Weekly Open Thread (2015-07-20)

NOTE: If you are subscribed to Seattle Bubble’s RSS feed and are seeing these open threads in the feed, please switch to our official feed at http://feeds.feedburner.com/SeattleBubble Thanks!

Here is your open thread for the week of July 20th, 2015. 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.

Note: The comment limit in open threads is 25 comments per person.

NOTICE: If you have comments to make about politics or economics that do not somehow directly relate to Seattle-area real estate, they may be posted in the current Politics & Economics Open Thread. If you post such comments here, they will be moved there.


About 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.

33 comments:

  1. 1

    Greek Realtors

    The rich elite homes there are plummeting in price as austerity is implemented. Seattle next?

    http://www.bloomberg.com/news/videos/2015-07-20/a-day-in-the-life-of-a-greek-realtor

  2. 2
    Blurtman says:

    Tomorrow, Bernie Sanders will introduce legislation in Congress to increase the federal minimum wage from its current $7.25 to $15 an hour. Yesterday, an opinion writer for the Washington Post argued against this move, saying it will cause jobs losses. I’ve posted the oped below because you should know what the other side is arguing. But they’re wrong. Here’s the truth:
    — The evidence shows that increasing the minimum wage doesn’t cause job losses because (1) workers have more money to spend, which generates more jobs, and (2) a higher minimum brings more people into the labor market, which gives employers more choice of whom to hire — thereby reducing their costs of employee turnover.
    — In the 25 states plus the District of Columbia where the minimum wage has increased since January 1, 2014, job growth has been higher than in states where the rate did not go up.
    — Similarly, in all of the five cities and counties where increases in the minimum wage have been in effect for more than a year, the number of jobs has grown.
    — The oped below concludes that doubling the minimum wage in “one fell swoop” is bad policy, but the Sanders bill phases in the increase over the next five years.
    Bernie’s bill deserves wide support. A decent society pays its workers a minimally decent living wage.
    https://www.facebook.com/RBReich?fref=nf

  3. 3

    By Blurtman @ 2:

    — The evidence shows that increasing the minimum wage doesn’t cause job losses because

    (1) It’s only been done in areas where the economy is fairly strong–e.g. Silicon Valley, or where employers are captive–e.g. SeaTac.

    The idea it will attract more workers is laughable. Increasing supply does not reduce unemployment–it increases unemployment. Just more populist BS from Bernie Sanders. At least this time though he has a specific plan–usually that is sadly lacking.

  4. 4
    pfft says:

    As usual lots of unsupported baseless charges by kary. decades of research show neutral to a slightly positive effect on employment.

    if you the system couldn’t take a slight increase in wages we’d need a new system and it wasn’t as good as the “free” marketers have told us.

  5. 5

    By pfft @ 4:

    As usual lots of unsupported baseless charges by kary. decades of research show neutral to a slightly positive effect on employment.

    Well that’s entirely true, if you completely ignore the fact that this has not ever been done before, other than in the types of places I mentioned. So more BS by pfft.

  6. 6
    pfft says:

    http://www.cepr.net/press-center/press-releases/new-paper-finds-modest-minimum-wage-increases-have-little-impact-on-employment

    “This is one of the most studied topics in economics, and the evidence is clear: modest minimum wage increases don’t have much impact on employment,” Schmitt said. “An increase to $9.00 per hour would be hugely important for the workers getting it, but the idea that this would lead to less employment is just not supported by the evidence.”

    http://www.truth-out.org/news/item/10477-raising-the-minimum-wage-is-cheap-and-easy

  7. 7
    pfft says:

    By Kary L. Krismer @ 5:

    By pfft @ 4:

    As usual lots of unsupported baseless charges by kary. decades of research show neutral to a slightly positive effect on employment.

    Well that’s entirely true, if you completely ignore the fact that this has not ever been done before, other than in the types of places I mentioned. So more BS by pfft.

    the only place it’s been done are you examples? laughable. how about a link kary? I don’t know why I bother asking for evidence anymore.

    just keep making baseless assertions based on your anecdotal(at best) evidence.

