patrick.net

You know what an insult it is for me to hear the bailout plans for fixing loans at 5.5%? With perfect credit, the best I EVER got was 5.75% on a 15 year fixed. How is this a fair solution? This is not even just a handout, it is preferential treatment, and completely backwards.

This kind of thing is *exactly* why I made that comment about recklessly overborrowing being economically "rational" behavior. We have rigged the system to reward the corrupt and stupid.

Malcolm,

Thanks. I see a good many of them in DC, but DC is pretty southern.

In the nice southern MD/northern VA suburbs, the roads get resurfaced every year or every other year.

California has great twisty roads though, nothing I've seen on the East Coast compares.

Thank you for proving my point. 150-200K for doctors is pretty much the norm. And in 10-15 years, these doctors will be making 3-6X that amount. Thanks for the example!

This sounds like classic MP/CR/FR style.

Let me just say (I have like 4 versions of this statement in moderation as we speak) that BB is full of $hit. 150-200K is for Las Vegas, not the Bay Area. The salary increases over the years not as a default. You have to work your butt off to build a practice. On top of that, a doctor's salary is supposed to be the "middle class" norm for buying in the Bay Area? Where is the logic?

skibum,

I have "liberated" your comments in moderation and deleted the copies.

Looks like the older comments just came out of moderation - thanks Randy.

oops - thanks HARM!

skibum,

Do not attempt to resist. You will be assimilated.

In five years' time, SF's economy will be entirely composed of VC and HF managers with a minimum networth of $25 million.

I think I'm in love with Kathleen Pender.

BigBrother,

I read.

But I'm jumping ahead. If we're suppose to assume SF is crammed full of doctors and lawyers making between 3 and 9 Ha Has, why not just jump ahead to people making 50 or 100 Ha Has a year?

Then maybe, just maybe, it's time to bring the Solarians into the equation.

It is your perogative that you think doctors with 10-15 years experience don’t make 300K. At any rate, continue.

It's not perogative, it's fact. Again, I won't deny that MDs in certain subspecialties make that amount, but most MDs, who are generalists, do not even come close. Stop making $hit up.

I think I’m in love with Kathleen Pender.
I have been waiting all ^@%$ing day for your comment :-)

You know, I think most people on this forum are envious of the young investment bankers making $200K/year to start. And what about the MBAs who got their degree at the University of Phoenix? $400K/year minimum.

Thanks for proving a point, skibum! You're just a jealous, bitter doctor taking things out of context. What do you have against hedge fund managers in Las Vegas? These senseless attacks are kind of like when Randy H comes to me, begging for help finding Alpha. And I'm like, look Randolph (I call him that to sound more official), I don't have time to help you find your dog. I'm tracking my shitbox appreciation on Zillow.

Just keep following the herds, kids. One day you'll be one of the Ass Effluent, just like me.

That’s not saying much, some of the roads are pretty bad here. The best roads I’ve seen for condition would have to be the east coast.

I've heard that I-95 in Georgia is absolutely horrible. No proof though. Something about a big dispute between the state and the feds over taxes...

By the way, I think it's hilariously funny that the rest of you get stuck in moderation while surfer-x and I are free to swear like sailors. :)

Well, how much oil should be is all dependent on how beaten up USD will get. It is just a way of staking the value. I believe oil will shoot up to $100 not because oil will get expensive, but because USD will lose value, and lose its status as the world's only reserve currency in which oil is traded.

However, housing won't go up due to a weakening dollar. The last time I checked, all of us working in the US are paid on USD. If you can find a deal that you can be paid in Euro, or better yet, barrels of oil, let me know cos I'd like to join that program too.

@EBGuy,

:lol: I'm seriously considering sending her flowers & candy.

I stand corrected on my US Wealth Distribution stats.

Nonetheless, my original point remains in tact. So instead of $25m putting one into the top sub-fractional percentile, it just puts one in the fractional percentile.

OO says: I believe oil will shoot up to $100 not because oil will get expensive, but because USD will lose value, and lose its status as the world’s only reserve currency in which oil is traded.

Aren't the OPEC nations trying to diversify away from the U.S. dollar? If a parallel exchange based on the Euro takes strong root, we could definitely see nasty trends in U.S. oil prices.

http://tinyurl.com/274z76

Not Investment Advice.

