The greedy and shortsighted who are buying up badly constructed “shitboxes” is giving rise to an equally greedy group — plumbing repair/construction/general contractors. What goes around comes around. Greedy real estate investors meet your new best friend — dishonest and unskilled repair man/person. Find one if you can, and be very, very nice to them, especially if you live far away from your hot new investment.
From Jersey Girl.
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FollowBefriend23 threads2,038 comments surfer-x's website
You and I know that STARTING salaries for Tier 1 college graduates are $50-80K their first year.
Seems crack smoking is rampent. Love this board, you can spew crap without data and expect everyone to believe it.
Everyone with a tier 1 college degree is making 2mil a year, each one of them drives the new v-10 M5, lives in an E SJ McMansion, no worries as RE only goes up and the equity gains are real! Spend people you deserve it.
I have a friend that graduated from Cal with honors, BS in CS, went to Stanford got a MS also with honors, what did this get him in the glory filled BA, 72K at oracle. Now riddle me this, if a person with 2 count'em 2 degrees one each from TIER 1+ universties goes to work for a Tier 1 company, who has done all the appropriate salary surveys, and makes 72K, what do all the rest of the chumps make? OH btw he saw the light and went back to cal to get a PhD in CS, shit he might be able to crack 90k with that. And think 90k will get him a mobile in E Palo Alto. Location Location Location man.
Yeah, a little wild. Don't you miss living here?
"The distribution of income is not exactly a bell curve, you have a lot of poor people, a lot of rich people, and few middle class (as defined by nationwide standard)."
Do you have data on this? Please share. If not, you should start off with: "My impression is", or "I think that".
FollowBefriend25 threads1,690 comments SQT15's website
There are plenty in Tracy or East Bay residents waiting to come to the west side of South Bay
Sac has tons of BA commuters as well, many of whom make a good living and would definitely buy into the BA if prices go down. I don't know about the salary thing though. We have some good friends who lived in SF who made about 200K a year combined salary, and they had a hard time trying to buy. They ended up continuing to rent because they couldn't find anything they could afford that they wanted to live in. Now, affordability is relative because they didn't want to take out a NAAVLP to buy.
I also agree that a degree is a starting point. There are a lot of well educated people who don't make that much for a variety of reasons. You might have a communications degree, but what do you do with it exactly? I have a journalism degree, but if I switch careers then I have to find a way to develop a new skill set. The BA seems based a lot on tech but if outsourcing continues as a trend, where will the new jobs come from, and who will be qualified to fill the positions?
FollowBefriend (5)44 threads4,602 comments Los Altos, CAPremium
Seriously though, besides houses, what do we make in America anymore?
The US produces a suprisingly high absolute percentage of many categories of global output, it's just that the per-capita production for a lot of stuff has been going down in the US, whereas it has been rising elsewhere (mainly Asia). Even in manufacturing, which has largely evaporated in the US, we still account for a large chunk of global output (mostly in the form of ultra-high-tech, automated specialty manufacturing).
You can find all this data at the World Bank:
What makes the US unique is that we consume an overwhelming portion of our own output domestically. It is for this reason that the US is largely insulated (compared to just about every other large industrial country) from global economic forces. What has changed in the past couple decades is our degree of exposure: most stats I see show we are over 20% globally interdependent, whereas in the 50s we were under 10% interdependent.
in many rich neighborhoods there is such constant remodelling Porta-potties are almost pernanent fixtures on the curbs so there is a constant stench.
I don't doubt it. Here in the Sac area it's not as bad, but the home improvement business has been booming.
I do know some people who have lived large off the re-fi $$ who are now feeling the pinch. I'm not sure it's because they've just spent too much, or if business is slowing down. (The wife sells restaurant equipment. With all the building out here, we've seen lots of new restaurants as well, so business has been good, but I think the boom is over) The wife was in major remodel mode for awhile, but that seems to be changing. It's only anecdotal evidence but it may be the beginning of a trend.
And does an education still improve your standard of living? This bubble does make one question many premises of the American Dream.
We don't seem to be a country that makes much anymore. Everyone I know who makes any money seems to be in the business of selling something, and really, a college education isn't necessary for that.
Ok, maybe we make more than I thought. ;)
"It’s only anecdotal evidence but it may be the beginning of a trend."
Speaking of trends, bankruptcy law service is booming:
I can only imagine how many filed this week.
It's not all bad news. The US is still a great place with a lot of potential. The current poblem is that there are two great countervailing economic arguments regarding globalization.
