patrick.net

I don't know. I think paying teachers more would be a good thing. If the wages were competitive you'd have a lot more applicants. I taught before I had my daughter and I hate to say it, but tenure is baaaad. It makes teachers complacent and unmotivated. I think that the competition a higher wage brings would result in a much more motivated workforce.

Their pay should be relative to the median income of the area.

Thanks! That is a good way to say that their pay should be decided by the market. :)

OT apologies, just can't let the vaccination discussion from last thread stand.

It is absolutely irresponsible to vaccinate children without an understanding of the risks. Fact is, vaccination DOES cause onset of autism in a subset of children. It is not even a subject for debate.

I've researched it myself extensively, and there is no way that I would vaccinate my children based on what I now know. It may well be that the greater good is served by the suffering of the few, but no russian roulette for my kids.

Some on this list seem to buy the "company" line without question, which is the equivalent of buying the AAA MBS ratings. Just because someone says it is so does not mean it is so. It is easy to dismiss as a conspiracy theory by those that don't really understand the complex machinations of interests and influence at work.

One must understand how our medical research establishment is corrupted by special interests to understand the current case study base and direction of research.

Draw your own conclusions, but Healy is in a better position to judge than anyone on this board. While she doesn't say that it is a direct casual relationship, she acknowledge the enormous pressure and meddling of the financial interests at work on the science and public health establishment.

Quoted today, CBS news, former head of NIH.

Dr. Bernadine Healy is the former head of the National Institutes of Health, and the most well-known medical voice yet to break with her colleagues on the vaccine-autism question.

Healy said: “There is a completely expressed concern that they don’t want to pursue a hypothesis because that hypothesis could be damaging to the public health community at large by scaring people. “First of all,” Healy said, “I think the public’s smarter than that. The public values vaccines. But more importantly, I don’t think you should ever turn your back on any scientific hypothesis because you’re afraid of what it might show.”

Bap, you can't pay teachers according to results unless you give them the authority to enforce the discipline required to achieve said results.

In addition to discipline, schools must also be able to expel students at will. This way, bad apples can be removed. There must be powerful incentives for students to learn, or else.

On the other hand, juvenile delinquents should be locked up.

Back on topic again.

What inflation are you talking about ? There is no inflation - just see the latest CPI. The gubbermint says that the gasoline prices actually declined. Pay no attention to prices on the pump. It's all illusion. Repeat after me, "gas prices are down, gas prices are down, gas prices are down ..."

The hedonic adjustments, seasonal adjustments, ignoring upwardly volatile food/energy prices - thank God we have enough intelligence to trick ourselves into believing anything.

Any "welfare" should be used to help people help themselves. If they do not want to help themselves, let them eat cake.

Is Obama Too Far Left on Taxes?

http://abcnews.go.com/Politics/Vote2008/Story?id=4852958&page=2

Me think that all three candidates are too far left on taxes. Any president who allows the existence of social security tax is a centrist at best.

It may well be that the greater good is served by the suffering of the few, but no russian roulette for my kids.
Oh boy, this is sounding more and more like the Prisoner's Dilemma from game theory. I think we're hosed :-)
BTW, I probably did come down hard on the Waldorf parents. They're from the "thermisol generation" and I might have had second thoughts with my own kids if that was still around. I think vaccination schedules are probably the important issue to pay attention to now.

OO and others, there was a very good thread on CR yesterday regarding Non-Borrowed Reserves and the Fed's Balance Sheet. I learned a thing or two. For instance, you can pledge subprime credit card receiveables at 60% of value at the discount window (or TAF).

SBIA,

I say, give us a 10 year of Paul Volcker, we can be even with rest of the crowd.

Paul Volcker on Inflation

northernvirginiarenter,

>Fact is, vaccination DOES cause onset of autism in a subset of children. It
>is not even a subject for debate.

False. No current research proves this theory. No matter how many times you repeat it, there was no link found between autism and vaccination.

> Draw your own conclusions, but Healy is in a better position to judge
> than anyone on this board.

