Weekly Open Thread (2015-03-09)

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Here is your open thread for the week of March 9th, 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.

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

22 comments:

  1. 1
    Blake says:

    By Blake @ :
    The US economy is back baby!!!
    Restaurants and bars drove US job growth in February
    http://finance.yahoo.com/news/restaurants-bars-drove-us-job-164557713.html
    … we can eat and drink our way to a bright future!

    pfft wrote:
    so I guess when we were losing those jobs it was no big deal? they’re only restaurant jobs? LOL.
    it’s pretty clear for some people that there is no possible way to please them when it comes to the economy.
    when we lost those jobs during the great recession was it now big deal then too blurtman?

    My reply: No pfft, we lost many more high paying jobs in ’08-’09 and they are being replaced by low paying service sector jobs, I think that is “trickle down economics,” right?
    I know you think we should all just put “5.5% unemployment” up on a pedistal and dance around celebrating, but others like to dig deeper into the headline numbers to see what direction we’re headed.
    Here’s the raw numbers:http://data.bls.gov/cgi-bin/surveymost
    “Employed full time (persons who usually work 35 hours or more)”
    Feb 2008: 121,474,000
    Feb 2015: 120,834,000
    … meanwhile the US population has gone up from ~304 million to ~321 million!
    Fewer people working and in crappier low paying jobs… but it’s all good! … 5.5% 5.5% 5.5% !!!!

  2. 2
    pfft says:

    “My reply: No pfft, we lost many more high paying jobs in ’08-’09 and they are being replaced by low paying service sector jobs, I think that is “trickle down economics,” right?”

    source.

    do you realize that the population is aging? ? 5% unemployment is to be celebrated, THE NUMBER IS TRENDING DOWN. The long term unemployed figures have been COLLAPSING lately. the trend is positive.

    like I said, nothing will ever be good enough for some people. we get it.

    Update: Best Private Sector Job Creation “Ever”?
    Read more at http://www.calculatedriskblog.com/2015/03/update-best-private-sector-job-creation.html#RQiYjJxp1IF42tqs.99

    Why the Prime Labor Force Participation Rate has Declined
    Read more at http://www.calculatedriskblog.com/2015/03/why-prime-labor-force-participation.html#VDfdS7VXMJMtWGWt.99

  3. 3
    pfft says:

    man, what an awful report!

    solid job growth — more than 3 million positions added over the past 12 months — is causing more consumers to splurge on lunches, lattes and dinners.

    the restaurant l jobs that were added were only 20% of the total number of jobs added. what about this?

    The higher-paying business services sector, which includes lawyers, accountants and engineers, added 51,000

    also the unemployment rate is the lowest in 6 years. wow, what a terrible report! I debunked you with your own report. also getting job s hitting on restaurant workers. are you a really that much better than them? you must be a doctor or banker right? you look down on us 99%ers?

  4. 4

    RE: Blake @

    Yes Blake:

    Even the anchor babies from Mexico are leaving America because there’s no living wage jobs [jobs that pay like $1500/mo rent] anymore. A snippet:

    “…After deportations increased and the U.S. economic downturn caused more families to return home, the number of U.S. citizens enrolled in Mexican schools almost doubled over the last three years, with the total now nearing 450,000. The transition for these American-born students is often no easier than that of Mexican immigrants entering U.S. schools — and often it is worse. Many encounter long delays in enrollment. Once admitted, many struggle to learn Spanish or have trouble adjusting to a new classroom culture and teaching methods,” the LA Times reports….”

    http://immigrationreform.com/2015/03/09/todays-immigration-headlines-march-9-2015/

    Pffft and his open border Democrat billionaire friends will call it Racist to give you this real news….LOL, Racist for being pragmatic, honest and intellectual? Give me a break.

    BLS also documented only an approximate 2,000,000 Total Labor Market Non-Farm growth in the last 7 years, so where do the 17 million added over-growth population work? The 17 million added are not domestic American citizens BTW, their birthrate is recently depopulating America by a 1.7 value, the added population to America is all foreign.