My favorite quote from a relitter was when I was considering a house that have been on the market for almost a full year. New construction, nice quality, all the extras......but it wasn't selling. There had to be some reason so I was going to watch it for a while. The relitter said "Won't last long at this price". Honest to Housing Bubble.....she actually said that with a straight face. A few minutes later, and too late, the perfect response came to me....."What's long....three years....four?"

My family doctor, an excellent one with almost 30 years of practice and constantly voted as one of the top doctors in BA, is making $340K in his business income filing. He may be hiding his income somewhere but I highly doubt it. I know about this because I found his business tax filing info.

BB is also exaggerating the pay of IB. Associates, VPs, Directors don't make that much in base (comparable base to doctors, big-firm lawyers), but may rake in big bucks in bonus in good years. You don't start making anywhere even close to a million, including bonus, until you become a MD. How many MDs are there in each bulge bracket bank? And they are mostly located in NYC, not SF.

BigBrother, who is full of shit, wrote:

Do you guys really doubt that salaries of ‘300K-1.5million’ is not common in consulting, finance, etc after 10-15 years experience? Kids nowadays right out of business school at 28 years old are making 300K in investment banking for example.

I just looked at the Financial Times business school survey, which tracks salaries for the top business schools averaged over 1-3 years out of MBA.

You are so f-ing full of shit. $300K? Lol.

The school I graduated from ranks in the top 5 salaries, coming in at about $150K. That's for those 28 year olds you refer to, but when they're *31*.

The two highest ranking salary schools are Harvard and Stanford, at $161K and $166K respectively. Again, those are salaries *3* years after graduating.

Reference: http://rankings.ft.com/rankings/mba/rankings.html

Oh, and what BigBrutha isn't telling you about the investment banking track is that pre-mba kids don't get paid squat. Not much better in management consulting. And if you factor the amount they get paid per hour worked it scores much lower than corporate jobs. It's not uncommon to find analysts barely making $120K in very expensive markets like SF and NYC. They only get the big coin

(a) after completing their top-ranked MBA
(b) after making through the big weed out in the associate levels. reference our friend "theotherside" who didn't make the cut, and now either sells real estate or at least crows about the virtues of real estate ownership as much as someone who sells real estate.

I read somewhere a while back that's like 5% of IBs make it that far. Most end up in corporate jobs before that, in things like Corporate Development roles or other currently in-demand finance roles. Those jobs usually pay $150K-$250K at big companies. The top of the top, VP level (or Senior Director level at huge companies) might earn $300K-$400K, plus get generous options.

So who are these "mass affluent" again? I agree with others, I think your mouth runneth effluents.

Oh, if you want to do some research on how much the people BigBruder check out:

(copy and take out spaces, spam filter avoidance)
www . vault . com
www . glocap . com

Both have PDFs you can buy which have proprietary salary data for all the high finance industries. I have last year's Vault guides to Venture Capital, Private Equity and Hedge Funds. I see very little which would qualify as BigBrudda's "mass affluent". I'd like to see where he gets his info.

Short of that, as they say, STFU. (I'm attempting to remedy GC-trollbot's accusation that I am understated.)

http://rankings.ft.com/rankings/emba/rankings.html

EMBA graduates from top schools, who are experienced professionals usually already at Director or Senior management levels, and usually aged 35 or older:

(US only)
Wharton: $263K
Kellogg: $220K
Chicago, Columbia: $201K

These programs and the others all cost over $100K in tuition. Graduates usually got to these salaries by experiencing 75%-100% salary jumps in the years after graduating, meaning they were only making $150K-ish before hand.

So again, where are these "mass affluent"? They're not coming from the B-schools as you posited. Maybe they're coming from Uranus. Dunno.

Footnote: only VPs and SVPs at Fortune 500 companies make $300K plus. There numerous smaller companies in the BA with VPs and SVPs making somewhere around 200Ks, or even less.

Even the one I know who did make $1M in the good years in high finance needed to take out mortgage to buy a $3.5M home because he didn't have enough cash at the time of purchase. These guys have extremely high operating cost. This guy and his wife go on vacation with their nanny.

