patrick.net

I think I saw it in the WSJ a few days ago.

On delinquencies, I read that subprime is starting to show noticable trouble already, while the higher quality loans are still doing fine with very low levels of trouble. However, one must keep in mind that delinqencies and foreclosures are lagging effects.

The California state tax burden is not really that high, 22nd overall:

http://www.ppic.org/content/pubs/jtf/JTF_TaxBurdenJTF.pdf

I don't know where everyone gets the idea that it is, it is one of those urban myths that keeps circulating around.

Different Sean,

Agree with your points on market effects. It is iffy to pick a normal or balance value. This requires assumptions of course. I believe one must make a base assumption about where the prevailing level of interest rates will be. From this (combined with many other variables) you can make a base line or normal trend line for prices, and compare actual to expected.

Good Lord! I guess business for sub-prime has dropped off to the point where they’re not generating enough business churning condos for illegals and dead transients.

that's a good point... the whole sorry RE business sector adjusts to new heights of loan size, volume of loans, etc, so when it slows down as the boom runs out of steam (still higher per transaction commissions than 10 years ago), they panic and liberalise again -- they can't cope with the idea of activity reverting to earlier sensible levels...

In the spirit of the topic, a passage from Edwin Lefebvre attributed to Jesse Livermore, the early 20th century stock operator, after losing big on cotton:

When we got to Philadelphia I drove to a broker's office. I
saw that there was the very dickens to pay in the cotton market.
Prices had broken badly and there was a small-sized panic on. I
didn't wait to get to New York. I called up my brokers on the
long distance and I covered my shorts. As soon as I got my
reports and found that I had practically made up my previous
loss, I motored on to New York without having to stop en route
to see any more quotations.

I bore the cotton market no grudge for taking a million
dollars out of me and I did not hate myself for making a mistake
of that calibre any more than I felt proud for covering in
Philadelphia and making up my loss. My trading mind concerns
itself with trading problems and I think I am justified in
asserting that I made up my first loss because I had the
experience and the memory.

I particularly like the line: My years of experience in trading told
me that the line of least resistance had changed from up to
down.

How many real estate operators are going to dispassionately play their real estate hunches, and recognize that the path of least resistance has changed from up to down before it is too late?

Re the effect of the IRC121 $250K/$500 2yr exclusion:

Zephyr said:

"I agree ... attractive benefit. But what it lets you do is sell without reinvesting. The prior law allowed unlimited exclusion for anyone - but you had to fully reinvest."

I thought the prior law only allowed deferral of gain above the lifetime cap?

I agree that some folks took their excluded gain and spent it, pumping up the economony or other asset bubbles. So that could reduces some price pressure on the costliest houses (say above $1M). But some here sense that IRC 121 added fuel to the flipping fire, pumping a lot of hot air back into the lower and more moderately priced properties. IE the flippers can take their gain, spend some and split the rest up to buy one or more cheaper houses to start all over again. When the recyling of gains back into speculation is coupled with dramatically relaxed mortgage standards (even Bernanke now sees it) you have the recipe for a speculative bubble.

Corretion: Nothing is moderately priced today.

This web site tracks listing inventories in various metro areas. Don't miss the amazing graph of current and historical inventory in Sacramento.

http://bubbletracking.blogspot.com/

Supply and demand, baby.

The sheer fact that you didn't have to "reinvest" BECAME the attraction! Back when we did things more correctly (the old tax code wasn't perfect but look at the alternative) you could make a huge profit selling your home but alas, unless you were over 55 you HAD to reinvest! So there wasn't a lot of incentive to move up, out or otherwise (until you reached 55!) For the most part folks stayed put, built equity and made improvements based on needs (not curb appeal or the "wow" factor). This lead to the "housing ATM" you've heard so much about. Hell you don't even have to sell the damn place to access the tax free money. Just wait by the phone for about half an hour and a mortgage broker will call to make delivery! This is what lead to fluffed up appraisals, pumped up income on mortgage applications and a consumer driven economy on steroids.

There was a time when couples took about 30+ years to cycle through their "starter" home, an intermediate home, their dream home and after 55 their "empty nest" home/vacation or 2nd home. Thanks to the 500K exemption we've now compressed this chronolgy to about 5 years. After you've made about 24 mortgage payments you should have enough "equity" to take it out and custom build your 2nd home. You have arrived! You can now buy, sell and trade vacation homes! If you're creative (and a little gutsy) you can show this as a "primary residence" and bilk tax free money from that too! What's the ruling here? Any two of the last five years? Conservative estimates show that in 2005 35%+ of home sales were "2nd homes".

