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PS - just to make Peter P jealous, I ate local blue crabs two nights in a row. 99 cents a pound and pretty darn near perfection. The meat and the roes were succulent and very delicious.
Blue crab... :|
RE: Railroads
I've been to Germany quite a few times. I have never, ever gotten a rental car (although the AutoBahn does tempt me). Germany's local light rail, the S-bahn, is nearly perfect. You could set your watch to the trains, +/- 3 minutes. For longer distance travel, I know for a fact you can get from Munich to Paris with about $65 if you book far enough in advance, and that's without a European discount card.
For anyone who thinks that an SUV makes you safe in the snow, try an Audi quattro AWD in the Alps. Flawless. Even in a collision I'd bet that the Audi is safer, and it gets excellent MPG on a turbocharged diesel plus abundant low-end torque. What you'd need an SUV in Cali for is beyond me, as you guys have very low mountains, no snow and primarily highway driving.
goober,
I can believe it. My mom's old Volvo got in a low speed collision with a big truck once. My mom's Volvo came out without a scratch while the truck's front was completely smashed up. Structural integrity and side impact airbags can do a lot to protect passengers, even against much more massive objects. SUVs, particularly American SUVs, have relatively poor passive safety features and do a poor job of protecting their passengers.
Astrid,
Your friend could look into the emerging field of Financial Engineering. U.C. Berkeley has a leading program. It's a relatively new official degree, so there's some risk in the degree being misunderstood or unrecognized. However, I'm seeing it requested more and more, and not just by big finance but also places like GE.
Oh, I should mention that Financial Engineering is very very very (I cannot overemphasize) math centric. It's the kind of advanced degree that appeals to quantum physicists looking to make some money in their careers.
Hiding,
I think Marxism is very useful as an explanatory theory for many social sciences, especially for social historians and modern lit majors. But in my experience, Marxists and pure Libertarians do not make good teachers. They let their doctrine get ahead of observable reality.
I'm no math whiz so my knowledge of economics is extremely elementary compared to the finance whizzes on the board. I do find concepts like scarcity, supply and demand, game theory, communal goods and bonding behavior to be extremely useful in understanding contracts and tort law. It's even kinda helpful for tax law and crim law. Constitutional law and admin law, on the other hand, confuses me to death.
Randy,
Thanks! Will definitely look into it. That sounds very interesting and comes with the added benefit of being close to me and only a 12 hour flight from Shanghai.
I'll have to ask my cousin about her desireable level of math though. I know she is very good at math (she's all around very studious and quite smart) but I'm not sure she's quantum physicist material. Her math and English are definitely good enough for traditional finance type courses.
SQT,
My hopes that Sac home prices drop quickly and steeply, so you afford both the home and vehicle of your dreams. :-)
SQT says: "Granted, there’s the mini-van, but honestly, any van I’d like to drive I can’t afford. Nice Honda or Toyota vans with the dual sliding doors can go for $30k new."
You need to test drive a Kia. Seriously. Two friends of mine have decked out Kia minivans. Leather seats, dual sliding doors, better safety ratings, a 100K powertrain warranty... all for 2/3 the cost of an American minivan.
In my mind, Kia basically killed Dodge, Chrysler and Ford for very good reasons. The Detroit Big 3 just build bigger, gas guzzling vehicles. They are expensive and they aren't even guaranteed as long. One of my buddies had a problem with his Kia, and they were in and out of the shop for zero cost on that warranty. You can't get that kind of service with a U.S. manufacturer anymore.
But I overall agree--I would rather have a Toyota 4Runner than any sort of a minivan, especially if gas mileage is comparable. One looks like a beaten down soccer-dad compromise, and the other looks like a woodsman-conquers-the-city converted truck that's due for an offroad victory lap on the town square of suburbia.
goober,
Sorry but I think UAW and other manufacturing unions are the sort of ossified self interested groups that Democratic party needs to move away from, pronto! Service unions, on the other hand, are doing some interesting things and working to reinvent themselves.
Brand,
Darn, you beat me to the Kia recommendation! I had heard good things about Kia too and wanted to do more research before recommending it to SQT.
My wish about cheap homes stands.
Hiding,
(Yeah, I'm quite horrible. I really am the queen of OT, I once threadjacked half a post to yak on about Japanese chef's knives)
No problem. I'm not one to disregard precedent (economics provides reasons for sticking to even bad precedent and bad laws). I think the problem with the 19th century formulation of natural law was that it looked in places where value was variable and difficult to quantify. Also, it was based on psuedo-science rather than observable and repeatable human behavior. I know the social sciences are considered "soft" sciences today, but they're still far more evidence driven than head shape measurements.
