patrick.net

Nomograph says

Whitman is a flaming liberal. She supports pretty much every single liberal social agenda in the book.

I don't know. Would like to know more about Brown (I will read more) as I haven't lived in California that long.

I am told that both would do state employee pension reform which directly effects me. And I am also told that I can trust Brown to do it in a more thoughtful way. Does anyone think he might solve the big financial political problems that are structurally built in to California this point ? That is, the prop 13 effect, and the 2/3 requirement for tax increases ?

Also, what do you think about the marijuana vote ? And isn't that likely to help Brown, that is bringing out the youth vote ?

RayAmerica says

Why are you liberals so afraid of a successful woman?

Why did (do) republicans hate Hilary so much ?

Yeah. Minimum wage has increased. That explains the underlying main reason for the 20%+ YOY home price appreaction in California during the bubble years. Since minimum wage never goes down so home prices should never fall. :)

Any governor can't really change anything. But they do make appointments that have a long-term impact.

We're in a partisan hell now that I don't see getting any better. Too many people just want to destroy the system instead of fix it.

theoakman says

I’ve placed quite a few bets on the Japanese destroying the Yen. If that happens, the trade deficit will persist

yeah, Japan's prices are still structured at Y150 or so.

Complicating matters is the capital interchange with China and Japan's energy needs from OPEC. This makes my head hurt.

Kevin says

I’m annoyed that they portray Whitman as the founder of eBay. She was not. She was appointed CEO just before they went public. By most accounts she did a respectable job at the company, but I’ve also heard that pretty much anyone could have run things because the original idea worked so well.
During her tenure she made some obvious fuck ups, Skype being the most obvious.
She doesn’t strike me as someone with genuine conviction, but rather someone who is just looking for more power, probably hoping for a presidential bid some day.
I don’t think either of these people can fix California though. California’s problem is not the governor — it can’t be, because California gives its governor so little power that it’s effectively a figurehead position. California’s problems lie in the absurd cost of living and the completely broken legislative system.

She's definitely the first batch before anyone knew who they were and she did lead a company that went from less than 100 to as much as 15K employee under her watch. It generated tremendous shareholder value until 2008 when they pretty much topped out.

As far as strategy, there were ubid, shop at home, Amazon and Craisglist and 100's of companies during the dot com era to deal with. Even though it is a great business concept, the validation system made it all work. eBay pretty much pioneer the review system you see copied everywhere now. How to make money on Ebay was one of NYT best seller.

If you're gonna ding her for skype, you have to give her credit for Paypal which is generally regarded as one of the most successful purchase for any company ever, a 10X return on investment. They also have about a 20% stake in Craigslist with visions to buy them outright if the original Craig decides to sell.

CEO's for the most part are goals driven. For the most part, you don't turn into a 30B company from scratch without setting the right strategy and executing year after year. While Ebay has a goal and execution culture, state government and government in general are not goal driven. I'm not sure she can bring business in Sacramento because quite frankly government is just not built that way.

Having said that, Jerry Brown is going to be more of the same. He's basically taken whatever seat is available the last 30 years and was a CA governor previously. As far as I'm concerned, government pretty much has gone downhill for the last 30 years so Jerry Brown is part of the problem, not the solution anyway.

My vote is for Whitman just to shake things up to make everyone feel uncomfortable.

This "Huntsville, Alabama" thing is overrated.

The wage is so low in that place. I doubt any real good engineer will go there.

SF ace says

CEO’s for the most part are goals driven. For the most part, you don’t turn into a 30B company from scratch without setting the right strategy and executing year after year.

You definitely don't do it "from scratch" -- and Whitman didn't. eBay was on track to be very successful whoever ran the company, because it was a rock solid business.

I'm not saying she wasn't a good CEO, I'm just saying that you can't really draw much based on her history at eBay. If she had taken a company that was in a crappy state and had fixed it, or had started something from scratch, then yeah, it'd be a good indicator, but in comparison to the fucked up state that is California today, there really is no comparison.

