patrick.net

Is Russia willing to go to war over that? That is really what you are asking.

I'm sure our guys could cause plenty of disruption and mayhem internally there to mitigate any real Russian response.

Who continue to play by the rules when the stakes are so high? Have the old sets of rules just become outdated?

China's reaction as their economy collapses and internal disorder spreads is what really scares me. They cannot project yet and I'm sure they would prefer to bide their time, but cornered they become very unpredictable. We would be wise to strengthen our ties and alliances with them in any way we can as soon as possible.

The thing is even after the 100K reduction in wishing price, it is still overpriced by at least 150K if not by 200K.
And if the CME Case/Shiller San Francisco Housing Futures are to be believed, we are talking about a 1 to 1.5% price decline per month. Mispricing and chasing the market down for the next year has some serious repercussions. I was looking at Dublin houses on Craigslist after you mentioned the high percentage of REOs/short sales. I still can't wrap my head around how much people are paying for homes -- out there! Looks like the commuter friendly stock (in new developments by BART) are being deeply discounted (that'll leave a mark). Relitters are manning the barricades at the Caldecott tunnel to make sure none of that bad mojo makes it into East Bay Prime country. What, a fourth bore, is that a giant sucking sound I hear?

“squatting” in their own home

On the bright side, we may not see a drop in consumer spending. $4000 a month of mortgage savings, I am thinking conusmers might come out stronger in a couple of years. More people start squatting, more savings for them. Heck, they could form a lobbying organization.

sa,

They already have! Their "voting with their wallet"! Like most everyone here, the Sinclairs are coming to the realization that having to feed that monster of a mortgage leaves little left for discretionary spending.

They've seen both sides now. Big (but largely empty) house and *no Applebees or... ditch the millstone payments and live a little! SP explains it better than I do but rather than have a little loose cash at the end of a payday Americans opted for the Semi-Annual MEW Orgy. Looks like they're changing their minds. Hope this doesn't catch on..?

I agree with sa.

If people are free from paying ridiculous amount of mortgage for their homes, they will have so much more discretionary spending.

Think about how much mental and financial pressure you'll have if you have to dedicate one spouse' paycheck entirely to P&I, tax, insurance and maintenance of a home, which is what most recent buyers are facing these days.

Just think, if they managed this for a year they'll have an extra $48,000 in their pocket - but I expect that 1) from what they said they are not earning that $4000 a month and 2) they are spending a big chunk of what they are saving by not paying their mortgage - they have to "treat" themselves after all!

Another thing - one of their plans is to file for Chapter 7 - why would they need to do that unless they don't have a non-recourse loan and they have already refinanced and maybe liberated some more equity on the way?

If we are going into a recession, why is this necessary? I assume someone deemed it so and lobbied for it, but why?

http://www.dhs.gov/xnews/releases/pr_1207334008610.shtm

BAI,

pay attention the following two requirements:

* Have successfully completed a degree in science, technology, engineering, or mathematics (STEM) included in the DHS STEM Designated Degree Program List from a college or university certified by the U.S. Immigration and Customs Enforcement’s Student and Exchange Visitor Program;
* Be working for a U.S. employer in a job directly related to the student’s major area of study;

this precludes the liberals arts or social science, economics, business majors where most job losses will occur. What kind of scientific or engineering skills do you think mortgage banker or builder salesman have? Zilch.

I am all for importing people with scientific and engineering skills. Liberal arts international students? Let's ship them right back to where they come from.

Claire,

Don't laugh! I've had similar thoughts along those lines. Here's how it could work;

Lender (since the borrowers are in arrears already anyway..) agrees to freeze the loan for 12 months. Borrower agrees to set aside brunt of what they're *not paying into some sort of escrow account. At end of 12 month period buyer actually has some liquidity w/ which to renegotiate the terms of the loan?

Might eliminate (or seriously reduce the need) for PMI. Borrower cannot claim BK during the reneg. phase of the agreement. Borrower may sell home for full amount owed at any time. Borrower must agree to keep home in tip top shape contingent on inspection (no trashing parties) if they decide to leave at the end of 12 mos. w/ their "walking money". Walking money will be paid directly to their new landlord if they decide they can't handle the payments.