  8. 8
    pfft says:

    By Kary L. Krismer @ 5:

    By pfft @ 4:

    As usual lots of unsupported baseless charges by kary. decades of research show neutral to a slightly positive effect on employment.

    Well that’s entirely true, if you completely ignore the fact that this has not ever been done before, other than in the types of places I mentioned. So more BS by pfft.

    and you know this how?

  9. 9
    redmondjp says:

    Classic pfft, asking for a link again . . .

    So, how many posts are you supposed to make every week, or do you work by the hour?

  10. 10
    Blake says:

    Some chart fun…
    http://moslereconomics.com/2015/07/20/euro-area-ca-macro-chart-update/
    (… be sure to scroll down to the housing permits chart – – “Beware the spikes in permits!”)

    Another one:
    http://4.bp.blogspot.com/-I6aO5yDXi4E/VW3pqNYGl-I/AAAAAAAAeBA/Ac90hT7IDs8/s1600/Factory%2BOrders%2B2015-06-02.png

    … sure doesn’t look like escape velocity to me!

  11. 11

    When are some qualified Democrats going to figure out that Hillary isn’t that great of a candidate and jump in the race? It reminds me of when the Dems thought Gore was a great choice, and he faced little opposition. But if I recall correctly, I think Gore faced more primary opposition than Hillary.

    http://www.aim.org/don-irvine-blog/meet-the-press-chuck-todd-latest-poll-numbers-show-that-hillary-doesnt-wear-well-video/

  12. 12
    Blake says:

    By Kary L. Krismer @ 11:

    When are some qualified Democrats going to figure out that Hillary isn’t that great of a candidate and jump in the race? It reminds me of when the Dems thought Gore was a great choice, and he faced little opposition. But if I recall correctly, I think Gore faced more primary opposition than Hillary.

    http://www.aim.org/don-irvine-blog/meet-the-press-chuck-todd-latest-poll-numbers-show-that-hillary-doesnt-wear-well-video/

    Agree… she’s abrasive and thin skinned. Very different than Bill. After reading about her upbringing and her father I do feel sorry for her. But I just wish she would retire with her $100 million and fade away! Alas… the Clintons will be with us for a while.

  13. 13
    Blake says:

    About those subprime auto loans… nothing to worry about! (Says the subprime auto loan tycoon!)
    http://libertyblitzkrieg.com/2015/07/21/subprime-auto-loan-titan-foolishly-proclaims-theres-nothing-to-worry-about/#more-25608

    … perhaps some day, they will be giving people 15 and 30 year auto loans! ;-)

  14. 14

    RE: Blake @ 13 – Back in the 80s they had a very low monthly cost loan or lease for Porches. It was secured not only by the car, but also your house!

  15. 15
    Blake says:

    Wall Street mergers and acquisitions… breaking all the records! They’re partying like it’s 1999… actually they are breaking records set in 2007!
    http://wolfstreet.com/2015/07/03/everyones-wondering-when-the-volcano-will-erupt-record-ma-in-q2-first-half-1-trillion/
    The US healthcare sector scored 537 deals in the first half, amounting to $294 billion, also the highest half-year volume on record, according to Dealogic. That’s up a vertigo-inducing 73% from the first half in 2014, a year that itself had been the biggest healthcare M&A year on record.

    This has been great for Wall Street. Goldman came out ahead as US M&A advisor so far this year, with $435 billion in deals, Dealogic reported. Morgan Stanley grabbed $377 billion in deals. And JPMorgan had to make do with $320 billion in deals. Ah, the juicy fees extracted from these deals!

    The average valuation so far this year reached 16 times earnings before interest, taxes, depreciation, and amortization (EBITDA). Avago is paying 20 times EBITDA for Broadcom. The prior crazy record was an average of 14.3 times, set in 2007 just before it all blew up.

