patrick.net

70-80,000 won't easily buy you a house now though!

Here's the quote in the article that tells it all:

"Even though corporations have enjoyed record profits and earnings for the past few years, that has not been reflected in creation of jobs. For example, last year, employers added 1.98 million payroll jobs; this year's job creation is expected to fall a bit short of that. By contrast, during the rip-roaring late 1990s, employers added 3.36 million jobs in 1997, 3 million in 1998 and 3.17 million in 1999. "

I didn't find the part in the article that says undergrads are making $70-80K.

@ConfusedRealtor,

Cut the crap.

Now you're trying to subvert the blog by making it appear that people are here "to help cope" and we're all people "wishing" for the housing market to crash. Most posters on this blog (you're not included) use data and facts to back up ideas about what may or may not happen to the housing market. As far as I can tell, you're the only one here who is "wishing" the housing market did something while ignoring "the big picture" and the "landscape you are in."

And stop the disingenuous statements like "Renting is fine. honestly, don’t let anybody tell you renting is throwing money down the toilet or is shameful."

That's like one of us saying, "being a realtor is fine, CR. Honestly, don't let anybody tell you selling real estate is throwing that pea-sized brain of yours down the toilet or is shameful."

# Claire Says:
November 12th, 2006 at 9:41 am

70-80,000 won’t easily buy you a house now though!

Not in california... So much for higher education

Ski bum - How are your hypotheses and facts going so far? Same old tune next year as the beginning of this year and the last?

My hypotheses are fine so far. Exactly as according to plan, in fact. Don't you worry your little brain about me. I'm doing fine.

Just face up to the fact that housing in SF is up again this year and the economy is just fine.

Are you asking me to "FACE REALITY"?

Are you a data programmer or something, constantly in fear of being outsourced or something?

No, I'm not. I gues you haven't been paying attention. Clearly you just troll around trying to spew your realtor propaganda without actually reading other posts.

What an idiot you are.

California has exceeded what is reality salaries in most of the rest of the country except possible NY metro. Curiously though look at the overall median So Cal included and you see just how outrageous the cost of living there is. The real wages are still in N. Cal.

MY question is with the cost of living so out of reality why are there so many bodies there? Are they all living working class\ near poverty?

@CR

Thanks for confirming you were an IB yourself, CR.

i’m sure there are a lot of renters who let the market come to them, instead of figuring out ways to improve their own earnings power to go to the market.

What percentage of those IBs make it to the $500K/yr tier? Last I checked the pre-req for that was surviving a few up-or-outs, being ranked top of your IB class, getting +700 on your GMAT, getting into one of 5 B-Schools, knowing the right people, and then getting a little lucky.

Analysts don't make $500K/yr, not even in SF or NYC. Go to glocap.com our vault.com if you want to see how much lower level IBers really make.

Sylvie,

I'm pretty sure the greater SF and LA areas are not particularly high income, esp. compared to NYC.

However, it is quite possible to live comfortably with a $30-40K/yr salary in the BA and not take on debt, just rent with roommates and don't go clubbing too often. Buying a house right now is the surest way to years of grinding poverty.

SFGuy,

Were you offended by my statement that live animals can be even more delicious? :)

CR conveniently ignored one very important factor in this:

Renting is a fine, fine thing. But so is owning a home. People say ‘homes in my area’ are only up 2-3% this year and barely keeping up or beating inflation. Better than rent oustripping inflation by 5X.. and then compare the return on rent to 2-3% inflation = ?

Rents started out at a small fraction of ownership costs. That's what started this whole thing for many of us former owners.

Even if all I do is ride rents back up to parity minus premium ownership costs, then I'm still far ahead of the owner who rode it down.

By the way CR (or any of your multiple personae), with the help of many people here I built a large scenario modeler which you can use to actually test your bullshit claims. Here is the location and thread. You're more than free to download it, find our errors, and post there or here why we're wrong. The best comments I've received are those where people found errors or questioned the model's assumptions.

You do know excel, don't you? Surely you made it that far in your brief IB career.

CR,

LOL! I could mention that I make more than that and spend less, but you would ignore it like you ignore everything else.

I would like to meet those proverbial $80K to start 22 year olds. I didn't even recall Harvey Mudders getting that sort of salary offer in 2000 and 2001. First year salary at IB firms/accounting firms/consulting firms is probably $55-65K, which is not that great deal considering how much traveling they do and the late nights they have to work.

CR,

Also, what do bonuses handed out in the "boonies" of Wall Street have to do with SF prices again?

If CR can convince me, one of the more optimistic people around here, then I'll hire him/her to help us buy a home in Marin. But as others have asked, you have to convince me that "this time is different", and there won't be any reversion to the mean.

astrid says: I would like to meet those proverbial $80K to start 22 year olds.

Unfortunately, I know lots of those people. Any engineer that hired on during the tech boom in California started at $75-80K almost automatically*. Starting wages in other areas were slightly less, but I always argued that with the cost of living difference, we were making much more outside California. Also, that base salary does not include discount stock purchase, stock options, profit sharing or any other extras. That easily tacks on another 10-15% in various incarnations.

Though the boom has ended, it seems to have affected job creation more than wages... i.e. now 20% of the people are getting hired, but the starting salary is still 80-100% of the Y2K water mark.

* Assumptions: Went to a respected engineering school. 3.0 GPA or above. Bright, motivated and interviewed well. Probably majored in an "official" Engineering degree; Computer Science and related degrees tend to make less unless the candidate is a bona fide hotshot.

Brand,

Huh, maybe I hung out with the wrong crowd and didn't know it. I know some BSes who made $80K+ after a year or two, and maybe more in the form of non-salaried compensation, but not at 22 yrs old.