Furthermore, the basis of contracts and tort law is property, which is intrinsically connected with the foundations of economics. Economics certainly helps understand the interests of the parties and of the State. This is even more striking when we move to legislative laws that directly governs economic life, e.g. the UCC or taxation or antitrust. The legislative law and even the courts do occasionally take notice of the changes in economic reality, so knowledge of economics can be a useful tool of persuasion and decisionmaking.
At least that's what my profs tell me...
Hiding,
Really! Does that mean American made Bimmers and Benzes are actually better than German made ones?
As far as “poor qualityâ€, I think Germans just have a different code (re: reptilian brain) on quality.
Well, there's that - and there's also the fact that they just haven't mastered electronics as well as the Japanese have. Software glitches in sunroofs (I had that). It's also the suppliers' fault: Bosch comes to mind - in certain Audis and Mercedes, the pax mirror will drift slightly due to a bug.
Also, Mercedes really has let quality slip in the last few years - BMW not as much.
I loved the train system when I went to school in Japan. I’d gladly give up driving if we had as good a mass transit system here in the states.
NY comes pretty close. Well, the New New York. Not the old 1980's NY when I was growing up.
A few weeks back I mentioned there was going to be a luxury condo auction in downtown Boston (near the waterfront). Well, there was, and the price drops were significant. For those who care about the Boston market, or who may see it as a bellwether, the link is below:
http://www.boston.com/news/local/articles/2006/10/08/sold_auction_reflects_downturn/
"By Kimberly Blanton, Globe Staff | October 8, 2006
Kevin Starr jumped into the fray as bidding for the third-floor Boston condominium kicked off at $825,000 and surged to $835,000, then to $837,000.
Hoping to elicit an $838,000 bid, the auctioneer, Ken Cullum, shouted, ``You won't be sorry tomorrow!" No one took the bait. ``Sold for 837!" he said, pointing to Starr, who had snared for $837,000 a condo that had been on the market for $1.2 million a month ago.
``I thought it was the deal of the auction," Starr said.
``I had no idea he was going to bid," said his wife, Daire Starr. ``Oh my god!" she screamed with joy..."
Those Boston bid winners are going to be very very sorry losers soon enough. Fundamentals in Boston are among the worse. You can never run out of suckers, I guess.
"Bryan Rich's hands shook as he signed an agreement to follow through on his $1.14 million winning bid for a 14th-floor penthouse with a terrace.
Five minutes later, he won another contest with a $1.09 million bid for a terraced unit next door with water views.
``My wife's going to kill me," joked Rich, former business owner who recently moved from the Boston suburbs to Miami. He plans to rent the units."
I did the research and found out the Ford Windstar had a pretty good safety rating, got one 1 year old for $13,000 (plus taxes and tags) two years ago, got a few problems fixed free under the warranty and it runs great so far. It was what I could afford and was much younger and nicer than the secondhand toyotas etc that were available. I am happy with it, my husband doesn't like it, but it does me just fine!
As for aquaplaning, there are some special tyres that you can buy that help to prevent it, I love them!
Randy H Says:
"...Your friend could look into the emerging field of Financial Engineering. U.C. Berkeley has a leading program. It’s a relatively new official degree, so there’s some risk in the degree being misunderstood or unrecognized..."
_____
I've had it with "high-tech." I'm considering chucking the whole idea of business and becoming a Short-order Pastry Chef. Does Berkeley offer a degree in Culinary Engineering with a minor in short-order pastries?
Just in case anyone is interested, the UC Berkeley, Haas MFE Program:
**Disclaimer: I am not a MFE, though I did audit one MFE course while in B-School. I've heard great things about this program, but it is very new. There's always a risk with new programs/degrees, so do your research before jumping in with your money and time. Depending upon what you want to do as a career in this general area, you may be better served with a specialized MBA, or a Masters in Economics; or maybe just the right track record of experience without even needing an advanced degree.
Greenspan Says `Worst May Well Be Over’ in U.S. Housing Slump
Cool. Now they can hike interest rate without worries.
Robert Cote'
Your argument vis-a-vis NYC mass transit appears to be an example of the Fixed Cost Fallacy.
From Pindyck et. al. (emphasis added)
The Fixed-Cost Fallacy. This fallacy asserts that short-run competitive
prices (marginal-cost prices) will prevent producers from recovering their fixed costs. These are covered not because short-run competitive forces set price equal to marginal cost, but because, if they were not covered, investors would stop building production while demand continued to grow. This would cause shortages and result in an overall lower total profit.
You can apply this argument to infrastructure. If you don't build it, then you'll perhaps have a higher short-run "profitability", but a lower long-run overall "absolute profit".
RE: Greenspan saying the "worst is over" for the housing slowdown, remember, this is the same charlatan who went out and told everyone that ARM's were a good idea in 2005. Sure, we believe you Mr. G.