SF ace says

As far as I’m concerned, government pretty much has gone downhill for the last 30 years so Jerry Brown is part of the problem, not the solution anyway.

So you think CA was better 30 years ago? You mean when Jerry Brown was governor?

The guy did manage to get CA to have a substantial surplus during his tenure, something his fiscally liberal predecessor (one Ronald Reagan...) couldn't manage to pull off.

Seriously, Whitman is just as much a part of the system in CA as Brown is, and probably more so considering her support for people like Boxer.

SF ace says

My vote is for Whitman just to shake things up to make everyone feel uncomfortable.

Isn't that exactly the thing people were claiming Arnold was supposed to do?

"Shaking up" the california legislature is beyond the capabilities of the governor. About the best you can hope for is someone who talks loudly directly to the people and makes them listen, since in CA the people were dumb enough to give themselves all the power.

gameisrigged says

Translation: you are a troll.

Is that how you see the world? When someone points out that you are wrong, they are a troll? That explains a lot...

ok, thanks

tatupu70 says

gameisrigged says

Translation: you are a troll.

Is that how you see the world? When someone points out that you are wrong, they are a troll? That explains a lot…

Think of that one all by yourself, did you?

xenogear3 says

This “Huntsville, Alabama” thing is overrated.
The wage is so low in that place. I doubt any real good engineer will go there.

True with all regions, but thats where you find more SV tech workers than local SV workers because they are cheaper.

sybrib says

pkowen says

thomas.wong1986 says

sybrib says

And for comic relief,
thomas.wong1986 says

Silicon Valley, may lose its competitive advantage to emerging Huntsville, Alabama

Comic huh? Laugh while Rome burns I suppose.

The comedy of it, is what competitive advantage?
The author of that piece refers to our competitive advantage, but he doesn’t even say what it is. I will tell you what it is: a magnet for Cool and Hip people from other parts of the USA, magnet for well-to-do Asian immigrants who seem only want to live and work in Fortress Enclaves, a magnet for illegals who want to be domestic help for corporate titans, say like, Meg Whitman.
What kind of competitive advantage is that? Maybe we should ask the management of Toyota & GM that fired thousands of Bay Areans when they closed the NUMMI plant instead of reducing operations somewhere else, or Intel which used to employ thousands of folks in manufacturing in Santa Clara County (but not any more), or IBM which did the same.

Cool and hip people in the Silicon valley? LMAO!

It looks like Congress punted on the Bush tax cuts; it will certainly make for an interesting lame duck session. I think the Dems need to buy the "keep your government hands off my Medicare" guy a bus ticket and send him to Republican rallys. Nothing as fearsome as a stampede of old folks on election day...

marcus says

I think it’s pretty hard for us to see the whole picture. The big picture. What if what’s best for the year 2150, or 2500, or 3000, isn’t what’s best for certain groups right now ? Not that anyone is actually looking at that.

By 3000AD Walmart will be purchasing all of its goods from Alpha Centauri - it'll be cheaper to manufacture there and ship through the Stargate.

Perot was victimized by the media for speaking his mind - he didn't get where he was by being dumb or crazy but they sure framed him that way. I saw him speak once and found him quite intelligent and cogent - and as a result I voted for him in 92.

Nomograph says

How do you know we aren’t sitting at the top of an inverted parabola? You don’t.

Now I do.

shrekgrinch says

and by moving assets out of the financial system

that's . . . productive. For every buyer there's a seller!

I'm a taxi cab driver and my wife's a waitress in san diego. We heard gold was a good investment....we're thinking about taking all of our tips to Vegas and hitting up the Gold ATM's. Thoughts??

I have $1,000.00 to invest in gold. Can anyone make any recomendations for gold options?

$1,000.00 won't get you very much.. Maybe some a few 1/4 ounce coins or some small gram bars.

Check out Apmex.

