all, because that employer moves half the town will lose their jobs?

When the originators of loans (banks or not) had to retain the WORST 10% of the risk (or they risked the entire pool being treated as equity, not debt which meant the payments wouldn’t have been deductible from the profits), they were pretty darn careful with the loans that were made. The time spent on due diligence was epic.

“Banks keep ALL loans on their books for at least five years before they can sell the loan to ANOTHER bank/investment company.”

How would one do this without government regulation?

Intelligent answers, only, please (I know this may be asking a lot!).

“If you want government guarantees out of the mortgage business, then say that. Just that.”

Aside from externalizing mortgage insurance costs to those with no interest in the lending-purchasing transaction, providing a massive risk subsidy which enables too-big-to-fail Wall Street Megabanks to steadily skim money at the taxpayers’ expense, inflating the value of homes due to federally insured mortgages at government-set prices, and putting taxpayers on the hook for mortgage losses, what useful purpose do government mortgage guarantees serve?

polly,

Instead of pointing out the impossibility of regulating ONLY banks in this way, you really can’t see that he was trying to say “mortgage originators” ? The new rule being: if you originate a mortgage, you must season it on your own books for 5 years before being able to sell it.

No. I believe that he was talking about banks because the rest of the post talked about sending bank executives to jail if their banks failed. Plus he is a little obsessed with bankers going to jail. In addition, what control is there if non-bank originators “keep” the loans on their books. They will always find a way of “sharing” that risk, probably by selling specialized bonds that get their income stream from the retained whatever. And non-bank originators have no regulatory authority over them at all except the new Consumer Protection agency and they are too underfunded and since the Republicans won’t let them have a director, they can’t actually use most of the power they were given to regulate consumer loans.

And I would like to revise my previous statement. It wasn’t the originators who kept the worst 10% of the loans when they were securitized. I was the pool itself, so the investment banks (not originators) who had to keep the worst 10% in order to be able to make and sell bonds of the other 90%. It worked just fine. And the partner I worked for told the people putting together the pools that if they didn’t keep that 10% they would lose the tax deductibility of the bond payments and the whole thing would collapse. It worked. And you don’t have to try to drag the world back to a time when all mortgages were financed through passbook savings account at the local, family owned small bank.

Private (not government) financing of the mortgage market is where we want to be. But that doesn’t mean going back to “It’s a Wonderful Life.”

“…if you originate a mortgage, you must season it on your own books for 5 years before being able to sell it.”

Why would you expect the mortgage market to function better under such a heavy hand of government regulation?

Presumably banks would conduct far more due diligence on income and require 20% down. The result would be house prices based on 20% down, i.e. much lower prices.

Not sure this would happen. I’m starting to formulate a theory that the PTB want to remove J6P from the housing equation altogether. Simply keep house prices high AND require 20%. No regular folks would even try to buy a house because the howmuchmonth would be too high. Only hedgies and equity firms will be able to buy houses which they could rents high enough to pencil out the carrying costs.

Shouldn’t house prices be allowed to what the market will bear? And if prices rise to where only the rich can afford to buy and the rest can only afford to rent, well, isn’t that the free market.

“…if you originate a mortgage, you must season it on your own books for 5 years before being able to sell it.”

Our mortgage was sold to Fannie 3 weeks after closing.

No no no…. YOU were sold to Fannie.

1) Lenders being able to avoid repayment risk is a core factor in generating the bad debt driving the global debt crisis. So it makes sense societies would want to avoid this scenario.

2) However, if there were no government guarantees of this system, the system would implode naturally of its own weight, due to the perverse incentives inherent in the system. Some people would get rich, a lot of people would be beggared and you’d have those responsible actually incurring personal consequences.

3) However, having both government guarantees for debt AND lenders being able to totally shed repayment risk simply results in Wall Street printing money and sticking the taxpayer with the tab.

Ultimately however, the campaign finance system is at the base of all these ills. The current finance system pretty much guarantees regulatory capture of high level politicians, if they want to stay competitive.

