patrick.net

Bill C Says:

Any insight out there?

Can only really give an insight from the other side of the Pond.

Back when I was a kid in London, almost no one from the working/middle class owned thier own homes. After the Blitz, large portions of London were basically bomb craters.
After the war almost all 'normal' people (ie not insanely rich and/or landed gentry) rented from their local London Council.
Huge amounts of housing was constructed - from apartment blocks, terrace houses (like a townhouse) and small semi-detatched houses (duplexes) and even some detached houses were built and rented out at reasonable rents.

Actually, the Blitz in many ways was a good thing, especially for the very poor. It razed some of the most miserable, dilapidated, vermin-infested slums ever. The 'council' came and built affordable housing, and improved the lives of lots of Londoners. Running hot and cold water, inside toilets, electricity...

Up until the 80's it was quite common for people to rent Council Housing for decades. It was common for leases to be handed down for generations.

Then, Margaret Thatcher took a leaf out of Ronald Reagan's book, and the whole thing changed.

During the great 'Privatisation' of Britain, councils were forced to sell off their rental stock, and all of a sudden the new rallying cry was "own your own home!" . Council stock went from being affordable rental housing to being flipped in much the same way as today.

Not surprising, then, at the end of the 80's that UK housing prices skyrocketed and then plummeted in the space of a year. Its still possbile to get a 'Council flat', but its not the affordable housing it was before Maggie.

Now, London has some of the most expensive Real Estate on the planet. I'm in the process of selling my Mum's flat in a suburb of London (Putney, to those that know it) and its going for as much as a 2b/2b SFH in Encino!

As for Europe...my French frends tell me that its common to rent, sometimes for life. In Paris especially, families will rent the same place for a pittance for years. Real Estate tended to be own by old families who didn't sell, but just rented out in perpetuity.

Same in Germany, although people did eventually buy, but not normally until near retirement age. They saved up during their working lives and could then buy outright (or almost outright) when they got older.

Anyway, the gist of it being that renting has never been seen as a second-class way of living. In old cities its unfeasable to have the kind of SFH properties you have over here, simply because there isin't room for it. Many people live and rent apartments all thier lives and it attracts no social stigma at all.

BTW: Peter P...don't know much about Vedic Astology either, but is it not true that the Mayan calendar actually ends in 2012?

The perfect match of birth time of the couple must be calculated based on Lunar Calendar, and the calculation is quite detailed so the birth time makes a difference too, at a 2-hour interval.

If your birth time doesn't quite match your potential spouse', there are also ways around it, for example, changing your name, changing his/her name, wearing a special kind of jade, etc.

More often than not, the birth date matching is used by the parents to reject a woman/man they don't like their kid to marry.

If your kid goes to a community college, then people start to talk behind your back as if you were the biggest failure they’ve ever met. It’s just too much pressure on the kids.

So what, success and failure are relative. The richest person in the world is a dropout.

Peter P,

But Chinese don't quite like leave things to chances. The fact that they do all these superstitious things like wearing a jade, fengshui, etc. is because they want to have the maximum control over nature. Going to Harvard definitely will open more doors than going to Foothill College, so why not go to Harvard? They don't like blazing the trail, perhaps because it is such an old culture that it starts to get stale, and frankly within China, after thousands of years of settlement, there aren't that many trails left unexplored.

Population density certainly has an impact on the thinking. If you have to compete with another billion population for very limited food and water, you'd better make sure you take the most proven path, because the price of failure will be huge.

Also, it is really awkward that now we are in our 30s, long past the school age, but when our parents introduce us to each other, they will still use phrases like, "this is Stephen, he went to Yale", or "this is Amy, she went to UCB", it's like the school brand is tatooed into my forehead that regardless of what I did in the last 15 years or what I will do in the future, I will always be referred to as the "OO from xxx school".

Then of course if you work for a "hot" company like Apple in the 80s, Microsoft in the 90s, google in the 2000s, the introduction will appropriately mention these brand names as well. If you are recently hired into Google with only 200 options (under water), and you stand next to a guy who is running his own business, you will be so much more desirable in the eyes of a typical Asian parent.

Astrid said,
I still have half a mind to think these two “opportunities” are a sign of economic end times of some sort. Both are essentially irrational bubbles that never ought to be. That fact doesn’t change simply because the bubbles got huge and provided the winning lottery ticket for a small number of people.

"End times" sounds a little apocalyptic. I think it is pretty clear that the first bubble fed into the second. The Greenspan Fed decided to soften the blow of the tech/telecom crash by slashing interest rates, which fueled the housing bubble. But the evolution of the internet truly was a revolutionary development. People just got carried away with it. And it really did make a lot of sense to lock in a law fixed rate mortgage and buy a house between '97-2001. But, again, people got carried away and drove the market far beyond what the fundamentals could support.