If the 500K exemption is such a "non-factor" why did the President's bi-partisan panel look at it so hard last fall (along w/ the deductibility of ridiculous amounts of mortgage interest) and why is the RE lobby marching on Washington to make sure it stays in place?

Coincidence?

Makes sense to me.

Garth Farkley,

You know HARM and others have very courteously brought it to my attention that I have beaten this thing like a "rented mule" and....... well..... they're right. The reason I took the pains to document the "home buying chronolgy of couples" is to exhibit just how distorted the exemption has made things. In addition to creating at least two (possibly three) generations with the belief that retirement savings are for suckers (leaving them seriously under funded to face the golden years) the exemption has de-stabilized our neighborhoods, fostered a false sense of security and left a nation with more debt than the government bond market. I say give the people what they want! Uh, are we still so sure?

SFWoman,

Alright! Now that you have "cracked the cover" on the NIMBY portion of our discussion did I mention I have a "rented mule" that you could take a turn beating? Go on! I'll hold the bridle.

O.K, that's quite enough.

FAB,

Huh?

The whole ball of wax that corrolates with this thread, which has been the foundation of frusturation amoungst all of us, and one that we don't like to admit is that as products of a generation that for the most part could work and procure a fairly decent middle income exsistence, we naturally expect a procession of ethical opportunity.
We expect to be rewarded for our hard work, our climb up the professional ladder, our careful spending and saving habits, and the other seemingly innocent advancements into the future. I'd say that most of us are at a similiar stage in our lives. We're married, or serious with someone we love, have been in our chosen industry for some time now, and now the next logical step is into a starter home of some sort. We've signed off on all our checklists. All the I's have been dotted and T's been crossed. Yet we've struck a wall. Ok- so we've saved up reasonable sums of money, have studied the market, and have the education needed to survive in the modern world... yet we can't afford that sort of mediocre house in Oakland? What in the hell happened?
The answers that we're continually seeking here is : Can what appears to be unethical practice, and what we percieve to be unfair be something that the "bad guys" get away with? Will our hard work be rewarded, just as it was for our parents, who haven't done anything diffrent than we have? Will those who took huge risks, made a bet by taking out an IO loan combined with an ARM really in the end be the ones who can sit back and laugh about how miserable they were, only to be able to pay for it thanks to a combination of government changes in taxation and "forgiveness" laws?
Sometimes I do some basic analysis of my own. I walk to work downtown every single day. On my way, I pass through the business district. A sea of 70k bimmers and men wearing $3,000 suits are the majority of those that populate this area, and from 9-5 every weekday.
We acknowledge that indeed the business district is comprised mostly of wealthy white men. We do so because that's just the way it is. Does anyone question whether this is ethical? Not really. Is it? Well, if you apply the same ethics that apply to this topic, then yes it is unethical.
So that brings up the final question that haunts many of us yet we're afraid to admit it: Is the BA turning into a place that will eventually be comprised mostly with upper income, primarily white, well-to-do people? The answer is that the high cost of housing is just a step in that direction. There has been a dramatic shift in class structure here. We view people who buy what we in Tennesee would call a "small home" as well off. The fact of the matter is that you could compare a kid with 3 pennies on a table and sliding one into the rest, where the last penny bounces off the opposite end. The middle class is now no longer the middle class. We are now the working class, the working class are now the working poor, and the wealthy are simply more prevelant in number. The uncomfortable truth could very well be that the BA is turning into an elitest location.
I went to this silly "boycott housing" site the other day. The sheer numbers of people who made good money, didn't own, owned, or rented were sayin the same thing: " ya, it's a great place to live... but I'll move if things don't get better." John mentioned the prevelance of mass immigration to "Pentobia". meaning the fleshing out of areas besides NY, CA, ect. We've discussed this countless times, but in my opinion, if people here are looking for what may never return to the BA, then "penturbia" is where it is heading.

Zephyr Says:

> BTW, I saw a report that RE lenders have recently
> loosened their lending standards. Seems like rather
> perverse timing.

Most "RE Lenders" are actually "loan originators" who make tons of fee income originating loans (that they know have a high probability of defaulting) before they make tons more money selling the debt to stupid bond buyers (so they don't give a shit if every loan they originated goes bad)...