False. Consumer protection is within the realm of states rights. States have the authority to pass lemon laws allowing you to return a car outside of the “as is” or caveat emptor sales within a period of 3-7 days. If the commerce conducted is across state lines, the feds have the authority to regulate it under the commerce clause. In my VERY humble opinion, some of the few things the commerce clause *should* be used for, as opposed to drug enforcement law.

“False. Consumer protection is within the realm of states rights.”

Whether the state governments or federal government does the regulation is a red herring.

The proposal is for a massive increase in government regulation to prevent the free market (or government-sponsored proxy thereto) from securitizing mortgages.

Is this simple principle really too difficult for a mathguy like yourself to grasp?

Because they sure seem to be having RE bubbles, with or without ‘em.

Who’d've thunk a massive liquidity injection from central banks all over the planet would spill over into residential real estate markets wherever homes are built, bought and sold?

Does the rest of the world have their own versions of Fannie and Freddie et al?

Because they sure seem to be having RE bubbles, with or without ‘em.

——

Bingo.

‘Bingo’

Bingo what? What is your point? You may know these GSE’s have collapsed. Do you remember that there are thousands of Enron type off shore entities they created? Do you remember that a criminal investigation was opened on Fannie by the Justice Dept in 2004, that mysteriously went away? Even while they continued to lobby our congress with their crooked bubble money! That the cost to the government is already at $190 BILLION! And I’ve been asking for years; do you think two multi-trillion $ corporations were brought down by 190B? Or is the problem likely much more expensive, maybe to be revealed when the off shore stuff is paid for?

These corporations were disgracefully corrupt. They should be eliminated and hundreds of people probably deserve to be in prison right now. You can sit around and say ‘Oh, there are bubbles in other places, so we should tolerate these crimes.’ I say BS! And I don’t even know what the hell that has to do with any of this.

My point was an honest question: Do other countries have equivalent versions of Fannie and Freddie? I don’t know the answer to that question.

But it is interesting that RE bubbles seem to be going on all over the world, if the other countries don’t have their own versions of F&F. I’m not saying this exonerates F&F from their wrongdoing. But if indeed other countries can have RE bubbles without a Fannie or Freddie, then we shouldn’t think that getting rid of F&F, alone, will rid us of RE bubbles.

Consider the source. Rationalizations and obfuscations are his stock in trade.

“But if indeed other countries can have RE bubbles without a Fannie or Freddie”

IF??? Because these countries with housing markets teetering on the edge of total collapse don’t have corrupt organizations called Fannie or Freddie?

Pray that God removes your dishonesty.

I pray that god removes your insanity.

How’s the house-hunting going BTW?

Duck and weave from your corrupt thinking. But it sticks to you.

Bingo.

What I meant was that crazy credit markets cause the problem, not the GSEs.

Even without GSEs, other credit markets find a way to oversupply the world with debt to people who cannot repay it. I had a friend who lived in Spain and borrowed in Yen (because rates were so low) to buy his house, so he was taking both interest rate and currency risk. That is insane, and a symptom of out of control credit markets.

I’m not saying the GSEs are good, as I’ve said over and over again, they should slowly raise the required down payment for the GSE debt until they are out of business.

What I am saying though is that the problem is far bigger than the GSEs, and focusing on GSEs ignores the larger problems of credit bubbles forming due to government intervention into credit markets to guide economic activity.

‘focusing on GSEs ignores the larger problems’

As I’ve said before, some of us can walk and chew gum at the same time.

‘In January 2007, as years of loose mortgage lending were about to send the nation’s housing market into devastating decline, Fannie Mae chief executive Daniel H. Mudd wrote a confidential memo to his board. Discussing the company’s successes, Mudd said one of Fannie Mae’s achievements in 2006 was expanding its involvement in the market for subprime and other nontraditional mortgages. He called it a step “toward optimizing our business.”

