Here is your open thread for the mid-week on June 3rd, 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!
cheapseats » Jun 3, 2009 at 12:18 am
No news flashes, but I found the following article interesting in that it gave some specifics about the effects of foreclosure to nearby houses 4-sale.
From the abstract “At a more local level, however, we Â…find that foreclosures that take place
within a quarter of a mile, and particularly within a tenth of a mile, of a house lower
the price at which it is sold. Our preferred estimate of this effect is that a foreclosure
at a distance of 0.05 miles lowers the price of a house by about 1%.”
http://www.jchs.harvard.edu/publications/markets/w09-4_pathak.pdf
David Losh » Jun 3, 2009 at 8:39 am
RE: cheapseats @ 1 –
The study is over a twenty year period, probably as it should be for a research piece,
On another Jonness made the observation:
Interestingly, when a lot of people I know speak about “getting back to a normal economy,” they are referring to getting back to a completely abnormal period of bubble-mania.
The Harvard sudy makes a claim that in some cases a “forced” sale can reduce a surrounding property sales price by as much as 9%.
OK, let me say we are in the most extraordinary times of home prices I have ever seen. There is no, none, nada consistency in the market place.
There are properties that have been completely redone or rebuilt in the most obscure neighborhoods and absolute tear downs selling for the same prices all around the city. I’d like to see some of the best bargains in the market today.
We’ve seen the junk posted here a lot of times, but what is it that makes sense as a good purchase?
WestSideBilly » Jun 3, 2009 at 9:43 am
That would be interesting to see, but it’s much easier to find the junk (since it’s on the MLS for months on end), whereas finding the good buys is a bit tougher.
patient » Jun 3, 2009 at 9:44 am
I listended briefly to Bernanke today, it’s obvious that the spanking ( spike in treasury yields ) we recevied from mother ( China ) had effect. There is now a lot of talk about returning to fiscal balance and exit strategies. Couple that with Geithners begging trip to China and the picture seems pretty clear.
Scotsman » Jun 3, 2009 at 12:08 pm
RE: patient @ 4 –
Yup, but unfortunately “the cake is already baked” as they say. We can’t change things fast enough going forward to cover the deficits without trashing the economy, and all of the longer term structural problems still exist. What are they going to do- raise taxes, cut spending, raise interest rates? Any one of those would kill a teetering economy. All they can do at this point is jaw-bone, tell the fools what they want to hear. That will only work until the math of exponents takes over.
Scotsman » Jun 3, 2009 at 12:13 pm
Ballmer says Microsoft will move jobs offshore if Obama tax plan passes. Now why would he do that? What kind of patriot is he?
http://www.bloomberg.com/apps/news?pid=20601087&sid=a3yutzL3xApI
Lake Hills Landlord » Jun 3, 2009 at 1:05 pm
Have you guys seen this trash?
NY Times Housing Sob Story
I am no fan of the banks and the actions they have taken, but talk about a complete lack of personal responsibility. The NY Times picked the wrong person to use as the centerpiece of a sob story. They claim she lived modestly, but somehow she still managed to double her mortgage debt in 12 years. Get a freaking clue. Living modestly starts with spending less than you make. Are there no standards for basic reasoning skills for news writers?
As a side note, how could she pay $20,000 for a new roof? I understand there are assessments against condo owners for these types of things, but really!? Do you get ripped off that badly? I paid under $6,000 to do a new roof on a 1400 sq ft rambler a few years back. She paid over three times as much for what was likely less sq ft of roof overhead? Something smells fishy.
jon » Jun 3, 2009 at 1:20 pm
RE: Scotsman @ 6 – Same kind of patriot that rebelled long ago against high taxes.
masaba » Jun 3, 2009 at 1:41 pm
RE: Lake Hills Landlord @ 7 –
Wow, I have never seen such a clear story of how one person used their home as an ATM. It just makes no sense to me why someone would put themselves in this situation. She paid $77K for the home and at one point her mortgage balance swelled to $200K! The reporter seems to act as if this is a trivial fact by stating that it was ‘Like millions of Americans.’ Was this really that commonplace?
Lake Hills Landlord » Jun 3, 2009 at 1:49 pm
RE: masaba @ 9 –
I agree with you in concept, but you seem to have mixed up the numbers. The house value swelled to $200k, while she spent up the mortgage balance to ~$144k.