Healy did not prove you point. She merely suggested that there is a certain lack of research on some side effects that might affect some subgroups of children. She is saying that officials do not want to scare public. People are easily scared and if they see an article with a headline like "SCIENTISTS HAVE FOUND A LINK BETWEEN VACCINATION AND FATAL BRAIN MUTATIONS" they won't read the rest of the article that tells a story about a single case of a poor kid in Nicaragua but will stomp each other on their way to the courtoom. What't worse, they will stop vaccinating their kids endangering not only them but the rest of the population. Just like it happened in Sweden with pertussis (1979–96), Netherlands with measles (1999–2000) and Nigeria with polio, measles, and diphtheria (2001 onward). Children and adults started to die en masse due to virtually extinct illnesses after the immunization programs have been stopped or weakened.

Your kids are your responsibility. Just do me a favor and lock them up in a Waldorf school if you decide not to vaccinate them, I don't want my kids to die because of polio outbreak.

RE: autism

At risk of being ridiculed, I still have to say that it is all in the stars.

Peter P,

Would you entrust the care of your child's health to an astrologer or to a doctor?

I intend to fulfill all legal requirements. But I would like to trust an astrologer.

Of course, we still need doctors for physical surgeries.

*** Not medical advice. ***

I support vaccinations though. The potential reward seems to outweigh any potential risk.

Remember, "scientific" studies can be constructed to show anything. Do not underestimate the corruption of Science.

BTW, Evangeline Adams was able to prove to the satisfaction of a trial judge that astrology has the "dignity of an exact science" in 1914.

Too bad mainstream science will continue to vilify astrology because of its inconvenient conclusion.

Loooooong time lurker. Great site Patrick.
Actually the investing comments are what I like best. Odd for a housing bubble site? I've made some money thanks to posters here. I ran across something I've never heard of in 15 years of following WallStreet. I immediatly thought of your site, anyone here heard of CEDE & Company?
http://www.commentamerica.com/

So many good quotes from Volker today. Hard to pick a favorite, but this one stands out.
``The Federal Reserve as other central banks is obviously taking onto its balance sheet a lot of mortgages these days,'' Volcker said. ``Well, the creators of the Federal Reserve system would be rolling over in their graves if they knew the Federal Reserve is buying mortgages.
Oh heck, how about one more since this is an inflation thread.
``If we lose confidence in the ability and the willingness of the Federal Reserve to deal with inflationary pressures'' and buttress the dollar, ``we will be in real trouble,'' Volcker said. ``That has to be very much in the forefront of our thinking. If we lose that we are back in the 1970s or worse.''

Peter P,

You are in rare form today, even by your own standards :-)

Exhibit A: >>Remember, “scientific” studies can be constructed to show anything.

Exhibit B: >>Too bad mainstream science will continue to vilify astrology because of its inconvenient conclusion.

Regular neo-libertarian trolling not working anymore?

Huh?

I am the resident mystic, don't you know? :)

BTW, I consider myself a free-market conservative with a libertarian slant. I am not a too big of a libertarian.

I have a few questions for the pro-privatization camp.

What is privatization exactly? I gather that it means our city and state services like education, police and fire departments, should be given over to bid by private firms and run tax-free. (Please correct my definition of privatization; I'm trying to learn what that term actually means).

In a private venture, the goal is profit. Right? How does a police department, fire department, or school district show a profit? And if I don't like the customer service I'm getting, can I really go to another police or fire department or transfer my kids to another district?

Your thoughts are appreciated.

Absolutely. Without a bit of inflation to 'grease the wheels' of the economy the incentive to invest is diminished. If the investment climate looks even moderately gloomy, and inflation (yes, of the monetary type) was not a worry, might as well keep your savings in a mattress. It's not altogether a bad thing though. In case you haven't noticed, the past century has been the most prosperous in history by a long shot, and since the Great Depression has been seen the longest stretch without 'panics' ever.

Some new developments I watch are finally cracking on their prices. My belief is that this will have a profound effect on the resale market. When you can buy new much cheaper than 20-30 year old homes most would chose new.
I think the 5% in Feb Case-Shiller (yes a single month) scared some builders. They are begining to look at the realistic holding costs for 2 years of chasing at least 1 percent drop each month. They are listing today at 20% of their last 2 years of asking price. Seems to me they are factoring in at least a 30% drop in those 2 years.
It is very nice to see that market forces are much more powerful than the bailout market manipulations.

It is very nice to see that market forces are much more powerful than the bailout market manipulations.

But that is the invariable truth. ;)

TO privatize public safety is a bad idea in my opinion. I want a cop that is a cop because he has the heart of a cop, not because he likes money.

We still need to make sure that cops get paid enough (market rate) though. Police corruption is rampant in countries where cops are underpaid.

