patrick.net

Yup, times change. Camaros were the greatest status symbol when I was in high school. Now I'm like, what the f@ck were we thinking? Man NM is like a time capsule, people here love those 80s American POSs. The emissions in this state are about the same as in the 80s. I'm getting headaches everytime we follow too closely, and they still smoke in restaurants.

Anyone who is familiar with the recent H1B crisis? It seems like the 2007 (or 2008) quota is already completely used up so lots of foreigners with job offers will need to leave.

The Congress seems to be reviewing a new proposal of lifting the cap of H1B by another 50,000 a year. How likely will such a bill go through?

Peter you might get your way. Looks like they are going to settle on a fee for work visa solution. $3500 per pop.

Malcom, I know you aren't ripping on Camaros. :o

Although 80's camaros (3rd gen) completely sucked from a body style standpoint. 1st generation rocked the hardest. A classic 60's RS or SS is a beautiful vehicle.

The Congress seems to be reviewing a new proposal of lifting the cap of H1B by another 50,000 a year. How likely will such a bill go through?

I am against all kinds of numerical quota. The market will let us know how many is enough.

However, the crisis means that many potential home-buyers will not be buying anymore. Oops. Spring bounce indeed. :twisted:

Peter you might get your way. Looks like they are going to settle on a fee for work visa solution. $3500 per pop.

Perhaps they should auction off the quota. The proceeds will go into the education system. :)

Malcolm Says:

> The other flaws that I see in boomers all the way
> down to the Ys is the failure to form lasting
> relationships.

The reason we have more Y’s with screwed up relationships is that we have more Boomers with screwed up relationships.

People tend to do what they saw growing up so if a kid grows up in Africa and watches Mom & Dad gather nuts and bugs to eat in the mud hut odds are that the kid will grow up and gather nuts and bugs and live in a mud hut…

If a kid grows up in Presidio Heights and watches Dad play dominos at the PU Club and watches Mom work on JLSF fundraisers he will probably grow up and play dominos at the PU Club while his wife works on JL fundraisers…

Most (but not all) the people I know who grew up in a screwed up divorced home have been divorced at least once while most (but not all) the people I know that grew up in a (at least appearing to the outside) normal home with parents still married are still married…

BAP, that is true although the Gila forest was gorgeous. Lots of tall healthy trees. The Indian cliff ruins were amazing.

The reason we have more Y’s with screwed up relationships is that we have more Boomers with screwed up relationships.

Right on, and I've thought that too. Why though are the boomers so screwed up when they had nice Leave it to Beaver families? I know that is a myth, and they had molesting priests and overbearing fathers but really, they had a better head start than the generations before them and the blew it. They just figured their parents were evil and tried to not be like them at all.

I had an 80 Capri in high school, and a 78 Camaro just after. I thought I was cool, I was wrong. To add to that in the early 90s we bought one of those Firebirds. It was that nice red color with T tops. It actually was a pretty cool car, but once you go from that to a well made foreign car you just can't go back. Once you go Jap you don't go back.

Baby Boomers- that is all true, and they were so promising with new ideas. I guess that's what I mean when I call them hypocrites. When they had to bear the costs they didn't promote blacks, oh they made a show of affirmative action and tried to make everyone else do it but they just became incredibly selfish and materialistic. They are the first generation to literally make sure that their heirs don't have an inheritance to build on. Only a baby boomer would come up with the concept of a reverse mortgage.

I think the Clintons are the poster children of baby boomers. Do onto others the way I say you should, never mind what I'm doing.

WWII generation raised the baby boomers, then often raised their children, and even their children in many cases only to be discarded when they were no longer useful. And all I hear from bably boomers is, what's going to happen to me when I get old? Who is going to support me? Only 1 in 10 has enough to retire on. They really are screw ups, and in typical fashion didn't care about anyone else but constantly whine about their own bleak future.

All the baby boomers could think about was how many people would be impressed with those hideous Cadillacs. OMG those are nausiating.

Brand,

Hmmm, that wasn't my impression but I'm not an engineer. My sense is that an engineer would not make as much as a marketing person of equal general ability, etc. I certainly felt my boyfriend was underpaid for his level of responsibility at his previous job.

I don't think the inequality between lawyer pay and engineer pay became evident until pretty recently. Didn't new associates get paid similar level as teachers in the 1960s? Now big NYC firms are paying first year associates $145-160K a year, equal to very senior engineers. That's a hell of a lot of money (even when divided by 2,500 billable hours a year) for people who are basically doing paralegal type work to start.

Jimbo,

I *may* have overstated how unfocused my boyfriend actually is -- he's very bright and pretty well adjusted, so things have always come easy to him. Now he's a bit burnt out and he's dragging his feet on what he wants to do next. I *may* be projecting some of my fears about him wasting his potential.