‘A month later, Fannie Mae outlined plans to further expand its activities in the subprime market. The company recognized the already weak performance of subprime loans but predicted that they would get better in 2007, according to another Fannie Mae document. Internal documents show that even late in the housing bubble, Fannie Mae was drawn to risky loans by a variety of temptations, including the desire to increase its market share and fulfill government quotas for the support of low-income borrowers.’

‘Fannie Mae aimed to benefit from subprime loans and expand the market for them — and hoped to pass much of the risk on to others, documents show. Along with subprime loans, which were typically issued to borrowers with blemished credit, the company targeted so-called Alt-A loans, which were often made with no verification of the borrower’s income.’

“By entering new markets — especially Alt-A and subprime — and guaranteeing more of our customers’ products at market prices, we met our goal of increasing market share from 22 to 25 percent,” Mudd wrote in a 2006 year-end report to the Fannie Mae board dated Jan. 3, 2007. In other internal documents, there was a common refrain: One of Fannie Mae’s objectives for 2006 was to “increase our penetration into subprime.”

http://articles.washingtonpost.com/2008-08-19/business/36856156_1_fannie-mae-daniel-h-mudd-subprime-loans

You know, people have just forgotten what a bunch of scumbags these people are.

“…Fannie Mae chief executive Daniel H. Mudd wrote a confidential memo to his board. Discussing the company’s successes, Mudd said one of Fannie Mae’s achievements in 2006 was expanding its involvement in the market for subprime and other nontraditional mortgages. He called it a step “toward optimizing our business.”

I kinda sorta remember, but please remind me: Was this before or after Ben Bernanke reassured the world that ’subprime is contained.’

The weather seems to be the culprit IMHO that would deter populations from swarming to all the open lands in the MidWest. You have humid or hot, hot summers with tornadoes and floods.

Well, FWIW east coast summers can be hot and humid, at least by Rocky Mountain West standards. Then again, we have the highest housing prices in flyover.

When I was a pup studying at the University of Michigan, I heard Traverse City referred to as Tragic City.

Grandeur areas like the Montana allure has can have big buckaroo buyers come in and drive out the lucky duckies.

There is lots of space in the Rockies. People don’t really get driven out except for a few small areas. They just get tired of their employment options. Although maybe I’m not taking into account the latest bubble…I haven’t lived out in the sticks since it started.

Fabled Oil Cities. Sorry, that series of posts from a few years ago cracks me up thinking about it.

And I am not rationalizing home prices, merely stating what is. All parts of ‘Flyover’ are not equal. Desirable areas do exist within the vast center of the U.S. and I gave a few examples.

Great post Ahansen!!

Would love to see you at this weekend’s Tucson Festival of Books. But if you can’t make it this year, oh well. Some other time.

the city is holding on by its fingernails, abetted only by infusions of phony cash from oil-backed real estate consortiums and federal subsidies
This resembles the financial condition of the country as a whole.

Ahansen your post reads almost like a Victor davis hanson article

My friend like to send them to me, sounds like the central valley really sucks. there must be rich farmers at least at the east side of the valley.

West side I don’t know? looks very dry? I see it when I fly from Burbank to San Jose.

the electronic billboard that used to attempt to extort more money out of county taxpayers
That’s the light at the end of the tunnel. If it goes unlit, beware!

That barren west side is oil — and plenty of it. The inhabited section is reclaimed swampland. In addition to boasting the previous Chair of the House Ways and Means Committee (pork out the wazoo), there are gazillions from Big Ag, Big Water, and surprisingly, a huge country music industry.

The real estate cabals came to a screeching halt about the same time Rep. Bill Thomas (R.), Bakersfield turned his lucrative fiefdom over to successor and current House Majority Whip, Kevin McCarthy.

And yes, the place is an aesthetic insult upon the face of the earth — except for the trees. Bakersfield is an arborist’s showplace; especially right now in the early springtime. For a real treat, drive Hwy 58 between Arvin and Bakersfield next month and roll down your windows. The scent of orange blossoms is near-stupifying.

surprisingly, a huge country music industry.