FAB,

I'm totally sure I don't know where you're taking this thing. However; if we're going to be silly (and it is Friday) then in distinguishing between correlation and causation we could then imply that the smoldering couches, torn down street lamps and empty plastic cups littered up and down fraternity row are not necessarily "correlated" nor "caused" by the free kegs of beer we dropped off the night before?

I mean, how could there possibly be a more direct and clear connection between the cap gains exemption and the housing bubble? Now that you and Zephyr have somehow put the burden of proof back into my court I'll simply ask you:

If cap gains (STCG or LTCG) were due on every transaction on every penny above your cost basis would everybody be so eager to sell, move and "lock in their gains"? If the ever abundant "serial refinancer" were told that every dime he/she took out in the form of a HELOC was going to be added to their AGI would they be chomping at the bit? I (for one) don't think so. You guys can pooh pooh it all you like but if it's it really a "non-factor" either of you mind if we change it back? I mean, since it doesn't really matter anyway?

SFwoman,
The one thing that always strikes me as being really off is the lack of children in the BA. What I mean by this is that while these days there seems to be a verifiable sea of newborns, it seems that there are no children between the ages of 5-15 or so.Either that or the prevelance of older, 45-50-something parents with young children. I think most younger people that have kids these days simply pack up and leave.As a parent, haven't you noticed this as well?I gauge this as a way of telling how many middle income families are actually still here. I'll retract my statement about a majority of white populace, but while I agree with the Brazil model, as has been mentioned a number of times by me and others here, I think that the model could very well be heavy on the upper class side, and very low on the middle class side, with an almost equal lower income class, and a massive sea of young, transient, unsettled single professionals. This transient population could potentially be a bad thing for business that relies on long-established experience.

FAB,

The 500K exemption and recent run up has caused lots of people to think of their primary residences as investments, rather than a conservative savings account + durable good. Thus, lots of people are buying the biggest house possible and buying/selling as often as possible, to cash in on their "investment". So during the upswing of the bubble, it causes more speculative buying and higher bid prices.

I definitely agree with you about the impact of the 500K exemption on the way down. This will dramatically reduce the cost of selling for long time owners, something that a future buyer should keep in mind and take advantage of.

Astrid,
Yup. It still strikes me as very strange the number of people I've met who readily ackowledge that they're planning on selling, buying something else as soon as they can. Most recently, A client remodled their kitchen. They spent over 50k on it, and subsequently had just bought the place less than a year ago. Selling it was already an option for them. Why remodel a kitchen when you aren't there to enjoy it?

astrid,

I couldn't think of any "schmizing" that ryhmes with downsizing. On that I agree, would you prefer the 20% a year appreciation on our 500K "investment" or would you prefer the 20% appreciation on our 1 mil. "investment home?" Let's see?

There is so much evidence (anecdotal and otherwise) in nearly every facet of American life today. Frankly, I didn't really anticipate there would be much to "debate" here at all. I thought we would be treating it more like an "intervention" where the "problem/abuse" has already been identified and we are now plotting a path to recovery! Folks, it's a problem. Let's fix it.

DinOR Says:

> I mean, how could there possibly be a more direct
> and clear connection between the cap gains exemption
> and the housing bubble?

I have not met (or heard of) a single person who is buying a house in the Bay Area just so they can sit on it for two years and cash out under the 1997 cap gains law change (where will they live after they put the $250K or $500K in the bank)?

> Now that you and Zephyr have somehow put the burden of
> proof back into my court I’ll simply ask you:
> If cap gains (STCG or LTCG) were due on every transaction
> on every penny above your cost basis would everybody be
> so eager to sell, move and “lock in their gains”?

Let’s not forget that before 1997 very few people paid cap gains on home sales. How many American’s move to a smaller home before they are 55 (most of the people I know in their 50 have High School age kids)? I know a lot of realtors and in the last few years under the new laws “MORE” people are actually paying cap gains on home sales than they did prior to 1997 (it is still very few people)…

> If the ever abundant “serial refinancer” were told that every
> dime he/she took out in the form of a HELOC was going to
> be added to their AGI would they be chomping at the bit?

Where did this come from? Equity loan proceeds have never been added to AGI. Let’s stick to why a change in the tax laws that does not change things for most people has caused the bubble…

> You guys can pooh pooh it all you like but if it’s it really a
> “non-factor” either of you mind if we change it back?
> I mean, since it doesn’t really matter anyway?

