patrick.net

Sorry for not acting earlier. I was eating pork cutlet.

why am I always getting moderated? What did I do wrong?

nomadtoons2 Says:

California was the golden state- the state where a middle income citizen could live well within their means, get a world class education, and participate in a society that was in large more tolerant regardless of race.

While tolerance is still above the norm here, all the rest is long gone. You WILL NOT prosper as a middle class citizen here, and this is why it is losing and will continue to lose it’s future.

Sorry I’m being negative, but I travel back and forth between the SE and CA and I see what it happening, and it’s pretty much a 360 degree change of what I grew up with. Change is in the air.

_______

Unfortunately, there's a lot of truth in what he said.

I never realized how good I had it growing up in Cali. I never thought it would become too costly, so prohibitive, so taxed, so resticted.

Bummer.

Tonkatsu

Yep. Somehow I was craving it.

astrid,

could you tell me which part of the message is causing the trouble? I removed the dollar sign, it didn't help, then I thought perhaps Mr. H's handle was banned, it didn't help either.

Since you could post without a problem, perhaps my handle got banned? :-)

perhaps my handle got banned

Never.

Owneroccupier,

Sadly, no. It got stuck in purgatory too. Peter P checked in and patched them through.

So it's certainly not your handle:)

I really can't imagine why it got banned. Wordpress is so weird.

I really can’t imagine why it got banned. Wordpress is so weird.

It uses a very complex stochastic fractal hyper-uncertainty algorithm.

Peter,

I'm not sure if what you've just said is true or come out of the Hitchhiker's Guide to the Galaxy. :P

I think WordPress is developing consciousness. It has transformed Jukubot(tm) into the ultimate troll-fighting machine.

WordPress just called me on the phone. This is getting wierd.

Let me show you another money-losing beauty of Marina PRIME, the place in SF that never goes down!

Here is a listing on MarinaPrime's favorite MLS, of course in our favorite Marina district
http://www.sfarmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSPropertyDetail&ARGUMENTS=-N927557355,-N186830,-N,-A,-N2933561

Listed for 1.195M, if it sells 100K above asking, don't be surprised, why?

Because accoding to zillow, its comparable (1737 sf) was sold for 1.441M in 2005. So even if it is sold for 1.3, that means the market is down.

So the next time our favorite Marinaprime shows us something selling for 100k or 200k above asking, check the zillow transaction price first before you get angry, he is just showing us in a different way how the market has already turned.

Things to be proud of:

The work culture at some companies in the valley (and probably elsewhere, too). Some random attributes I can think of:
Freewheeling, gentle, non-authoritarian, innovation-fostering, multi-cultural, unbureaucratic, energetic.

This is very, very hard to copy.

It can be overdone (and it has been at some places :-) ), but if it's done right, it's without competition in the world.

WordPress just called me on the phone. This is getting wierd.

It just synthesized a piece of sushi in front of me.

It got off your plate at 10:48pm but it appeared in front me at 10:31. It has time travel capability!

I wonder if I could have eaten it before 10:31? Creepy. Perhaps it was always destined to disappear, uneaten at 10:48, and if I'd eaten it I'd have killed my own mother before I was born.

Back to the theme, proud Californians.

The one single thing that I am most proud of is amount of brain power I met here. Joe Schmoe mentioned it before, I could have packed and headed for a place with lower cost of living, but my brain doesn't get half as much stimulation and after a while, it starts to get very boring.

This is the most diverse place on earth precisely because we have so many top talents from all around the world interacting with each other, bouncing ideas off each other. You won't meet half as many interesting and brilliant minds anywhere else.

This is the most diverse place on earth precisely because we have so many top talents from all around the world interacting with each other, bouncing ideas off each other.

This is true. We need to make sure that the system will continue to encourage this.

You won’t meet half as many interesting and brilliant minds anywhere else.

How about Boston? Brilliant minds can discuss their ideas eating steamer clams and chowdah.

Boston is a bit too old money for me. California is all about nouveau riches :-)

Plus I hate Boston weather, so damn humid in summer and so damn cold in winter, the only bearable time is foliage season in fall.

The best thing about California is... Stockton!

Come to the Asparagus Festival next weekend. But stay close to the crowds because stragglers are killed and eaten.

Every night sounds just like the fourth of July. The Talking Heads described it perfectly in the oldy Life During Wartime: "The sound of gunfire, off in the distance, I'm getting used to it now."

pretty much a 360 degree change

wouldn't it be 180°? 360° would be back to how it was. heh :lol:

Did the notorious HH get disappeared? Or just sulking?

On April 18th @ 10:24 PM Girgl said:

Things to be proud of:

The work culture at some companies in the valley (and probably elsewhere, too). Some random attributes I can think of:
Freewheeling, gentle, non-authoritarian, innovation-fostering, multi-cultural, unbureaucratic, energetic.