    It “feels like the last days of Pompeii: everyone is wondering when the volcano will erupt,” a senior banker told the Financial Times. The highflying city was buried under lava and ash by the eruption of Mount Vesuvius in 79 AD. But not yet. “Nobody knows,” the banker said. “It feels like we still have some leeway, but it won’t last forever.”

    The story is that executives have been afflicted with the “fear of losing out,” and that this fear is driving the boom into the stratosphere. So now is the time to gobble up competitors instead of competing with them. No company likes competition. It makes you work too hard and puts too much pressure on prices.

    And the cost of money is so low it’s almost irrelevant.
    (end quote)

    See also: http://www.nakedcapitalism.com/2015/07/wolf-richter-private-equity-scrambles-to-buy-primary-care-doctors-leverage-their-patients.html
    And I thought Obama socialize health care!?????

  16. 16

    By pfft @ 4:

    As usual lots of unsupported baseless charges by kary. decades of research show neutral to a slightly positive effect on employment [of minimum wage increases].

    I came across this link, which once again shows pfft is just an Obamabot.

    First, since 1970 there has been a decrease in the minimum wage after accounting for inflation. So if there is decades of research, it shows that dropping the minimum wage has a positive effect on employment. That is exactly what anyone having passed Econ 200 would expect.

    Second, in 2006 the minimum wage was $5.15 and it went up to $5.85 in 2007, $6.55 in 2008 and $7.25 in 2009. And as we all know, employment skyrocketed after each of those increases! /sarc

  17. 17
    Blurtman says:

    Bernie is correct. Here are 6 big arguments in favor of a $15 minimum wage, and why those who don’t want it are wrong:
    1. If the minimum wage of 1968 were adjusted for inflation, it would be $10.60 an hour today. If adjusted for the increased productivity of the American workforce since then, it would be over $20.
    2. Today’s typical minimum-wage worker is a major breadwinner for their family, who desperately needs a raise.
    3. By not giving workers a $15 minimum wage, the rest of us subsidize employers who refuse to provide their workers a living wage — by providing them food stamps, Medicaid, housing assistance, and other help to bring them and their families out of poverty.
    4. The argument that different sections of the country should have different minimums is hokum. (Hillary’s argument.) Different sections of the country don’t have different minimum safety standards or minimum Medicare or minimum Social Security or minimum worker’s compensation standards based on their different costs of living, so why should they have different minimum wages?
    5. This higher minimum won’t cause job losses because it puts money into the hands of people who will spend it, mostly locally, and thereby create more jobs. It will also attract more people into the labor market, thereby giving employers a greater choice of whom to hire and resulting in less turnover and lower costs.
    6. It’s the right and morally decent thing to do.

    https://www.facebook.com/RBReich?fref=nf

  18. 18
    Blurtman says:

    By Blake @ 12:

    By Kary L. Krismer @ 11:

    Agree… she’s abrasive and thin skinned. Very different than Bill. After reading about her upbringing and her father I do feel sorry for her.

    I am still having a hard time digesting that cattle prod story. What kind of parent would do that to motivate a child?

  19. 19

    RE: Blurtman @ 17
    I’d Go One Step Further

    Reduced to work weeks of 2-3 days with full pay. There simply isn’t enough work for all the job seekers or full pay for the week. Automation was suppose to reduce our work week [hades we made everything in our homes and all our own automobiles in 60s and 70s with only 200M citizens]. Now we have like 400M people citizens and foreign visitors with chain migration, and we manufacture practically nothing. We also want a lot of double incomes in this mess. Pass the iPhone to me, I want to play the jelly bean game.

  20. 20

    By Kary L. Krismer @ 16:

    By pfft @ 4:

    As usual lots of unsupported baseless charges by kary. decades of research show neutral to a slightly positive effect on employment [of minimum wage increases].

    I came across this link, which once again shows pfft is just an Obamabot.

    First, since 1970 there has been a decrease in the minimum wage after accounting for inflation. So if there is decades of research, it shows that dropping the minimum wage has a positive effect on employment. That is exactly what anyone having passed Econ 200 would expect.