  5. 5
    Blake says:

    By pfft @ :

    I debunked you with your own report.

    Really?
    Here’s what I wrote: “we lost many more high paying jobs in ’08-’09 and they are being replaced by low paying service sector jobs”

    Please debunk that…
    … or this:
    http://www.ibtimes.com/unemployment-report-six-years-after-great-recession-are-good-jobs-ever-coming-back-1838178
    “…middle- to high-wage sectors such as manufacturing, construction and finance accounted for 78 percent of the jobs lost during the recession. But from February 2010 to July 2014, they accounted for only 57 percent of employment growth. By contrast, low-wage industries such as retail shops and fast-food restaurants accounted for the other 43 percent.”

  6. 6

    Seattle Mortgage Rates to Sky-rocket Soon?

    “…Wall Street walloped amid rate-hike fears, currency turbulence

    U.S. stocks took a beating on Tuesday as traders worried over the specter of Fed rate hikes, and the U.S. dollar soared against the euro.

    The issue out there has been the strong employment report, which has set off fears of an interest rate hike by the Fed sooner or more aggressively than had been anticipated,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York….”

    http://finance.yahoo.com/news/wall-street-slumps-1-percent-161800259.html

    Strong Employment Report? LOL

  7. 7
    Blake says:

    Just saw this… amazing!
    http://www.seattletimes.com/seattle-news/data/mapping-king-countys-disappearing-middle-class/
    Since 2000, 95 percent of new households in King County have been either rich or poor. A mere 5 percent could be considered middle income.

    Between 2000 and 2012, King County grew by 85,000 households — what Constantine referred to in his speech as “new households.” Data show that more than 40,000 of these households are low-income, earning less than half the King County median income (or about $35,000 in 2012). Roughly the same number are high-income, with earnings at more than 180 percent of the median (or about $125,000 in 2012).

    That means, of course, that there was barely any growth in the middle-income group — just 3,500 households earning between $35,000 and $125,000.

    Speaking to a New York Times reporter, Constantine put a Seattle spin on this redistribution of wealth toward the extremes: “It’s people doing really well, and people making espresso for people who are doing really well.”

  8. 8
    Blake says:

    RE: softwarengineer @

    SWE… the irony is that while stocks are being crushed today, allegedly because interest rates are going up, bonds are RALLYING and bond rates are dropping!? Smells eh?

  9. 9
    pfft says:

    By Blake @ :

    By pfft @ :

    I debunked you with your own report.

    Really?
    Here’s what I wrote: “we lost many more high paying jobs in ’08-’09 and they are being replaced by low paying service sector jobs”

    Please debunk that…
    … or this:
    http://www.ibtimes.com/unemployment-report-six-years-after-great-recession-are-good-jobs-ever-coming-back-1838178
    “…middle- to high-wage sectors such as manufacturing, construction and finance accounted for 78 percent of the jobs lost during the recession. But from February 2010 to July 2014, they accounted for only 57 percent of employment growth. By contrast, low-wage industries such as retail shops and fast-food restaurants accounted for the other 43 percent.”

    the funny thing is…I never tried to debunk that claim. you made no effort at all to source it until I asked.

    as your own link stated there are still many high-paying jobs being added. some, and I stress some of the high-paying jobs are being replaced by low-paying. although you really don’t tell us how high-paying or low-paying they actually are.

    I guess you are arguing for more stimulus to create higher paying jobs?

  10. 10
    Blurtman says:

    RE: Blake @ – The 10 year is inching up. If there is real anticipation of Yellen raising rates, it may go up more. Any hint of slowing growth, and rates stay low.

    When would you buy 10 years, if at all?

  11. 11
    Sam says:

    Is earthquake insurance needed for homes in Issaquah/Sammamish area? It is about 25% of my overall insurance and comes with a 15% deductible. if you are an insurance agent or broker giving advice, call that out. Does the fed/state gov help home owners for EQ peril? I am asking because Federal govt covers damages from flood. A quick search suggests less than 10% of home owners in the west coast have it. Why arent people buying EQ insurance if west coast is most susceptible? Why are lenders not requiring this insurance because people may simply walk away from the loan if there is no coverage?