I'm pretty sure you're serious. I don't work in the valley -- or apparently on the same planet as you do -- so I haven't a clue. I have had a handful of great supervisors through the years. And a few flamers.

Owneroccupier: This is the most diverse place on earth precisely because we have so many top talents from all around the world interacting with each other, bouncing ideas off each other.

Peter P: This is true. We need to make sure that the system will continue to encourage this.

This gives me hope when folks decry the loss of heavy manufacturing in America. Do we really want to be China with 16 of the world's 20 most polluted cities? Building new, cleaner and more efficient factories for the products we will use in the future is easier than building an educated middle class. We don't need to be the world's leading manufacturer of horse drawn carriages.

This gives me hope when folks decry the loss of heavy manufacturing in America. Do we really want to be China with 16 of the world’s 20 most polluted cities? Building new, cleaner and more efficient factories for the products we will use in the future is easier than building an educated middle class.

There was some heavy-duty chastising (sp?) going on a few threads back when someone gleefully wished for higher gas/oil prices. Your point is exactly why higher gas/oil prices can be a good thing, as hopefully market forces will drive innovation into alternatives to carbon-based fuels. There should be more pressure on industry to innovate, and there should be more incentives for innovators to gravitate towards the energy industry.

I've seen this urban legend/statistic:

Mexico city is the only city in the world with a larger population of Mexican citizens than Los Angeles.

Just out of curiosity, can anyone conclusively confirm or deny this? I don't know what the ultimate significance is either way. But if you want to know what the Golden State is about today, we have to start here.

About manufactoring... Over 11% of the state's population works in manufactoring related jobs.That's compared to 5% nationally. The sector as a whole comprises 1/5th of California's income. That is fairly signifigant since California has such a massive population. Imagine if this sector were to fold entirely? That's more people than live in some states. A loss of this sector would put a sizeable dent in the local economies of entire areas of the state that are heavily reliant on it's success.
Since 1990, 15% of this industry has either folded or moved away, either to other states or other countries. This rate has accelerated since 2001 years due to obvious cost factors related to environmental regulations, taxtation, cost of living and wages demanded by their employees,and even power costs, which can be as much as 2/3 cheaper in other states. Add to the fact that other states offer millions in tax cuts, incentives, and cheap land and according to one california economic newsletter I susbscribe to, and the general feeling is not if they will move, but when and where.
I see other vulnerabilties in the tech sectors, where industries that were once specialized and therefore fully able to pay very high wages to these specialized employees are now just a few of the countless national and international companies and R and D facililities that can do the same and more for less with a fresher, younger staff. The fact that the CA housing boom accelerated the cost of housing out of relation with actual wages is what caused this severe vulnerability. People in the region say wages are down, but in reality, if wages were down, then the cost of living should have come down as well to reflect the change in industry expansion outside california.
The above statement is what I use as a gauge to measure how far housing might come down. I think California could potentially be in for not only a severe correction in housing costs, but a correction in the cost of living as well, as their once specialized industries become further absorbed into the nationl mainstream, hence California may actually come in line with the rest of the country, and in the end, this will be better for the state, which will benefit from not being so out of whack in relation to cost nationally that other states and countries can take such easy advantage of it's talent, erroding its future.

Has anyone else been perusing the just-released minutes to the most recent Fed meeting and the media/market responses? Very interesting stuff:

http://www.federalreserve.gov/fomc/minutes/20060328.htm

Uniformly, the media outlets have been portraying the minutes as a signal that the Fed is "nearly done" raising rates this go-around. I don't think this is correct, if you read the entire minutes. At the risk of a long post and quoting out of context, here are a few key statements:

House price appreciation appeared to have slowed from the rapid pace of the summer, but price increases for both new and existing homes remained well within the elevated range that has prevailed in recent years.

Since the available indicators showed that the economy could well be producing in the neighborhood of its sustainable potential and that aggregate demand remained strong, keeping rates unchanged would run an unacceptable risk of rising inflation. Most members thought that the end of the tightening process was likely to be near, and some expressed concerns about the dangers of tightening too much, given the lags in the effects of policy. However, members also recognized that in current circumstances, checking upside risks to inflation was important to sustaining good economic performance. The need for further policy firming would be determined by the implications of incoming information for future activity and inflation.

My naive interpretation of this document is this: First, the economy is more or less where they want it to be. However, keep in mind inflation can still rear its ugly head, and we'll have to raise rates as a result. Yes, we want to signal to you investors in particular, that we MAY be near the end of rate increases, but we won't say "told you so" if we decide to continue rate increases, based on economic data.