    Second, in 2006 the minimum wage was $5.15 and it went up to $5.85 in 2007, $6.55 in 2008 and $7.25 in 2009. And as we all know, employment skyrocketed after each of those increases! /sarc

    This post would have been a lot better if I’d pasted the link! I know I copied it, but apparently didn’t paste.

    http://money.cnn.com/interactive/economy/minimum-wage-since-1938/

  21. 21

    By Blurtman @ 17:

    Bernie is correct. Here are 6 big arguments in favor of a $15 minimum wage, and why those who don’t want it are wrong:
    1. If the minimum wage of 1968 were adjusted for inflation, it would be $10.60 an hour today. If adjusted for the increased productivity of the American workforce since then, it would be over $20.

    The $10 figure is roughly correct, and the reason why I’m not opposed to an increase in the minimum wage. That that doesn’t support an increase to $15.00 an hour. As to the increase in productivity, that’s rather irrelevant, because it’s not necessarily the low skill labor that has become more productive and to the extent it is it’s likely because the low skilled labor has been replaced by machines and technology.

    2. Today’s typical minimum-wage worker is a major breadwinner for their family, who desperately needs a raise.

    Well Ray needs to get $600,000 for his Tacoma flip so that he can break even on it. Should someone pay him $600,000 for that PoS house?

    3. By not giving workers a $15 minimum wage, the rest of us subsidize employers who refuse to provide their workers a living wage — by providing them food stamps, Medicaid, housing assistance, and other help to bring them and their families out of poverty.

    This is probably the best of the arguments, but it’s also somewhat flawed. The reduction in work caused by an increase to $15 will push more people into poverty. It’s sort of like rent control–it helps some people and hurts others.

    4. The argument that different sections of the country should have different minimums is hokum. (Hillary’s argument.) Different sections of the country don’t have different minimum safety standards or minimum Medicare or minimum Social Security or minimum worker’s compensation standards based on their different costs of living, so why should they have different minimum wages?

    Hokum? Apparently you’re not aware that different states do have different minimum wages. Pushing a $15 minimum wage on a state that is a financial backwater (basically most the right to work states) would be economic disaster for them. They try to attract industry by being cheaper. Take that away and their economies will suffer.

    5. This higher minimum won’t cause job losses because it puts money into the hands of people who will spend it, mostly locally, and thereby create more jobs. It will also attract more people into the labor market, thereby giving employers a greater choice of whom to hire and resulting in less turnover and lower costs.

    Complete nonsense. Let’s raise the minimum wage even higher and require all existing wages to double, and we’ll all do even better! It’s a pull yourself up by your bootstraps type of argument that has no connection at all to reality.

    6. It’s the right and morally decent thing to do.

    Taking an action which will cause many people to lose their jobs is right and moral? Personally I’m glad the Seattle City Council doesn’t try to help me. I couldn’t survive that!

  22. 22
  23. 23
    Blake says:

    Wow… it’s not just Seattle. Rents have risen by more than 10% in all these cities:
    http://www.bloomberg.com/news/articles/2015-07-23/13-cities-where-single-family-rents-are-skyrocketing
    … That is for single family dwellings, but still that’s 15 million households. This is a major problem with capitalism and why it is unstable and has recurring crises… The property owners and business owners press their advantage to raise rents and prices and the consumer gets squeezed, consumption drops and the economy suffers… Add to this the overhang of student loan debt and rising health insurance premiums and costs and you can clearly see the mess we are in.
    Worldwide commodity prices are tanking, world trade is down for the 5th straight month… looks like the central bank fueled boom (injecting $19 Trillion!) is busting…
    David Stockman provided a very good overview 3 days ago:
    http://davidstockmanscontracorner.com/central-banks-have-shot-their-wad-why-the-casino-is-in-for-a-rude-awakening-part-i/
    China and the commodity-dependent developing economies are the first to drop… not sure what tricks Janet Yellen and the money mavens have up their sleeves? Heard they are considering sending debit cards to every American and giving them free money to spend! Seriously…

  24. 24

    RE: Blurtman @ 22 – Not sure why you don’t think that’s a good analogy. Why is Ray any less deserving than anyone else? Everyone should get all the money they need! We’ll quit paying any attention whatsoever to what something is actually worth. /sarc

  25. 25
    Blurtman says:

    By Kary L. Krismer @ 24:

    RE: Blurtman @ 22 – Why is Ray any less deserving than anyone else?