In a private venture, the goal is profit. Right? How does a police department, fire department, or school district show a profit? And if I don’t like the customer service I’m getting, can I really go to another police or fire department or transfer my kids to another district?

Your thoughts are appreciated.

Easy, there are multiple police and fire services in each municipality. If you don't pay their "protection fees" they bust into your house, rape your wife, kill your kids and then burn it to the ground.

If you don't like this arrangement, you are free to start your own fire or police service to out-compete them.

Ain't the free market grand?

Bap, that is why it is especially important to have conservative judges in the Supreme Court.

I don't know why the left cries about losing liberty. All they can lose is the liberty to infringe upon the liberty of others (e.g. infanticide, forced charity, atheism, etc)

Peter P,

Umm, how is atheism infringing on liberties of others again?

If teachers are not allowed to talk about God...

Remember, even if people try to preach, one always has the freedom to ignore. I am not a very religious person anyway.

You are oversimplifying First Amendment's Free Exercise Clause vs Establishment Clause controversy that is specific to public schools.

"Teachers, as agents of the government, may not indoctrinate students in religious beliefs" - or in lack thereof. On the other hand teachers, as citizens of the United States, cannot be barred from exercising their freedom of speech.

Balancing these two basic doctrines is a very difficult and sensitive task.

Bap,

If you noticed I specifically mentioned "public schools" (schools that use federal funding) in my previous comment. The government as an employer has to follow certain set of rules defined by law. Any private company can make you sign an NDA or any other free-speech-limiting document. In this case you voluntarily forfeit your freedom of speech in exchange for certain amount of $. Local boards of education cannot make teachers sign frivolous speech-limiting contracts since they can be later contested in the court of law as contradictory to federal regulations. Right now U.S. Department of Education has the following guidelines based on various court rulings in this area :

“When acting in their official capacities as representatives of the state, teachers, school administrators, and other school employees are prohibited by the establishment clause from encouraging or discouraging prayer, and from actively participating in such activity with students. Teachers may, however, take part in religious activities where the overall context makes clear that they are not participating in their official capacities. Before school or during lunch, for example, teachers may meet with other teachers for prayer or Bible study to the same extent that they may engage in other conversation or nonreligious activities. Similarly, teachers may participate in their personal capacities in privately sponsored baccalaureate ceremonies.”

This is why privatizing schools solves a lot of problems.

Oh great, before long, Fed will be knocking on the door of renters to collect rent, or calling delinquent credit card holders to collect bad debt.

"Hello, this is the Federal Reserve, calling you about the credit card balance that you have not paid for the last 6 months"...

EBGuy,

thanks for the heads up, I am still trying to get used to the new CR format.

California man losing nine homes in mortgage mess
Sun May 11, 2008 1:21pm EDT
By Dan Whitcomb

LOS ANGELES (Reuters) - A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.

Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.

"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."

Forgaard bought a house in Santa Cruz, about 60 miles (100 km) south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans -- in which payments do not cover the interest so that a borrower's balance grows over time.

It was those "neg-am" loans, which include triggers causing payments to balloon if the debt reaches a certain percentage of the original balance, that would come back to haunt him.

"I knew I was sitting on time bombs," Forgaard said. "I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.

"I didn't anticipate a downturn of epic proportions such that home values are 40 percent less than they were," he said.

The mortgage market has melted down in the past two years in a crisis that began in the subprime sector and has left millions of Americans facing the possibility of foreclosure on their homes.

'THIS COULD GET UGLY'

Forgaard bought his first investment home in the booming housing market of North Las Vegas in 2004, followed in the next two years by eight others in such hot markets as Phoenix and Palm Springs, California, before he realized in 2006 that the situation was worse than he had feared.

"I knew that the market was soft but at that point I'm realizing that this could really get ugly," he said. "At that point I had a bad feeling in my stomach."

Forgaard thought he still had enough equity in the homes to "take a huge hit," possibly losing most of his investment, but thought for a while that he could still ride out the storm.

"It really wasn't until five months ago that I realized, 'Hey, you know what? Not only am I going to lose everything I have invested but this is going to force me into bankruptcy," he said.

"I'm going to lose my car and my primary (home) and we're not going to be able to live in Santa Cruz, where I was born and raised, and live by the beach. And that was pretty tough to take."

Experts say speculators like Forgaard, who count on real estate values to keep rising to pay off their debt, play a risky game and doubly so when they use neg-am loans.