We're just giving these people all the power in negotiating these things! The bank's only option is to take it up the @$$ and like it. A little carrot, a little stick. These lenders need to get over the "We're shell-shocked" phase and start sucking it up. Not ALL the help can come from DC (you pukes)

When the Japanese fought the second world war, they exhausted all young people of a certain age group outside of college in the first phase. Then they had to tap into the college students (going to college was a privilege back then).

The first batch to send to battlefield were liberal arts with philosophy major being the top of (ok to die) list. As the war dragged on, the second batch to tap into were business and social science major. Right before the end of the war, Japanese were so desperate that they were about to send their science major to the battlefield. The batch that they fought hard to keep at home were engineering majors.

OO
I wasn't trying to make an argument against temporary slave visas - just wondering why they're necessary now, if doomsday is upon us.

As I was reading your response, it occured to me that since this is DHS, it may be that the lobbying occured 2-3 yrs ago, but they only now got around to making the rule :-)

For what good it did them.

The first batch to send to battlefield were liberal arts with philosophy major being the top of (ok to die) list. As the war dragged on, the second batch to tap into were business and social science major. Right before the end of the war, Japanese were so desperate that they were about to send their science major to the battlefield. The batch that they fought hard to keep at home were engineering majors.

OO
Is this actually true ??!! It seems stunning to me.

BAI,

whatever foreign science and engineering slaves we can keep in this country will be a loss to their home country. Keep that in mind.

I am all for banning international students of majors other than science and engineering from getting a job in the US at all. We don't need them, we actually have so many of our own homegrown graduates that we need to export.

BAI,

it was completely true. The dad of a good friend of mine (Japanese) was a Biology student at Tokyo University at that time. Tokyo U was deemed the most prestigious university in Japan and it still is. By 1944, his dad got the draft. He said that all his liberal arts and social science students had all been drafted and sent to the battlefield two years before.

It was lucky for him that the war ended with us dropping two nuclear bombs, before the draft was put into practice.

I am all for importing people with scientific and engineering skills. Liberal arts international students? Let’s ship them right back to where they come from.

I am all for unrestricted immigration IF the welfare state can somehow be dismantled.

Let Free Market decide!

OO
re japanese and the draft in wwii

Wow! Even though I see the logic in it, I still find it stunning that they had that much discipline, even in the midst of such a terrible war.

I have to say that it's doubly smart. You not only preserve your "brains", but "brainiacs" tend not to be that physically imposing (I know I'm stereotyping, but indulge me please). Better to send your Steve Balmers to mano-a-mano war, than your Bill Gates!

I am all for banning international students of majors other than science and engineering from getting a job in the US at all. We don’t need them, we actually have so many of our own homegrown graduates that we need to export.

LET THE MARKET DECIDE!

Sorry for yelling. I need some honey please.

LET THE MARKET DECIDE!

You keep repeating that mantra Peter P. Hasn't the housing "market" of the last few years given you any reason for a modicum of skepticism? :-)

Well my point was simply that the battlefield needs engineers too! When the replacement commander arrived on Iwo Jima he couldn't believe they were digging trenches right in the beach. They were only marginally dug in when American forces arrived.

That aside I don't believe any engineer's life is more valuable than mine or anyone else's for that matter. If you love your country, here's your shovel and here's your rifle.

Bubbles are not avoidable in any capital market driven by people. We just have to live with them.

Market interventions do tend to exacerbate asset bubbles because regulations are themselves reflexive.

The Japanese were not ranking the life of its citizens, it is ranking the usefulness of its citizens in a combat situation, particularly those who carried the hope of the country.

If it didn't preserve so many science and engineering students during the war, it most certainly wouldn't be able to rebuild its industrial might quickly after the war, and re-emerged as the second biggest economy.

Back to our OPT and H1B issue. Every single science and engineering talent from foreign country that we can keep, is a loss to their home country, so it is a 0-sum game that we must win. I think it is a good process of giving all of these students OPT of a certain period. If they are good enough, they will be kept by their employer, who would then file for H1B and GC petition for them. If they are not good enough, let them go. That is letting the market decide.

