patrick.net

"You must have a hole in your head if you think diluting an existing race and culture is a good thing."

You could have disagreed with me without insulting me. That was completely unnecessary.

Suggestion for new thread topic (directed at SactoQt):

OIL SHOCK! (Part II). With Rita now headed straight for the US refinery heartland, what effects can we expect economically. Short-term, long-term, macro, micro, psychological. And finally, if/how/when will this affect the Bay Area's real-estate bubble?

They say diversity of race/sex/perversion is great, but how? They have never provided one logical argument about why it is great. Because they can’t. Their real goal is to destroy America and western civilization in general. They do that with their constant attacks on morality and Christianity. They do that with their socialism. And they do that with their immigration policies allowing this country to become the United Nations.

Firstly, I'll try to avoid the direct race-baiting which is going on. I really deplore that kind of troll the worst.

(a) One need not be liberal to believe diversity has logically consistent, social and economic benefits. I, for one, am anything but liberal. I count myself an Objectivist, which is closer to Libertarian than anything, and I ensure you that I am _way_ more fiscally conservative than you can imagine.

(b) I have provided at least 4 logical arguments regarding diversity, all of which are grounded in economic theory and proven empirically and historically.

(c) Who's goal is it to "destroy western civilization"? Just because intelligent people disagree about these things doesn't indicate that they are somehow your enemy. Not only does this not follow, but it's starkly anti-American.

(d) Morality and Chistianity? You have drawn a parallel linking Liberals to non-moral/non-Christians and conservatives as the opposite. Let me ask you this: Who, exactly, has been responsible for the overwhelming bulk of immigration into the US since the Industrial Revolution, continuing today? Unless you answer Oligarchs, Industrialists, and most recently Multinational Corporations then you are simply wrong. I don't seem to recall seeing many of these folks crusading for leftist causes over the years.

(e) Finally Socialism. Historically, Socialist countries have allowed very little-to-no immigration. This continues today in much of Socialist-Democratic Europe. If the US becomes "more Socialist", then expect less immigration because the people here already will exert their self-beneficial intent to erect barriers to free-trade, immigration, and capital market liberalization. It is the fiscal conservatives (pro-free market, free trade), who want _more_ immigration because it helps to create greater overall economic growth and wealth generation.

...I'm happy to provide ecomonic proofs, etc. but if all people are worried about is religious culture wars, then I can't offer anything of use. Just remember that dogmatic ideological crusades make you no better than those you call your enemy.

Do you they ever claim that China is worse off because it only has Chinese?

...and one more thing, you show your ignorance here, I'm afraid. China is not "one-people", even if they all "look the same to you". Go travel in China a bit and tell me that the people in the rural north are the same cultural, ethnic, religious as those on the coast. China, in fact, is incredibly diverse, and is becoming more integrated as the government modernizes the economy and infrastructure and people move between regions.

...and lots of people complain about Japanese monoculture and hegenomy, and have been doing so since the early 1960s. Ask anyone who happens to live somewhere near Japan.

Thanks, Randy, for the very well-reasoned arguments. I agree completely.

“are they nuts! I’m not selling for $705K.”

I think this scenario is repeating itself all over the place.

...The entire Central Valley, which is the most productive farmland on earth, would be desert without intensive irrigation.

Originally the southern end was a huge lake/wetlands, which is why the early Spanish drew the area as an island on maps. Too bad LA sucked the place dry.

“The article contains this rather disturbing statement:
Through September, foreigners had provided 32 percent of the money raised in U.S. credit markets in 2004, up from 14 percent in 2000.”

Yeah, a little unsettling isn't it? What would happen to money rates if they pulled their funds? Wouldn't that pinch our credit spree in a big way?

Joseph E. Stiglitz

Did you mention Stiglitz? I like his work.

Historically, Socialist countries have allowed very little-to-no immigration. This continues today in much of Socialist-Democratic Europe.

Although Canada is quite pro-immigration compared to Sweden.

Yeah, a little unsettling isn’t it? What would happen to money rates if they pulled their funds? Wouldn’t that pinch our credit spree in a big way?

If they pull their funds (sell their dollar-denominate assets, which is our debt), then all hell would break loose. But they won't, at least not in any dramatic or rapid fashion. The current worries are that they'll simply stop buying as many dollar-assets, and they'll diverify more, probably into EUR and JPY assets.

