Posted by: Timothy Ellis (The Tim)

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.

66 responses to “Weekly Open Thread (2014-03-10)”

  1. Kary L. Krismer

    By Blurtman @ 72:

    For a healthy dose of schadenfreude, I offer this collection of litanies of student loan hell: http://projectonstudentdebt.org/voices_list.php?page=2&page=5

    Stories of folks who may be paying off student loans from the grave. Lots of bad planning, childlike reasoning, refusals to take responsibility, health issues, and sleazy school sales tactics. An interesting slice of what America really is.

    Student loans are another good example of the reason you should run whenever a politician tries to help you. They are also like health insurance in that they are good example of what happens to prices when you have “easy money” flooding a market. In essence what student loans did was allow legislatures across the country to reduce funding of public schools by allowing greater percentages of the cost to be paid by tuition, and they greatly helped private schools because they were no longer competing with the dirt cheap tuition offered by public schools. That resulted in tuition rates that increased at roughly double the inflation rate for years if not decades. The ones not helped were the students, unless they actually managed to get a degree in something that had available jobs that paid more than average.

    But then if that wasn’t bad enough, the politicians in DC got in on the act changing the discharge in bankruptcy provisions from being very difficult to nearly impossible.

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  2. softwarengineer

    RE: Kary L. Krismer @ 1
    The Lion’s Share of College Folks Working Decent Jobs

    Are just the college instructors….the graduating students end up on 50%+ unemployment and a lion’s share that are working are severely underemployed…..thank goodness we stop counting them as unemployed after they finally “give up”?

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  3. pfft

    By Kary L. Krismer @ 1:

    By Blurtman @ 72:
    For a healthy dose of schadenfreude, I offer this collection of litanies of student loan hell: http://projectonstudentdebt.org/voices_list.php?page=2&page=5

    Stories of folks who may be paying off student loans from the grave. Lots of bad planning, childlike reasoning, refusals to take responsibility, health issues, and sleazy school sales tactics. An interesting slice of what America really is.

    Student loans are another good example of the reason you should run whenever a politician tries to help you. They are also like health insurance in that they are good example of what happens to prices when you have “easy money” flooding a market. In essence what student loans did was allow legislatures across the country to reduce funding of public schools by allowing greater percentages of the cost to be paid by tuition, and they greatly helped private schools because they were no longer competing with the dirt cheap tuition offered by public schools. That resulted in tuition rates that increased at roughly double the inflation rate for years if not decades. The ones not helped were the students, unless they actually managed to get a degree in something that had available jobs that paid more than average.

    But then if that wasn’t bad enough, the politicians in DC got in on the act changing the discharge in bankruptcy provisions from being very difficult to nearly impossible.

    studies show very little of the increase cost of education is tied to government support. I’m sure you’ll offer not evidence of your claims and just say “it’s economics.”

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  4. pfft
  5. pfft

    By softwarengineer @ 2:

    RE: Kary L. Krismer @ 1
    The Lion’s Share of College Folks Working Decent Jobs

    Are just the college instructors….the graduating students end up on 50%+ unemployment and a lion’s share that are working are severely underemployed…..thank goodness we stop counting them as unemployed after they finally “give up”?

    studies show going to college more than pays off over a lifetime.

    http://2.bp.blogspot.com/-6WcImEVmRAM/Ux236LzqkQI/AAAAAAAAeQI/6OlKArA9SvU/s1600/UnemployEdFeb2014.jpg

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  6. Blake

    By Kary L. Krismer @ 1:

    Student loans are another good example of the reason you should run whenever a politician tries to help you. They are also like health insurance in that they are good example of what happens to prices when you have “easy money” flooding a market. In essence what student loans did was allow legislatures across the country to reduce funding of public schools by allowing greater percentages of the cost to be paid by tuition, and they greatly helped private schools because they were no longer competing with the dirt cheap tuition offered by public schools.

    Good points Kary, I almost completely agree with you except that way back in the early 80s, when I was at Wisconsin, the state legislature cut back on support for the UW system at the same time that Reagan was making student loans harder to come by. So the cut backs to our wonderful state schools predated the increase in student aid. The state school system was one of the great “investmaents” this country ever made and together with the GI bill really broke down the class barriers and broadened the middle class. Now it is just like everything else.. a racket! Check out these stats:
    http://www.bloomberg.com/news/2014-03-06/college-grads-taking-low-wage-jobs-displace-less-educated.html
    “Recent college graduates are ending up in more low-wage and part-time positions as it’s become harder to find education-level appropriate jobs, according to a January study by the Federal Reserve Bank of New York. The share of Americans ages 22 to 27 with at least a bachelor’s degree in jobs that don’t require that level of education was 44 percent in 2012, up from 34 percent in 2001, the study found.”