I wouldn’t care if the law was changed back and I don’t think many other people who bought bubble homes would care if we go back to the old laws. The young couples I know that are buying $1mm TIC flats in the Marina and Cow Hollow are not planning to cash in any time soon, but plan to sell at a profit and roll all the equity in to a single family home (usually outside the city if their kids will not be the third generation to go to Town/Cathedral or Burke/Convent)…

astrid Says:

> FAB, The 500K exemption and recent run up has caused
> lots of people to think of their primary residences as
> investments, rather than a conservative savings account
> + durable good.

People thought of their homes as “investments” long before 1997…

> Thus, lots of people are buying the biggest house possible
> and buying/selling as often as possible, to cash in on their
> “investment”.

Do you really know anyone that is doing this?

Let’s say I bought a condo in the Marina for $500K with my wife (if I was married) in 1997 and we sold for $1mm in 2002 and put the $500K profit in the bank what are the odds I could talk my wife in to moving to the Sunset (since we couldn’t afford another condo in the Marina without the $500K) and buying another condo so we could wait for it to double in value like the last one.

My main points on this “change in the cap gains laws did not cause the bubble” debate is that:

1. Prior to 1997 almost no one paid capital gains on a home sale or pulls out any cash.
2. After 1997 almost no one pays capital gains on a home sale or pulls out any cash.

P.S. Post 1997, just like Pre 1997 anyone could refinance and pull out equity tax free…

Asrtid, Dinor, FAB & Zephyr:

Astrid said:

So during the upswing of the bubble, it causes more speculative buying and higher bid prices. I ... agree about ... the impact of the 500K exemption on the way down. This will dramatically reduce the cost of selling for long time owners, something that a future buyer should keep in mind and take advantage of.

This makes sense too, which argues for a harder landing. Wasn't Zephyr's original point that IRC121 creates no fundamental support for a higher plateau. He didn't say that the 2yr exclusion is irrelevant to the direction and velocity of prices. In this view the exclusion makes the roller coaster ride steeper both up and back down.

But, at near the bottom, or near a false bottom, some speculators will come back for tax free money again. It's an extraordinary lure -- an attractive nuisance if you will, for the unsophisticated "investor" who either has cash or can borrow the loose money spread around by "loan originators" who don't actually lend the money.

FAB

Do you believe that the 2yr exclusion has not aggravated flipper-mania?

FAB,

"People thought of their homes as “investments” long before 1997…"

However, not nearly as many as now and back then, only for the very long haul via paying down the mortgage. Most of my parents' friends bought only as big of a home as they needed, and a few lived in apartments even though they could afford homes. In fact, when my parents were planning to sell their home, they were only expecting a 20-30% increase in value (they got 125% increase), even with the awareness of prices going up all over D.C.

"> Thus, lots of people are buying the biggest house possible
> and buying/selling as often as possible, to cash in on their
> “investment”.

Do you really know anyone that is doing this?"

Yes! I know quite a few of people in their 20s and early 30s who bought prematurely (buying with boyfriend/girlfriend, buying with downpayment from parents, taking ARMs, paying more than 1/3 of their gross salary for the houses). These people are not traditional house buyers, they are also buying more house than they can comfortably buy. And almost every one of them expect to sell the house in 2 to 5 years, when their life situation changes, for a substantial profit after basis and transaction costs. This thinking is also creeping into my parents' generation. Most of their friends still think houses can only go up and feel they need to lock into a house immediately

It is precisely the high end that's most affected by the 500K/2 yr exemption. Most shitboxes do not go up by 500K in 2 years, the higher end stuff can --- even when experiencing smaller percentage increases. The tax exemption on the 500K is free money, and it makes sense to lock in that tax savings and reset the clock, which will cause market volatility. So even if you continue to buy and sell the same property, you get to lock in appreciation tax free all along the way. (I know this calculation gets tricky in CA with prop 13)

Furthermore, in your house selling and repurchase scenario, perhaps you can persuade your wife to sell the house and then dump it onto two 500K properties. Then get tax free appreciation on the primary residence and LTCG taxed appreciation on the vacation property.

"My main points on this “change in the cap gains laws did not cause the bubble” debate is that:

1. Prior to 1997 almost no one paid capital gains on a home sale or pulls out any cash.
2. After 1997 almost no one pays capital gains on a home sale or pulls out any cash.