In both cases, I think you had a justifiable boom, followed by an unjustifiable bubble.

It is pretty clear to me that commodities could be the next boom/bubble. Oil prices have boomed from $20 to $75/barrel and gold is up from around $250/oz. to around $620/oz. But most people haven't bought in yet.

Will the commodities boom turn into a bubble? Probably still too early to tell. At this point, I would not be at all surprised if irrational exuberance overcomes these markets and we see oil at $200/barrel and gold at $2000/oz. Especially if the Fed starts slashing rates again to counter the bursting housing bubble. But I don't really have the courage of my convictions, so I am only holding small positions in these commodities. Five years from now, I will probably look back and kick myself for missing another bubble. Oh well. I would rather build wealth slowly and steadily than try to predict the future.

But Chinese don’t quite like leave things to chances. The fact that they do all these superstitious things like wearing a jade, fengshui, etc. is because they want to have the maximum control over nature. Going to Harvard definitely will open more doors than going to Foothill College, so why not go to Harvard?

I thought Chinese people believe in:

1. Fate
2. Luck
3. Feng Shui
4. Karma
5. Study

So having good feng shui should be more important than going to Harvard, no?

If you have to compete with another billion population for very limited food and water, you’d better make sure you take the most proven path, because the price of failure will be huge.

Most proven path means competition. If you work very hard, you will still have to share the resource with those who work equally hard, or harder. Why not implement a creative solution and frustrate those who attempt to achieve by hard work? :)

OO,

It's amazing how many commonalities exist between the social behaviour of people from China and India. In spite of the mighty Himalayas, acting as a wall through out the history, to prevent any meaningful cultural interchange.

In all your posts, I can do a s/Chinese/Indian/g and it would still be spot on.

I just think they often take it too far and turn school into a hellish pressure cooker situation.

And the cheating is quite brazen, TA friend of mine at Cal indicates that the asians will go so far as to pick up others tests from the pile in the front. I personally busted a chinese graduate student copying another students lab reports, pretty much line for line. Not that cheating is limited to chinese, but they seem to be do what ever is necessary to get a good grade, the grade is what matters. cheating is so bad in china that the GRE folks had big issues.

The ETS investigation, which covered more than 40 countries, showed security breaches occurring only in China, Taiwan and Korea.

No one race is superior to another, profound pressure causes people to act in ways that they normally wouldn't.

OO and Bill C and SP,

I totally agree about the population density and one trackness of the Asian scholastic system, but also from the communal mindedness and patriarchal nature of the society. Parents seem to take ownership of their kids' successes and failures.

Also, I think the first generation push on their kids also seem to operate like parents of child actors. For my parents' friends, providing more opportunity to kids is always the first and foremost impulse for immigrating to America. They've usually made such tremendous sacrifices to be in the US that they just can't comprehend how their kids could fail to live up to expectations.

Peter P,

I think to some extent, the pathways open to kids of 2nd generation parents (or 1st generation parents who went through BA in the US) are not open to 1st generation families. The families don't have the financial or social resources to just let their kids branch out, so they'd rather take the safer path even if it yields lower rewards on average.

Please unlock my post.

The families don’t have the financial or social resources to just let their kids branch out, so they’d rather take the safer path even if it yields lower rewards on average.

Sounds reasonable.

You have to understand that the higher echelon of the society you go into, the more importance people place on what you are, less on what you can do.

You can struggle very very hard and still end up in the great middle, being squeezed by both sides.

That's why you see a lot of incompetent people at the top.

Conor,

My college experience is nothing that can't be replicated with 2 years of surfing the internet, 2 years of online schooling, an active myspace account, and knowing someone over 21 for the purchase of yeast related products.

Personally, I really don't understand why colleges are so bloody expensive (except I sort of do, those college presidents and administrators get paid waaaay too much, and those stupid vanity buildings that aren't that nice inside). They already own the land and most professorships are endowed by grants, and the TA and untenured profs (who seem to carry at least half of the actual teaching responsibility) gets paid pittance.

Threadmasters,

I have registered with the site. What else I need to do to get thread authoring rights ?

Thanks.

SBA, you have been promoted.

The incompetence you see at the top is very typical after a boom that shouldn't have last so long.

Merit-based system is always the best, that's what put the british navy to the top of the world, and the US too, after the war. Even if you want to trace back in history, the Tang dynasty of China flourished partially because they pioneered on the exam system which was entirely merit-based.