There are millions like her. The two saddest things are that she takes no personal responsibility for her choices and that the reporter is spinning this in a manner that implies we ought to empathize with her.
I can’t understand how you can live your life that way. If I crash and burn due to my financial decisions up till now (some doozies I tell ya), I know exactly where to look when I go to place the blame. I’ll peg it all on the moron in the mirror.
softwarengineer » Jun 3, 2009 at 2:02 pm
RE: masaba @ 9 –
YES, ABOUT 50% OF HOMEOWNERS USE 2ND MORTGAGE
See the prove:
“…About 50 percent of at-risk borrowers have a second mortgage, which can make it difficult for them to afford their homes even after payments are cut on their primary mortgages. Second mortgages were popular during the housing boom for buyers who could not afford big down payments….”
The rest of the URL:
http://njhelocheaven.blogspot.com/2009_04_01_archive.html
33% of all home mortgages, which includes some 2nd mortgages [or HELOCs], are now upside down.
masaba » Jun 3, 2009 at 2:03 pm
RE: Lake Hills Landlord @ 10 –
He says that she currently owes $144K, but at one point the mortgage balance exceeded $200K: ‘Like tens of millions of other American homeowners, she added to her mortgage balance as the value of her condo swelled, at one point exceeding $200,000.’
masaba » Jun 3, 2009 at 2:14 pm
RE: masaba @ 12 –
After rereading this, you are right, the value of the condo went to $200K, but she currently owes $144K, my bad.
patient » Jun 3, 2009 at 2:29 pm
RE: Scotsman @ 5 –
“That will only work until the math of exponents takes over. ” My thought exactly.
Kary L. Krismer » Jun 3, 2009 at 2:32 pm
RE: softwarengineer @ 11 – Correction. Second mortgages were not used by people who could not afford large down payments. They were used by people who wanted to avoid paying slightly more per month with a 100% mortgage with PMI. That PMI was not tax deductible for a long time helped move people to 80/20 loan packages. Many mortgage people also pushed them, because they were used to looking for the lowest monthly payment option.
I never liked 80/20s because of the liability on the 20. On a $400,000 house that would be an $80,000 liability. I would pay a lot of money per month to avoid that type of liability, but the risk and the options probably weren’t explained to most borrowers.
E » Jun 3, 2009 at 2:40 pm
RE: masaba @ 13 –
Still…if you think about it…she started with a mortgage of probably no more than $70,000, which, if she had paid on it for 10 years, would leave a balance of $55,000 (just a guesstimate).
Refi that 55k at 5% fixed and the payment would be less than $300.
Woulda shoulda coulda
The Tim » Jun 3, 2009 at 3:29 pm
RE: E @ 16 – Hmm, interesting concept, this crazy paying down debt idea of yours.
The only thing you seem to be overlooking is the financial truth that debt = wealth. So if you pay down your debt you have less debt, and therefore less wealth.
</sarcasm>
deejayoh » Jun 3, 2009 at 3:36 pm
Article in the PI today
you have to sign up to get the actual report, so I did not order it.
EconE » Jun 3, 2009 at 3:57 pm
RE: The Tim @ 17 –
No doubt.
It’s interesting how the stories as of late portray the issue as “job loss”.
Her current $1500/mo SS check could have easily covered her mortgage if she had the original one and didn’t refi.
I’m curious as to where all the money went. Of the extra $75k (or so) that she pulled out, $20k went for a roof and $15k (I’m guessing) went for a new Hyundai. Where’d the other 40k go?
I used to wonder where people got so much money for so much “stuff”.
Now I know.
masaba » Jun 3, 2009 at 4:09 pm
RE: deejayoh @ 18 –
I read the article also. The thing that caught my attention was the following line: ‘The report determines what house prices “should be” in markets by looking at differences in population density, relative incomes and historically observed market premiums or discounts’
I am curious what your thoughts are on this, Deejayoh. Your post showed a relationship between home prices and per capita income. In my opinion, it was a pretty convincing argument that area income is very strongly correlated with area home prices (at least up until 2001).
What do you think of the argument that population density is also correlated with home prices? It immediately makes me think of one common argument for the old Seattle is Special group (we have a lot of water, and they aren’t making any more land). Do you think this is true? If two cities had the same PCI, but different densities (all else being equal), should we expect to find higher home prices in the denser area?