The Boomers had a rather self indulgent revolution against their parents' world, and boy did they let everyone know about it!

Now the Snowflakes think mommy and daddy made everything just perfect and they can be perfect and special as they are.

(Randy, I know I am a severe pessimist. You say America still has the entrepenerial spirit, but I see that becoming more and more crass; more about making money than building something lasting and long term. It feels like America has skid off the rails of Henry Ford and became a massive Enron funny money game.)

Malcolm Says:

> I have a 99 Boxster which is the same. Nothing
> handles like it, and it has that classic rounded
> sleek sportscar look which looks just like what
> James Dean wrapped around a tree.

Dean actually wrapped his 550 Spyder around a 1950 Ford…

Some PCA guys still drive out to the accident spot East of Paso Robles when they come up to events at Laguna Seca…

What kind of engineer is he astrid?

? Now big NYC firms are paying first year associates $145-160K a year, equal to very senior engineers.

The difference is that those first year associates will be working 209138720 hours a day, whereas the senior engineers will be working a mere 60 hours a week.

Also, those first year associates will have massive dry cleaning bills. :)

chem e and he doesn't want to go to med school (that, he is certain about)

So my question is, short of terrible catastrophe or nuclear war (which somehow manages to not irradiate me),

That's one of the reasons why I want to move to NY/Boston/DC - in the event everything goes to hell, I won't have anything to worry about.

[Goes back to laughing about how in 24, all the terrorism happens in LA, and how Jack Bauer is able to cover so much ground every hour driving]

But senior engineers actually have skills beyond shuffling paper and getting into a top 20 law school law review!

PS - my guess is that Jack Bauer actually graduated from Hogwarts Academy and stole a time turner from the Ministry of Magic.

LunerPark,
that Marc article has got to be the most idiotic articles I seen.

Anyone really pluged into real wall street business news already
knows that business-capital tech spending is down. Fact is we
are already seeing spending for semi, computers, storage, and
software down.

What a stupid writer....

Monday, April 02, 2007
BusinessWeek: Weak Capital Spending

For equipment and software, investment declined in two of the last three quarters. With a lag of 3 quarters, the YoY change would turn negative in Q1 2007. Of course the lag might be longer, or YoY investment might not turn negative this time. But it would be reasonable to expect the YoY change to turn negative soon.

/calculatedrisk.blogspot.com/2007/04/businessweek-weak-capital-spending.html

A reprint from my maiden thread, for the boomer critics. I probably take this all much too personally.

mrsburnside says:
October 8, 2006 at 5:57pm

That is the crux of the matter, of course. Whether or not your post reflects your actual nature - that I can't know - it breathes insularity.

/rant

(we had fun watching a trust fund Gen Y kid try and find the spare on his M Roadster at an autocross at the Marina Airport a couple years back)

I changed a tyre on an M coupé a while ago, and it wasn't easy. There's about 10 gadgets just to get the tyre to drop out from under the boot -- it's external and underneath. And the supplied spare is about the dimensions of a bicycle wheel...

P.S. we had a grumpy old guy work for us for while who was a gadget freak -- spent every cent on laptops, orienteering toys, yachting and m/bikes, didn't own a house, and was one of about 8 kids, so wasn't going to inherit much... however, he really didn't know a whole lot about technology, and was pretty similar to the UPS kid... nor did he work very hard... so boomers and Gen Y can reverse, and clearly people vary within generations, not just across them...

Malcolm Says:

Post 1
Baby Boomers - I guess that’s what I mean when I call them hypocrites. [...]they just became incredibly selfish and materialistic. They are the first generation to literally make sure that their heirs don’t have an inheritance to build on. Only a baby boomer would come up with the concept of a reverse mortgage.

Post 2
I have a 99 Boxster

Most (but not all) the people I know who grew up in a screwed up divorced home have been divorced at least once while most (but not all) the people I know that grew up in a (at least appearing to the outside) normal home with parents still married are still married…

nature or nurture, the perennial question...

Randy H Says:

Part 1
This is an incredible strength which gives me great confidence in the next Century of “American Dominance”. I almost hesitate to use that term because it’s become so maligned.

Part 2
I’m no jingoistic patriot.

jokes ;)

PS:

Thanks for the f&*^ed up world/mess you baby boomers gave to the gen y kids. I now have to spend my lifetime trying to clean it up salvaging civilization. You baby boomers did a very bad job, now give us a chance and pass your verdict after we have had the 30 years you used to screw all of us.

I'm Gen-X.

I'm not sure if we're "lame" or just the victims of circumstances.