I am certain of this for many reasons, but one above all others. Aside from the Europeans, who have their own unique (and quite structurally deep) fiscal problems, the Asians who hold a significant portion of US debt cannot afford the purchase-power-parity adjustments and rapid inflation that would ensue were they to start selling of dollars en masse.

Randy H, your comment about China's diversity is like saying America would be diverse, even if it was all white, because folks are different in the South, the Midwest, the West Coast, New England, etc. We all know that all countries have very diverse regions within them, some more so than others. I don't think anyone on this board is the type that assume all people of one color are the same (culturally, etc.)...well except maybe that East Cali dude. China and many other countries will never have anything near the multi-national-cultural diversity that America does. Is this good? Bad? I don't really care!
If anything, I'd rather concern myself with environmental practices in manufacturing leading to unfair business advantages in global economy.

Did you mention Stiglitz? I like his work.

I took a week long course taught by him at London Business School some time back. He's much more impressive in print, lol. But his main problem is that he's a genius. Genius types make for great academics and less than stellar pragmaticicsts. (And, I don't like his latest book all that much.)

Back on housing for a moment...

Noticed the yield curve squeeze is on in a big way following the Fed's quarter-point hike Tuesday:

1yr-10yr spread = .31
2yr-10yr spread = .23
(source: US Treasury Dept. tinyurl.com/79u6u)

We should be seeing inversion by the next rate hike in November --if not sooner.

No one's commented on this yet (possibly due to yesterday's 'incident'). More writing on the wall, or just the same shysters now trying to capitalize off bubble fears (or both)?:

HARM Says:

September 21st, 2005 at 11:04 am
Remember Condoflip.com (and all those RE get-rich-quick seminars that have sprouted like fungus everywhere)? Now meet “GotExit?”: www.gotexit.net

“The GotExit? real estate exit strategy seminar series is designed to help people just like you design unique and appropriate exit strategies for their appreciated investment real estate.

Our presenters and affiliates are all experts in their fields and include: attorneys, CPAs, financial planners, realtors, 1031 accommodators, and other industry professionals.

We also offer additional “exit strategy” seminars and consulting on other important personal and business transition events including business succession, family legacy planning, and general asset protection techniques.”

GotExit? LOL!

Perhaps an UnderWater seminar later? How about a real estate support group?

We should be seeing inversion by the next rate hike in November –if not sooner.

HARM, or anyone--care to explain the concept of "inversion" for those who aren't finance/market types?

HARM, or anyone–care to explain the concept of “inversion” for those who aren’t finance/market types?

Basically, the way banks make money is by borrowing short-term (from the Fed) and lending long-term (to businesses and individuals). As long as interest rates ("yields") are higher for long money than short, this works. This is the normal state of affairs, as the extra risk premium for lending money long-term usually translates as higher long rates.

This doesn't work when short rates are equal to or lower than long rates. When long & short rates are roughly equal (we're nearly there now), the yield curve is said to be "flat". When short rates are higher than long rates, the yield curve is said to be "inverted". When this happens the money/credit supply typically shrinks (or at least stops growing). Yield curve inversion has hstorically been a a good predictor of recessions and asset-price squeezes.

Oops --meant to say "This doesn’t work when short rates are equal to or higher than long rates."

Just posted on Craigslist (tinyurl.com/a247v):

HELP HELP HELP I'm over extended.

...My house in Landsdowne is a single family home and is being built. I'm going to settlement next month. The House has 5 bedrooms and sits on a golf course. Similar homes in the neighborhood have sold for $973,000. I want $850,000. Why? I'm over extended. I don't know a lot about this house including the address, but I can assure you that it is a money maker for any investor or a great deal for a family looking to settle down.

Surfer-X - time for a 'crazy miner' dance?

It's interesting to note how the media is becoming more cautionary towards RE. Here's a news story from Sacto's NBC affiliate:

http://tinyurl.com/95vbu

They even quoted these guys before the realtors:

Chris Thornberg, a senior economist with the UCLA Anderson Forecast, argues that the dramatic rise in what he calls "ultra-high-risk" mortgage financing is a sign of a "distended market."

"What happens when you run out of people who could even qualify to buy a house with an interest-only, (zero-down), variable-rate mortgage?" Thornberg asked. "The answer is ... there are no more shills to enter the bottom of this pyramid and, therefore, the pyramid scheme will have collapsed into itself. We are in the midst of the biggest bubble we've ever seen."

fade in: creepy horror-flic organ music..