PS - It's not at all unfortunate. Engineers' starting salaries are pretty high but hits a ceiling pretty quickly. I think they should get paid more since they actually make stuff, rather than just spend their time pushing paper or goods onto other people.

BTW, what's an "official" engineering degree? I assume EE and mechanical engineering count, but what about civil engineering? Sound engineering? Financial engineering? :)

Live shrimp has an interesting texture -- the important thing is not to overthink it.

I have my limits too, I absolutely refuse to eat live monkey brain or live baby mice.

I refuse to eat Taurus realestaticus. I hear it is stringy and bitter.

SFGuy,

Sadly, that was intentional. I wasn't sure how to say BS in plural.

I go by Futurama's guidance on intergalactic ediblity (I will eat anything that was stupid enough to blow its money gambling...including gambling on flipping real estate).

BSes

I wasn’t sure how to say BS in plural.

The accepted plural form (American) for "Bullshit" is "Horseshit", although most people will use the colloquial "load of Bullshit", or the idiomatic "pile of Bullshit".

BSes = bachelors of science.

I'll try B.S.es next time, and hope that's more clear.

SFWoman2

Horseshit (see above post).

http://media.ft.com/cms/c51a4c7c-8f2d-11da-b430-0000779e2340.pdf

(2005 data)

Haas: $123,968
Stanford: $156,126
Columbia: $148,778
Harvard: $159,973
Chicago: $140,602
Wharton: $153,415

to find a salary under $100K for US b-school you have to go down the list to Michigan State.

Didn't we already cover this a couple threads ago?

One of the things I have noticed is some of posters who work in Tech or support infer six figure incomes. I lived in the LA metro for thirty years and I know that until five years ago you could still live decent on 45k yr.

Well, that's the double-edged sword of engineering degrees. You tend to start out higher than everybody else. But your friends in "money-related" fields (investment banking, capital allocation, stock brokerages, etc.) will eventually earn 1.5-2x more. Of course, they will also kill themselves during the early parts of their careers attempting to reach the big money plateau. In addition to their MBAs and graduate degrees from good schools, they tend to graduate with a lot of debt. Most people at my firm went to state schools, and my employer paid for their masters degrees and MBAs. And there is something to be said for working a consistent 40-50 hour week for your entire career.

People with engineering degrees can be snotty about the "E". Myself included. Hey, at least I admit it. :) But seriously, you go through a lot more punishment in math and physics for the difference to a similar major. My reference list of engineering is basically: chemical, mechanical, electrical, civil, computer/semiconductor, industrial, mining/petroleum, nuclear.

I'm not sure what financial engineering would entail. It sounds like it could be one of two things: 1. some sort of big money job that leads towards CFO positions, or 2. an impostor engineering that ends up somewhere between Sanitation and Software on the bogus title scale. :)

Kidding, KIDDING for all your Sanitation Engineers out there!

Sanitation engineers...are those the guys who come by in big stinky noisy trucks every Tuesday morning (at 6AM)? I heard there's good money in that, esp. if you're Italian.

SFGuy,

No, I'm not actually a cannibal. There's an ancient Chinese saying that human meat is sour and foul. I heed that and stay away from human meat.

I'm still working on a loophole so I can consume popplers.

Wouldn't BScs lead lay people (like me) to think I'm talking about a Bachelor of Science in CS, rather than the plural Bachelors of science?

Isn't the proper term singular-only? I think it only turns plural if you use it as slang to refer to people. You can just call them BSers, I guess.

Sanitation engineering is very lucrative in Chicago. 364 days of the year it's picking up trash, crushing it and burying it. But there's always that occasional call from Uncle Antonio, who needs a special pickup for immediate disposal.

Brand

http://mfe.haas.berkeley.edu/

It's a new program. It probably would be more accurately titled "Masters in Financial Mathematics", but "Financial Engineering" is commonly used in the industry, so thus the name of the degree.

The mathematical rigor required for MFEs is an extension of the most rigid engineering, computer science, or physics undergrads. A lot of the folks who go into MFE are physics or math undergrads, and most already have a masters engineering degree of some sort, if I'm correct.

astrid and SFGuy,

I believe the proper grammar and punctuation you seek is to add an apostrophe when pluralizing an acronym term ending in S. For example, you learn your ABCs, or read some EKGs, but your college granted many BS's and the realtwhore flipped many POS's.

skibum,

Thanks for clearing that up.

SFGuy,

I prefer to think that popplers look like "breaded shrimp" with eyes. Though you don't see the eyes until they're old enough speak.

SFGuy,

Thanks for the link. I had no idea that there were so many IBs ahead of investment banking.

@SFGuy,
Thanks for clarifying. Re-stated: "The FBs try to flip many POS's."

SFGuy,

Okay, point taken. I will try to avoid ordering fictitious intelligent dog-poop colored creatures in the future.

Well, cannibalism is technically illegal...and in bad taste.

BA company importing consumer products from Asia. ... I’d bet they relocate to Charleston SC - good port, low wages, interesting city, inexpensive housing compared to BA.

Uh, they must be flying the goods in by plane, then? If it's water-based shipping, then I would suspect some Oregon port as a more likely target.

Anyway dryfly, I guess our anecdotes are different. My BA perceptions are admittedly skewed because I know only Californians from my own firm and from our customers. All are doing hardware engineering; most are Fortune 500's. I would point out again that 60-65K in the continental U.S. is equivalent to 70-80K in Silicon Valley, just based on cost of living.

It is actually difficult for salaries to drop at large, existing firms. Once they gain some experience, the new hires start comparing themselves to their peers, and realize that they are making a lot less for comparable work. If you were to tell them that they would never catch up, based solely on their hiring date, you would run the risk of losing young talent. That is particularly dangerous for any firm.