By The Tim on March 11, 2009
Here is your open thread for Wednesday March 11th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.
Be sure to also check out the forums, and get your word in the user-driven discussions there!
Posted in Open Thread | Tagged open_thread
Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.
In the link Ray provided concerning 50% off pricing in Florida it also mentioned that new construction built close to a million housing units lasyt year. Those are a lot of jobs for nothing that will be lost.
What will be the next job base for this country? Where will money be circulating next?
That’s easy. Government.
This nation has become more and more a service economy, but education has not kept up. If it had, the only time you’d see a company trying to bring in foreign workers would be for someone with really “special” skill such as was the case of KCPQ & Leslie Miller. ;-)
You wouldn’t see Microsoft wanting to bring in people because of their brains and eduction.
In other news:
“Disagreements between the European Union and the US over how to combat the global recession widened on Tuesday as EU governments made clear they had little appetite for piling up more debt to fight the collapse in output and jobs.”
http://www.ft.com/cms/s/0/13783b6c-0db2-11de-8ea3-0000779fd2ac.html
RE: Kary L. Krismer @ 3 –
“You wouldn’t see Microsoft wanting to bring in people because of their brains and eduction.”
One could argue that the reason they are bringing in people from other countries is because the demand for clear thinking people in other parts of our economy is so high that it is hard to find people willing to be code monkeys.
**MTG CRAMDOWN COMING**
Jamie Dimon pushing Wall Street and guess what……………………………Its gonna happen….Interest rate reductions on upside down homeowners does nothing………………Just delays the inevitable!
Bank on Dimond.
http://online.wsj.com/article/SB123673662900091009.html
RE: jon @ 5 – you’re right on here; the global talent pool will find a lot more software-inclined folks willing to do the work Microsoft is so desperate for. And the work just isn’t interesting to today’s American graduates when there’s more fulfilling, better-rewarding careers elsewhere. Yes, even in this economy.
It isn’t a skills issue. It’s a skills and interest issue.
RE: Ray Pepper @ 6 – Assuming your talking Chapter 13, it does more than anything else discussed because you can adjust not only the interest rate, but also the balance, AND you can literally wipe out all the unsecured credit card debt. If the goal is slowing foreclosures, it’s the best remedy. If the goal is saving banks, it might not be.
RE: Jeff @ 7 – If it’s a lack of interest, maybe Microsoft should have developed Mario Basic.
Kary @3,
Bringing folks here from other countries is little more than wage arbitrage on the part of large corporations. One need look no further than IBM’s ‘Project Match’ to see this clearly. Employees who were let go in the US were offered the possibility to take another position in an international location at ‘local terms and conditions.’ So if you are let go you have the ‘option’ of moving to India and working for an Idia based wage. Could the game be made any clearer?
RE: Kary L. Krismer @ 10 –
Computer science enrollment has been declining since the 80’s, which signifies at least some lack of interest. The two posited reasons in the article are a) American students are lazy and want an easier major or b) American students see computer science as something that is outsourced, and don’t want to bother. I’m not sure if either is the cause (or at least not the only, or primary cause).
I think a lot of folks have been lured away by higher-paying careers. Before graduate school, I was working with a lot of sales/marketing folks straight out of their MBA programs who easily made double my salary, before commissions. If money were my primary objective, I probably would have gone for an MBA instead.
In a recent (heated) discussion about the economy I was accused of being too negative, too oblivious to the good things that are happening.
OK. I’m always open to criticism and change, always more interested in learning, in doing right and following facts than in just being right. And I’ve always seen value in starting with a clean sheet of paper, from the beginning, when working an analysis and trying to figure out what’s happened and where we’re headed. But to be honest, I see the current economic situation as having deteriorated far faster and far further than I would have expected, so at this time it’s hard for me to see what the positives are.
Any bulls out there? Any anecdotal stories about how things are turning around? Is there something major I’ve missed, or is my friend pushing hope over reality in a vent that just happened to focus on me? Was it the message, or the messenger? TIA.
RE: vermillionsky @ 12 –
I’ve always said that code writers/programmers would be the CPAs and book keepers of the 21st century. The job would always be there, require real intelligence and hence pay well, but wouldn’t attract the best and the brightest because the nature of the work was such that over time the challenge would disappear along with the satisfaction gained. Perhaps the industry has matured to the point where this is now true.
I remember reading that the average profession requires 1.5 to 2 years to master to proficiency, and then becomes rote. This was said to be true for everything from technical welding to heart surgery. I have a friend who does 3-4 balloon angioplasties a day and makes $500K . But after 20 years of education and work, he’s bored to stiff. I’m not a geek, but get the sense that computers/software are stuck on a plateau. The main action is over, the maintenance phase has begun, and many now seek thrills and rewards in other areas..