    “A year-long survey ending in July 2012 of 500,000 Americans ages 19 to 29 showed that 63 percent of those fully employed had a bachelor’s degree, and their most common jobs were merchandise displayers, clothing-store and cellular phone sales representatives, according to Seattle-based PayScale Inc., which provides compensation information.”

    Yeah… go out and borrow $100,000 to get educated! It is very sad… and our political leaders keep pushing the simple lie that we just need more education and training.
    That trillon dollar student loan bubble is and will be a burden on the US economy for a generation – – who’s going to buy houses or cars?
    … and don’t look now, but all those easy, subprime car loans made the last 5 years are starting to come home to roost! (US car dealers got an exemption from the Dodd-Frank and CFPB rules… Gotta love that free market! It NEVER makes bad decisions… ;-))
    http://www.counterpunch.org/2013/12/09/easy-lending-to-risky-borrowers-makes-a-comeback/

    Too bad the big bad government forced all those car dealers to make loans people with bad credit… wait…?? Where have we heard that before? “You mean the gov’ment didn’t force the car dealers to make those loans… they just made them to sell more cars (houses)?”

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  7. Blake

    Oh… I forgot the punchline!
    http://www.ft.com/cms/s/0/b49f3b7c-8747-11e2-9dd7-00144feabdc0.html#ixzz2vbngmoJ1
    “Sales of risky pools of securities backed by car loans have jumped this year as investors’ search for yield takes them to corners of the market that boomed in the build-up to the financial crisis. Sales of subprime auto asset-backed securities in the US have increased year-to-date to nearly $4bn, almost double the volume during the same period of 2012….”

    Bwa ha hah ha hah ha ha!!! S’funny!!
    http://www.zerohedge.com/news/2013-11-08/no-car-no-fico-score-no-problem-ninjas-have-taken-over-subprime-lunatic-asylum

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  8. Kary L. Krismer

    RE: Blake @ 7 – The bankruptcy act amendments from about 7 or 8 years ago made it so that more debtors would likely reaffirm the debt, which seemingly would reduce the risk to such lenders. The made that change despite the fact that many of those loans originate out of auto dealers where people are very likely to get ripped off. Seemingly that would decrease the risk of such loans and make lenders more likely to loan. So it would be interesting to see some stats from before the change.

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  9. Kary L. Krismer

    By pfft @ 3:

    studies show very little of the increase cost of education is tied to government support. I’m sure you’ll offer not [sic] evidence of your claims and just say “it’s economics.”

    Yes I know I’m feeding the troll. I just thought I’d point out the irony of a claim not backed up by any evidence, and then a prediction that my response won’t be backed up by evidence.

    But clearly I’m all wet suggesting that billions of dollars of funds had any effect at all on tuition rates. Next pfft will claim that sub-prime loans had no effect on the housing market.

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  10. Blurtman

    RE: Blake @ 6 – The Widows and Orphans fund, Calpers, your pension fund and others are holding these securitized auto loans: http://finance.yahoo.com/news/california-republic-bank-announces-successful-162300035.html

    I am sure they offer an enticing yield and are Triple A.

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  11. mike

    RE: Kary L. Krismer @ 1 – Wasn’t the original state and federal funding of public universities granted by legislatures also a situation where “politicians were trying to help you”?

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  12. Scotsman

    RE: pfft @ 3 – First let’s take a look at college costs verses inflation: http://inflationdata.com/inflation/images/charts/Education/Education_inflation_chart.htm

    Hey- costs went up 5 times as fast as general inflation. Then we could look at incomes- and here’s a big secret- the increase pretty much matches the rise in inflation. Spendable income is actually less. So how in the world were people able to pay? Yup- government and private loans. The clever thing the .gov did to help out its buddies in the banking world was make the loans bankruptcy proof. Yup, they follow you around like a dog on a bone. Then talk, talk, talk, about how EVERYBODY needs a college education and pretty soon you have the perfect scam to drive up prices. Can you name the fastest growing college expense? Administration. It ain’t about the teaching- it’s about the dynasty.

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  13. Scotsman

    RE: pfft @ 5 – College pays? Not so much when you run a standard investment grade analysis on the numbers. http://market-ticker.org/cgi-ticker/akcs-www?post=228432 To be fair there’s more to college than just employability, but you need to be employable when you get out. And if you borrow you need to be employed at a rate that covers the loans. I have two kids who went to colleges of the $60k/year variety. I’m not that rich so there were grants- not loans, from the schools to help. Both graduated with no debt. The eldest has a solid engineering job in CA. It wouldn’t pay an acceptable return on the full cost of her education if borrowed. The second is probably headed to med school. Those numbers would be even worse. The real winner in the education game is the guy/gal who starts working at 18, learns a unionized trade- electrician, plumber, etc. and manages their money well. Surefire millionaire. Too often though beer gets in the way of financial correctness. The system is unsustainable. $1+Trillion in student loan debt in a $14trillion economy? Really? Say goodbye to college as we know it.