But like all systems, people find ways to crack it. The world's first SAT system pioneered by the Chinese over the years became complacent, people spent more time researching on the background and preferences of those who score the papers than studying useful subjects. The subjects to be tested themselves morphed from useful subjects to entirely useless argumentative essays on "strategy" which was nothing more than mincing words. Isolated from the outside for too long, the upper level of bureacracy in China, which used to be the most competent in the world, turned extremely incompetent, although they came out of the same SAT system which made the country strong many years ago.

Every system goes through such a life cycle. You just need new ways to fine-tune the system to make it reflective of true merits again.

GC,

I have no idea where you offended the censors on that post, but I certainly agree with you. The test based screening system don't actually test for useful talents at work and you actually end up with lots of incompetent people who got there solely because they were good at testing.

Conor,

I totally agree. I personally feel that college is a very expensive way of spending 4 years not learning very much. I wish it was established more like Med school or trade school, with greater emphasis on practical hands on internships that would result in a journeyman position once the student gets out. Such learning would also be much cheaper than 4 or 5 courses a semester with a professor and assigned make work. Most schools tend to overemphasize the academic aspect while not spending enough time helping the student adjust into working life.

I didn't enjoy college all very much, I spent a lot of time alone in the library, reading up on modern English lit and architecture. With 45K (it was more like 30K full tuition when I went) a year after taxes, I could travel the world and still have money left over for a car and a down payment for a non-coastal house after 4 years.

Conor and Astrid,

I agree with Conor's comments re: future inflation in education costs. The deflationary impact of the internet has yet to be felt in the educational context. But it will happen. I read somewhere that MIT has put 75% of its lectures online for free public access (would have been 100%, but for the cries of protest from tenured faculty).

We have the technology to give everyone a free (or very cheap) post-secondary education. Educators will fight the trend toward lower cost education, but the trend will be inevitable.

I think there are a couple of reasons why college costs have gotten so high. (1) Supply and demand--anyone with a pulse can get admitted to a four year college and qualify for government subsidized loans to fund their pursuit of a bachelor's degree in forensic anthropology or applied basket weaving (driving up demand), but the number of spaces available for freshman in "name" schools is relatively fixed (limiting supply); (2) price fixing (notice how whenever Harvard or Stanford raise tuition, lesser schools like Bennington or George Washington U follow suit); (3) price discrimination (only the rich pay full fare, everyone else gets kickbacks, in the form of grants, which are magically just enough to cover tuition after the student has maxed out his or her capacity to borrow money from private and gov't subsidized sources); and (4) bundling (by this I mean that most large schools now "offer" mandatory health insurance, recreation centers, staffed and stocked libraries, landscaped lawns, non-revenue generating intercollegiate athletics, etc., etc... These services add little, if any, educational benefit).

When mom and dad have maxed out their equity lines, something will have to give. They will start looking for cheaper places to send their kids and the market will respond. Education really doesn't need to cost anywhere near what it currently costs. No-frills campuses and distance learning will become all the rage as consumers become more cost-sensitive.

I could write a similar tirade on health care inflation, but I'll save it for another day.

surfer-x,

there's this privately-run school called New Orient in China offering TOEFL and GRE English prep classes. It is an amazing school that makes absolutely sure you can score high in TOEFL and GRE verbal regardless of your genuine command of English.

They got busted by sending a troop of students into tests for the ONLY purpose of taking down all questions. Since GRE used to recycle its questions randomly from a finite set, if you keep sending people to all tests, at some point you will be able record the entire set. And they did it.

The result is quite devastating for the entire Chinese student population, because US grad school admissions start to discount their scores, people either get suspicious, or dismiss the test scores altogether. Nevertheless, New Orient has made sh*tloads of money and is about to go IPO on NASDAQ later this year.

OO,

I'm not sure I'd agree with you. I think the Chinese exam system is the inherent result of an increasingly conservative neo-Confucian government after the end of North Sung. That conservativism made the Chinese and Korean governments very long lived, but caused the whole culture to stagnate as a side effect.

My main problem is that most tests are not good judges of people's inherent thinking/working capacity. At most, they show a certain level of intelligence and a certain amount of dedication to getting the A's. The only way to really test people is to hire them and give them more and more responsibility, and see how they deal with that.

Peter P,

Thanks.

Here is some entertainment for your reading pleasure. :lol:

repost It's the P word.

Checking in. Just got out of bed.

Peter P says:

Asian parents seem to want their kids to become the perfect employees. So they want the right schools in the right field. However, in real life, doing the “right” thing will not get a person too far. A rat race is a rat race.

Yes and No.

Getting into the right school is very much ingrained in the Asian mentality, due to the long history of exam meritocracy.

