patrick.net

@SFWoman,
...the middle is increasingly being pushed downward economically while at the same time living an aspirationally driven lifestyle financed by easy credit.

As that easy credit is withdrawn, I wonder about the deflationary impact and how it will impact the income generation potential of the middle class. At the same time, over the next three decades we will see demographic pressures boost wage inflation as the size of the working population falls in the developed world (and the developing world is not producing enough skilled workers to make up the difference). It will be a crucial tug-of-war between these (and other, like technology) deflationary and inflationary pressures. BTW, what kind of income and assets do you consider middle class?

@Randy H,
If so I propose FS, which is what many of us are likely to become if there’s a giant bailout funded on the backs of our savings and larger tax burden).

If bailout legislation of that magnitude passes, then I'm hiring you to help me work out the most tax-efficient and timely way to strike 90% of my dollar-denominated positions and redomiciling my business offshore. The way I see it, if the U.S. turns hostile against savers, investors and businesses almost to the degree of various second- and third-rate economies around the world, I might as well move to a location where there is an up, instead of staying where the trend is down for the forseeable future.

apostasy said:
what kind of income and assets do you consider middle class?

That's easy.

If you have a comfortable life and can afford all your necessities (food, shelter, transport, clothing AND savings), but still have to work for a living, you're middle class.

Even if you can survive several months without a job, but eventually will run out of money, then you are middle class.

SP

My understanding of the Fed's approach currently is that they aren't really denying that there will be failures or that they can save any hedge fund, most mortgage firms and ALL the banks.

They are simply trying to control "the failure rate".

I haven't read all the posts on this thread (not enough time right now) so this may have already been suggested.

You can get the plot ID# for any property off of zillow. Then go to the county (wherever the property is) assessors website and there's a good chance you can do a search which will give you the property owner's name. I do it all the time.

Did anyone else see the Chicago bond-guy market reporter on CNBC this morning hold up the "Mr. Housing Bubble" logo t-shirt?

I guess it's officially mainstream now.

Randy H,

Seriously? Rick Santelli? Good for you Rick! Tell it like it is baby!

Peter P,

Hot off the presses is today's Idaho Statesmen annual best-of reviews here in Boise.

Best Shusi

Shige Japanese Cuisine, 100 N. 8th St.

Hon. Mention Shusi

Koi, 800 W. Idaho St.
Zutto Japanese REstaurant, 615 W. Main St.
Fujiama, 283 N. Milwaukee St.

Make that "Sushi".

Hey, did anyone note that the skull and crossbones image on the "F the Rich" thread has changed? I'm betting the shirt shop changed it without telling anyone.

DinOR

It was the Rickster. I can imagine him wearing Mr. Bubbles as he orders his cheeseburger at Bill Goat.

It's times when I see the talking heads argue on CNBC and Santelli is the only one telling it like it is, that I really start to miss Chi-town. The winters are cold, but the people are real.

You know real estate's in trouble when even the sheeple are complaining about the prices!

*Billy

Hot off the presses is today’s Idaho Statesmen annual best-of reviews here in Boise.

Thanks... if I visit Boise, I know where to go...

I do want to visit Coeur d'Alene.

Today I heard new housing sales for juli were up against june. A while ago you explained how this number does not really reflect true new housing sales. I can vaguely remember you sad something about buying options that are included in the number but I am not sure. Could you please tell me the name of the indicator and what it tells? Thank you.

>> our universities have serious problems. ive been around these VC firms here in SV, all these golden startups are is a bunch of rich kids who played volleyball at Stanford. blah blah Web 2.0 blah blah startup blah blah Social Networking.

Original Bankster,

The more selective the school, the greater the admissions advantage enjoyed by recruited athletes. And once in college, recruited athletes in golf, fencing, crew, squash, polo, and other upper class sports often sink to the bottom of their classes academically.

Please read:

http://bensbookblog.blogspot.com/2007/02/price-of-admission-by-daniel-golden.html

This is a sad but true tale about the reality of college admissions at some of the most elite universities in America. It proves what we've all come to know, that money talks, its who you know, and it pays to be famous. Working hard is for stiffs, especially if you're Asian. There are some beacons of hope to help root out such instituionalized corruption. Caltech is cited as the school setting the trend. But don't hold your breath for the system to change anytime soon.