I realize that this question is best answered by analyzing data, but I’m just curious if anyone has actually looked at some of that data and come to conclusions.
Kary L. Krismer » Jun 3, 2009 at 4:10 pm
RE: deejayoh @ 18 – And my comment to that article:
I did a study of salaries, and it turns out the most overpaid people are those who perform studies on what assets are the most over-valued. Since their work is completely worthless and pointless, paying them anything is paying them too much.
Assets are worth what people buy and sell them for.
deejayoh » Jun 3, 2009 at 4:16 pm
Another interesting find: KUOW looking for people to share their real estate experiences:
deejayoh » Jun 3, 2009 at 4:26 pm
RE: masaba @ 20 – I agree with your statement that it’s a question best answered w/data.
couple of thoughts
– Time series modeling like what I did in that other post is a fine methodology – but if you can triangulate your results by validating them across markets, it is a good confirmation
– I am surmising they used the normalized data for income (e.g. annual change) as the independent variable. That gives a pretty low r-square so it is likely you’d look for other variables to enhance the predicitive value. I don’t doubt that population density works as a factor to normalize across markets. think about NY, SF, Boston. All high cost markets and more dense than here. 7x income multiples were common in those markets even pre bubble. Scarcity has to be an issue at some point.
Overall, their conclusions are consistent with mine (e.g. not at a bottom) – though they show us closer to a bottom than my simple take on it. Their model does implicitly take into account increasing density over time, which I did not. Maybe if I get some time I will re-run my analysis with some sort of density variable added.
The Tim » Jun 3, 2009 at 4:47 pm
RE: deejayoh @ 22 – Yeah I got an email from them yesterday and hadn’t had a chance yet to post it, due to a busy day today.
David Losh » Jun 3, 2009 at 5:26 pm
RE: Scotsman @ 6 –
Microsoft is a company built on government research. They hold several patents, but computer science and internet technology are and were government projects long before Bill came along.
Neither Bill nor Balmer are patriots. Along with Paul Allen this is a group of petulant children hijacking our tax dollars.
The tax benefits we give them have nothing to do with them moving off shore. They need fresh blood, and minds.
A friend of mine retired with some snippets of programming code as he calls them. He worked here in the United states for years before moving his operations to Egypt. He is very correct that he has produced more results in the past two years than the ten previous years here in the United States.
The people in Egypt, who I have only talked with on the phone, are energized to even have a computer system to work with. They are the way it used to be here for say a company like Microsoft. The enthusiasm is contagious. The work is the very best they can perform. Their education is a privilege for them to have.
Egypt is one of my favorite countries. The life style and integrity are inspiring.
In those short two years he has acquired Proctor and Gamble as a client. Here in the United States he would be one of a thousand programmers. In Egypt he is a big fish with a lot of resources.
Moving off shore was a done deal years ago. In the article it mentions the Ireland loop hole. That hole will only continue to open.
Racket » Jun 3, 2009 at 5:36 pm
By Kary L. Krismer @ 21:
Wouldn’t that make your study doubly worthless?
Alan » Jun 3, 2009 at 5:50 pm
And there is no value in predicting future changes in those prices, is there?
Ira Sacharoff » Jun 3, 2009 at 6:10 pm
“Neither Bill nor Balmer are patriots. Along with Paul Allen this is a group of petulant children hijacking our tax dollars.”
It’s sacrilege to say something like that in this town. And for that, Brother Losh, you have my respect.
David Losh » Jun 3, 2009 at 6:16 pm
RE: Kary L. Krismer @ 21 –
This is as good of a starting point as any. Salaries have nothing to do with the value of real estate any more than any amount of statistical analysis.
There are macro economic conditions concerning a job base that should be followed, but from experience, I know, all of that can change.
What we just experienced and are continueing to experience is way outside any type of statistical base. There are no constants. There are no certainties. There is no basis for analysis.
In my opinion we are in completely uncharted territory. I think that’s why all of this day trader, stock market jargon, of supply and demand or future predictives is impossible to address.
If we had Boing, or if we had Microsoft, or if we had trade with China, can all change tomorrow. If we had more building or if, and I like this one the best, banks start bull dozing housing units, it changes everything.
Banks are deciding to bull doze housing units rather than maintain them. Come on, throw me a bone on that one, nothing is for certain in the housing market today.