The first is that, if another country can make something cheaper, then why shouldn't we import it instead of producing it ourselves (excepting strategically critical goods, like jet fighters and aircraft carriers). This is the comparative advantage argument. We net benefit when we consume cheaper output.
But the counter is that we lose long-term productivity growth (even though we are more productive in the short term) when we surrender production to other countries. This is the absolute advantage argument. The best example is banking. Countries that chose to allow sophisticated, lower cost, higher efficiency banking infrastructure to displace their own local systems (primarily US, Japanese and European banks), failed to ever develop the skills and learning domestically and now are permanently unable to compete (this is the Stiglitz reasoning). The fear is that as we abandon things like steel production, we'll lose the ability to produce steel competitively forever as places like Korea develop new techniques of production.
Market fundamentalists argue that completely open trade and capital markets will solve this disparity naturally. The problem is that this has not happened, probably because markets are never perfect and governments have political agendas and will always intervene for self interest. I personally think that we should be very wary about abandoning production for cost reasons alone, but we should abandon making stuff that is not signficantly integral to the US economy and wellbeing.
Seriously though, besides houses, what do we make in America
Weapons. Really really good weapons.
“And does an education still improve your standard of living?”
Statistically speaking it does:
We talked about this extensively on a previous thread. Education (not necessarily 4-year University degrees, but all forms of higher ed including trade schools, skill licensing, etc.) are almost perfectly correlated to socioeconomic strata. It is extremely rare for individuals with higher ed to be in the "true poor" strata, short of alcoholism, drug addiction, or mental illness. The converse is also true; it is very difficult to climb strata without some form of formal higher education.
As others have said, education doesn't create your standard of living, but it determines your starting point.
FollowBefriend (4)117 threads17,655 comments Premium
Market fundamentalists argue that completely open trade and capital markets will solve this disparity naturally.
I like the term "market fundamentalists". ;)
Soros and Stiglitz use that term a lot.
I like the term “market fundamentalists”.
Soros and Stiglitz use that term a lot.
Just for the record, before someone starts flaming me again on the Stiglitz thing: Stiglitz, while a genious, has some fairly blatent holes in his world view. When I took a Stiglitz course it was co-taught by Bruce Greenwald (the Value investor guru). Ultimately, Greenwald came out appearing much more rational than Stiglitz, even though he doesn't have a nice Nobel prize on his mantel.
Here's my favorite ommission in the Stiglitz "formula". He never accounts for the cost of stability in places like Europe and much of Asia. Of course, this cost is almost entirely footed by the US, but doesn't show up in nice, nifty national-income accounting. If we were to instantly remove this spending, the US would suddenly appear much different in terms of current account deficits. As Greenwald might say, if you want to solve trade imbalances then let the world defend itself. (Of course, we don't do this because we generally try to avoid world wars. But, we pay the cost almost solely).
"I personally think that we should be very wary about abandoning production for cost reasons alone"
So, would you say that maintaining certain valuable industries, for the sake of staying up to speed with advances in global technologies (sort of a macro "use it or lose it" idea), is worthy of subsidization?
Then the idea is, when the rainy day comes & the nation(s) we've been depending on ceases production for some reason or another, we can then kickstart our own mfg to replace it? Sounds pretty good to me. Hey, perhaps they could then pay back some of the subsidy. LOL.
So, would you say that maintaining certain valuable industries, for the sake of staying up to speed with advances in global technologies (sort of a macro “use it or lose it” idea), is worthy of subsidization?
Things like basic sciences and primary research have always been heavily subsidized in every modern country, especially so within the US (in the form of University research grants, military R&D and space research). I've yet to hear even the most "fundamentalist" free-marketer argue that we should abandon all of these subsidies.
Here’s my favorite ommission in the Stiglitz “formula”. He never accounts for the cost of stability in places like Europe and much of Asia. Of course, this cost is almost entirely footed by the US, but doesn’t show up in nice, nifty national-income accounting. If we were to instantly remove this spending, the US would suddenly appear much different in terms of current account deficits. As Greenwald might say, if you want to solve trade imbalances then let the world defend itself. (Of course, we don’t do this because we generally try to avoid world wars. But, we pay the cost almost solely).
Stiglitz and Soros have their political agenda. I do not necessarily agree with their views. I like Stiglitz because of his work on Globalization. I like Soros for his prowness in speculation. Nothing more.
Interesting developments this morning, filled up the Hyundai, cost 30 bucks, whoever got gas before me spent $75. Driving to work and was passed by a SUV convoy, love it, gigantic trucks with 1 person each. Is it me or isn't seeing this just like watch a 300lb fat ass mowing a #5 supersized? you just want to look away.