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  14. Kary L. Krismer

    By mike @ 11:

    RE: Kary L. Krismer @ 1 – Wasn’t the original state and federal funding of public universities granted by legislatures also a situation where “politicians were trying to help you”?

    It might be that they didn’t do that to help the individual, they did that to help society, realizing that a well educated society is going to outperform a less educated society. They might have seen it as an investment, not an individual benefit.

    But if that is true, maybe politicians were different back then. I might have actually liked a politician or a party back then. For one thing they were probably smarter. I know that they could write better legislation back in the 1930s than they can today. Even after amending the Distressed Property legislation it is still full of drafting errors.

    Or it might be that pushing public education was their thing back then. That was the push they made. As I’ve mentioned several times over in the political thread, government over the years adds more and more programs to what it tries to do, each the favorite program of some politician who is likely long gone. Eventually they add so many programs that the core programs suffer. As an example, just recently King County had a hard time funding animal control!

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  15. softwarengineer

    RE: pfft @ 5

    You Believe Everything the MSM Tells You?

    Last article I read was degreed folks were sucking all the old unskilled highschool education jobs away from the undegreed [the lucky ones I'll add]…..perhaps that’s what you mean?

    What a waste of money on a student loan….

    Examples include in Seattle, but are not limited to:

    1. fireman
    2. medical billing
    3. waitresses
    4. etc, etc…..

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  16. softwarengineer

    They Can’t Hide Foreclosed Properties Off the Seattle Area Listings Forever

    Or this happens:

    http://travel.yahoo.com/photos/hauntingly-beautiful-ghost-towns-across-america-1394143079-slideshow/

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  17. wreckingbull

    RE: Scotsman @ 13 – That is an interesting take. Pfft keeps telling me that “college is still the best investment out there”, so I am eagerly awaiting him to pick apart that analysis.

    One mysterious thing I keep noticing is that those who tell me “college is still the best investment out there” are those who directly or indirectly benefit from my investment in college. So strange.

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  18. Kary L. Krismer

    RE: wreckingbull @ 17 – College can be good or bad. But just getting a degree doesn’t mean you’ll qualify for a job that pays well. Some degrees almost certainly mean you won’t be paid well!

    And of course, there will always be those who do really well without ever having gone to college.

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  19. pfft

    By Kary L. Krismer @ 18:

    RE: wreckingbull @ 17 – College can be good or bad. But just getting a degree doesn’t mean you’ll qualify for a job that pays well. Some degrees almost certainly mean you won’t be paid well!

    not true kary. You don’t have to get a job in the area you get a degree in. A lot of people don’t get a job in the field they got their degree in. Employers above all want you to first get a degree.

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  20. ChrisM

    Arizona Constitution Article 11, Section 6 states “The university and all other state educational institutions shall be open to students of both sexes, and the instruction furnished shall be as nearly free as possible.”

    “As free as possible” That changed significantly while I lived there… I suspect two things the 1% learn in their private schools is the use of weasel words as well as gaming systems.

    Washington Constitution Article IX states “SECTION 2 PUBLIC SCHOOL SYSTEM. The legislature shall provide for a general and uniform system of public schools. The public school system shall include common schools, and such high schools, normal schools, and technical schools as may hereafter be established.”

    I’m curious what technical schools are in play.

    Regarding Washington Constitution Section IX, Sections 1 & 2 are so easy to read, but Section 3 is an abomination (to this non-lawyer). Reminds me of Euclid’s crazy fifth postulate..

    In today’s world a cost benefit analysis (CBA) is definitely necessary before committing to a 4-year degree. Only a moron would disagree. Why aren’t Liberals / Democrats arguing for a change in bankruptcy law, where student loans would be dischargeable? The mind boggles….

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  21. Blurtman

    Perhaps Moody’s and S&P can be involved in rating the bonds, and perhaps AIG can insure these. Without all of the fraud settlement money kicked back to Freddie and Fannie by the criminal banks, and without the banks being forced to take back fraudulent securities, and without the Fed being the bad bank and concealer of toxic securities it has absorbed from the clueless and criminal, one can only wonder if Fannie and Freddie could have been legitimately resuscitated.