The number of whites enjoying preference [for college admissions] far outweighs the number of minorities aided by affirmative action. At least 1/3 of the students at elite universities, and at least ½ at liberal arts colleges are flagged for preferential treatment in the admissions process. P6

Students without any non-academic preference are vying for only 40% of the slots at Ivy League schools. P7

Only 3 to 11% of students at America’s most selective universities come from the lowest income quartile. Asian American are disproportionately affected – rebuffed by what appears to be an informal quota system. P11

Senator Bill Frist, who opposes affirmative action for minorities, apparently did not object to preferential treatment for his eldest son… Princeton admission officers were taken aback [Frist’s son background]: his grades and test scores fell far below university standards. On a 1 to 5 scale (5 being lowest) – he was a 5… Frist was a Princeton alumnus and his family donated $25M in 1997… No wonder that the newly appointed Princeton president advised her admissions staff that Frist’s son was a high priority. His son was admitted. In 2004, his Sophomore year he was arrested for drunk driving in. At the time of publication, he had not yet graduated. P12-6

Harvard looks out for its own
Harvard admits fewer than 1 in 10 applicants, turning down more than ½ of candidates with perfect SAT scores. P25 So even if you ace the SAT with a 1600, you’ve only got a 50% chance of being accepted at Harvard. How do you like them apples?

Harvard enrolled 336 children of about the 340 eligible children from the families who serve on its fund raising committee – an astonishing enrollment rate. P26

Legacies [alumni chidren, donor children, famous children] account for 13% of the student body. P28

72% of the students on the z-list [admission is deferred by 1 year] are alumni children… For Harvard, deferral was a no-lose proposition: either it would discourage underqualified legacies from enrolling without actually rejecting them, thus preserving academic quality and donor goodwill, or the students would mature in their year off, readying them for Harvard. It turns out however that most z-listers are willing to wait for a Harvard education. P39 Why do the wait? Because their 2nd choice option – without having the alumni or donor connection to leverage– will be a huge step down from Harvard for most academically weak students.

For well connected students, the z-list isn’t the only roundabout route to Harvard. Harvard typically admits only 5% of its transfer candidates – but children of alumni and donors enjoy a marked preference. P40

It’s much tougher to get into Harvard than to graduate from it; 97% of those who matriculate emerge with a degree. Therefore honors awarded upon graduation offer a better yardstick for measuring academic prowess. Data show that donor children were far more likely to graduate without honors than the Harvard average. P42

Duke's fundraising engine
Great universities profess to safeguard the quality of their student bodies by constructing a firewall between fundraising and admissions. In reality there is no such wall – not even a shallow trench. Almost every university takes development admits… Like other nonprofits, seeking funding, they’ve discovered the easiest way is to admit the children of the rich. P55

Duke relaxed its standards to admit more than 100 applicants a year, with more than ½ enrolling (3 to 5% of the incoming class). Many of their grateful parents joined Duke’s fundraising group, which led all universities in 1990s in unrestricted gifts from non-alumni parents. P57 Quid pro quo alive and well in North Carolina.

Eager to place as many graduates as possible at top institutions, prep school counselors help colleges identify development admits, often through an unobtrusive phrase or two in a letter of recommendation stating that the parents have been generous to the prep school and are likely to give to their child’s college as well. The prep school’s fund raising office may call the college to reinforce the message. P59

How much does it really cost to buy your child’s way into college? $20,000 is enough to draw the attention of a liberal arts college with an endowment in the $100M range. At an exclusive college, it can take at least $50,000 with some assurance of future, greater donations. At a top 25, a minimum of $100,000; for the top 10, at least $250,000 and often over $1M. p60

For celebrity applicants like Lauren Bush – niece of President GW Bush, there’s no such thing as a deadline. A month after the Princeton deadline had passed, Lauren contacted the university. And despite SAT scores considerably below average for Princeton, and a ‘B’ high school GPA, she was admitted. P93

Brown: Hollywood U
Brown is the college of the famous and celebrity children. However, these celebrity students lag behind their more obscure classmates. 20% of Brown seniors graduate with high honors. 0% of the celebrity children do. 30% of Brown graduates receive distinction, but only 12% of celebrity kids achieve the same. P94

Notre Dame’s average of 1394 for admitted students is artificially deflated by the lower scores of legacies, athletes, and donors. Applicants without preference actually need a 1470 (that is the Harvard average by the way). P120