I work with real estate agents, investors, land lords, banks, attorneys and builders. The one common conversation is that we don’t know what’s going to happen next.
One Eyed Man » Jun 3, 2009 at 7:15 pm
“A dollar borrowed is a dollar earned.” Actual quote from a successful California real estate investor I met working on a deal in the 1980’s when inflation was your friend. It sort of makes you wonder if he ever really intended to pay for anything. I guess that’s why the Chinese students laughed at Bernanke. Incongruity is the root of all humor.
It’s too bad the lady in the NY Times article didn’t get a van instead of a Hyundai, then she could be living on water front down by the riiiverrrrrr. Sadly, even though none of us identify with the woman she’s probably more representative of American political culture than any of us believe we are. I’m pretty sure the over and under on budgets balanced by the United States in the last 50 years is about 5. Who the F__k do you vote for when none of the A-holes intend to pay for anything? The only difference between a republican and a democrat is whether they increase deficit spending for defense or social welfare.
“And the parting on the left
Is now parting on the right
And the beards have all grown longer overnight
I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday . . .
Meet the new boss
Same as the old boss .”
Pete Townshend
Rock and roll goes great with beer.
Scotsman » Jun 3, 2009 at 7:16 pm
RE: David Losh @ 25 –
“Neither Bill nor Balmer are patriots. Along with Paul Allen this is a group of petulant children hijacking our tax dollars”
WTF. Wow, if that doesn’t sum up the current political dichotomy perfectly. David- they aren’t your f*+king dollars, they aren’t the government’s dollars, they aren’t the public’s dollars. They belong to Microsoft and the people who own the company- the stockholders. I know this may come as a big surprise to you and others, but successful people and companies don’t owe you a thing. They don’t owe you free health care, they don’t owe you a cushy retirement, they don’t even owe you a minimum lifestyle. If what the government and political class “steal” through taxes to support their power and lifestyle while redistributing what’s left isn’t enough for you, too bad. But here’s a heads up – it going to get worse, and there will be less to distribute, so you’d better prepare.
As a self employed person it’s pretty easy for me to pay more than half of what I make in taxes, and yet that’s not enough for some. Screw it, I’m quitting. Good luck in the future.
The only “petulant children” I see are the asses who whine and complain about “getting their share” while sitting on their butts, sucking off the government teat from birth until death. Thank god we’re probably less than a decade away from having the whole system wiped out. Reset time can’t come too soon.
David Losh » Jun 3, 2009 at 8:08 pm
RE: Scotsman @ 31 –
Oh, you mean corporate welfare, yes, I agree, we need to do away with corporations like Microsoft sucking off the government teat from birth until death. How about Boeing? Talk about government hand outs to a monopoly.
The only free ride in the United states are these very successful corporations who owe us everything.
Technology was supposed to make life easier, cheaper, and more productive. That didn’t happen because of the greed Bill Gates and his ilk thought was more important than the greater good. There are many things Bill personally could have done and he chose to hold his programming codes, patents, and exorbitant wealth from ever circulating.
Stock Holders? Stock holders, as I think you have pointed out, consist of Hedge, Pension, Mutual Fund manipulation. You are very right those are programmed trades that drive the market.
How about insurance companies? Surely you can see that our government regulators have created and protected an industry called insurance. When they chose to deny claims, who picks it up?
Health care? We already pay enough tax dollars to fund and administer health care for every man,. woman, and child in America. We funnel the dollars into Health Insurance Carriers Profits instead of simply, easily, and effeciantly providing health care for every one.
I’m self employed.
My tax dollars have been wasted by our government paying farmers not to grow food. My tax dollars have been spent to regulate small business into higher and higher tax obligations to cut competition to corporations. My tax dollars protect oil interests, auto industry, bank swindles, and all the other very successful business models in America.
These people, these corporations owe every body.
cheapseats » Jun 3, 2009 at 8:18 pm
RE: David Losh @ 32 – “These people, these corporations owe every body.”
So where is the dividing line between what you are and what they are?
Courtney » Jun 3, 2009 at 8:30 pm
RE: David Losh @ 32 – : “These people, these corporations owe every body.”