    —He is a heathen and a blasphemer.

    Everyone should get all the money they need!

    — Everyone should have all the money they can print!

    We’ll quit paying any attention whatsoever to what something is actually worth. /sarc

    — We’ll continue to create fictitious values and use appropriate mumbo jumbo to justify it.

  26. 26

    RE: Blurtman @ 25 – Well, when it comes to Wall Street, I’ll have to concede that last point.

  27. 27
    Blake says:

    Wow… pretty riveting stuff by Evans-Pritchard about China. Those commies sure know how to tame a wild market!
    http://www.telegraph.co.uk/finance/economics/11756858/Capital-exodus-from-China-reaches-800bn-as-crisis-deepens.html
    -snip- Half the shares traded in Shanghai and Shenzhen were suspended. New floats were halted. Some 300 corporate bosses were strong-armed into buying back their own shares. Police state tactics were used hunt down short sellers.

    We know from a vivid account in Caixin magazine that China’s top brokers were shut in a room and ordered to hand over money for an orchestrated buying blitz. A target of 4,500 was set for the Shanghai Composite by Communist Party officials.

    Caixin says the China Securities Finance Corporation – a branch of the regulator – now owns an estimated $200bn of Chinese stocks and has authority to buy a further $500bn if necessary to prop up the market.

    This use of “brute force” – in the words of Peking University professor Michael Pettis – has done the trick. Equities have recovered. How could they not do so, since selling was illegal, and not to buy was also illegal?
    (end quote)

    Blaek sez: Get some popcorn and pull up a chair… wild ride ahead for Mr. Market and the World economy! If you thought ’08 was crazy… wait til ’16!

  28. 28
    redmondjp says:

    RE: Blake @ 27 – No doubt – China’s financial turmoil is a concern that is orders-of-magnitude greater than Greece, with respect to the potential impact on our country.

    Tinfoil hat/infowars prediction: world economy goes to pieces; Emperor Obama uses an existing executive order to declare a national emergency and suspends the upcoming presidential election (get your cash out now – access to all of your financial accounts can/will be suspended, just as happened in Greece). Of course, when Jebillary gets elected, nothing is really going to change anyways so carry on!

  29. 29
    redmondjp says:

    Great article in The Atlantic showing that if your parents are rich, you’re likely to be as well:

    http://www.theatlantic.com/business/archive/2015/07/america-social-mobility-parents-income/399311/

    So how old can I be and still be adopted?

  30. 30
  31. 31

    The Stock Market for 2015

    Has been a Bear Market, Hades, 1% CDs are a better way to make money this year. I sold off and cashed in my Stocks earlier this year before more losses, my 2%+ long-term CD is doing much better. It still has time to correct, but no one knows where stocks will be by the end of the year….am I haughty? Hades no, just lucky.

  32. 32

    Boeing Loses $23M for Every 787 They Deliver

    And the 767 Tanker failed fuel system pressure testing. Gone are the days when we cut aluminum parts in Washington for the 767…..no one likes to admit we’re outsourcing almost all our commercial airplane parts and getting foreign junk in comparison to the past.

  33. 33

    RE: softwarengineer @ 32 – I’m pretty sure that includes the amortization of a lot of the development costs. And those development costs related to using plastics will be useful on future planes.

    But I did see an article yesterday indicating that each 787 has something like $17M of titanium! Maybe I’m not getting the right price on titanium, but that would seemingly be over a million pounds of titanium (or at the price they quote 680,000 pounds). Or maybe that includes the cost of processing/milling the titanium.

    http://www.reuters.com/article/2015/07/24/us-boeing-787-titanium-insight-idUSKCN0PY1PL20150724

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.