Well, demand is still strong and people can always sell one kidney to finance their homes. A household of four can sell four kidneys. Once the organ-mortgage market catches on, the market will take off again. :twisted:

While Los Angeles has rights to lots of Central Valley water, it doesn’t typically exercise those rights much because that water is expensive to transport to L.A.

Windog, thanks for the detail. Ok, perhaps I exaggerated...However, I do believe it was an impressive body of water, drained for agriculture, etc. Regarding transport, what about the California Aqueduct? Looking at the maps, I notice a long arm extends from the sacto delta to LA reservoir. This all a tangent really, I just remember some stuff from a documentary a few years back...

Once the organ-mortgage market catches on, the market will take off again.

Coming soon: organ-flipping! Buy organs on the cheap, flip for massive returns.
Next on the Discovery Channel: "Flip that Organ", hosted by Dr. Mengele...

"Once the organ-mortgage market catches on, the market will take off again."

and

"Please reply to retardedmofo@homedebtor.org"

LMAO!

"Next on the Discovery Channel: “Flip that Organ”, hosted by Dr. Mengele… "

Still LMAO... Reminds me, I recently saw ads for a show on one of the home improvement channels about homeowners who very much need to sell their homes. I even saw a show synopsis where one of the owners featured didn't succeed in selling by the end of the show. That doesn't sound all that dramatic, except that most of these home-oriented shows have exclusively happy endings.

tsusiat, don't get me wrong, I think Canada is a fine country. There is a good chance that I may move there someday.

Randy H.,
Don’t you think that every person is unique and can’t be labeled as being less beneficiary or more beneficiary based on ethnicity?
There is nothing wrong with people of different cultures living and working together. I have nothing against immigrants, being one myself. But there is now a whole new science of diversity - books, obligatory college classes, diversity specialists being hired all explaining how diversity benefits economy, society and anything else. It seems to me, this is an another ideological snake oil. The same applies to class theories.

I stated early, and will state again that I believe all forms of social engineering are dangerous and usually don't work. I am making statements about diversity as being driven by economic market forces. Remember, I'm a bit of a market pureist (but not entirely so, I realize that sometimes market controls are needed, but rarely in my opinion), and moreso I'm very much an Objectivist. Therefore, what I seek to prevent is any form of coercion, which in fact prevents optimal market function. I see a lot of the anti-immigration, cultural purity, religious hegemony arguments as vailed coercive acts by people in the "in-group" trying to block out other, often more competitive entrants.

Class theory is more well founded and studied. It's just a classification, not provable in it's own right, but then again biological nominclature is just a classification, and not provable. What is known is that strata of society, in all cultures, emerge and movement between those strata encounters friction. The US is famous for having less friction, historically, and this is what people are worried is changing.

The US is famous for having less friction, historically, and this is what people are worried is changing.

I recall some pretty high points of friction in US history (ok, not to the level of the Balkans), but as time wore on, didn't things usually level off? I'm thinking of initial friction towards a number of immigrant groups: japanese, jewish, chinese, irish, italians. Are these marginalized peoples now? Personally, I think anyone who works hard in the US still has a chance. By the same token, I don't think anybody should be coddled by the govt.; it only promotes apathy--a far worse enemy than prejudice.

What is known is that strata of society, in all cultures, emerge and movement between those strata encounters friction. Yes, it seems the "old guard" always reacts to outsider competition. However, their tactics to suppress seldom work long-term, and I believe the same holds true for today. Just my .02, I'm sure I've left something out...

Basically, the way banks make money is by borrowing short-term (from the Fed) and lending long-term (to businesses and individuals). As long as interest rates (”yields”) are higher for long money than short, this works. This is the normal state of affairs, as the extra risk premium for lending money long-term usually translates as higher long rates.

I think this is the arbitrage effect that occurs in response to inversion of the curve, not the cause of the inversion. It is correct that the "normal" state of affairs is an upwards sloping curve, which can be explained simply by liquidity preference.

When the curve inverts it does so for a number of reasons, many of which have to align to actually cause inversion instead of just flattening. The question everyone should ask is why, if short-yeilds are lower, would anyone borrow long? It strikes me that the duration-matching argument only goes so far. The tongue-in-cheek response (I read in the FT) is that borrowers better borrow at bad long-rates now before they have to borrow at worse long-rates later. I think this is a sentiment argument, but I'm not a behavioral finance expert.

The US is famous for having less friction, historically, and this is what people are worried is changing.

Yes, it is a slippery slope. No friction at all. Gravity applies though.