However, amongst the American middle class, this mentality has been very, very strong since the 70’s, when the elite schools opened up to less privileged kids.

About the right schools: Aside from proper socialization and excellent friendship, you also develop connections which will be extremely beneficial in your latter life. I’ve had chances to make 30-40 mil because I know the right guy at the right school. Of course I botched it and am wandering here.

However, these days, the importance of the right schools is much downplayed. I blame SAT meritocracy. Anyone with a good mind and discipline can acrue enough “right” credentials — president of the debate club, co-captain of the cross-country team, chair of the after-school volunteer program — can go to Harvard, Yale Princeton. So there’s less connection factor, more cut-throat competition, and pure meritocracy shit.

But you still get good connections. THose cut-throat A’ses are so competitive that they’re bound to succeed in their respective careers — note that success is far from a dirty word in America. So I can always call them up in the middle of the night, should I ever need private venture funding for my next p...or....n site.

It used to be if you go to the right high school, you will end up in a great college. Not any more.

Regarding rat race: I disagree. If I can afford it, I’ll make sure my children don’t end up in a rat race. My parents certainly never prepared me for this, not even work.

Rat race is over-rated. I actually had some trouble with a few fellow students in grad school, one from China and another (real asshole) from India. I just shied away from that. But you know what? In the end, I was still the top guy leading a large project, my papers and thesis embodied the work that rat racer did, and was recruited by companies because of this, not because I was a dogged rat racer.

But I wish my folks had money so that I didn’t have to meet these people in the first place.

GC, I agree that connections are indeed very important.

Tests (and schools for that matter) can vary wildly in quality. I'm one of those people who can score very well on a test simply by guessing cross-referencing different questions and answers. If I had to design a test, it would have questions that have multiple valid answers on a scale of "brute force" to "elegant". The harder part would be redoing the questions to prevent people getting used to them, or passing down solutions.

Of course, if you really want to test people, you have to use the proper format. The interviews Adm. Rickover did when he ran the Navy's nuclear program are a good example of this.

Possibly an ARM reset?

SATs and other ETS exams have only themselves to blame. They've designed tests that, if not quite cracked the way New Oriental cracked the TOFEL, allow for dramatic improvements with some pre-test preparation and frankly has little to do with how well a student would be able to digest information in a college classroom, how well they can write essays and follow verbal orders, and most importantly, how well they get along with other people.

Looks like another ARM reset and she wants to burn away her 401k retirement account to save her house.

allah,

Yeah, I don't get it. What the hell do they think will happen once they get deeper in debt to help them over the current hump? ARM rates will drop to zero? Home prizes will zoom up another 30%? They'll win the multi-state Powerball?

As we have now been discussing education and school districts for awhile, feel free to comment on a new topic:

"Examples of stupid comments I’m tired of reading in real estate reports and listings"

Critical mass of approximately 250-300 posts has now been reached...;)

tsusiat,

Yeah, I know. But the BA is pretty much all about meritocracy and people who did well in school...and their Spanish speaking gardeners, nannies, house cleaners, pool boy, courier, etc. And the latter are pretty much invisible and don't have much of a voice. So it's no surprise that school districts and name brand schools come up a lot in discussion.

Allah

that thread on your link is just bizarre to read. The real face of human greed and pain...

An old Chinese saying: You'll find beautiful women and gold in books.

It's so true. Just look at Playboy.

that thread on your link is just bizarre to read. The real face of human greed and pain…

Yes, but nevertheless very entertaining! I love reading about flippers getting burned. It gives me great satisfaction as if I had revenge on someone who did me wrong. These flippers screwed up the whole meaning of the "American Dream", now they are going to pay the price.

I love the way she just keeps on shrieking "HELP ME", without actually taking the time to listen to what people are telling her. That, and bitching about the 4% commission (when she owes 850K) and keeps on wittering about how they're priced 'at market value'.

Drop the price!

Go on, go on, go on, you will, you will, you will!!

(OK, only people who've watched "Father Ted" will have any idea what I mean by that last comment. Sometimes its hard to be a dual citizen...)

allah,

The best is the advice to basically cut an illegal side deal:

You might even talk to the builders agent on the side - take her out for a cocktail and make it worth her while to send a buyer your way...just maybe....

And people wonder why we use pejoratives when referring to realtors(tm)? Deciding to use an attorney and skip the agent altogether was the best decision I ever made.

allah,

Haha. If these people bought in Vallejo 2 yrs ago, they ought to have some equity in the house...unless they HELOCed it all to finance the husband's "career" and their "lifestyle".

Notice how they didn't think about selling until the 2 yrs have passed and the market was no longer going up.

Yup, I have no pity for them at all.