50% of legacy applicants to selective colleges boasted incomes in the top 25%, as against 39% of nonlegacy applicants. Princeton President William Bowen states “Legacy preference serve to reproduce the high income/high education/while profile that is characteristic of these schools.”… Legacies are more likely to afford private schools, tutors, test prep courses, etc. that usually translate into higher test scores… Alumni children should be high achievers; by definition, they start with the advantage of having at least one college educated parent. To equalize opportunity, alumni children would need to be held to a higher standard, not a lower one. P121

Penn explicitly links alumni child preference and early decision, urging alumni children to apply early for maximum consideration for the legacy affiliation. P122

Alumni contributed $7.1B to higher education in 2005, representing nearly 28% of all private giving to colleges… You gotta believe that some of that is donated in thanks for children already admitted to the alma mater, or in the expectation that a sizeable check will smooth future acceptance. P126

In 1952, Harvard admitted 63% of all applicants. In 2002, it admitted only 11% of overall applicants, but 40% of legacy candidates. P129

The more selective the school, the greater the admissions advantage enjoyed by recruited athletes. And once in college, recruited athletes in golf, fencing, crew, squash, polo, and other upper class sports often sink to the bottom of their classes academically. Why do colleges compromise their admission standards for athletes in marginal sports that don’t enhance ethnic diversity and rarely generate media revenues? The kindest explanation is that they are simply pursuing excellence in all their endeavors. P156 Or could it be that these sports preferentially filter out low income, minority candidates, allowing the university to recruit a wealthy, white student body? Nah.

Since most universities have faculty committees overseeing undergraduate admissions, and since it’s easier to replace an administrator than a professor with lifetime tenure, the last thing any admissions staff wants is to alienate faculty… Faculty children often receive an edge bigger than that given to alumni offspring. P179

33% of faculty children at research universities attend the parent’s institution if offers them a financial incentive to do so. If the institution pays the same share of tuition no matter where the child goes, then only 13% stay. P184

Are you smart enough to be rejected by Vandy?
Vanderbilt’s tuition reimbursement plan had a bizarre twist. It would pay 94% of tuition at any other institution only if the Vanderbilt had rejected the child. The concept was that a faculty child who aspired to Vanderbilt should not be penalized for being turned down, but in practice it offered a perverse incentive to fail. Brilliant Vanderbilt offspring contrived ways of being rebuffed so they could go to Harvard or Yale on Vanderbilt’s dime. Some students would apply to the music program when they couldn’t play a note, knowing that entry required an audition. One conniver showed up purporting to be proficient at the oboe, then surveyed an array of wind instruments before asking ‘Which one is the oboe?’. P186

An asian applicant needs to score 50 points higher on the SAT than other applicants just to have the same chance of admission. Being an alumni child, by contrast, confers a 160 point advantage… Black and Hispanic lag 100-125 points below whites. P204

UC Berkeley turned down 1421 Californians with SAT scores above 1400. 662 were Asian. Of the 359 students accepted with scores below 1000, 231 were Black, Hispanic or Native American. The UC Regents chairman accused his flagship campus of ‘blatantly’ discriminating against Asians. P211

We're number 1!
In 1999 US News anointed the California Institute of Technology (Caltech) as the nation’s best university. How could a tiny engineering school surpass Harvard, Yale, Stanford, and even MIT? Yielding to critical pressure from the established elite, the magazine changed its criteria. Caltech, which otherwise, might have stayed on the top for years, instead slid back to the bottom half of the top 10, saving the Ivies and other powerhouses from perennial embarrassment. Yet there’s good reason for putting Caltech a notch above the rest: the Pasadena school comes closer than any other major American university to admitting a student body purely on academic merit. Caltech doesn’t compromise admissions standards to attract donations or foster to a wealthy alumni base. Nobody gets into Caltech because their families are rich, famous, or well connected; they get because of their talent, period. P261 I could not have said it better. – Ben Sharma, Caltech Grad, class of 1988.