I see a lot of the anti-immigration, cultural purity, religious hegemony arguments as vailed coercive acts by people in the “in-group” trying to block out other, often more competitive entrants.

Randy, I agree with you that there's a strong element of xenophobia and economic protectionism at work among those seeking to reduce or eliminate ANY immigration. However, I'm not 100% convinced of the societal "benefits" of all forms of unlimited immigration, especially the illegal kind going on here in Cali.

Illegal immigration here has largely been used by big business as a blunt instrument to beat down wages and living standards for those "Working-class" and "Educated Skilled Class" you described earlier in great detail. It has also made it much easier for many industries to offload the burden of providing health insurance, pensions, etc. to the public sector (think agriculture, construction, hotels, food service, Wal-Mart, etc.).

While I am generall an advocate of free trade as well and oppose government/public efforts to interfere with well functioning markets, I also see how illegal labor arbitrage is damaging the standard of living for average working people here. I'm all in favor of free trade and market transparency; however, this doesn't mean that I support breaking any law so that multinational shareholders & executives can enrich themselves at my expense.

Even "free markets" must operate on specific rules that societies agree upon. Without any rules, you get chaos and fuedalism.

HARM,

I agree 100% with your comments. I'm not advocating we live in an anarchy without rule of law, and I agree that illegal immigration is generally negative. I simply mean that those laws must be color/religion/socioeconomic class blind, or they serve to have adverse effects. I'm glad you agree that it's the corporations which laregely benefit from "labor arbitrage", because I think this is a truism, but it contradicts the arguments made by many anti-immigration folk, including some on this board, who try to always blame "liberals" and "socialists".

Randy H,

Thanks for clarifying that --we are in complete agreement :-).

If I loose my job tomorrow, I feel I will move between strata with no friction at all. No reason to worry for me.

Fortunately, there is downward friction too. So long as you are educated or skilled, the chances of you moving down more than one strata are practically nil, short of self-destructive behaviors (alcoholism and drug abuse being the big 2) or mental illness. Pretty much the only way into the Poor is to be born there or forced there through specifically unfortunate divorce.

Harm,
We all like to feel as if we are protected by laws. However, you have to ask the question who is making and shaping the laws. Lobby groups, multinationals etc, I guess the final say the people have is at the ballot box, and it appears there too, there is substantial influence applied.

However much we might not like it , maybe globalization is a good answer, after all , won't the majority of jobs be somewhere else and that will attract the illegals somewhere else?

You never know, sometime in the future, China and India might be the desirable place to be .......... :) ;) ;) ;)

HARM, Randy H,
I feel I can't agree about illegal immigrants being a problem.

First off, what percentage of jobs do the illegals have.

Second, don't the factories in Indonesia that make NIKE's pay alot less than workers in America. Therefore there are none of these factory jobs in America to be had by illegals??

The benefactor in this is the American consumer that has the oppurtunity to pay less for goods.

So long as you are educated or skilled, the chances of you moving down more than one strata are practically nil, short of self-destructive behaviors (alcoholism and drug abuse being the big 2) or mental illness. Pretty much the only way into the Poor is to be born there or forced there through specifically unfortunate divorce.

Hmmm... not so sure about this one, having witnessed a number doing so first-hand (and almost ending up there myself during the early 1990s). It's less likely than moving down from the working-class, true, but I can assure it possible, even without self-destructive behavior or divorce. I can name a few other trigger events: (1) being downsized in a major recession or depression, (2) having your "skilled" job outsourced or rendered obsolete due to technological advances, (3) being bankrupted due to medical expenses not covered by insurance.

sorry about the extra italics --not intentional

I feel I can’t agree about illegal immigrants being a problem.

The problem is arbitrary enforcement. Legitimate businesses should not be force to break immigration and labor laws just to stay competitive.

First off, what percentage of jobs do the illegals have.

In some industries, such as agriculture, construction, hotel staff, food preparation, etc. the percentage is almost 100%. Of course, it's hard by definition to produce exact stats, because such hiring is illegal.

Second, don’t the factories in Indonesia that make NIKE’s pay alot less than workers in America. Therefore there are none of these factory jobs in America to be had by illegals??

The benefactor in this is the American consumer that has the oppurtunity to pay less for goods.

AntiTroll, I'm not sure I get your point here. Are you arguing that because there's so much offshoring/outsourcing to asia, there can't be much illegal immigration in California? The census here (and direct observation) says otherwise. I can assure you as a native Californian that the flood of illegal immigration is very real, and labor arbitrage here is alive and well.