I happen to hate CNBC and Cramer, et.al., and have been said to be overly critical of it. If you happen to like CNBC and Cramer, you mignt not like this collection of Daily Show clips that “The Big Blog” over at the P-I posted. I, on the other hand, found them hilarious.
http://blog.seattlepi.nwsource.com/thebigblog/archives/163919.asp
RE: Scotsman @ 14 – That may depend on the type of software your working on .
I work on embedded software, and maybe it’s just that I’m really easily amused, but so far it’s still a lot of fun and many times I end up learning something new by the end of the day.
RE: Kary L. Krismer @ 15 –
I found it hilarious too. …Baron’s financial weekly recently had an article taking all of Cramer’s recommendations, and supposing what would have happened if you had done the opposite….Well, you’d have made a ton of money, shorting his “buy” recommendations.
RE: see it clearly @ 11 –
I agree completely. I don’t see how anyone still believes the old MS line that there aren’t enough skilled workers in the US to do the work. Heck, just go to Wikipedia’s entry on H1-B Visas and check out the top ten H1-B Users 7 of the top 10 are Indian body shops.
You’d have to be blind not to realize why companies are shipping work there. And don’t give me that “If American’s worked harder” meme. Americans are more productive than most other industrial nations, and certainly more productive than their 3rd world counterparts (please see Dell, HP, and the many other firms that are pulling back from offshoring in the face of whithering customer complaints). If Americans didn’t mind open sewage, non-potable drinking water, and the majority of our population living in ghettos and shanty-towns, we could be every bit as competitive as Chindia, but you get what you pay for.
Scotsman @ 14, very much agree re “The main action is over, the maintenance phase has begun, and many now seek thrills and rewards in other areas.” What do you see as those areas? For the last several years, I’ve seen best-and-brightest types either beelining for finance or — I also agree with V. Sky @ 12 — doing whatever’s going to get them into a good law school or MBA program. In my MBA program, there were a lot of people who’d gotten engineering or CS degrees never intending to work in those fields, because the Wall Street firms prefer MBAs who hold those undergrad degrees.
But there are not so many thrills and rewards in finance anymore. Whither the young brainiacs?
Did anyone watch the Seattle PBS show on the area’s housing situation? A lot of it was fluff and at the end they had a discussion of the situation. Some of the panelists were saying we’re just about at bottom yet they give no reasons for why. How about some data or leading indicators to back up your clams?
http://www.kcts9.org/video/housing-part-7-7
By vermillionsky @ 12:
CS enrollment peaked in the late 90s. During the dot-com bubble, a CS degree was a comparably easy (relative to engineering) degree that would lead to a $50-75k job straight out of college. Freshman enrollment at my alma mater was around 100 in ‘97 and over 300 in ‘99. It fell off pretty fast by ‘02 after the prestige (and easy money) of a CS degree wore off. Degrees for various IT jobs had a similar trajectory. Good IT guys were making $70k, $80k, or more in the mid 90s, so it was appealing to up and coming geeks who didn’t want to deal with the math required for engineering, but once companies realized most IT work can be handled by the $12/hr high school kid, those salaries tapered.
But the reality for both IT and CS professions is that 90% of it is *not* interesting, relatively easy, and once supply caught up to demand, the salaries fell in line with that. The interesting portions of the CS field, the front line development, still pays well and still draws the best and the brightest. The people looking for an easy meal ticket are put off by the monotony of debugging, documenting, and so forth. So yes, MS and the sort resorted to outsourcing the debugging and documenting and other monotonous parts, then paying the creative guys lower salaries to boot.
So whether people are interested or not, prospective CS students are staring at a field where a lot of the jobs are tedious and boring, their salaries are competing against Indian outsourcing firms, and the companies tend to be really fickle. For the last 7 or 8 years, a business degree + MBA was the meal ticket. That gravy train is dry now too, so maybe some of the brains will go back towards CS, or engineering.
I was in college in the mid 90s and CS degrees in general were a joke. There were very few schools I knew of whose CS curriculum were worth anything remotely useful. A vast majority of the people I knew in CS fields once I got in the employment world did not have CS degrees at all, but got into it because it was something they enjoyed — I have a Geography degree myself, yet I am a software developer. I can’t say whether that trend has continued, because it’s been a very long time since I was in college. But I do know that have a CS degree hasn’t been required required any any of the places I’ve worked doing CS work, and more often than not, any new CS hire required significant effort to literally unlearn what they were taught in school so they could be taught to do it the RIGHT way for the real world.
Too important to not get noticed!
The Buffet is coming to an END FAST!
http://www.cnbc.com/id/29640663?slide=16
http://www.realogy.com/
The Goose is cooked!