We've been accused of being "slackers," yet our generation has stepped up to the plate just as much as any other but sees diminishing returns for our efforts. Hell, most of us won't even see a pension, much less affordable housing.

The good news is that 40 is the new thirty, so we can pimp out ten more years of living at home, riding a skateboard and hanging out at the beach!

Hey, it's only rock 'n roll...but I like it!

Different Sean Says:

> I changed a tyre on an M coupé a while ago,
> and it wasn’t easy. There’s about 10 gadgets
> just to get the tyre to drop out from under the boot

Here in the US the M Coupe does NOT have ANY spare tire (and why the Gen Y trust fund babies get so frustrated when we ask them to show us where it is)…

http://www.bmw-m.net/Reviews/m_mobility.htm

Older Gen-Xers were toughed up early on by Bush I recession. Younger Gen-Xers were toughed by the dot.com bubble burst.

Maybe the housing bubble burst will toughen the Gen-Yers.

We did have one advantage over them - it was a heck of a lot easier to get into a top 25 school back in the 1980s and 1990s.

Michael Holliday Says:

> The good news is that 40 is the new thirty, so we
> can pimp out ten more years of living at home,
> riding a skateboard and hanging out at the beach!

The “boomerang” kids that move back home in their 20’s are bad but anyone that moves back home in their 30’s is truly pathetic…

FAB,

No more pathetic than living in a $750,000 loft completely paid for by parents and getting parental help with groceries.

OT, but here's a NYT article about the subprime mess that's surprisingly bearish, considering how much of a REIC cheerleader the rag usually is. A few of interesting issues raised in the article:

- The Clinton administration deserves a fair amount of the blame for initiating loose lending standards in a misguided attempt to increase homeownership rates. (As I believed all along, it comes down to the misguided and poorly thought out liberal do-good mentality, yet again).

- As I've brought up before, a big part of the grease that kept this wheel turning was that with ever-increasing appraisal values, rolling the refi fees into the refi costs was no big deal to the FB, as they still got a good bit of cash out with the refi. Now, those fees are a big chunk to swallow when the appraisal comes in flat. (Of course, depreciating appraisals are a whole other problem).

- The article nicely ends with a trashing of the subprime bailout idea.

Sorry about the long post - a login is otherwise required, and I thought this was a pretty good read.

*********************

Home Loans: A Nightmare Grows Darker

By GRETCHEN MORGENSON
Published: April 8, 2007

SNAZZY and newfangled mortgage loans, like those with low initial rates of interest or extended terms of 40 or 50 years, helped to drive homeownership rates in the United States from around 64 percent two decades ago to a peak of almost 70 percent in recent years. Called “affordability loans,” these new kinds of mortgages have gone mostly to first-time home buyers and borrowers with tarnished credit or spotty employment histories.

Even though these subprime mortgages account for only one-eighth of total mortgages outstanding, they represent 60 percent of foreclosures, according to the Center for Responsible Lending, a nonprofit and nonpartisan research organization in Durham, N.C. This is not surprising, since the features common to subprime mortgages actually increase the risk of foreclosure, mortgage experts say.

“The subprime market should be an additional and welcome opening of the credit markets for borrowers who have previously been shut out,” said Michael D. Calhoun, president of the center. “But it has been allowed and even encouraged to develop in a way that we think will result in a net loss of homeownership.”

For years, the homeownership rate in the United States ranged from 60 to 65 percent of the total population. But in 1995, President Bill Clinton directed Henry G. Cisneros, then the secretary of the Department of Housing and Urban Development, to work with the housing industry, nonprofit groups and other government officials to develop the National Homeownership Strategy, “an unprecedented public-private partnership to increase homeownership to a record-high level over the next six years,” as described in an Urban Policy Brief in August of that year.

Citing studies showing that high rates of homeownership generate financial wealth for borrowers, reduce crime and stimulate economic growth, the group agreed to a list of initiatives. One was to make financing arrangements for borrowers more affordable and flexible.

Lenders were off to the races. They created slick new mortgage products with low “teaser” interest rates that ratcheted up significantly after two years or so. They devised loans that required only the payment of interest, not principal as well. They extended mortgages to 50-year terms to reduce monthly payments.

The partnership succeeded. In 2004, the homeownership rate reached 69.2 percent, a record.

As recently as January, even as delinquencies among subprime mortgages had risen, the Mortgage Bankers Association, a lobbying group, praised the role that the loans played in bolstering homeownership. “The availability of nontraditional mortgage products is a positive development because these products increase the financing choices available to borrowers,” the group said in a report.

But according to experts on lending practices, the products devised to propel homeownership did so only as long as housing prices kept rising. Now that prices have started to fall, these products look instead like a transfer of wealth to mortgage lenders from those who can least afford it: subprime borrowers.