Not so surprising. That’s where a bunch of the Okies ended up during the last great recession, including Merle Haggard’s parents.

That barren west side is oil — and plenty of it. ”

“let there be blood” was a history of that area I think

The opening scenes of W. Texas threw me at first

Righteo.

The mammoth sets from the film (the five-story wooden derrick, assorted rigs and custom-forged drilling machinery (as well as the turn-of-the-century locomotive,) are on display at the Kern Oil Museum. It’s really an extraordinary display if you’re ever in the area.

OK. I’m just trying to figure out if as a young veteran on the GI Bill back in the early 90s I should have tried to get into such an institution instead of just going to the University of Wyoming. I’m still not seeing it. I just went to classes until I graduated, thinking that it was the diploma and GPA that mattered. I never asked anybody for a recommendation letter, I never met with my advisor for anything but a signature, I never asked them for anything but a diploma. I guess that’s what you mean by “passive”. But the bottom line is that I would have never even known what I was supposed to do to not be passive. Do you think I’d have still been better off at a top 25 school when all I wanted was a BSEE and a job? Your statement on better recruiting sounds like the only possible reason that I might have been. That never worked for me and I had to beat the street myself for my first engineering job. It was rough for new grads with no internship experience in 95. I didn’t do any internships because I was busy with National Guard in the summer.

I can’t say if you would’ve been better off. My argument is less about whether any one individual would be “better off” and more about whether certain schools are worth 4 years of opportunity costs and $100k (or more) of someone’s money. And generally if someone could get into a competitve school, it already shows they have some of the abilities needed to stand out at an average school. I revile Dick Cheney, but he is a good example of this and I do admire that about him. Went to Yale but realized it wasn’t for him. Went back to the Mountain West and apparently did very well at U of Wyoming.

If I could restate my argument from above again, I would emphasize that “everyone must go to college” means that college today is watered down and that the market is seriously warped. Corporations no longer train people, they use college as a way to screen potential employees. And only at the top end of colleges will an average student really have access to the traditional advantages of college–small classes, one on one attention, access to professors, very little adjunct faculty, a wide-ranging exposure to the liberal arts, etc. Most colleges, for most students, are just factories selling debt. The actual education could be gotten very cheaply in books, except for some high-level courses that really aren’t taken by most students ever (most students never take a legitimate laboratory science course, for example).

Also keep in mind that some schools will force you out of passivity. USMA/USNA/USAFA are good examples of this. For better or worse, even the most passive student will need to learn leadership and political maneuvering, just to merely survive if not excel.

A good advisor will also make introductions and help you consider other pathways. We didn’t declare a major until Spring of soph yr. My advisor for fr/soph yrs was a Molecular Bio professor (this was my interest area out of HS) but she realized from talking to me a few times a semester for 2 yrs and looking at my grades and scheduling that I would probably do better elsewhere. I thought about it and she was correct. It was a small enough school where I’d see her around or talk to her in the cafeteria (she had regular “office hours” in our residential college’s cafeteria) and there was a rapport there. I know from talking to friends who went to big schools (Penn State, Syracuse, U of Maryland, Towson U) that this basically never happened there. No sportz factory school is going to place that emphasis on a rank-and-file student.

Also keep in mind that some schools will force you out of passivity. USMA/USNA/USAFA are good examples of this. For better or worse, even the most passive student will need to learn leadership and political maneuvering, just to merely survive if not excel.

Interesting. I had already been an NCO on active duty so I knew a little about leadership. Didn’t see any point in trying to apply it at college, though. I was just trying to get in, get my ticket punched, and get out. But it’s still the political maneuvering that confuses me…it seems to me that while college might be a good place to practice it for some types of people, it’s not really going to teach it to people who naturally avoid it.

But it does sound like you’re saying that I might have gotten a lot more from my advisor (like first of all knowing what I should be getting from my advisor) at a top 25 school. Which might have been quite valuable.