Caltech admissions committees hold alumni and faculty children applicants to a higher standard. Being a legacy could have a negative effect. P262

Without underperforming rich kids dragging down the overall quality, the average SAT score in 2003 was 1505, including a remarkable 775 in math… About 85% of the students graduated from public high schools vs. 40-45% at the Ivies. P263

Caltech’s grueling curriculum leaves no refuge for less than brilliant minds – white, black, rich, poor. Caltech students take 6 classes per semester – 2 more than at most colleges. Rarely is credit granted for AP courses [I took over 8 AP courses in high school and receive only 1 semester credit in one course while the University of Arizona granted me admission into the 2nd semester of Sophomore year via AP credits]. Nor is a failing grade erased from a student’s transcript, as it is from some universities, if a person retakes the class and passes. ‘Everyone understands the enormous challenge represented by admission to Caltech’ Nobel laureate David Baltimore told me in his office. ‘Only the rare, special student can handle Caltech.’ Caltech professor David Polizter, 2004 Nobel prize winner in physics, said he would not have survived as an undergraduate: ‘I’m too slow. The pace here is outrageous.’ He is a Univ of Mich undergraduate, and Harvard PhD graduate. Caltech demands more gray matter than an Ivy League. ‘At Harvard and Yale, grades don’t mean squat. The goal is to become CEO of some Fortune 500 or President of the US. At Caltech, there isn’t much else besides academics.’ P278 [I can personally tell you that I never worked harder, or suffered more than my four years at Caltech.]

Today I heard new housing sales for juli were up against june. A while ago you explained how this number does not really reflect true new housing sales. I can vaguely remember you sad something about buying options that are included in the number but I am not sure. Could you please tell me the name of the indicator and what it tells? Thank you.

Sales are up, BUT prices are DOWN

@DinOR,

I'm no big fan of Michelle Malkin or any demagogue either right or left, but sometimes, just sometimes... she hits the nail right on the head.

@DennisN,

Yup, the t-shirt site moved that jpeg. Np- I just used anopther.

@Surfer-X,

Thanks --the Mrs. & I will get back to you very soon.

@HARM,

Yeah, I hear ya. In our house she isn't so much popular for her "views" as the fact that she's a Filipina AND opinionated! What ISN'T an emotional issue for her!? From a cultural standpoint she's bridge between the sterotypical "submissive asian female" and reality. It seems many asian cultures interpret an out-spoken female in public as crude and unrefined.

Evidently *astrid was absent for these "grooming" sessions as well!

MM's responses weren't so much "knee-jerk" bail-out=liberal policy, b/c she lambasted "William" Gross as well. Do these guys have an exaggerated sense of self importance or what? Where does some bond guy come off like that!? Dude, go back to toiling in anonymity.

HARM the Mrs. was serious, let us know when you what the omelet.

What omelet? :)

You went to CalTech, too PermaRenter? When were you there? I agree it is a grueling place: the incredible workload, along with my general upreparedness for it, led to me failing out after two years.

I was generally unhappy there, due to the amazingly bad "ratio" but that was probably really only ancillary to my academic issues.

LowlySmartRenter Says:

Greenland has about 8% of the world’s glaciers, all melting right now, and falling on London and Amsterdam

gravity works in mysterious ways... ironically, oz is in a 7 year drought, and even large parts of the US are in drought right now. and yet london recycles more water in the urban context than anywhere in australia.

But it’s not likely most Europeans will want to put up with the likes of Bush. I think they’d rather drown.

enough said. they get 'socialized medicine' after all... (cializ anyone?)

Peter P Says:
I have to agree Italy has a lot of cheap, good food. But they were still using LIRA when I visited.

at least with euros they can't pretend you handed them a 10000 lira note when it was a 100000 lira note when giving you change... although introduction of the euro seemed to result in a massive rounding up of prices everywhere, even in formerly cheap places like italy and spain, creating systemic inflation...

Bank Protection Act of 2007

isn't that why they invented centralised reserve banks?

http://en.wikipedia.org/wiki/Federal_Reserve_System#History

HARM Says:
I’m no big fan of Michelle Malkin or any demagogue either right or left, but sometimes, just sometimes… she hits the nail right on the head.

hmm, even a stopped clock is right twice a day... and robert kiyosaki...

Kiyosaki is telling us to load up on silver now...right when digital cameras have obviated the need for silver.

DennisN Says:
Kiyosaki is telling us to load up on silver now…right when digital cameras have obviated the need for silver.

hmm, bring back the days of bimetallism...

kiyosaki just reads what someone fairly reputable commentator wrote and repeats it 2 days later... i could do that, just have to create a cult of personality first...

i could do that, just have to create a cult of personality first…

I know the first step you can take in that direction...