    “The Senate framework would allow private entities to purchase an explicit government guarantee to cover catastrophic losses on mortgages issued as bonds from a new guarantor, similar to how the Federal Deposit Insurance Corp. regulates banks and provides deposit insurance to minimize bank runs. Rather than issuing separate securities with an implied federal guarantee as Fannie and Freddie did, the new system would see multiple firms issue a common security in which the government would stand behind the payment of principal and interest to bondholders, preserving the deep and liquid markets created over the last 30 years by Fannie and Freddie.”

    http://finance.yahoo.com/news/plan-mortgage-giants-takes-shape-003800649.html

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  22. Blurtman

    RE: Kary L. Krismer @ 18 – I think borrowing $300,000 to get a degree from the Cordon Bleu cooking academy can pay off down the road. (It sounds funny, but people have gone into deep debt to be able to work as a minimum wage food preparer, or obtain an expensive degree at a “world class” art school.)

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  23. Blurtman

    RE: ChrisM @ 20 – Prior to the changing of the bankruptcy law, there were numerous stories of grads who had apparently gamed the system, discharging their student loan debt prior to beginning a medical practice, and earning a good income, for example. Most students who graduate with debt, little assets, and no job are likely technically bankrupt.

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  24. Kary L. Krismer

    By ChrisM @ 20:

    Why aren’t Liberals / Democrats arguing for a change in bankruptcy law, where student loans would be dischargeable? The mind boggles….

    Who the F do you think passed the current bankruptcy laws? The changes were incredibly popular with both parties because it allowed the members of the Senate and House to suck up campaign contributions for years and years (by dragging an absurd abortion debate into the issue). Clinton vetoed it while Congress was out of session because he was concerned about having a veto overridden.

    Although I will say it was slightly more popular with Republicans and when Bush was re-elected is when I decided to quit practicing bankruptcy law because I knew it would then finally get pushed through.

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  25. Kary L. Krismer

    By Blurtman @ 23:

    RE: ChrisM @ 20 – Prior to the changing of the bankruptcy law, there were numerous stories of grads who had apparently gamed the system, discharging their student loan debt prior to beginning a medical practice, and earning a good income, for example. Most students who graduate with debt, little assets, and no job are likely technically bankrupt.

    That must have been a very long time ago, because it was always very difficult under the Bankruptcy Code (the one enacted around 1981 or so). And there were HEAL loans (health education related) which I seem to recall were even more difficult under the Code. The more recent Bankruptcy Act is what made them nearly impossible to discharge.

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  26. willynilly

    RE: Blurtman @ 22

    Tuition is $17500 a year for that school, I assume that you mean borrowing $30k.

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  27. Kary L. Krismer

    RE: willynilly @ 26 – The additional funds are the budget for eggs.

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  28. Kary L. Krismer

    There’s been discussion here of generational differences. Here’s a NAR survey, but note it’s of home buyers, not the general population.

    http://realtormag.realtor.org/daily-news/2014/03/12/generational-differences-drive-housing-preferences?om_rid=AADdSv&om_mid=_BTII85B84y54x2&om_ntype=RMODaily

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  29. wreckingbull

    RE: Kary L. Krismer @ 18 – Absolutely – If you come from a wealthy family or a family with nothing, it can make sense. For everyone else, it is out of reach, unless the student decides on a lifetime of debt servitude.

    Those who continue to push college eduction at all costs see themselves as enlightened and compassionate. I see them as cruel.

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  30. Blurtman

    RE: willynilly @ 26 – $17,5000 a year for the Cordon Bleu? Really? OK, so you get an AA degree there, that’s 2 x $17,5000 = $35,000 just tuition and fees only. There are other school related expenses, rent, food, transportation and medical, to name a few. So if you are a person of meager means, you are probably borrowing. When all is said and done, you could be $100,000 in debt for the pleasure of getting a two year degree that earns you a minimum wage job. Good investment?

    In the link I provided earlier to the student loan blog, a number of folks lamented going in debt for this scam degree. A second category of the indebted for life club seems to be folks that get a four year degree at an art college. Let’s take the Rhode Island School of Design, tuition and fees $42,932 per year. If you borrow to go there you may be $250,000 or more in debt by the time you graduate with a BA in photography and start your career at McDonald’s.

    And the Cordon Bleu displays financial aid availability front and center on their website. Kids, you’ll get a loan, no problem, so get off the couch. What are you waiting for?

    Law grads were also in the tops of student loan debt regret. And then PhD’s in not in demand fields.

    And even the best schools misrepresent starting salaries and placement rates. There is no law against that.