The main benefit of the higher end schools is the fact that you can get involved with the faculty if you choose and the faculty have enough connections to get you noticed if they make a few calls or write some letters for you. Can you do this at state U? Of course you can. But how many 18 year old kids can actually decide exactly where their academic interests lie, research the faculty at their school to find out who is the best person to approach and then figure out how to make a connection. At the upper end schools, this can happen with relatively little effort from the students, because the schools reinforce that culture of faculty/student connections. Other places, you have to work harder for it.

On of my law school recommendations was written by a prof I had for 1 1/3 classes (he team taught one and taught the other). They were larger classes. No reason in particular that he should even have known my name. But I was interested and went up to talk after class sometimes and stopped by office hours on occasion. Not in my major - it was senior year and I was mostly playing around. But it was easy to make the connection. Recommendations mean a lot more when the professor remembers you instead of just looking your id number up in an old grade book.

Thanks for indulging me, polly and joe. Even though I never attempted to make any connections with faculty in college, I’ll try to keep it in mind as something important for my son to know about in the future. In the past when I’ve heard people talk about connections made at Ivy League schools I always assumed it was with peers who were connected. I never thought about faculty.

Where I work we like to hire from the top universities like Stanford and USC, Berkley, UCSB, UCLA, and for some reason avoid the state colleges.

I think it’s a big mistake and our company is paying for it
we can’t hire enough engineers.

I wonder if it’s because H1B go to top ranked schools and we like to hire them and work the crap out of them ? What are they going to do quit? get deported .

In Contrast Engineering in defense like L3 almost all engineers were state college for example Cal Poly SLO, American with security clearences. Every other friday off. In all fairness they worked pretty hard too though.

Laywers probably the University is much more important.

They need to make sure you know how to “Think Right”

Caddy Shack comes to mind for some random reason

I wonder if it’s because H1B go to top ranked schools and we like to hire them and work the crap out of them

That’s one of the biggest reasons. Until they get their greencards (which can take anywhere from 3 to 10 years depending upon the country) the employer has them by the ball$.

Insanity.

Someone on here tried to explain it as a) good weather b) the local college = jobs and need for student housing.

IMO, neither of these should trump some relation to wages in the area.

look up what retired state workers make in CA

And why are so many choosing the central coast to retire

I imagine Prescott AZ to be about the same for the above reason

Median Household Income: ~$32,000

Students I would guess drags this down

Obama did NOT direct them to do any such thing.

The DHS operates pretty much autonomously.

But the biggest crackdowns were by LOCAL police. Namely those paragons of respecting civil rights, the NYPD.

It was the same in other cities.

Even the libtard media confirms this is true:

http://m.dailykos.com/story/2012/06/07/1095420/-FOIA-Revelations-Show-Administration-Role-In-Occupy-Crackdown

Obama is very capable of committing his own sins. No need to blame him for the sins of others.

From the link:

“Documents just obtained by the PCJF from its FOIA request show massive nationwide monitoring, surveillance and information sharing between the Department of Homeland Security and local authorities in response to Occupy.”

Thanks for proving my point.

NYT and WaPo are pretty shoddy at times as well. However, they do important international reporting, financial reporting, and other functions. Setting any politics reporting aside, the NYT especially has a lot of interesting content. The Daily Caller on the other hand… LULZy. That is their only contribution. Even when they are right, the quality of the reporting is ridiculously bad and panders to their audience which probably averages an 8th grade education. I’ll take my conservative slant from more thoughtful places, just my opinion.

more thoughtful places

Drudge Report
Washington Times
Breitbart

Are the sources most often re-posted here.

National Review is bland and safe.
Weekly Standard is slobbering neocon.
And Takimag or Buchanan’s American Conservative, well they’re just Racist®

…and the ENTIRE FIRE sector.

I really don’t trust Main Street either days.