@Boston Transplant,
Yeah, I've been keeping up with that story. There are so many interesting reprecussions. It looks like units sold from 20% to over 30% below original asking. Seems pretty good, but how much of this will look like catching a falling knife a year or two down the road? This would presumably do quite a number on the comps in the area. And the truly screwed are the 65 owners who bought preconstruction and paid original asking price. Sucks to be them!
Goober brings up an interesting point. What if Greenspan was really right, this isn't a bubble, etc.? It looks like people here have previously discussed the "what if we're wrong" possibility, but it seemed to focus on whether or not people had interpreted the indicators correctly.
I would be curious to see a future picture for California, assuming rising interest rates and continued home appreciation above the rate of inflation and wage increases. How long would it take before almost no one could afford a house or even a fixed-rate loan? Would Prop 13 become a permanent barrier to people entering the state? How long before rent prices exceeded Average Joe's ability to pay on the low end? Right now a lot of middle class Californian boomers are retiring to cheaper states. Could we ever see an exodus of the basic non-tech working class?
If a moron (?) like Karr can have dream of making money telling his story, why not Casey?
Huh? I thought it was all about getting a free business-class upgrade flying from Thailand.
The Federal Reserve cares about housing quite a bit for some very good reasons, many already pointed out.
Most basic, the Fed needs to know if housing is going to deflate significantly, especially if it is nationally, because houses constitute by far the largest portion of American individual wealth. In fact, houses are really (to the Fed) just big savings accounts. If those accounts start shrinking, then the entire monetary base changes.
This doesn't mean there aren't any conspiracies. It just means that a conspiracy isn't necessary to explain why the Fed cares.
HonestHunk,
I'm a girl who is into guys, but I'm definitely not into Casey. Casey looks like a dumb slacker and talks like a dumbass. Complete turn off! You and his prison bunkmates can fight for his ass.
Neo Con Conspiracy,
I doubt Casey Serin = MarinaPrime. This Casey Serin doesn't trigger my BS detector and he plays his hapless role with aplumb. If Casey is a fake out, he deserves real kudos for doing such a convincing job.
HonestHunk Says:
any girls here? dont you think Casey is hot? he makes me wet. oooh
WTF?? Are you demented? Casey looks like a Michael Jackson Neverland ranch reject.
Ha Ha:
I think you're right about paying interest only. This turns everyone into a renter. That would be heaven for the FED & the banks - maxamizing the amount of money lent. Everone will be a slave to the banks and working on the plantation with nothing to show for it.
Paul
Skibum,
I agree, in a couple years even these new buyers may look like chumps. But I still think the auction has done Boston a nice service by highlighting the fact that the market clearing price is far below what people are asking in the rest of the market. It reinforces the thought that if one buys in the next couple years it should be from a (rational) developer rather than an (emotional) individual...
Randy,
Thanks. I understand that there will always be risks as well as opportunities with relatively new fields. I think I'd strong recommend against a plain vanilla finance program for my cousin. My dad mentioned that there's a huge concentration (in the neighborhood of 80%) of Chinese students doing finance degrees in England.
I'll talk to my cousin about her personal strengths and preferences before steering her towards either a more traditional accounting program or towards something more exotic. My mom says my cousin is quite good in math and physics, so I don't think American finance math would faze her.
The nice thing about an accounting degree is like you mentioned, she can always go back for an MBA with a special focus on an area of special interest. I definitely think she's too young to fully take advantage of an MBA program.
Peter P,
Good point. I think this HonestHunk person is joking, but I'll edit the comment slightly just in case.
Do you think my gigolo comment is okay? Maybe I shouldn't have wrote that either.
SFGuy,
Thanks for the feedback. I think prostitution for both sexes is okay in Nevada, but you and Peter P are right. I'll erase my comments and edit HonestHunk's comment slightly.
do you have a guess as to what is significant to the FED? How much yoy deflation in this asset you call a “savings account as far as the FED is concernedâ€, can they tolerate and for how long?
Fast answer: No.
I'm not a Fed expert; some others here know a lot more about how exactly short and long rates relate to bonds, credit lending, liquidity and ultimately Fed policy.
I am a student of Neoclassic economics and Monetarist theory. Using those theories, the Fed should only be able to tolerate a very small amount of sustained housing deflation.
Say 5% per year or less. If there's more than that for long enough then the multiplier effect starts to work in reverse, and there will be widespread deflation. The Fed will not allow this under any circumstances (with their current philosophical mindset).
The multiplier effect, briefly, is just how far each dollar put into the system goes. It is great than 1 because each dollar put in to banks by the Fed is lent out, and then can be invested, recycled, and lent out again a few times. But this can work in reverse too, which would happen as equity is drained from Americans' homes over a long enough period of time.
The Fed shouldn't care too much about short-term corrections, even if they are fairly steep. 10-15% each year for 2-3 years won't directly panic the Fed. What would, though, is recession that could occur because of indirect effects of slowing housing.
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