My husband has a client with a Hummer and he got to look inside, he tells me they have virtually no cargo space at all.
I have to make a confession, we own a (gulp) SUV. We got it through my dad (auto wholesale broker) about $3000 back of blue book because we had to replace the family car quick. I had a mini-van and hated the thing-- anyone ever drive one? They are flat-out scary to drive in the winter-- they hydro-plane all over the place. I wouldn't drive an SUV except that I don't have to drive far every day. My daughter goes to school a mile away and I can make a tank of gas last 2 weeks. It is very useful for hauling the kids and their stuff. We find the cargo space very handy.
I thought I'd put in my 2 cents about the SUV because so many here wonder why anyone would have one. For me it came down to having space for the kids. If I drove a small car I wouldn't be able to take any of my kids friends with us anywhere (I tend to take extra kids when we go on field trips) and when the kids are small you end up carrying the playpen, diaper bags, and other assorted paraphernalia wherever you go. Plus, since I don't live in the BA the car isn't as inconvenient as it would be in the city.
But the increase in gas prices has made us use the car less. If I need to run errands I use my husband's Hyundai. That car has turned out to be a great buy. (100,000 mi factory waranty is a beautiful thing).
Please don't hate me now. :?
Honestly, we are thinking about an SUV. There are just too many large vehicles out there for it to be safe driving small cars. I want something that weighs at least 5000 pounds.
I’ve read an article somewhere that said something about how people think they are safer in an SUV and it turns out that it isn’t true based on crash data. For one thing, they have a high center of gravity that makes them flip over very easy!
Very true. SUVs are not safer in single-vehicle accidents. Very large sedans (5000+ pounds) are impossibly expensive though (e.g. RR, Bentley).
"I thought I’d put in my 2 cents about the SUV because so many here wonder why anyone would have one."
Sacto, don't feel badly. SUV's get a bad rap, but there are valid reasons to own one, like you listed. We seriously considered buying something that could carry more than 5 people and more kid crap when we had a second child, but in the end it came down to my loving my current car too much to give it up, and because we don't live near our families, it's usually only on vacations when we need to haul extra people.
"Very true. SUVs are not safer in single-vehicle accidents. Very large sedans (5000+ pounds) are impossibly expensive though (e.g. RR, Bentley). "
Before I bought my car, I was about to have our first child and was possessed with finding the safest car possible. It's absolutely true that SUV's are not necessarily safer, and funny thing is, Volvos sell themselves on the image of safety, but in all the tests I found at the time (1999-2000), BMW's were safer. I ended up getting a 528, because we lived in Germany (so not as expensive as they are here), and it was rated one of the safest sedans. It is a very heavy car, not sure if it's over 5000 pounds, but I think it's close.
I know BMW's also have a certain negative image, but I am a car enthusiast, and it is an absolute dream to drive. Germans really do know how to build cars.
FollowBefriend1 threads3,248 comments
Stanford grads in BA are a dime a dozen, every other resume I see is from Stanford. Among my circle of friends, ALL of them have one sort of advanced degree or another, MBA, PhD, Msc, JD, etc. And there are lots of international talents from different countries coming here with their own patents. The fact of the matter is, places like NYC and BA really have a lot of world-class brains, and places with these brains tend to have extremely high cost of living.
I am not saying the current housing price is sane, it definitely needs to come down in real terms, but BA will always be hard to afford, it is just like London, Paris, NYC, etc. will always be out of reach for most population, especially with a more fluid international labor market so that you start to see competition from the best minds from India or China competing for the same shack down the street.
Back in 95/96, when BA was just coming out of the realty recession, the foothill areas of the South Bay was already going for around 650-800K, which of course more than doubled today. But it just won't go back to that price level, because we went through two bubbles in which some people DID keep the money they make from these bubbles.
Stanford grads in BA are a dime a dozen, every other resume I see is from Stanford.
There are at least two on this blog. Probably more.
But it just won’t go back to that price level, because we went through two bubbles in which some people DID keep the money they make from these bubbles.
Not necessarily. Bubbles are psychology-driven.
The world is always swining between two extremes. This wave of globalization will be replaced by closed-door policies and regionalism for a while, and then we will swing back to globalization. AG is not the only person who overshoots, we all do.