Mmmhmm, yup. And everyone owes me DOUBLE what they owe you, because I’m a woman. If I were an ethnic minority, it would be triple, so you should thank your lucky stars I’m whiter than sour cream. Well that’s it, I’ve had it. I’m through with all of this financial, political, sexual, and medical oppression… I’m moving to Egypt.
One Eyed Man » Jun 3, 2009 at 8:49 pm
RE: Scotsman @ 31 –
I think discussing the pros and cons of the corporate form is more about flatulence than petulance unless you want to discuss the socio economic pros and cons of capital formation through independent entities that lack personal liability for their ownership. I’m not against MSFT, in fact, I’m still a shareholder. But if a monopoly is defined in economic terms by barriers to entry, then I think it’s pretty hard to say the windows OS isn’t a monopoly. As we all know, the windows installed base makes it virtually the only OS personal computer application developers have written for. If it weren’t, they’d never be able to get away with stuff as Craptastic as Vista and still dominate the market place. But although they may have an unfair competitive advantage, I don’t think that it’s been economically detrimental to consumers. And what’s anyone going to do about it anyway, break them up? Or just fine them like the sore looser political pricks in the EU?
But just like MSFT ate IBM’s lunch and IBM didn’t see it coming, one of these days, some smart young people operating out of a dorm room or a university office bldg will change the world. And no one at MSFT will see it coming until it’s too late. I hope MSFT can develop another cash cow before then. I’d hate to see the east side economy dependent on the future of the Zoon. If that happens the population density and the per capita income on the east side will drop to the point where you’ll get an eastside McMansion free with the purchase of a Big Mac and I’ll be back to saying “Do you want fry’s with that?” But I must admit, at this age It seems like it might be sort of fun like it was for Kevin Spacey’s character in American Beauty. And I kinda like the cool hats you get to wear. Maybe I shouldn’t drink anymore beer tonight. Ah, what the heck, bring on the re-set Scottsman. I think I’ll switch to single malt and suck on the teat of a Scottish Distillery before I crash. Do you think the government teat will ever offer single malt? Probably not.
Racket » Jun 3, 2009 at 8:58 pm
“I’d hate to see the east side economy dependent on the future of the Zoon”
that is “zoon phone”… its coming.
The zune is actually a cool device, but it won’t get you laid, so the iPod is better.
I would like an apple by w/ my McMansion thnx…..
Lets take all the money out of corporations hands and give it to the .gov they will know better how to do it.. We can buy all single mom’s Escalades so they can be like the yuppies in Kirkland, and never have to explain to their kids why they don’t have a nice car too.
David Losh » Jun 3, 2009 at 9:01 pm
RE: Courtney @ 34 –
You’re right, If only you were …. you should get more.
Racket » Jun 3, 2009 at 9:12 pm
By Courtney @ 34:
Mmmhmm, yup. And everyone owes me DOUBLE what they owe you, because I’m a woman. If I were an ethnic minority, it would be triple, so you should thank your lucky stars I’m whiter than sour cream. Well that’s it, I’ve had it. I’m through with all of this financial, political, sexual, and medical oppression… I’m moving to Egypt.
Ok not funny, does your husband know you’re not in the kitchen?
One Eyed Man » Jun 3, 2009 at 9:24 pm
RE: Racket @ 38 –
If you get a sex change, do you go from being a debtor to a creditor? Will the real estate bubble result in a rash of unanticipated sex changes to avoid foreclosure? And more importantly, will it be covered by the Obama health plan? That’s it! That’s how Obama’s going to fix the economy by enacting health care reform.
Racket » Jun 3, 2009 at 9:29 pm
where’d the quotes go.
If I got fake boobs I’d have a hard time leaving the house…. Can I get welfare for that?
Ira Sacharoff » Jun 3, 2009 at 9:46 pm
By One Eyed Man @ 39:
The Obama plan will bring in the big Russian sex change corporation, Cutchacockoff, and pay them tax dollars to open a branch in this country, perhaps occupying the empty offices once filled with mortgage executives.
Racket » Jun 3, 2009 at 9:49 pm
“occupying the empty offices once filled with mortgage executives. ”
Sadly many of them are still employed..
Maybe track home builders???
David Losh » Jun 3, 2009 at 10:09 pm
RE: cheapseats @ 33 –
There is no dividing line.
Yes, I can have as large of a corporation as I want. I can make as much money as I want. I can go where ever I want and do whatever I want. There are no impossible dreams for the white males in America.