"You are essentially betting the house on the strength of the housing market and if you're that leveraged in debt and the market goes down, you're going to lose your shirt," said Austin King, director of the community organizer ACORN's Financial Justice Center.

"To do it eight or nine times over is eight or nine times as foolish as just doing it once," he said.

The Forgaards likely will sell their Santa Cruz home and declare bankruptcy before banks start foreclosing on his properties. With a newborn son, they intend to start over in his wife's Northern California hometown.

Forgaard said that some good has come out of the experience and that his family is optimistic. He is relieved that he no longer has to deal with 10 homes at once and now will pursue a lifelong dream of starting his own business.

"Where I went wrong is I invested heavily in an area that wasn't my passion and I had a really demanding full-time job so I couldn't pay attention to nuances, the little indicators telling you the housing market was going soft," he said. "I was in over my head."

Tragedy of axing five family members to death occurs in Austria

www.chinaview.cn 2008-05-15 00:11:28 Print

VIENNA, May 14 (Xinhua) -- A 39-year-old Austrian Reinhard St. killed five of his family members by an axe Tuesday and turned himself in to the police in the early morning of Wednesday, said Lieutenant Colonel Thomas Stecher of the Criminal Department I at a press conference in Vienna.

Stecher said on Wednesday that Reinhard admitted his crime of killing his 42-year-old wife and his 7-year-old daughter in Vienna and three other bloody crimes of axing his parents and his father-in-law to death in Upper Austria.

The body of the daughter was found in a taproom and the wife's body was found in the bathroom in Reinhard's home in Vienna.

After killing his wife and daughter, Reinhard drove about 200 kilometers to the city Ansfelden, where is near city Linz, the capital city of Upper Austria.

He then killed his 69-year-old mother at the first floor and axed his 72-year-old father to death who was sleeping in the chair on the second floor of the house.

Then, Reinhard drove forward to city Linz and killed his 80-year-old father-in-law who opened the door for him at the night of Tuesday.

Stecher also mentioned that by the side of each corpse in Upper Austria, there was a letter written by Reinhard, while no letters were found by the bodies of the two victims in Vienna.

The axe, with which he committed crimes, was found at the back seat of Reinhard's car.

The motive of killing his family members was for a 6 digits debt, confessed Reinhard when he reported himself to the police. The real motive and other details of the murdering are still under investigation. It is at least the seventh family tragedy in Austria since 2004.

Hi Guys,

OT I know - but I thought that there's bound to be someone here that can give me the low down on Zecco? Anybody using them?

Thanks,

Claire

BTW - I still lurk a lot, but Mountain View/Los Altos - or at least the zip code(s) I would like to buy in are very disheartening, so i have been taking a rest from the bubble blogs until I have good news to report!

In a survey issued this week of Alt-A mortgages originated in 2006 and 2007 -- these are nonstandard mortgages often marketed to buyers with less-than-prime credit -- Fitch Inc. analysts found that a rise in delinquencies could still be traced to "borrowers who purchased a home they could not afford or those engaged in mortgage fraud for the purpose of property speculation." Legitimate homeowners, the analysts said, "rarely view the home as a short-term investment ... they do not default based solely on a drop in value."

Fitch has also found a high level of misrepresentation in loan applications "by borrowers, brokers, and other parties." When Fitch analysts subjected 45 sub-prime loans to detailed examination late last year, they found "the appearance of fraud or misrepresentation in almost every file," a situation they termed "disconcerting at best" in a report in November.

Some 66% involved "occupancy fraud" -- that is, the borrower misrepresented his or her intention to live in the home, rather than to buy it as an investment. That finding underscores the possibility that bankers are blaming owner-occupants for the more common, and not unexpected, phenomenon of "walking away" by real estate investors.

One source of walkaway "folklore" may be services that purport to help homeowners skip out on their mortgages without long-term harm to their credit ratings. Among them is San Diego-based You Walk Away, which launched a website in January offering to help homeowners "unshackle yourself from a losing investment and ... Walk Away."

Co-founder Jon Maddux acknowledged in an interview, however, that the firm's typical clients are people facing genuine financial stress, whether because they cannot make their current mortgage payments or know that an upcoming raise in their interest rate will make default all but inevitable.

"We do have a lot of people who cry to us on the phone," he said. "They're under stress and don't know what to do. A lot of these people should never have got the house."