On the released number of "New Home Sales".

Today I heard new housing sales for juli were up against june. A while ago you explained how this number does not really reflect true new housing sales. I can vaguely remember you sad something about buying options that are included in the number but I am not sure. Could you please tell me the name of the indicator and what it tells? Thank you.

Sales are up, BUT prices are DOWN

More than that. These tactics have gotten so old that the Patrick.net regulars don't even bother commenting on it.

First, the sales include contracts that can be canceled. So it's not a true statistic. Second the prices are not (and cannot be) adjusted for free upgrades. So the real prices are down much more.

Third the more important trend indicator, compare against YOY - the sales are DOWN. The sales are lowest July sales since 2000. Similarly the YOY median price is DOWN. The DROP in median (3.4%) is highest YOY drop since Oct 2001.

None of what a Patrick.net regular typically will highlight, will ever be used as a MSM headline. The important details will be buried inside the story and headline will try be a cheerleader as much as possible.

For housing news, ignore MSM and use the blogs.

OT interesting artcile(long though)

http://theaveragejoeinvestor.blogspot.com/

whew.......

glad to see the market rebound and that new homes data......

for a minute there i thought we were headed for a rate cut!!!

(beware the sarcastic poster)

The uptick in home sales of 2.8% is vs what base? I searched all over the news and none of them seem to quote the base upon which the 2.8% is computed.

Is it based on YOY comparison or vs. June 07?

Is it based on YOY comparison or vs. June 07?

Perhaps June 1932. :lol:

Is it based on YOY comparison or vs. June 07?

it's vs June 07. YOY, it was down around 10%.

Also, the data is little old. i believe the current market purchases will show in sep'07

Is there a technical term for people who were unqualified cheerleaders for the housing bubble, but have now started issuing statements that are attempts to cover up their old sins?

This particular fellow comes to mind:

“‘Over the last couple of years, people became so desperate to buy a home that they stopped asking what the payments would be over time,’ said Nicolas P. Retsinas, director of Harvard University’s Joint Center for Housing Studies. ‘The only question they asked is what’s the least possible payment I can make next month so I can afford to buy that house.’”

The volume of new home sales increased by 2.8% in July compared to June. However, sales in July 2007 were 10.8% lower than the sales in July of 2006. Of course, the effect of cancellations could undermine this growth in sales volume.

The median price of a new home rose by 3.9% (to $239k) during July, but is up by only 0.6% since last July.

It is taking much longer to sell a new home this year as well (6.1 months compared to 3.6 months last July).

On August 20, I had posted:
Hate to be the bearer of bad rumours, but the jungle telegraph is saying Bernanke is going to do something more tomorrow to prop up the financial sector. The banks have served notice that they can’t keep up with the maturing repo obligations.

Exactly what he will do is the subject of much speculation. Monkeys on tv are chattering about a rate cut, others are saying it will be less public than that.

I still don't exactly know whether the rumor was true, but I found this article that may be a possible clue.
http://tinyurl.com/yt46we

"The Aug. 20 letters from the Fed to Citigroup and Bank of America state that the Fed, which regulates large parts of the U.S. financial system, has agreed to exempt both banks from rules that effectively limit the amount of lending that their federally-insured banks can do with their brokerage affiliates."

SP

Thanks for the clarifications provided by fellow bloggers above, that's why I stopped trusting MSM numbers.

I was watching a footage of CNBC aired a week ago when DOW first headed down 200+ point and eventually came back positive + 10 points or something just before the close. The crowd at the back were cheering as Maria Bartiromo exclaimed at the front, yeah, we are positive, what a come back!

What do they think DOW has become? Spectator sports game? What the hell is positive anyway? If expressed in Euro terms, and adjusted for inflation, is the positive really positive?

Owner Identity?

I was on the Spoke Software site. A San Mateo company that has thousands of employee records. I sure think many employers or even employees would be shocked to find insider info was available to
anyone. To me these guys are scum and care very little when info can
be traded for money.

http://www.spoke.com/

Remember - the Census Bureau will revise July housing figures two more times before arriving at a final figure. For some time now, the final revision has been sharply lower than the initial estimate.

Not only are the Census figures based on contracts for sale, and not only do they not record cancellations, they also do not include cancelled-contract houses in their unsold inventory totals, producing positive distortion in down market conditions.