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2006 Oct 20, 4:54pm 14,873 views 145 comments
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SP Says:
> Peter P said: You assumed that people consume
> the same amount regardless of income.
> I am probably an eccentric, but I have found that
> my appetite for consumption has actually fallen as
> my income went up. The more crap I can afford,
> the less crap I want to have.
I've noticed that many people spend less as they make more. My parents are a classic example of a couple people who make more in a day now than they made in a year when they got married but they don't even spend everything they get from Social Security each month. When I look in my closet and see thinks like my Dunhill cashmere overcoat I don't think I could spend that much on a coat today and when a friend called recently telling me that he found a great deal on a set of ceramic brakes that would fit on my car he was surprised when I said I really wouldn’t even want them if they were free...
SFWoman Says:
> FAB, I wouldn’t pull the plug. Confused presents an
> alternative point of view, albeit one that is fairly easily
> refuted with data at the moment. If Confused is a Realtor,
> and is hiding the fact, the deceit is sad, but I don’t think
> we need to be the type of forum that automatically
> cans anyone with a viewpoint that differs from the
> one most of us espouse.
I don’t have any problems with different points of view… I have often had different points of view than Randy H but I still think his posts are intelligent and well thought out. CR just throws up crap without any support and wasted our time. As a Libertarian I like to discuss politics with partisan Republicans and Democrats, but I walk away from the people who can’t say anything but “Slick Willie is an idiot†or “Shrub is a moronâ€â€¦
SFWoman,
Your statement regarding HF's above is almost 100% accurate. That one sentence should read; Everyone and their "long lost" brother!
What this has really been about is an effort to A, skirt securities law, and B, a desire to get out of "production". (Production meaning the "sales" end). Can't say as I necessairly blame anyone there but just b/c you're tired of selling (and who isn't) doesn't mean you're qualified to run any fund, let alone something as complex as a hedge fund. The lure was that (for a time) all you had to do was mention you were starting one and everyone would form a line to throw money at you!
I've heard your husband's sentiment echoed throughout the industry as law firms re-evaluate the situation. He's absolutely right, many of these guys will become a liability b/c they've seen the power of billing clients qtrly. for fees and only had to sell ONE time to raise the initial capital. Now flush w/fee driven income, hell they can hire some "wash out" to raise capital for them to fill the hole in the assets they've lost. See, every thing works out.
SFWoman Says:
I wouldn’t pull the plug. Confused presents an alternative point of view, albeit one that is fairly easily refuted with data at the moment. If Confused is a Realtor, and is hiding the fact, the deceit is sad, but I don’t think we need to be the type of forum that automatically cans anyone with a viewpoint that differs from the one most of us espouse.
I agree with SFWoman completely. Not only do we need to stay away from silencing dissenting views, but it's nice having a straw man to knock down every once in a while!
Italics corrected:
SFWoman Says:
I wouldn’t pull the plug. Confused presents an alternative point of view, albeit one that is fairly easily refuted with data at the moment. If Confused is a Realtor, and is hiding the fact, the deceit is sad, but I don’t think we need to be the type of forum that automatically cans anyone with a viewpoint that differs from the one most of us espouse.
I agree with SFWoman completely. Not only do we need to stay away from silencing dissenting views, but it’s nice having a straw man to knock down every once in a while!
Randy H
2006 Oct 23, 1:59am
I vote we allow Confused Renter until he/she clearly crosses the Troll line, or he/she turns out to really be Face Reality with a new costume. The last couple of CR posts read very similarly to FR, right down to the way he/she made pseudo-quant claims to support flimsy arguments.
Confused Renter said: "Boston Transplant, in 3 years, you and your wife will be making $400K or thereabouts i’m assuming if you are at $250-300K now. In 3 years, you could easily afford a nice $1-1.2 million condo/house. And in 5 years, you could easily afford more."
I'm afraid CR has turned us into poster children for spoiled over-consumers of real estate, which we are not. For one, we don't make assumptions about growth of our income in the future, and secondly we would like to have the freedom to live on 1 to 1.5 salaries. We know that this will mean less space and that's fine. I hope we didn't come across as a rich a**hole couple, because that's not who we are. Mainly I just wanted to inject a real data point into the MBA salary debate...
Randy H
2006 Oct 23, 2:18am
New Thread Bouncing Dead Cats
My apologies to cat lovers, I didn't coin the term.
CR's perspective appear to treat housing utility function as "the more the merrier" and does not consider the tradeoff from other utility derived from job security, flexibility, not having to suck up to a horrible but lucrative client, etc.
*unlurks*
OO mentioned something about "up and out" in IB and consulting firms. Here's a paper on "up and out" as explained in economic terms, for law firms (but plenty applicable to IB and consulting).
http://www.marginalrevolution.com/marginalrevolution/2006/10/why_law_associa.html
The page opens to a general summary of the paper, the paper itself has some nice equations. I know Randy H will love it!
*relurks*
The law is actually a much less cruel mistress than IB or consulting as described on this blog. There's usually a fairly broad swatch of work outside of big corporate law firms (though the highest paying jobs will be in those firms).
TOLurker, you might consider law school too, if you can stand doing what lawyers do on a regular basis (as long as you avoid litigation, writing/research/drafting/counseling). Law firms are probably a little less discriminating about where your degree comes from (as long as it is in the top quartile of programs) and it's a broader track than finance/consulting. It is also easier to find work outside of major finance centers and easier to do parttime work. You said you have a technical background so IP work is a possibility (have you considered being a patent agent as another job insurance course? They can make $80K+ in the DC area - lots of flexibility).
A teaching certificate is another possible job insurance, but teaching is a path that some people love and others get very burnt out from.
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Start with any generally observable and credible premise. Example: "Rents are up 10%." Or "Inventory is up 135%."
Assuming the premise is true, what impact will this have on the Bay Area housing market?
For instance:
KCBS reported rents are up 10%. Most anecdotal evidence suggests anywhere between 7% to 15% increases. If this is true, it could have the following consequences:
1. Rents go up -> Wages go up -> Wage inflation slows job growth -> Puts brakes on population-driven rent increases -> Rent vs. Buy adjusts a little, not a lot.
2. Higher rents -> People move out of area -> Rents stabilize, maybe fall -> Rent vs. Buy doesn't change a lot, and demand for both rental and for-sale housing softens -> Prices continue to slide.
3. Higher rents + refis -> help to bail out a few homeowners, reducing the overhang of potential FB's -> Could cushion the landing a little.
4. Rents keep going up 10% per year -> Creative renting strategies (home sharing, warm-bedding, etc.) become common, but overall renting becomes an expensive proposition -> People continue to do whatever they can to buy, keeping nominal prices high -> Rent vs. Buy is mainly adjusted by higher rents.
Or another example.
Premise: Punch bowl gets thrown away after Nov. 8 elections.
FB's rush to the exits -> No buyer confidence -> Inventory spikes up -> Prices fall FB's put unsaleable houses for rent, driving rents down.
The above are just examples. You can start with any other credible economic premise and expand it to assess impact on the HB. And even those outside the Bay Area can contribute their own crystal ball visions. And if this turns out to be too arcane, feel free to start a new thread.
SP
#housing