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  31. Blurtman

    RE: Kary L. Krismer @ 25 – Yes, I don’t remember when this was a topical issue, but I distinctly remember politicos complaining about newly minted MD’s declaring bankruptcy to discharge student loan debt before going on to earn a good living. Certainly pre-internet.

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  32. mike

    RE: Kary L. Krismer @ 25 – I haven’t seen any good stats on it, but I imagine during the home equity free for all a lot of people rolled student loans into equity lines and discharged them through foreclosure.

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  33. Blurtman

    “If you did not go to a top 40 law school and finished in the top 25 percent of your class, you’re not going to get one of those jobs,” said Jordan Abshire, principal of attorney recruiting agency Lateral Link. Abshire said that since 2008, he has seen more attorneys with a few years of experience filing for bankruptcy, often carrying a new home mortgage on top of their student loans.”

    “Misty Kennedy, 34, took out about $145,000 in loans to attend Appalachian School of Law in Grundy, Va. She graduated in 2005 and filed for bankruptcy in March 2010.

    “I asked for the maximum amount of loans, and it was just handed to me,” she said. “I thought, spend now and pay later, when my income grows.”

    http://www.reuters.com/article/2012/02/03/us-usa-lawstudents-bankruptcy-idUSTRE81213C20120203

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  34. Blurtman

    Christopher said to pump Webistics.

    “A Manhattan trader was killed Tuesday morning by a speeding Long Island Rail Road commuter train, marking at least the seventh suicide of a financial professional this year.

    Edmund (Eddie) Reilly, 47, a trader at Midtown’s Vertical Group, jumped in front of an LIRR train at 6 a.m. near the Syosset train station.

    He was declared dead at the scene.

    Reilly’s identity was confirmed by Salvatore Arena, an LIRR spokesperson, who said an investigation into the incident was continuing.

    Passengers on the west-bound express train told MTA investigators they saw a man standing by the tracks before he jumped in front of the train, Arena said.

    “Eddie was a great guy,” Rob Schaffer, a managing director at Vertical, told The Post in an email. “We are very upset and he will be deeply missed.”

    The divorced father of three had rented a house around the corner from his ex-wife, Michelle Reilly, in East Norwich, NY.

    One family friend, who said he spoke to the trader on Sunday, told The Post that Reilly “didn’t look good.”

    Separately:

    ■  Autumn Radtke, the CEO of First Meta, a cyber-currency exchange firm, was found dead on Feb. 28 outside her Singapore apartment. The 28-year-old American, who worked for Apple and other Silicon Valley tech firms prior to founding First Meta, jumped from a 25-story building, authorities said.

    ■  On Feb. 18, a 33-year-old JPMorgan finance pro leaped to his death from the roof of the company’s 30-story Hong Kong office tower, authorities said. Li Junjie’s suicide marked the third mysterious death of a JPMorgan banker. So far, there is no known link between any of the deaths.

    ■  Gabriel Magee, 39, a vice president with JPMorgan’s corporate and investment bank technology arm in the UK, jumped to his death from the roof of the bank’s 33-story Canary Wharf tower in London on Jan. 28.

    ■  On Feb. 3, Ryan Henry Crane, 37, a JPM executive director who worked in New York, was found dead inside his Stamford, Conn., home. A cause of death in Crane’s case has yet to be determined as authorities await a toxicology report, a spokesperson for the Stamford Police Dept. said.

    ■  On Jan. 31, Mike Dueker — chief economist at Russell Investments and a former Federal Reserve bank economist — was found dead at the side of a road that leads to the Tacoma Narrows Bridge in Washington state, according to the Pierce County Sheriff’s Department. He was 50.

    ■ On Jan. 26, William Broeksmit, 58, a former senior risk manager at Deutsche Bank, was found hanged in a house in South Kensington, according to London police.”

    http://nypost.com/2014/03/12/trader-throws-self-in-front-of-train-in-finance-worlds-latest-suicide/?utm_campaign=SocialFlow&utm_source=NYPTwitter&utm_medium=SocialFlow

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  35. Kary L. Krismer

    By mike @ 32:

    RE: Kary L. Krismer @ 25 – I haven’t seen any good stats on it, but I imagine during the home equity free for all a lot of people rolled student loans into equity lines and discharged them through foreclosure.

    And as far as I know, you can do that. There’s no pass through of the non-discharge quality of the debt, like their is borrowing money to pay taxes. That might result in a fraud claim, however.

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  36. Kary L. Krismer

    RE: Blurtman @ 33 – You could probably find news stories about the lousy job market for attorneys going back 30 years or more, probably without a gap. I think part of that may be due to California where unless things have changed you don’t need to have gone to an accredited law school to become a member of the bar. That means there’s a large supply of attorneys in that state.