…either, these days…

Marie Antoinette didn’t get it either.

http://www.whitehousedossier.com/2013/02/14/middle-class-warrior-obamas-900-valentines-day-dinner/

Obama’s role model Stalin ruled for almost thirty years.

The “fundamental transformation” of America that The One promised us will take much more than two terms to achieve.

Forward

You go ahead and believe that.

I remember the same pablum coming out of the right in the 90’s.

+1 Ben

I am glad you are up to it - unfortunately the local commies here don’t care because there is a “D” near the phrase “President Obama”

“Liberalism is a mental disorder” — Michael Savage

Not any more, that’s for sure. But they were getting too extreme back in the 1970s.

What they actually are is drinking their own kool aid.

High powered psychological warfare CAN bite you the butt.

…can bite you IN the butt…

We spend more time looking at screens than looking at faces, so it’s pretty easy to pull off.

Damn that R party for stickin it to a black man!

Here’s a non-PDF map… http://upload.wikimedia.org/wikipedia/commons/f/f5/United_States_House_of_Representatives%2C_Maryland_District_3_map.png

click and see what I’m talking about

Why would Masters of the Universe limit themselves to the bounds of the Fed’s charter?

With $40 bn / month in QE3 MBS purchases, subprime, prime, exotic, toxic and idiotic all are not merely contained, but fully engulfed by the Fed’s balance sheet.

118 million an hour is all we ask.

yep and all loans turned out to be sub prime

I wonder what university these guys went to to turn sub prime loans into AAA rated tranches ?

Sell them off as AAA bonds and then short them !!

critical thinking indeed

This is correct. Businesses fail when they are undercapitalized. People don’t appreciate what it really takes to be properly capitalized (perhaps because even the banks in this country aren’t properly capitalized).

If you want to put, say, 100k into a business, I’d say that you also better set aside another 100-200k to prepare for any bumps in the road. And the 100k better be a smallish fraction of your total assets, to the extent that you can see the business as just one part of your assets, not “everything I have”. If you put everything you have into a business, you’re going to be likely to make questionable business decisions.

An offshoot of this reality is that people who actually want to run a small mom/pop type business and really work for the business (be self employed) are quite disadvantaged when going against a) big business and b) savvy small business operators who spread out their money and have management and financial issues to bring to the table. This means having the knowledge or the people to handle regulatory issues and taxes.

Apparently the Fed clings to the predictions of failed theories for years after failure becomes apparent.

there is no money trickling down , thats the problem. all the money is being used to pay down bad loans and gamble in the stock market and commodities market.

No crumbs have trickled my way.

No crumbs have trickled my way.
If the power is still on in your neighborhood & you can get potable water, be grateful for that.

I truly believe that nobody really understands the damn dictionary definition of “trickle”!

trick·le - [trik-uhl] verb, trick·led, trick·ling, noun
verb (used without object)
1.to flow or fall by drops, or in a small, gentle stream: Tears trickled down her cheeks.
2.to come, go, or pass bit by bit, slowly, or irregularly: The guests trickled out of the room.

verb (used with object)
3.to cause to trickle.

noun
4.a trickling flow or stream.
5.a small, slow, or irregular quantity of anything coming, going, or proceeding: a trickle of visitors throughout the day.

“If the power is still on in your neighborhood & you can get potable water, be grateful for that.”

Also I assume there are no military units roaming around launching artillery strikes on the homes in your area, or planes dropping bombs, or drones making assassinations?

I assume there are no

Popular anguish in China over murder of infant:
The strangulation in northeastern China of a two-month old baby accidentally left in the backseat of the stolen vehicle has unleashed an outpouring of anguish and soul-searching online over the state of morality in China’s quickly changing society at a time when leaders leaders are trying to assure its citizens of their nation’s progress. The baby’s disappearance set off a massive search throughout Changchun, the capital of Jilin Province in northeast China. Hundreds of local taxi drivers and private car owners joined in the hunt. Local news even reported some instances of husbands driving around with their nursing wives in case they discovered the baby hungry.