Money is the easiest thing in the world to get. Power and influence just come naturally after that.
Now if you are a woman you have the opportunity to get whatever you want, you just have to follow a few more rules and become more white male like.
That’s it, that’s the secret. Go to the right schools, meet the right people, say the right things, follow the rules, be white, and you will be fine.
Now don’t get me wrong you can be flamboyant. You can be a character as long as you follow those rules. You can even be a minority as long as you follow the rules correctly.
We have dynasties to protect here. Please give generously to your local corporate monopoly. They need your money as well as the tax dollars we pay for their protection.
Remember the slogan “To big to Fail.”
cheapseats » Jun 3, 2009 at 10:45 pm
RE: David Losh @ 43 – Coolio, just checking, seemed like you were in the blame the “they” camp…. mostly based upon the “These people” comments.
Racket » Jun 3, 2009 at 10:58 pm
“Yes, I can have as large of a corporation as I want. I can make as much money as I want. I can go where ever I want and do whatever I want. There are no impossible dreams for the white males in America.”
FYI you are perpetuating racism in the name of tolerance.
The dream is real for everyone, this isn’t the 60’s 70’s 80’s or even the 90’s.
Before you know it we could have a non-white president.
Kary L. Krismer » Jun 3, 2009 at 11:07 pm
By Alan @ 27:
Because it’s impossible, correct. There’s no value to it. But we’re not talking about that. We’re talking about one entity’s opinion that certain things are over or under-valued. Who cares? I think Corvettes and F-250s are over-valued. That’s irrelevant. The buyers and sellers determine value.
Alan » Jun 3, 2009 at 11:38 pm
Don’t real estate agents try to predict what price a client’s house will sell for?
Scotsman » Jun 3, 2009 at 11:54 pm
RE: Kary L. Krismer @ 46 –
Kary, your perspective is too egocentric. Just because you can’t predict predict the future, (or so you’ve stated) doesn’t mean others can’t. Lots of people successfully “predict” future events. Their success isn’t luck, or chance, or as some like to say, “a broken clock (that) is right twice a day.” Their success comes from research, understanding, long hours, lots of work. And they are very well paid. Because being ahead of the curve, seeing future opportunities, and positioning to take advantage of them is very valuable indeed. It’s how fortunes get made every day.
One Eyed Man » Jun 4, 2009 at 7:03 am
RE: Scotsman @ 48 –
With all due respect Scotsman, although I believe in predictive analysis based in mathematics, I think you overstate your case. You’ll have a ways to go to convince me that economic predictive modeling is an exact science and that there is no reasonable diversity of opinion as to what’s going to happen. Even if the odds are in favor of a certain outcome, the conclusions are only as good as the ability of a model to predict occasionally irrational mass human behavior. Millions of people bought pet rocks. Need I say more. I’m pretty sure that Lehman, Bear Stearns and all the rest invested more than a nominal amount in math based predictive analysis. But even if the model is extremely sophisticated and the analysis is logically consistent I tend to believe the human element can always result in unanticipated and sometimes irrational outcomes.
Kary L. Krismer » Jun 4, 2009 at 7:12 am
By Alan @ 47:
Unless you’re talking about the future in the context of days or maybe weeks, they try to determine what it’s worth in the current market, not some future date. Also, tecnically they only try to determine what the property should be listed at, not it’s value. Sometimes it is purposefully listed high or low.
Kary L. Krismer » Jun 4, 2009 at 7:16 am
RE: Scotsman @ 48 – I’d agree as to some things–like say stocks or options.
BTW, as to the blogging community, again I’d point out that Eleua seems to have been correct as to the reasons for a fall in the real estate market. So impossible was too strong of a word, although I will note Eleua was incorrect as to the scope of the consequences–at least so far. Time will tell.
David Losh » Jun 4, 2009 at 7:27 am
RE: cheapseats @ 44 –
That would be Professor Griff and Chuck D, “the white man has a god complex.”
The reference to these people is a reaction to the discussion that we pay taxes so people on welfare can sit on their butts and do nothing. Getting welfare is a full time job.
Ronald Reagan, who I think was a great President, cut mental health funding that to my knowledge has never been reestablished. We now spend another set of millions of dollars policing the mentally ill.
Social programs are an important part of any society.