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  37. willynilly

    RE: Blurtman @ 30

    Unless you go into food service management most culinary degrees are going to be 3 years or less. Even if you do not kick in a dime of your own money and only take out loans, a student can surely walk away with 100k in debt. This is a huge amount of debt. I am not claiming higher education is always great investment.

    You post here a lot, often in dramatic fashion, sometimes boarding on hysterics. I was just questioning your claim of $300k in debt from Le Cordon Bleu, which sounds like a gross exaggeration.

    I know quite a few people who teach in higher education and I have got to peek under the hood as to the caliber of output from students. Getting a degree ensures nothing because schools are a business – and excellence or competence are not required.

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  38. Kary L. Krismer

    My earlier comment on the value of some degrees was based on my prior bankruptcy practice. I remember some people who spent a considerable amount of money to work in a profession that simply didn’t pay very much by any standard. That’s what they wanted to do, but the tuition at the UW is pretty much the same (undergraduate) no matter what you get your degree in.

    As to that last sentence, it is somewhat surprising that they don’t charge more for certain degrees, or maybe certain classes necessary for certain degrees. I can see there would be issues with that, such as people changing degrees or even universities. But you would think there would be some way for the school to capitalize on the value of the degree. Alternatively, maybe they could offer tuition rebates for people who earned a degree in social work or some other degree deemed to be socially valuable but not that lucrative.

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  39. Blurtman

    RE: Kary L. Krismer @ 35 – Or a job offer from JP Morgan.

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  40. pfft

    By Kary L. Krismer @ 9:

    By pfft @ 3:

    studies show very little of the increase cost of education is tied to government support. I’m sure you’ll offer not [sic] evidence of your claims and just say “it’s economics.”

    Yes I know I’m feeding the troll. I just thought I’d point out the irony of a claim not backed up by any evidence, and then a prediction that my response won’t be backed up by evidence.

    But clearly I’m all wet suggesting that billions of dollars of funds had any effect at all on tuition rates. Next pfft will claim that sub-prime loans had no effect on the housing market.I’ve already posted a link a while ago. your move. you made an unsupported claim. go!

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  41. pfft

    By Scotsman @ 12:

    RE: pfft @ 3 – First let’s take a look at college costs verses inflation: http://inflationdata.com/inflation/images/charts/Education/Education_inflation_chart.htm

    Hey- costs went up 5 times as fast as general inflation. Then we could look at incomes- and here’s a big secret- the increase pretty much matches the rise in inflation. Spendable income is actually less. So how in the world were people able to pay? Yup- government and private loans. The clever thing the .gov did to help out its buddies in the banking world was make the loans bankruptcy proof. Yup, they follow you around like a dog on a bone. Then talk, talk, talk, about how EVERYBODY needs a college education and pretty soon you have the perfect scam to drive up prices. Can you name the fastest growing college expense? Administration. It ain’t about the teaching- it’s about the dynasty.

    you know why college prices are so high? demand? you know why demand is so high? because over the course of your life you make about $1 million dollar more than a non-college grad.

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  42. pfft

    By wreckingbull @ 17:

    RE: Scotsman @ 13 – That is an interesting take. Pfft keeps telling me that “college is still the best investment out there”, so I am eagerly awaiting him to pick apart that analysis.

    One mysterious thing I keep noticing is that those who tell me “college is still the best investment out there” are those who directly or indirectly benefit from my investment in college. So strange.

    you ever notice how the people telling you that college is not needed are themselves college grads? meanwhile the person single lady working 3 jobs prays every day that she can put her kids through college. same with the guy working at the factory his whole life. Unless you gut it out owning your own business you aren’t going to get far if you don’t have a degree. Even if you do get lucky there still is a ceiling.

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  43. pfft

    By wreckingbull @ 29:

    RE: Kary L. Krismer @ 18 – Absolutely – If you come from a wealthy family or a family with nothing, it can make sense. For everyone else, it is out of reach, unless the student decides on a lifetime of debt servitude.

    you are an austrian/libertarian aren’t you? have you ever used the world malinvestment?

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  44. wreckingbull

    RE: pfft @ 42 – Yes, and that makes it even more tragic. You have families sacrificing everything on a poorly-conceived investment. I refuse to participate in this “I got mine, screw everyone else” mentality you have. Going to college today is a very different situation than it was when I, and likely you, attended. You are applying yesterday’s logic to today’s problems.

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  45. Kary L. Krismer

    RE: wreckingbull @ 44 – The reason it is more tragic is because the cost of getting the education has gone up so much, and a popular payment option puts an anchor around the graduates’ necks afterward.