One day later, the pink blanket used to warm the baby and the vehicle were found in a neighboring suburb, but folks online continued tweeting prayers and hopes that the baby would be found safe.

Those hopes ended Tuesday night when the thief, identified as Zhou Xijun, 48, turned himself into police, and according to authorities, confessed to strangling the baby after discovering it in the backseat and dumping the body in the snow.

As thousands turned out for a candlelight vigil in Changchun, sorrow online turned to hand-wringing and even anger over the money-crazed values of China’s new society.

“How did the social security become this bad? How did man lose all his humanity?” posted one mother named Che Xiaoyan.

An eerily similar case one month ago in New York [had] a vastly different outcome.

After stealing a jeep containing an 8-month-old girl in the Bronx, the thief not only left the baby and vehicle unharmed, but called police twice to give them the location of the SUV.

One Chinese blogger under the handle “Sishi Bowen” noted the heated competition between U.S. and China these days, and said, “The same car thieves, different ethical bottom lines. A country [like China] with several thousand years of history can’t even match the culture of a country with just a two hundred year history.”

IMNSHO this actually reflects pretty well on Chinese culture, in view of the popular search that followed and the publicly expressed grief. Infanticide was common in many ancient cultures & mandatory in some, like Sparta. Every human society will have its murderers.

Speaking of which two idiot teenagers from my hometown killed three people in a robbery gone wrong last weekend. Big news in a little town…stuff like that is very rare.

‘Start with home builders ‘

Thanks, I’ll start there.

The pension plans that most people will never see in the end?

The insurance companies that are constantly raising rates while denying claims?

HALLELUJAH! It truly is a FIRE sector miracle!

Never see in the end? Who looks at the end? It’s quarter-by-quarter that gets looked at.

Two-and twenty. Get your two-and-twenty as it is offered up and let somebody else worry about this end thingy.

The miracle of using OPM is it is Other People’s Money!

And these Other People do not expect to get a return on their money right away, no, their expectations are that they will get their return somewhere down the road - in the end.

But as the end slowly approaches the people who manage the OPM get paid as the journey to the end progresses. In other words, they don’t have to wait for the end to be reached in order to get paid.

And if there is no money at the end? Well, shucks, it’s just OPM.

muppets never learn I guess. Are these people that ignorant?

The recent housing bubble ain’t the first rodeo.

Short answer: yes, they are.

when the wages don’t go up

A 70% consumer economy doesn’t need consumers.

Sure, it’s a “permanent” reduction in our standard of living.

“…reduction in our standard of living.”

As reflected by a permanently higher slice going to the FIRE sector to pay for housing…

Good thing Bush found Bin Ladin and those WMDs!

But why did he let him go and lose the WMDs?

If Reagan did his job and didn’t back those crazies in Afghanistan against the Russians, nobody would be able to blame anybody for anything.

Don’t forget about Saddams anthrax attack.

If what you describes happens, I’ll have to roll with the punches. It will be smalltime landlords who only have a few properties that will be screwed. Or people whose properties are not paid off.

Regulation tends to actually be OK for business. It’s the small timers or less savvy types who get screwed. To be honest, having more section 8 vouchers in the market in general helps to raise rents. If more people are forced to accept vouchers, it will be further windfall to my fam which is another symptom of the problem. Right now we could get more from Section 8 than from traditional tenants, but it doesn’t make sense. If everyone else starts taking sec 8, though, it would start to make some sense perhaps.

I like how you point out I’m naive after I basically rip the gov’t a new one for even intervening in this at all. Just the other day I said that I find all government support for housing prices to be naive.

It’s Bush’s fault.

Nothing is Bush’s fault (or Obama’s fault). Americans get the government they deserve. The people should be the masters of their government, but the American people are sheep.

Also, both parties harbor disdain for people who work for a living.

Nothing is Bush’s fault

Iraq war is Bush’s fault and only his.