We spent billions of dollars to invade Iraq to protect our oil interests. For the amount of money we spend on a war we can never win we could do some good in the world.
Clinton, who I think was the most socially aware bleeding heart liberal we have had as President, gave us the welfare to work program. That has never been fully funded or explored. It was just left to Wal Mart to use as a forced labor pool. Now we have Wal Mart creating welfare and providing Health Benefits that they own, manage and fund.
The line between government and corporate dollars is blurred. Privatization will never work as long as there is no over sight and regulation. Our system of government works. It’s our job as tax payers to ensure our wishes are enforced. We are the tax payers. Stock Holders have a conflict of interest about the greater good.
Cheap South » Jun 4, 2009 at 9:17 am
Now, this couple just needs a parking space…
http://www.mynorthwest.com/?nid=11&sid=174613#
WestSideBilly » Jun 4, 2009 at 10:46 am
RE: One Eyed Man @ 35 – Microsoft Windows was never a monopoly, just like Internet Exploder was never a monopoly. It was simply the best OS and got the most support. There were always competitors to Windows (BeOS, MacOS, UNIX, Linux, etc), and IE (Netscape, Firefox, Opera, Chrome, etc). In most cases, the product offered by M$ was superior to those offerings, which is why everyone used them. In the browser world, that’s no longer true – Firefox is superior and roughly half of all web browsers are using Firefox. For all the "female dogging" and whining about Vista, is there a better alternative (not including XP)? Leopard is pretty "golly" good, and if Apple hardware wasn’t so bloody expensive more people would be using it.
If you want a real monopoly, take a look over at WSLCB.
Fran Tarkenton » Jun 4, 2009 at 11:13 am
Quality of product has little, if anything, to do with whether a monopoly in that product area exists. A monopoly exists where one product supplier has sufficient control over the product market to (roughly) unilaterally implement price changes. Having a monopoly is not per se illegal. Abusing a monopoly is what runs afoul of antitrust law.
The main issue with IE is not whether or not Microsoft has or had a monopoly in the web browser product area; it’s whether Microsoft leveraged an OS monopoly to make an illegal tying arrangement with its web browser. Both the Dept. of Justice (which settled) and the European Commission feel strongly that an illegal tying arrangement exists or existed.
By WestSideBilly @ 54:
jon » Jun 4, 2009 at 11:17 am
RE: WestSideBilly @ 54 – People don’t choose Vista based on a comparison of the merits of the OS. They choose it because of the application base. Likewise, developers don’t choose to develop for Vista because of the merits of the OS, but because of the user base. For Vista to maintain its status, it just has to be adequate enough to preserve those two sides and to stay sufficiently different from other OSes to make it a PITA to do cross platform development.
I think Linux and Apply are currently strong enough to prevent MS from monopoly pricing, but their uses are restricted to niches for the time being.
patient » Jun 4, 2009 at 11:17 am
RE: WestSideBilly @ 54 – Imo windows success has never been about being a technically good product, it’s been about supplying the best platform for 3rd party vendors to make money. I.e it has been the best platform for application providers to build business upon and applications attracts the users. I think both IBM and Apple have had superior OS offerings early and Linux is likely technically better than Windows as well but if you don’t get the apps you don’t get the users. MS is all about business savviness not about technical superiority IMO.
patient » Jun 4, 2009 at 11:19 am
RE: patient @ 57 – Hey Jon, we agree on something! Both comments at 11:17 but you apparently beat me to it.
jon » Jun 4, 2009 at 11:50 am
RE: patient @ 58 – OK, won’t happen again. Back in the 90s I didn’t think too much of MSFT because SunOS was much better, and would win out in the long run even though the hardware it ran at that time on was more expensive. Turns out I was wrong. Windows was adopted so quickly that reduction in the cost of the hardware was too slow.
patient » Jun 4, 2009 at 12:07 pm
RE: jon @ 59 – If cloud computing ( new fancy word for client – server ) advances in the future with help of the always connected abilities it could revive the unix flavours since a server solution is much more dependent on multi-user performance, reliability and stability but I would never under-estimate the business minds at MS and their ability to come out on top whatever the direction we go.