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  46. Kary L. Krismer
  47. whatsmyname

    RE: Kary L. Krismer @ 46
    Abolition of slavery also ended a lot of “jobs”.

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  48. Kary L. Krismer

    RE: whatsmyname @ 47 – Don’t get me wrong. I’m not necessarily against the increase to $10.10, but at the same time I recognize that increase will hurt some people. The increase to $15 is just totally insane though. That would hurt a lot of people, not all of them people earning minimum wage.

    BTW, the increase to $10.10 would probably help Washington state by forcing all wages up in other states.

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  49. Blurtman

    RE: Kary L. Krismer @ 46 – These are no more “Laws” than the discarded past “Laws” of sophists and clowns in full masquerade.

    “…the number of unskilled and low-skilled workers looking for entry-level jobs would increase.”

    So what are these folks doing now, exactly, cursing the Caribbean on their yachts?

    This is merely conjecture and opinion, and a biased self interest in defending dogma upon which careers have been built. Drivel.

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  50. Kary L. Krismer

    RE: Blurtman @ 49 – I’m not sure I get your point, but I would agree that the number of additional people looking for work would be minimal with an increase to $10.10 for the reason you suggest (people have to be doing something now to survive). Maybe a spouse would be more likely to look for work????

    I was actually focusing on the other side. Jobs will disappear, particularly over the long run.

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  51. Blurtman

    RE: Kary L. Krismer @ 50 – If every fast food place had to pay folks $15/hr, the businesses would either keep prices stable and take a hit on profits, or raise prices. If every fast food place raised prices, their would be no relative competitive pricing advantage. If rising wages increased spending on fast food, etc….

    I generally find it to be extremely disingenuous to waive around what seems to be irrefutable representations of absolute reality to make a point on economics, when this is sociology at best that is constantly looking in the rear view mirror, and whose spokespersons have been established to be influenced by the financial support of biased interests, and to be influenced as well by the need to reiterate conjecture masquerading as dogma to advance one’s career.

    When I attended the very prestigious UC Berkeley graduate business school, I had to sit through an economics course taught by a silly young fop who would insist on drilling dogma into his students that was absolute rubbish. One example – full employment is incompatible with low inflation. Anyone could think of several scenarios where that would not be true, and in fact, history has shown that to not be true. But the silly fop had checked his ability to reason in order to reiterate gibberish dogma in order to either advance his career, or perhaps, because he was truly a blind man being led by the blind.

    Look at how utterly wrong economists have been only very recently.

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  52. Kary L. Krismer

    RE: Blurtman @ 51 – So you don’t think that $15 an hour is enough to motivate employers to find additional labor saving devices?

    You don’t think $15 an hour is enough to entice some people into the job market, forcing some of those currently in it out?

    There’s little doubt that the employers would try to raise prices. Some will succeed at raising prices, some will fail at raising prices, and some will go out of business. That doesn’t mean the employment picture will remain static.

    Oh, and even those who succeed at raising prices will not sell as much product, further reducing the need for employee hours.

    If raising the minimum wage is such a great idea, why stop at $15? I’d love to see at $100 and hour so that we’d be talking about those $6,000,000 Ballard shacks. ;-)

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  53. whatsmyname

    RE: Kary L. Krismer @ 48
    There is no action – or inaction – society can take that will not have negative consequences for someone. Therefore, the existence of these negatives, without degree or context, does not make a coherent argument.

    You are a practical guy. How will the number of jobs lost compare with the number of jobs created when large numbers working people have significantly more dollars to spend?

    There is money everywhere looking for yield. Dollars for investment is in surplus. How is the economy affected when some of those dollars go into primary economic activity rather than dead holding or desperate speculative investment?

    I don’t know exactly what minimum wage should be, but employment worth having should support a living. Enterprises built on exploitation (like antebellum southern cotton) are deserving of extinction. If a fair price does not cover an acceptable return and a free person’s labor, you are losing business to a better alternative in the market, and rightfully so. More often in today’s world, it is simply someone with big ambitions gouging their workers.

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  54. wreckingbull

    RE: Kary L. Krismer @ 52 – The problem is that $15/hour is completely arbitrary.

    I favor a system which pays 16-17 year olds a non-living wage, but limits the work week to 20 hours during the school year. I worked 36 hours per week during high school and it destroyed my ability to learn. When I got home at 8:30 each night, I’d fall asleep into my textbooks.

    Then raise the minimum wage for adults to a level which does not externalize employment costs to the taxpayer. Allow regional variation to deal with different base living costs. If there is going to be a federal mandate, it must allow for this variation.

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  55. Blurtman

    RE: Kary L. Krismer @ 52 – All conjecture. But please waive around a graph and claim it is science.