The wall street response to this yesterday seemed to be sheer exuberance. But interestingly, the very next major econ indicator out today is CPI, up to 0.4%, core 0.3%! Maybe Ben and co. are pure geniuses, able to walk the line between preventing wall street sheer panic and continuing to justify rate increases, or maybe there really IS some conspiracy going on. Yes, DinOR in particular is upset that the Fed has been dicking around with tiny rate increases, but my interpretation is they are very cognizant that anything more drastic is going to send investors panicking.

An important side note to all of this is that housing's slowdown gets a very hefty mention during the meeting - the Fed is clearly aware of what's going on in the housing market, and again, to me they're saying yes, housing may be slowing down, but we've got bigger fish to fry.

Sorry for the long post.

"House price appreciation appeared to have slowed from the rapid pace of the summer, but price increases for both new and existing homes remained well within the elevated range that has prevailed in recent years."

It seems like this report was written just like every other report- with the key langauge being written for homeowners. There's a lot of obvious conclusions left out of it. It almost sounds like there isn't anything to worry about at all, as if housing prices are through rising and will simply level off and continue rising on a slower scale. BS. I agree with your statement that anything else would cause sheer panic and a massive selloff, so perhaps making a rosey report like the one above is good disaster control for the masses.

The FT this morning had a small column about economists disagreeing (apparently quite intensely) over what the Fed is really signaling, or even if they are signaling at all. Being a Fed watcher is about as fun as being a Supreme Court watcher. You sound real smart talking about this or that factor, precedent and signal; but you're often wrong (just when you most need to be right).

Randy,
Either way, it's fun stuff. Despite the fact that even the "experts" are often wrong, the concept of reading into Fed signals and what not clearly have a large impact on market behavior, as we saw yesterday. I'm sure doing it is a full time occupation for more than a few economists, and it's kept them employed for quite some time!

Vincent,
While California's cost of living will probably not degrade to the level of other states, the fact that CA has on average 7 times the number of people than the avg US state tells me that there are virtually entire frontiers of new land available for future opportunities. California's greatest contribution will be it's outward movement of young people with their skills to be applied to new regions. I am a firm believer in this.
Someone mentioned that unlike Europe and Asia, Americans were far more likely and willing to relocate for better potential sucess in other states, and that's exactly what will continue to happen unless the cost of living here comes down. As we speak, it is over 4 times the cost of the country avg. It was double that in 1992, so While some people expect as much as a 50% correction in housing costs, I wouldn't be surprised if the cost of living came down as well due to legislative changes in state operational policies in order to stem the tide of business out migration.

nomad,
Yes, I agree that a lot of what the Fed puts into these minutes/statements is to make sure the masses are placated/sedated so they can keep on truckin'.

nomadtoons,

If I recall, Americans are 20 times more likely to relocate than western/southern Europeans. Americans are also dramatically more likely to move great distances from their birthplace, whereas Europeans are more likely to remain near where they grew up. Americans move for economic reasons first, and family reasons second (usually marriage-related).

I'm sure there's some corollary in there that Americans are more likely to marry someone from outside of their region than Europeans also. Of course, it helps we all speak the same language, watch the same TV shows, and shop at mostly the same stores.

The only reason the comparison to Europe is interesting (in my opinion) is because of the EU. Despite open borders and work rights within most of the Eurozone, Europe has had a real problem because people just won't move to where the jobs are. Actually, some Europeans will, but it's almost exclusively the Eastern new entrants, which is causing lots of social strain.

Randy,

The union friendly laws of Europe also pose an impediment to European mobility. A person born and raised in a particular region has significant advantages over an outsider for local jobs.

This is less of a concern on the upper and lower end of the job market.

Randy,
While everything you mentioned is dead-on, EU has the same regionalism that exsists in the US. Basically the big popularity contest that occurs between CA NY, and the rest of the country is similiar in the EU,with Germany, Britian, and France being the big guys, while some of the others are given the dim light. The migratory and immigration issues there are also similiar except many of the bug guys are totally opposed to cheaper labor, hence why France didn't sign the EU pact this last summer over what they considered a threat of a flood of immigrants from Poland, Turkey, and Other less wealthy members. So in essence, the immigration situation is opposite in terms of where immigrants go( for now) in the US. I see the same patterns over in the EU, except as mentioned, if Americans feel shafted in one region, they'll pack up and leave pretty fast.
If one were to reason why CA and NY have so much presedence in the US public, it's because MOST of the media we see on TV is produced in these 2 regions and shoved down our necks day after day. Take those TV shows and film em' in say- North Dakota, we'd no everything and anything you'd possibly want to ever know about that state and more. Even when Hollywood places films and shows in alternative regions, most often it is the stereotypes of those areas that are romanticized, whether it be done in a apple-pie way like in O' Brother where art thou?, or from some other non-modern standpoint. When was the last time that you saw a film about modern Atlanta, Detroit, nashville, Phoenix,Austin or any given number of other regions? Probably not many if any at all.
The media is a powerful tool, and the only reason we had a housing and tech boom, and why Americans are in severe debt. Basically, everyone wanted to live just like Californians and New Yorkers, because that's what they see every time they snap on the TV. When I go home, all I see are fat dudes riding around on harley's with that stupid Jessee James Iron Cross on the rear fender.

astrid,

There are a few reasons for that, not the least of which is what you point out.