P.S. Post 1997, just like Pre 1997 anyone could refinance and pull out equity tax free… "

Excellent points. I primarily see greater volatility (people seeking to lock-in the tax exemption) and more entrants who seek this tax benefit earlier than prior to 1997. More people are also selling their much appreciated primary residences to finance the purchase of 2 or more houses, to maximize the potential appreciation.

Unlike Zephyr, I still think that a permanent 500K primary residence exemption will raise prices, though I'm clueless as to how much. It operates just like any other subsidy to distort the market and shift long time prices upwards.

However, other restrictions can bottleneck the market to prevent the buy side (for example, via strict lending that forces everyone to buy less house than they'd want otherwise), which may result in greater supply on the supply side, as FAB mentioned.

Wow, some great posts this AM on the "capital gains contributed to the bubble" debate. I think both sides have some good points. On Zephyr & FAB's side, I can see their point about tax-free money from SELLING, not necessarily REINVESTING not being able to support higher prices (long-term) and even providing an incentive for some to sell early.

However.... and this is the big "but", eliminating the "once-in-a-lifetime/over-55" restrictions has enormously increased the incentive to CHURN and SPECULATE in residential real estate to an extent that would have been unthinkable for average people before the law was passed.

Lets' not forget an important sea change (dare I say "paradigm shift") in Joe McHomedebtor's psychology prior to 1997 vs. now, as DinOR, astrid & Garth have pointed out:

Pre-1997: housing = mainly a place to live and sort of long-term "forced savings/retirement account".

Today: housing = the new NASDAQ, Vegas & Amway all rolled into one. A rapidly (perpetually) appreciating and frequently traded volatile commodity to be flipped, traded, leveraged and borrowed against as often as possible, with no nasty tax consequences.

I think herein lies the heart of our differing opinions. I see the new laws incentivizing volatility and helping to turn housing into a new vehicle for reckless speculation.

SFwoman,
I'm not going to rationalize whether having kids at an older age is a good idea or not. My grandfather had my mother and her sister at the age of 45, and this was back in 1950, in the rural south where at the time, people were expected to get married right after high school, if they even went, and therafter have large numbers of kids. He lived until he was 98, thus saw both his children grow up and lead sucessful lives. But the reasons for him doing so were never tied to finances.
I can't put my finger on it, but it disturbs me to see people around here in their 40's, 50's having kids. It makes the kids appear more like luxury items that are their "reward" for having run the rat race, saved up enough so they can "afford" to have children. It's weird to me because in my neighborhood, just like what I imagine what it is like in your neighborhood, if people have children at all and live their permenently, then they tend to be pretty well off and older. I have no problem with older people having kids. It is a personal choice. I can even say that I too fit under the category of "saving up" for the day that I might have children. Having them now would be financial disaster, at least in my mind. I'm not really all that wild about having kids now anyhow, so that too is a good reason I feel the way I do.
At the end of the day, I can think back to what it was like when my parents were raising me, and we didn't have much money. Did we turn out ok? sure, and they are actually doing pretty well. My dad told me something a long time ago that " you never have enough money to have kids,so just get used to the idea. Otherwise, you'll never have them." There is some truth to that statement. My gut feeling is that if I ever really want to have children, I'll not even give a 2nd thought to leaving the state immediatly. Money will never be a deciding factor into whether or not I could or would have kids. There's no right or wrong answer here. It's just the way I feel, so if others feel diffrently, then that's ok too.

HARM,

I agree and I think that unlike Nasdaq and Vegas, the average flipper person is not afraid of real estate. Real estate is a little bit like the weather, a constant subject of idle chatter. IMHO most folks think they understand the real estate market.

I agree with flippers percieving RE as a safe bet because since the start if the modern economy, RE has always been touted as the "safe" investment. How could you go wrong? now... when people start investing in housing like stocks, and NOT houses, that's why we have a forum like Patrick.net, to question the end result of a trading tactic never before seen nationwide.

WW2,

My wife are in our forties and have a four year old. He's the light of our lives. Trust me it's not a hobby.

The reason we both waited is we met late in life and neither of us ever found anyone we trusted to have a child with.

I do agree that having kids isn't about money. I once got offended here when someone implied that poor folks shouldn't have children. If you are a decent, loving, caring person and want to pass that on to your child, then you're probably qualified to be a parent even if you're poor.