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  56. mike

    So yeah… Seattle market not slowing down this year. Sold for $540K in May 2007, closed at $609K today, $29K above asking.

    http://www.redfin.com/WA/Seattle/2511-NW-North-Beach-Dr-98117/home/289929

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  57. Kary L. Krismer

    By Blurtman @ 55:

    RE: Kary L. Krismer @ 52 – All conjecture. But please waive around a graph and claim it is science.

    So do you deny more people are likely to want a job if it pays more?

    Do you deny that employers will be less inclined to employ people at higher wages?

    You might have some situations (7/11 for example) where the employer cannot do much to control the number of hours of work. Their only choice is to suck it up or go out of business.

    You might also has situations where labor is a small portion of the overall picture, so plans go ahead anyway.

    And of course, you can have situations where the overall economic direction is positive, such that any adverse impacts are hidden. Just like housing isn’t controlled by one type of impact (e.g. interest rates), the total number of hours of employment in an area isn’t controlled only by one impact.

    But none of that means that absent some sort of positive economic event a higher minimum wage will be painful for some of the people it is trying to help. I’ve called it a simplistic solution, but calling it a solution is really a stretch.

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  58. ARDELL

    RE: Kary L. Krismer @ 52

    One thing I don’t see discussed anywhere is the ripple effect of a minimum wage increase. If you have 6 employees and two are at minimum wage and the other 4 have gotten raises over the years bringing them up to $15 to $20 an hour, won’t they want more than “the new guy”?

    If the new guy gets $15, the one who received raises over the years to get to $15 will not likely want to be paid the same.

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  59. Kary L. Krismer

    RE: ARDELL @ 58 – That’s why unions favor minimum wage increases. It gives them an argument to increase their wages when the contract expires.

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  60. whatsmyname

    “Wages and salaries peaked at more than 51 percent of the economy in the late 1960s; they fell to 45 percent by the start of the last recession in 2007 and have since fallen to 42 percent.”

    http://economix.blogs.nytimes.com/2014/03/14/people-think-were-in-a-recession-dont-blame-them/

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  61. Blurtman

    RE: Kary L. Krismer @ 57 – So you seem to be taking the position that concentrating (relative) wealth in fewer is bad, and it should be distributed to more. (Drawing on pipe, in paisley smoking jacket in leather chair with rivets.)

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  62. Kary L. Krismer

    RE: whatsmyname @ 60 – I think you could probably attribute some of that change to technology. For example, between electronics and robotics, I would suspect it takes far fewer man-hours to build a car today than in 1960.

    I would assume outsourcing would also contribute to that.

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  63. whatsmyname

    RE: Kary L. Krismer @ 62
    And there are many more software engineers today than in 1960 – though apparently not earning enough to replace old assembly line incomes. And that’s the point. Workers today produce more, but receive less of the value of what they produce. That’s income redistribution you can believe in.

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  64. Kary L. Krismer

    By whatsmyname @ 63:

    That’s income redistribution you can believe in.

    I’m not sure what you base that comment on. I’m not against people making more money. What I’m against is simplistic proposals put forward by morons that will hurt a lot of people. A $15 minimum wage is such a proposal.

    What’s interesting about the SeaTac one is that was probably a good idea for the only people it’s currently not helping–those who actually work at the airport.

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  65. whatsmyname

    RE: Kary L. Krismer @ 64
    In simplest terms, I am basing my comment on the quoted ratios and the charts in the article I reference in post 60. They are, after all, about changing distribution of income.

    In more practical terms, I know that no one here has more posts than you on increasing productivity through technology, so I know we agree workers are producing more – in real terms. Are they getting more – in real terms? Most people would agree that they are getting less, often a lot less.

    That $15 minimum wage will hurt a lot fewer people (in the US) than our trade policies have done. And we have the opportunity to watch Seatac to somewhat isolate and stratify the effects. It’s a great learning opportunity. I think people on both sides will be trying to not learn from the results.

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  66. Blurtman

    Obama sucks. So will Hillary, given the chance. So will any Republican president.

    “Four years after President Obama promised to crack down on mortgage fraud, his administration has quietly made the crime its lowest priority and has closed hundreds of cases after little or no investigation, the Justice Department’s internal watchdog said on Thursday.

    The report by the department’s inspector general undercuts the president’s contentions that the government is holding people responsible for the collapse of the financial and housing markets. The administration has been criticized, in particular, for not pursuing large banks and their executives.’

    http://dealbook.nytimes.com/2014/03/13/u-s-overstates-efforts-to-prosecute-mortgage-fraud-watchdog-says/

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