I love it when everyone blames the poor and the gov while the corps rape them blind.

You can’t fix that kind of stupid.

“If you renew the president’s contract, you will feel it,” Clinton said.”

“The family are among the 47 million Americans now thought to depend on food banks. One in five children receives food aid.”

5 years and how many Wall Street crooks in jail?

“I love it when everyone blames the poor and the gov while the corps rape them blind.”

Holder: Big Banks’ Clout “Has an Inhibiting Impact” on Prosecutions

March 6, 2013, 2:15 pm ET · by Sarah Childress
The attorney general’s comments underscored previous concerns that the Justice Department hasn’t been sufficiently aggressive in prosecuting major banks for the fiscal crisis.

http://www.pbs.org/wgbh/pages/frontline/untouchables/ - 47k -

I guess this company doesn`t have Warren Buffet`s accountant.

Whole Foods CEO John Mackey Advocates Conscious CapitalismIn his new book, the co-founder of Whole Foods Market promotes free-market thinking while criticizing Wall Street.

Ira Stoll | January 28, 2013

Much of the book proceeds along these sensible lines. Mackay writes, for example, that in 2011, the taxes his company paid were “more than twice as high as the profits we were allowed to keep.” ($343 million in after-tax profits, $825 million in total taxes.). “If business taxes were lower, all the other stakeholders would have more — lower prices for consumers, higher wages and benefits for team members, and higher net profits for investors, and the amount of money we could give to support the nonprofit sector would also be proportionately greater,” he writes.

To the extent that Mackey wants to change current business practices—and he does—he writes that “the lead agents of change need to be those who are engaged in business—not politicians, bureaucrats, or regulators.” This, too, makes plenty of sense.

http://reason.com/archives/2013/01/28/whole-foods-ceo-john-mackey-champions-co - 151k -

Holder: Big Banks’ Clout “Has an Inhibiting Impact” on Prosecutions

Easily remedied! What needs to happen is the too-big-to-fail banks need to be busted up into small-enough-to-jail banks. Once stripped of their size advantage, Megabank, Inc would suddenly become as tame as a pussy cat.

If the Republicans follow Noonan’s suggestion, I will literally join the party.

DECLARATIONS
Updated January 11, 2013, 7:08 p.m. ET

It’s Pirate Time for the GOP
The party needs to be unpredictable and bold—and grab some of Obama’s issues.
By PEGGY NOONAN

It’s official. Congress is now less popular than cockroaches and colonoscopies, though more popular than the ebola virus and gonorrhea. Really. The numbers came, this week, from a Public Policy Polling survey. The House and Senate have an approval rating of 9%.
…
So here’s an idea for Republicans in Congress. It has to do in part with policy, in part with attitude and approach.

They should starkly assess their position. It isn’t good. They just lost an election, they’re up against the wall, they have to figure out how to survive and thrive as a party that stands for something, while attempting each day to do the work that needs doing for a country in trouble. The challenges are huge, the odds long.

They can sit back and be depressed and whine. Or they can decide: It’s pirate time.

And really, it is.

Now is the time to fight and be fearless, to be surprising, to break out of lockstep, to be the one thing Republicans aren’t supposed to be, and that is interesting.

Now’s the time to put a dagger ‘tween their teeth, wave a sword, grab a rope and swing aboard the enemy’s galleon. Take the president’s issues, steal them—they never belonged to him, they’re yours!

In political terms this means: Reorient yourselves. Declare for Main Street over Wall Street, stand for the little guy against the big interests. And move. Don’t wait for the bill, declare the sentiments of your corner.

Really, it’s pirate time.

Examples of what might be done:

If you are conservative you are skeptical of concentrated power. You know the bullying and bossism it can lead to. Republicans should go to the populist right on the issue of bank breakup. Too big to fail is too big to continue. The megabanks have too much power in Washington and too much weight within the financial system. People think the GOP is for the bankers. The GOP should upend this assumption. In this case good policy is good politics.
…