Garth,

I don't think poor people shouldn't have kids, but it does feel increasingly like the middle class can't have kids. It's just so scary now, since you need to save for their education, have consistent health insurance, a reliable social network to care for them, live in a decent school district, and not move much. Such a tall order in the days of globalization...

It makes me rather nostalgic for the 50s.

The poor seems to have an easier time, since they're less demanding. I don't think most of them do a good job, but since they can live without all those middle class pretensions, it's at least possible.

O.T., but you gotta admire this classic "head-and-shoulders" for TOL:

http://tinyurl.com/cyhbl

DinOR,

I'll have to come in on the side of FAB and Zephyr on the tax variable. I will make this reasoning:

Tax rates, deductions and credits in their application to individuals (the mechanics are different for businesses) have a very significant impact on consumption versus savings/investment decisions.

However, since home ownership is a savings decision for individuals, the net effect of a tax deduction generally results merely in a shifting of savings/investment decisions.

The tax argument is more tortured because what you are essentially arguing is that increased tax deductions have rebalanced savings/investment allocation into higher priced housing assets, which itself has spawned derivative dissavings (HELOC behavior). There's some macroeconomic logic to this reasoning, but it doesn't hold up in a micro economic analysis. It's possible that the missing "external" variable here is liquidity versus inflation in the broader economy, and that the individual micro economic actors aren't changing specific demand behaviors in aggregate merely due to tax deductions.

Keep in mind that saying tax deductions don't affect micro economic behavior doesn't mean that specific individuals don't change their behaviors. We all probably know of people who do or don't buy/sell directly because of tax implications.

HOWEVER, the question is does it all even out. With this type of tax application it most probably does, in a micro economic context. Again, the cost is probably in terms of inflation, which is not at all micro economic, but purely macro.

One more note on the impact of the 2yr exclusion:

We left out the idea that the roller coaster shoots up so fast it actually leaves the rails and catches air. The capital gains exclusion won't help the flipper who has to sell at a loss or can't find a seller at all. That's when the roller coaster crashes. That's what I call an impact.

Garth,
Hopefully I didn't step on any toes. Again- Most members in my family had kids late, and things turned out just fine. My only problem is the money thing. I have met a number of folks who had kids right when they thought they were well off enough, which is silly. Astrid, I agree that they middle class are getting F*cked every which way. The education aspect is in itself severe. I was in college just a short 8 years ago. I went to what I thought was an expensive art school that cost 11k a year. I paid with a mutual fund that had been started when I was born. My brother who just now completed his bachelor's at the Univ of TN paid more than that, and that's for a state school. The tuition at the college I went to now costs around 15k more per year. Who in the hell can afford that on a middle class income is a mystery to me. My brother is next starting his masters, then Doctorate. Even if he stays at UT, he will be paying for it for years. I feel bad about this because when I lived there, tuition was only around 5-6k a year, so just like my situation with housing, he is suffering from inflation of a diffrent kind in education- a problem that I didn't have.

Lill,
you've outlined one burning question I've wondered about parents with young kids, which is if they want their kids to stay in the state, what plans are they making for them? I think your plan sounds really great as far as planning for your son. I guess I would possibly do the same thing.
I just can't help it that I see the irony sometimes, like my neighbors that kept a " say no to proposition a- keep California uncrowded!" sign in their yard for over a year and yet have a 15 year old kid who someday will have to find a way to buy something thanks to people like their parents who've paved the way to make things difficult for the future generations.
Good lucj in whatever decision you make. We might pass each other in our moving trucks someday.

We left out the idea that the roller coaster shoots up so fast it actually leaves the rails and catches air. The capital gains exclusion won’t help the flipper who has to sell at a loss or can’t find a seller at all. That’s when the roller coaster crashes. That’s what I call an impact.

One of the guys over at Ben's blog had the *perfect* visual metaphor for this: Wile E. Coyote, while blindly pursuing the Road Runner (RE profits), runs right off the cliff without even realizing it. He hangs in mid-air for a moment, just as he finally realizes where he is. That's when he plunges head-first to his doom.

WW2,

No offense taken. I really agree with you (or at least your Pop) that having kids isn't about dollars. I do hear you and Astrid both it's daunting for the middle class. I stopped by CSUMB student bookstore last week for the macro text that Randy recommended. Ninety (yes, $90) for a used off-brand text. I'm stunned.