A big problem in "Old Europe" is that the "middle class" there are almost exclusively unionized labor or protected government worker employees. In Germany, more heavily manufacturing unionized labor, in France more heavily government workers. But the effect is the same: creating preferential employment for natives; sometimes even for regional natives even _within_ the country.

I think more interesting is the social/cultural aspect which in Europe which is exactly opposite of what nomadtoons believes is occurring in the US. In Europe, Westerners _will not_ move to Eastern Europe, even for economic reasons (which are just now starting to appear). Of course some enterprising Germans head East, and you can read about them, but overall essentially no Westerners will leave the West. Since the skills, educated knowledge workers, and know how for many new industries are in the West, it will be very difficult for the East to reach parity. Right now they're mainly just exploiting labor arbitrage. Some former Soviet countries have nascent IT/software centers, but nothing on a scale or depth approaching the established high-tech centers in Scandinavia, Benelux, Germany and France.

It's like this: The American Randy will move anywhere in the US (except Ohio) if given ample economic motivation, either good or bad. The Dutch Randy won't move to Hungary for any conceivable reason, and will force his government to subsidize him staying in Rotterdam for the rest of his life even if he'd be more wealthy and productive in Budapest.

Nomad,

I like your line of thinking. I'm trying to figure out what makes coastal California so expensive. I don't live in CA, but anyone with experience living in CA and elsewhere, please fill me in on the cost differences.

housing
gas prices and fuel (based on cost per month)
utilities
insurance (home, health, auto)
food
entertainment (incl. cable, movies, plane trips)
education

Based on my observations, I don't think California is outrageously expensive other than in housing and in children's education. At the risk of being called a racist pig, I'd say a major contribution to both are illegal immigrants and marginal legal immigrants. They tend to have large families and don't (usually can't) prepare their kids for school. In areas with high immigrant populations, these kids' unpreparedness brings down the entire school.

In response, the middle class (even the working class who care about their kids' education) try to squeeze into good (too expensive for poor immigrants) school districts or send their kids to private school, which instantaneously sends their cost of living sky high. Due to this squeeze on "acceptable middle class living", places like California will probably always be higher relative to low immigrant areas.

Do I sound like I'm a white flight apologist or what? I'm not saying poor immigrants are bad people, but they do affect the quality of life for their neighbors.

I think the Bay Area compares to the other top-5 US large metro areas in cost of living. Even real-estate isn't out of line when compared to the other large metros.

2000 Census:

1. New York-Northern New Jersey-Long Island: 21,199,865
2. Los Angeles-Riverside-Orange County: 16,373,645
3. Chicago-Gary-Kenosha: 9,157,540
4. Washington-Baltimore: 7,608,070
5. San Francisco-Oakland-San Jose: 7,039,362

I used to think Chicago wasn't in a RE bubble, but the HSBC report shows otherwise. In that report, all the above have bubbles, and the BA isn't the worst.

The entire table:

RankMetropolitan Area NameStates2000 Pop.
1New York-Northern New Jersey-Long IslandNew York, New Jersey, Connecticut, Pennsylvania21,199,865

14Phoenix-MesaArizona3,251,876
15Minneapolis-St. PaulMinnesota, Wisconsin2,968,806

I don't think CA is all that more expensive than anywhere else in terms of food, utilities, and travel. For one, certain things like alcahol and many fruits and vegetables are cheaper here than in many other regions because A: other regions charge taxes on alcahol and might have to ship fruits and vegies in. TN has NO income tax... so they make up for it by having high consumer goods taxes. Wine is about 20% more there, so as a result, I bring cases of wine on the plane with me for mom!
The lack of need for heating is another saver. I am warm natured, so the heat stays off all winter, plus I live in Alameda which is 20 degrees warmer than SF. Back home we heated with a wood stove, and the wood was leftover scraps of lumber from a timber frame outfit my dad's friend owned. So our costs were minumal. But for everyone else, thanks to TVA, the heat of choice were electric heat pumps, which cost anywhere from 150-200 a month in the winter.
One more interesting observation about EU is that MANY jobs that pay decent in the US, like my job as a graphic designer, pay CRAP in EU. I basically would be a little higher than the gas station attendant on the food chain. Thus there doesn't seem to be as much flexibility to move up there, so perhaps people don't even have the ease to make geographic changes to start with.