All of Obama's job stimulus programs have proven to add nothing as far as permanent employment. His programs are as fraudulent as FDR's New Deal. After 8 years of New Deal policies, Treasury Sec. Henry Morganthau reported to Congress that: “I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot!” The lesson is that government is a hindrance to creating viable, stable economies that employ people in sustainable jobs. Obama, like FDR, is proving this to be true.

http://www.gallup.com/poll/143426/Gallup-Finds-Unemployment-September.aspx

For Moraganthau's statement:

http://blog.heritage.org/?p=2233

The bankers are in for some interesting times.

Buying gold in Dubai is supposed to be the best place to buy actually. Low overhead costs and strict rules on quality.

Especially gold jewelry, where you never know what might be in it! The places over there are tightly controlled.

What I found interesting in shopping in those stores over there is that they charge per gram for jewelry. So if you wanted a broach, the price was listed right there. $150/g (or whatever it is now+markup for workmanship), and then it would list how many grams of gold was in the piece. Every piece was charged in this fashion, unlike our jewelers here who charge based on the workmanship put into the pieces.

How about setting up a gold pawn shop on mall kiosk and collect gold for 15-20% off.

Monthly rent of kiosk: 3K
Estimated margin per oz $200/oz
Salary, overhead, fixed cost 10K
Total fixed Cost 13K
Oz/month to break even. 13,000/200 = 65oz
per day 2.0 - 2.5 oz per day

buy 5 oz a day and you'll be making 15K+ a month in addition to salary draw included in fixed cost. I imagine there will be some people who would sell their jewerly for christmas gifts.

2oz is about 2-3 2mm 16" 24 karat gold necklace

Actually, I think I was way off. When I saw these jewelery shops it was about $16/gram. Of course gold was only about $400/oz back in 2002 range.

I've seen a few articles on those "gold collectors", where you mail in your "gold" and they send you a check. Apparently they're incredibly sleazy, giving you only a few days to tell them "no" on their offer, they mail it late and of course put up lots of walls to block you. After X days, they melt your product down apparently, so you're stuck with whatever cash they've given you.

Gold kiosk around here would be pretty hard to operate I think. I'm betting there would be quite a few laws in handling and selling gold, especially appraising it.

Gold is pretty easy to appraise if you treat them like they will be melted. There are equipment to measure the gold unit oz. and equipment to weigh it. The value is strictly gold unit. The markup is simply what the gold pawn is willing to accept. The design of the jewelry is irrelevant. So if you bring something from Tiffany's, it would be appraised the same as a no-name.

Zlxr says

Ray just enjoys giving ellie mae some of her own medicine. Nothing more

Wow, I'm so awesome you're bringing this up a couple of months later? I do enjoy that ya'll can't get enough of me, but I do understand why.

My ex used to work for a huge-ass govt contractor - they'd say "a million here, a million there ... pretty soon it adds up to real money."

I think being in political office is like working in a casino cash cage - you see so much money go past you that it loses its meaning. A million bucks doesn't seem like much when you're dealing with millions or trillions, but a hundred dollars is the difference between eating and starving for many people.

RayAmerica says

Morgenthau made this “startling confession,” as historian Burton W. Folsom Jr. calls it, during the seventh year of FDR’s New Deal programs to combat the rampant unemployment of the Great Depression.

How did he make this startling confession about being "8 years of this administration" in the 7th year of the FDR's presidency. Especially since the date it was 6 years and 5 months after FDR was elected. That doesn't make sense. I would like to see the whole statement, not just the abridged out of context part that Burton W. Folsom Jr provided. What is in the "..." that he didn't want us to see. Even more odd the quote is attributed to a meeting at the ways and means committee, but is cited as being from the Morgenthau dairy. Where are the meeting minutes? I'm no fan of FDR or the new deal, but something isn't right here.

By the way, was that the same Burton W. Folsom Jr that wrote a book calling the robber barons "constructive visionaries who benefited consumers"? Same guy as writes for NRO? Just curious.