Its ABOUT TIME!
IOt’s coming!!
http://img.photobucket.com/albums/v99/smallestminority/debtstar.jpg
As global corporations break down who will own the businesses to take up where they left off?
Do we really need an out of State supplier? Is our State out of sulpplies? Why do we send credit payments out of State? Are there no lenders here? Why do we pay a loan servicer when there is an investor at risk of losing thier money?
All business is open to negotiation so why do we all say there is nothing that can be done?
The money is still there, the money is still in the system. I think the trick is to pull the money into our corner of the world.
Lakehills@22
I would say that is true about many degree programs that are offered in college not just CS programs. It is very similar with the business degrees as well.
RE: being patient @ 26 – Law school teaches you how to do the research and compose the arguments, but they teach you very little about the nuts and bolts or actually practicing.
I remember my first legal job, while in law school, the partner I was working for asked me to prepare “an order shortening time.” I probably just looked at him with a blank stare.
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I often disagree with what Mr. Sowell says, but he nailed it this time.
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Subsidizing bad decisions
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Now that the federal government has decided to bail out homeowners in trouble, with mortgage loans up to $729,000, that raises some questions that ought to be asked, but are seldom being asked.
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Since the average American never took out a mortgage loan as big as seven hundred grand— for the very good reason that he could not afford it— why should he be forced as a taxpayer to subsidize someone else who apparently couldn’t afford it either, but who got in over his head anyway?
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Why should taxpayers who live in apartments, perhaps because they did not feel that they could afford to buy a house, be forced to subsidize other people who could not afford to buy a house, but who went ahead and bought one anyway?…….
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….The same politicians who have been talking about a need for “affordable housing” for years are now suddenly alarmed that home prices are falling. How can housing become more affordable unless prices fall?…
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……the subsidizing of bad decisions destroys one of the most effective sources of better decisions— namely, paying the consequences of bad decisions.
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In the wake of the housing debacle in California, more people are buying less expensive homes, making bigger down payments, and staying away from “creative” and risky financing. It is amazing how fast people learn when they are not insulated from the consequences of their decisions.
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Well shoot- looks like the bottom is indeed in. Even Citi is on solid footing, maybe one of the better banks out there. Not bad considering they were among the walking dead just last week.
http://www.reuters.com/article/newsOne/idUSTRE52B7SD20090312?sp=true
I guess I owe Ardell an apology. I’m sorry Ardell. You were right, I was wrong.
Happy days are here again!
It’s a great time to buy a house!
RE: Scotsman @ 29 – Do I sense a little sarcasm?
I will note that GM also said it won’t need the 2B it requested for March.
I wonder if things are actually getting a bit under control, or if the companies are finding that the government money leaves a bad taste in their mouths? I suspect the latter, but hope for the former.
RE: By Kary L. Krismer @ 30:
I may be overly cynical, but I bet the linked detail below was a great motivator for CEO’s getting their act together……
Obama caps pay for financial industry execs
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President Barack Obama on Wednesday slapped a $500,000 salary cap on financial industry executives whose firms receive future U.S. government financial aid …….
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RE: TJ_98370 @ 28 -
Banks made the loans. A bad business model is giving people money they aren’t able to pay back.
Let’s talk about me. I have worked in the Real Estate business since high school. I buy and sell houses, help other people buy and sell houses, repair houses, talk, live and breath houses, all my life, and my business is over.
You can blame who ever you want, but my business is dead.
Those same people who were handing out money have closed thousands if not millions of businesses who don’t have business today because banks were handing out money to every body.
With those thousands of businesses that are out of business millions of people lost jobs. All because banks were handing out money.
Now banks want to collect the money they were handing out from the people they put out of business. The people they put out of business were the good risk people, but they want to collect from the people they made unemployed.
Now the people who got the money have the money, they aren’t the ones asking the government for the money. Banks, the banks who made the bad decision to give every body money, are asking the government for money.
Is this clear?
Why are you blaming the consumer? It’s the banks problem, it should remain the banks problem, and if the bank can’t collect, they should write it off and move on.
RE: David Losh @ 32 –
Great post, David, and as clear as a bell.
RE: TJ_98370 @ 31 – That and having to listen to moron Senators grandstand and whine.
RE: TJ_98370 @ 31 –
TJ- that was my first thought as well. These guys will make more money with the bonus structure intact, even if the company goes bankrupt, than they will in recovery with Obama’s restrictions. They might as well let the firm die, grab their golden parachute, and move on to the next job. Because the reality is all the level three crap is still there, falling in value every day, and there is no way they are going to make it once the bond market cracks from the deficit spending. Higher interest rates will not only drive their cost of funds up, but also kill the demand on the lending side.