This wave of globalization is creating too many negative effects at home. There is simply no way we can outsource poor people overseas, so we need to keep some jobs for the underprivileged before they set the cities on fire. That will either manifest itself in politics (some kind of protectionism lunatic will emerge in sweeping popularity), in economics (most US consumers have no $$ to spend), or the combination of both.
So I think the opportunity for the next decade or so is on regionalism, focusing on serving local communities. Produce locally, consume locally, fuck the international cheap labor lol :-)
I agree. But things do not swing the other way without catastrophes. Sadly, we may have to witness cities on fire, fascist leaders, and possibly wars before the tide changes again.
I admit to owning a SUV also. I'm not proud of it, and when I bought it almost 10 years ago, I had a lot more reason to justify it on practical grounds. We don't like it so much anymore, and gas prices are the final straw. But, with 2 dogs, a kid, and an extremely active life style we'll still need to replace it with something "big" and utility friendly (racks for stuff), and I hate minivans (which aren't very fuel efficient either). I've been holding out waiting for some reasonable SUV hybrids, or perhaps a wagon I actually like. All that said, I'm kind of getting sick of pulling anti-suv bumper stickers off my truck every time I have to park in Berkeley, lol.
Our other car is an older BMW, which we fight over driving rights daily. No one wants to drive the SUV.
I’ve been holding out waiting for some reasonable SUV hybrids, or perhaps a wagon I actually like. All that said, I’m kind of getting sick of pulling anti-suv bumper stickers off my truck every time I have to park in Berkeley, lol.
SUV hybrid is a joke. You will end up with a "high-performance" truck with ok gas mileage.
How about Volvo V70?
Sadly, we may have to witness cities on fire, fascist leaders, and possibly wars before the tide changes again.
The good news is that the US fares better than just about anywhere during times of heavy protectionism, because we already consume such a large portion of our domestic output. The bad news is that the rest of the world does not, and previous cycles of isolationism tend to have fairly ugly punctuation marks at the end of them. I forget who it was that said (in response to criticism over growing European exports in the 60s, mostly German Wirtschaftswunder related), that either Europe exports goods, or it exports war; the choice is up to us.
How about Volvo V70?
(I might date myself here). As a former owner of a 1976 Ford Granada, and thereafter a 1984 Ford Tempo, I have hereby sworn to never, willingly own or otherwise encourage the ownership of another Ford.
The good news is that the US fares better than just about anywhere during times of heavy protectionism, because we already consume such a large portion of our domestic output.
But we are so used to cheap, crappy imports nowadays...
But we are so used to cheap, crappy imports nowadays…
That's an easier adjustment for us than the converse. Imagine how Germany or Japan would do if they lost wide, open access to our consumer markets (and the collateral damage they'd suffer when everywhere else follows suit).
As a former owner of a 1976 Ford Granada, and thereafter a 1984 Ford Tempo, I have hereby sworn to never, willingly own or otherwise encourage the ownership of another Ford.
Understandable. How about Sabb 9-5 Sport Wagon? You have nothing about GM, right?
Do not buy a Saab. Lease one. Or face the consequences after three years.
(Not car-buying advice)
That’s an easier adjustment for us than the converse.
I am not too sure about that... The business model of Walmart will break apart.
I am not too sure about that… The business model of Walmart will break apart.
During times of protectionism, there is still open international trade, just bi-lateral in nature. I dare say that China will be very willing to enter into such agreements with the US very readily. Their alternatives aren't so attractive. The heavy hammer would fall on Europe and Japan (although Europe would also bi-laterally trade with China too, just less so than us). My only point is that the US wins at this type of international brinksmanship, and the other producing nations know it. Even with the Walmart model firmly in place, we are still nearly an 80% local economy. How about Germany, the UK, Japan?
How about Sabb 9-5 Sport Wagon? You have nothing about GM, right?
I'm mainly about BMW and Audi right now; I just need to find some overpaying greater fool to fund my indulgance.
WOW we really got far off topic…..Here is an interesting article at least related to the bubble.
What was the topic again?
There is no thread bubble!
Warren Buffet? All you can eat? ;)
I think Europe is more shielded than Japan. Isn't EU or Euro set up for a freer flow of goods and labor to create a big and sustainable internal demand from within?
Japan is in a worse situation than Germany, but its internal consumer market seems to be recovering. I will have a chance to take go to Japan soon so that I can observe from within. The most f*cked country here is China, and deservingly so. You just can't place the burden of growth of a 1.3B people country on someone else. I am all for closing the door to China, I would rather pay slightly more for goods to be manufactured in Mexico, after all, it is right at our backyard, and their wellbeing is more critical to us than China.
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