What do you ALL think the EFFECTS will be on the MARKET (total freeze, Price squeeze, Banks unwilling to make new loans?) {doubtful as they sell them to GOV anyway}, I see Realtors suffering greatly without inventory, and an unsure outcome, who would buyers be of course some but by and larger most will likely choose to sit and wait it out and now millions of people could stop making payments knowing full well that they can live now maybe 36-48 months enough to save 3K a month say, 24 =75K 36=108K and if they can hold off banks 48 months 150K I mean wow, I don't know how to figure this out I would love to hear everyones thoughts on what the effects will be, I wrote Patrick and asked that he consider writing something from his educated point of view.

So you are calling the architect of FDR's New Deal economic policies a liar?

RayAmerica says

Bob … seriously … get the book that Folsom wrote. It is very well documented and a real eye opener.

I'm open to reading it, I'm not a great fan of FDR. He actually reminds me a lot of Bush II (except the flip side of the political coin) in terms of abuse of power and politicizing every issue. Like Bush he was an utter and total failure in the business world. Like Bush he used government agencies to hound and harass anyone who disagreed with him. Like Bush he desperately wanted to centralize more power in Washington and hated the supreme court. As political operators they are very much twins.

But since you have the book in hand then provide the citation from the quote that you are so enamored with. Was it from the diary or the actual minutes from the meeting. If the diary, then why didn't he back it up with the minutes? Something in there that contradicts his claim perhaps? I'm still very suspicious of this.

Ray--

Morgenthau was hardly the architect of the New Deal. From the little I have read about him, he seems to been against most of it--in fact he was not Keynesian at all. He was actually one of promoters of the balanced budget in 1937 that pushed the US back into recession.

If you have the book, you surely know this. Why do you continue to post the rubbish about him being the architect of the New Deal

It will take decades for the interest rate to go to 10%.
It is not something you should worry about.

Let’s assume that currently, a $200k house can get a mortgage rate of 4.0% 30 yr fixed.
Down payment: 20% ($40k)
Loan: $160k
Monthly payment (less property tax): $763.86

@10% interest rate, an $85k mortgage would be $745.93 30 yr fixed (those 2 monthly payments are close enough).

So at 10% interest rate, the same house would be $106,250.
Down payment (20%): $21,250
Loan: $85,000

You’d be losing ~45%-46% just from interest rates going from 4% to 10% if purchasing power does not change.

If interest rates went to 10%, inflation would be humming. The ~$750 payment would be more like $900 in today's dollars....incomes would be rising in step. And that would be if interest rates rose to 10% in a small amount of time, like 3 years. If it took like 10 years, with inflation the $750 would likely have doubled.

A house would be about $130,000 given your terms if inflation rockets interest rates to 10% in three years. Thats about a 35% loss.

In ten years, the house would be about $215,000 given your terms. Nominally, it would have increased in value.

The calculation itself should be fairly straightforward.

$200,000 @ 4.0% APR (30 year fixed): $954.83

at 10% APR (for a 30 year fixed loan) the comparable house price is $108,803.66

$108,800 @ 10% APR (30 year fixed) = $954.80

But the correlation between interest rates and prices is not nearly as straightforward as the above example. Second, you ask how much will you "loose". Loss is subjective. If your talking about lost equity, it depends on whether or not you have a loan, the loan balance, etc.

If you have a fixed rate mortgage, then a rise in interest rates won't effect you.

I guess I'm having difficulty determining what you are really asking. If rates were to suddenly go from 4% to 10% overnight, then all heck would break loose. But this isn't reality. Rates will (eventually) trend upward over an extended period of time. If anything, rising rates (if sustained) may cause a slight increase in house prices, as buyers on the sidelines start to buy in order to "lock-in" the lowest rate they can. Plus, rising rates would most likely occur only after growth is seen in the economy, so a broader recovery (including rising home prices) is possible.

At the end of the day, I expect we will see rates low for an extended period of time. (Sub 5% until mid 2012). Followed by a semi-dramatic rise in rates. prices, and yes even wages, as inflation finally starts to take hold.

Look at the past 30 to 40 years. The stagnation of the 70's lead to the growth of the 80's. We may be in a rut right now, but eventually things will turn the corner in a big way. Even the great depression didn't last for ever, and it was followed by a period of rapid economic expansion.

You should assume the other ways --> 0% not 10%.