That aside I don’t believe any engineer’s life is more valuable than mine or anyone else’s for that matter. If you love your country, here’s your shovel and here’s your rifle.

That's typically/traditionally what most societies believe (or so I thought). That's why I was so surprised that the japanese would think/act otherwise.

Anyway I'm sure they had some engineers in battle. It just seems (from what OO is saying) that they made an effort not to "waste" their brainiacs as cannon fodder.

Market interventions do tend to exacerbate asset bubbles because regulations are themselves reflexive.

Perhaps. But to this idiot it seems highly suspicious that there is a conicidence of market intervention - in the sense of lifting regulations - and bubbles. You never hear of a bubble because of too much regulation. At least not in anything as "boring" an asset class as the US *national* housing market should be.

Every single science and engineering talent from foreign country that we can keep, is a loss to their home country, so it is a 0-sum game that we must win.

The same is true for all kinds of talent. Engineering is great but it is meaningless in a vacuum.

A great salesman can make a fortune selling crap. Engineering masterpieces ain't worth nothing without the market.

The preservation of science and engineering students is not unique to Japanese, it is the same with Chinese. During WWII, all the science and engineering college students were rounded up, sent to the inland and NOT drafted at all. A Nobel laureate in Physics, CN Yang, was a product of this era.

On the other hand, liberal arts students were encouraged to go to the war, or more actively participate in the war. Chinese students in college were in fact discouraged from studying subjects other than science and engineering because that was seen as useless for serving one's country. Such a tradition continued all the way into the 80s, until they started to figure out finance could make more money.

"the hope of the country" IS... the guy in the trenches!

"rebuild it's industrial might" (you mean that "we" rebuilt?) You mean the rebuilding effort that should have went into the Philippines (our allies) instead? I guess I'll never understand that part?

You never hear of a bubble because of too much regulation.

Tax incentives... artificially low interest rates... FHA... should I continue?

The hope of a country is FAITH.

Sorry, I just think science and engineering are over-rated. We need more right-brain talents.

Peter P

tax incentives and FHA were there before but didn't cause a national bubble.

Artificially low interest rates are artificial only in the eye of the beholder. And they didn't cause the bubble. Lack of enforcement of sensible regulation did. Regulation that existed before and will exist again in the future. Low rates are just extra fuel.

FAITH

is this an acronym?

Lack of enforcement of sensible regulation did.

This is like saying gun confiscation is the only way to prevent crime.

It is *a* way (not the only way) to prevent a certain type of crime. However, there's something in the constitution about it. Nothing there about flipping, I/Os, ARMs. $0 down, securitization of loans masquarading as AAA (there's your free market for you!) etc etc etc

It is *a* way (not the only way) to prevent a certain type of crime.

That way is as effective as outlawing crime.

Before the late 1960's, as far as I know, there were no quotas for highly educated immigrants, at least on any meaningful scale. Yet our country did fine and in fact thrived with masses of the "uneducated" and "lower class" immigrants that came - Eastern Europeans, Irish, etc etc.

Why is it that different today? I know I know, today's economy is based on "high tech." But, do we really have so little faith in our home-grown education system that we have to import educated workers?

That's lame.

But, do we really have so little faith in our home-grown education system that we have to import educated workers?

Well, the education system outlawed faith. Enough said.

That way is as effective as outlawing crime

If so then maybe we should consider that path. Over the centuries crime has been outlawed by most and it seems to have worked rather well. When the laws and regulations are intelligent and intelligently enforced that is. ANything can be taken to extremes.

The fact is, we are not generating enough of these "well-educated" people in subjects we need.

If there were enough home-grown Americans who were studying science and engineering at college and graduate school level to begin with, our schools wouldn't have been admitting that many international students *on scholarship*, and our employers wouldn't have had enough clout to lobby for H1Bs.

Home grown Americans are more interested in instant profit, so we have more-than-adequate supply of MBAs and JDs. That's also precisely why you seldom see any foreigner studying at business school or law school on scholarship. Even there are, most of the foreign MBAs and JDs have to head home right after they finish their studies because given the fierce competition from domestic graduates, they cannot find a job here!