Brand,
Yup. You nailed it. I'm just a JBD (jealous bitter doctor)!

This fascination with salary, again, reeks of MP/FR/CR. I get a distinct sense of deja vu here with this conversation.

OO

Dead on. I'd say there are certain hot compliance-related and M&A related finance jobs where Senior Directors at F500 are pulling in over $300K; maybe $350K tops. But those are very few. Like companies that have a separate Chief Accounting Officer or red hot M&A. I'll bet there aren't 500 of those jobs total in the entire BA.

And OO hit it squarely when he pointed out that investment banking is cyclical.

Eventually the binge on corporate liquidity will end, and then M&A will dry up. IBs will hit the streets in droves. Very very very few will ever find jobs making anything in sight of their old salaries. Most good ones will settle into corporate roles for 50-70% of their IB salaries. Most of the average ones will have trouble even getting those jobs, as there will be a glut of overeducated finance guys who're light on quant and heavy on schmooze.

Randy H says: I’ll bet there aren’t 500 of those jobs total in the entire BA.

But are there even 500 houses on the market in the $2.0-3.5M range? If every one of those people was new to the Bay Area this year and bought a house, that would mean all those houses are going to move. Some of them at a premium, because the schools are better or they have water views.

And why focus on only one industry? There is plenty of ass effluent across the spectrum of the diverse Bay Area economy. In the last few years, a lot of it pooled in real estate!

Skibum, being a doctor is very prestigious. You are a professional and thus you get to mingle with realtors who consider you their peer in their professional circles.

I do hope you read the quote as to gain the maximum humor.

Malcom---I'm curious, which do you think is more important? Physically healing people, or healing people's souls by helping them to achieve the American Dream?

Brand,

We should not forget the mortgage finance professionals and the debt collections professionals :)

Brand, a house is so much more permanent than good health. That is kinda tough. I guess I don't know.

I would choose the real estate professional if a new car comes with the house.

astrid: Mortgage brokers are like ancient alchemists. They can transmute modern lead into gold! Just think, for a few shuffles of paper, you can take a hefty commission and pass off all the risk... er, investment grade paper to a bank or hedge fund.

We mortgage brokers are pretty humble, but it's really not the sort of job that just anyone can do. You've got to attend several seminars, and there's even a test! In contrast, I figure that pretty soon robots will be setting broken bones and reading X-rays. If people have been doing those things for thousands of years, how hard can it really be? That's why we don't let doctors hang out at our parties. It's nothing personal---there's just a bar you have to jump to hang with our crowd.

Malcom says: Brand, a house is so much more permanent than good health. That is kinda tough. I guess I don’t know.

What's more important, a long, bitter life lived throwing money away to rent, or a shorter life lived in the happiness and comfort of your own home? Houses are forever, Malcom. You can't say that about health. That's why we're pushing for the Japanese model of 100 year mortgages. It's possible that one day we will be authorizing 103% loans guaranteed only by your immortal soul. Think of how rewarding that will be!

Eventually the binge on corporate liquidity will end, and then M&A will dry up. IBs will hit the streets in droves. Very very very few will ever find jobs making anything in sight of their old salaries.

Randy,
In fact, isn't it a typical scenario for M+A activity to shoot up during the last throes of an economic expansion, to the extent that it's almost a harbinger of upcoming recession?

It’s possible that one day we will be authorizing 103% loans guaranteed only by your immortal soul. Think of how rewarding that will be!

I'd take the house and mail in the soul.

Skibum, being a doctor is very prestigious. You are a professional and thus you get to mingle with realtors who consider you their peer in their professional circles.

:)

Yes, got the reference. In fact, that one should be one of the ridiculous realtor (TM) quotes - (to paraphrase) "we are professionals, just like doctors, lawyers etc., and we can't understand why there aren't more TV shows about our glamorous lives"...

Peter P - As long as we are able to print money, we will always be able to bail everybody out. This is the common ideal in socialcapitalism.

Well, this illustrates the importance to participate in asset inflation whenever possible.

So again, where are these “mass affluent”? They’re not coming from the B-schools as you posited. Maybe they’re coming from Uranus. Dunno.

Well, Uranus rules surprises. You never know... :)