“It’s not good to put somebody into a home if they can only afford it when home prices go up,” said Thomas A. Lawler, founder of Lawler Economic and Housing Consulting Daily, a newsletter. “Now that prices are falling, the folks who made enormous amounts of money lending in 2003, 2004 and 2005 are giving some of it back. But they aren’t giving it back to the poor borrowers.”

Comparing prime and subprime loans shows how different the two types can be, Mr. Lawler said.

Loans made to borrowers with good credit histories, for example, rarely generate prepayment penalties when the loans are refinanced. But 70 percent of subprime loans have such penalties, he said. And they are hefty — typically involving six months’ worth of interest.

On a $250,000 loan with a current interest rate of around 8 percent, a prepayment penalty would be $10,000. Because many subprime borrowers do not have that kind of money lying around, lenders typically offer to roll the amount into the new loan offered in a refinancing. Tacking on such penalties to new loans makes it even harder for borrowers to pay them off.

Another characteristic of subprime loans, Mr. Lawler said, is that they rarely have escrow accounts. These accounts are established to collect money over long periods to cover real estate taxes and insurance.

CRITICS point to two possible reasons: without property taxes added to the mix, the mortgage payments look lower than they otherwise would. In addition, the absence of an escrow account in a subprime loan often means a big tax bill that cannot be paid unless the borrower undergoes another expensive financing, with all those fees attached.

Finally, subprime loans with low initial rates that reset at much higher rates almost force refinancings, generating fees for lenders but often putting borrowers in a hole. Now, for instance, subprime loans that reset after two years have interest rates based on the London Interbank Offered Rate of interest, or Libor, which now stands at about 5 percent, plus 6 percentage points.

It is almost impossible for subprime borrowers to get lower rates on their mortgages given such reset rates, Mr. Lawler said. “A subprime A.R.M. borrower,” he said, one with an adjustable-rate mortgage “with an initial rate of 8 percent for the first two years would face an upward adjustment on her mortgage unless the Fed cut its short-term rate target to 2 percent.

“These loans are designed to make borrowers refinance and keep the loan production mill churning,” Mr. Lawler said.

Mr. Calhoun of the Center for Responsible Lending said that few borrowers, subprime or not, would be able to survive a reset shock that increased their monthly payments by as much as 50 percent. Ditto for serial refinancing deals that generate fees of 6 to 10 percent of the total loan value each time.

“Probably the majority of homeowners who have been in their house for a while could not afford payments on those loans,” he said.

While subprime borrowers try to climb out of the holes they fell into, those who sold and packaged the loans are laughing all the way to the bank. “Folks who ran these companies are going to walk away not just unscathed but extraordinarily well rewarded,” Mr. Calhoun said.

Josh Rosner, a managing director at Graham Fisher, an investment research firm in New York and an expert on mortgage securities, says he has watched with interest and exasperation as the same groups of people who pushed for higher homeownership rates now recommend ill-conceived bailouts. He also believes that the current system creates incentives for people to strip equity from their homes rather than use their mortgages as a forced savings device.

“If you’re trying to do social engineering, it should be to put people in homes so they can build up equity as a cushion for economic shock,” Mr. Rosner said. “But unless they have significant equity, they are not homeowners; they are renters. We’ve created a society where we love the term homeownership, yet we can’t allow people to understand that they are being taken advantage of by the term.”

skibum Says:

(As I believed all along, it comes down to the misguided and poorly thought out liberal do-good mentality, yet again).

As compared with the well thought out liberal do-good mentality, espoused by such notable liberals as me. Problems occur if your policy is to enable dodgy market solutions to dodgy market problems...

The policy dislocation between these two paragraphs is your problem, right there:

"Citing studies showing that high rates of homeownership generate financial wealth for borrowers, reduce crime and stimulate economic growth, the group agreed to a list of initiatives. One was to make financing arrangements for borrowers more affordable and flexible.

Lenders were off to the races. They created slick new mortgage products with low “teaser” interest rates that ratcheted up significantly after two years or so. They devised loans that required only the payment of interest, not principal as well. They extended mortgages to 50-year terms to reduce monthly payments."

Apart from the fact that similar banking products have been offered around the world throughout the boom without National Homeownership Strategies. I doubt whether policy apparatchiks in the Clinton administration would have premised their strategy on a belief that it will always go up. The NYT seems to have blurred quite a few things together to try to smear the Clinton policy platform as a discrete agenda. Does NYT generally lean right?

"The “boomerang” kids that move back home in their 20’s are bad but anyone that moves back home in their 30’s is truly pathetic… "

I left my parents home at 18.5 yrs and never looked back. In fact have not been in contact since. And loving every minute of it since.