Scotsman » Jun 4, 2009 at 1:11 pm
RE: One Eyed Man @ 49 –
Gotta disagree- it works like a charm. Those who use it consistently, like GS, and the “smart guys” in bonds do very, very well. Where it gets confusing is in the political and economic posturing that goes along with much of what passes as analysis for public verses private consumption. And I’d argue that BS and others didn’t fail because their analysis was bad, but because their focus was too narrow and powered by greed.
jon » Jun 4, 2009 at 1:33 pm
RE: Scotsman @ 61 – The quants are not trying to predict the economy, they are just estimating probabilities and variances. They are just hedging, not predicting, supposedly. (Hilarious piece on dabagirls.com a while back about how it seemed like many people thought a “hedge” fund was just a really good fund, like those shoes are so hedge._
There were a large number of factors that tripped them up. Overly simplistic models assumed events were independent when they were not, failure to account for fraud, failure to predict the bubblemania effect on prices, failure to predict the cost of unwinding in an illiquid environment, and so on. I’d say their analysis was very bad.
Scotsman » Jun 4, 2009 at 1:52 pm
RE: jon @ 62 –
Jon, agreed- but note we aren’t talking about quants and/or specific trading oriented programs, but full-on economic modeling, especially as it pertains to macro flows. A very different deal.
Angie » Jun 4, 2009 at 3:45 pm
And I’d argue that BS and others didn’t fail because their analysis was bad, but because their focus was too narrow and powered by greed.
This included in the part about the “human element” and “irrational outcomes”. What’s that quote, you can’t get a man to believe in something if his paycheck depends on him not believing it? Better believe that applies in the realm of financial analysis, economics, etc, etc., too.
David Losh » Jun 4, 2009 at 7:25 pm
As a business owner I know Microsoft products do not play well with others. The truth is most software needs to be Microsoft compatible in order to survive. The tentacles of Microsoft are to long to risk having a software that may have problems with a Microsoft Licensing Agreement.
Licensing is what business complains about, but at the same time Licensing is the watch dog against piracy.
While Microsoft Balmer complains about the 28% they pay in taxes, and how dare our federal government ask for more, they expect federal protection of copyright, patent, and Licensing Certification. I wish my tax dollars could buy me protection from my competitors.
Microsoft turns out any type of carp they decide they want out of Research and Development then go on to the next thing. It is stale product with limited innovation.
Our tax dollars are the only thing keeping that zombie walking. Just thank god they have enough money today or they would want a bail out.
“Too big to fail”
Racket » Jun 4, 2009 at 9:11 pm
“MS is all about business savviness not about technical superiority IMO. ”
XP was a great OS, Vista started out as crap and is now considered ok. Windows 7 is a legitimate product.
One Eyed Man » Jun 5, 2009 at 7:10 am
RE: Racket @ 66 –
Once again, I’ve got to agree with you Racket.
About 15 yrs ago, Bill Gates accepted an invitation to speak at what if I recall correctly was an anniversary event of the UW Computer Science Dept. I also think I recall that the title for his talk sounded like it was technically related. When I asked friends who were on staff at the UW about it they implied that to them it was kind of a joke because, to paraphrase, Gates is a business guy, not a technical software guy. Everybody remembers Jobs, but many don’t even know Wozniak’s name. Everybody remembers Gates, but outside of the computer industry most have never heard of Kildall or Paterson.
What Gates did was brilliant, but it was primarily his calculated business positioning coupled with his understanding of software that made him the richest man in the world. IMO Gates saw every move like a bridge player who wins the bid for a slam. He knew the IBM XT was an open architecture machine with the exception of the BIOS which could be reverse engineered. He licensed MSDOS to IBM for a flat fee of 85K because he knew the value of becoming the installed base for a soon to come multi billion dollar clone market. He knew that an installed base was a virtual monopoly because programers would write for the largest installed base. Gates knew programing but so did a lot of other guys. But consider this. IBM probably didn’t really need MSDOS because I think they had deals (or could get deals) to license Unix and/or Kindall’s 8 bit OS on a per machine basis. IBM thought they were getting a deal on a license for an 8 bit operating system from MSFT because they could put it on as many machines as they wanted for a flat fee of 85K. In reality, IBM left a TRILLION dollars on the table. Deal of the century is probably an understatement.
If you’re hoarding cash for a purchase of an east side McMansion at a bargain rate, thank Trey and his understanding of the economics of monopoly for the deal you will get. Scotsman’s right. Stock options fueled an over built market for east side McMansions that you can now buy at a discount.