    Tim, this may be worth a post

  12. 12

    RE: Blake @

    Yes Blake

    It was Clinton in the 90s that stated that $250K/yr was Middle Class….had me rolling on the ground in laughter….then Bush really got me laughing [what good does crying do?] when stated $10/hr is good pay. The saving grace for sanctuary cities like New York [Seattle too] is a lion’s share of the city’s over-priced home buyers don’t need a job, they don’t work. They just sip their lattes and could care less about where their barista will live…

  13. 13

    RE: Blake @

    Bonds are Interest Rate Sensitive

    I’m sure the high dollar has helped get the foreigner investors buying the zombie interest rate treasuries in America that’s keeping interest rates low for bond buying and simultaneously giving them a safe place to park their cash. I use to try to predict how long the low mortgage interest rate beer party would last, but look, they just rolled another keg in from the front door…LOL

  14. 14

    RE: Sam @

    SWE’s Two Cents on Earthquake Insurance along the Puget Sound

    Especially the Olympic Peninsula coastline where the faults are closer from the Pacific, is somewhat depressing. I read about a decade ago that a $50,000 deductible in cash [or a 2nd mortgage?] is needed before the insurance kicks in. Geee….for a 6.5, or even a 7.0 Richtor wave; that would pay to get the cupboards back on the studs again and even pay for the sheet rock repairs, before you even needed the insurance. The cracked cement foundations can be masked with plastic filler and paint before you stage it to sell with home inspection….destroyed and dangerous brick chimneys too.

    If we’re talking the really big one, like 7.5-8.5 Richtor, give up in my book. Its like a super hurricane hitting Florida….the disaster insurance companies just declare themselves insolvent and move out of the state. Florida has left over destroyed hurricane homes for decades, so will Seattle, insurance or no insurance….

  15. 15

    RE: Sam @ – IMHO, earthquake insurance is a good idea. While the feds will help people out in a flood (and subsidize flood insurance), I don’t think much of that help comes in the form of a grant (but I’m not sure about that).

    The reason the cost of EQ insurance is so high is because the risk is so high. The reason the deductible is so high is because the chance of minor damage in an EQ is so significant. Also, don’t assume you can just walk away from your mortgage after an EQ. The bank can sue on the note.

    The things you most want to insure for are those which are not that likely to occur where the damages are very high. A major EQ fits that perfectly. But there’s more to the decision than that. The age and location of the house and the financial condition of the owner also come into play.

  16. 16
    Blake says:

    RE: softwarengineer @
    It’s been about 315 years since the last Great Earthquake (> magnitude 9.0) around here, and they seem to happen every 200-500 years. So DNR estimates about a 1 in 10 chance to see one in the next 50 years… I hope we don’t live to see it! A 9.0 releases 1500 times more seismic energy than the 2001 M 6.8 Nisqually Earthquake!!

    http://www.dnr.wa.gov/publications/ger_ic116_csz_scenario_update.pdf
    What Are the Odds?
    The evidence for past earthquakes of magnitude 9.0 suggests that they recur on average every 500 years, but the actual intervals between events are far from predictable—such earthquakes have been separated by as many as 1,000 years and as few as 200. The estimates of the sizes of pre-1700 earthquakes are also uncertain. Cascadia has now been building up strain for over 300 years, so the next great earthquake could happen at any time. Reduced to simple odds, the chances that an earthquake as large as magnitude 9.0 will occur along the zone within the next 50 years are about one in ten.

  17. 17

    RE: Blake @ – There’s more than one fault in the area. I think the one you are referring to is the one off the coast. There’s another major fault running right though Seattle east/west, at roughly I-90. I don’t think that is expected to generate as large of a quake, but being closer that wouldn’t matter. It would also defeat any advantage gained of the new earthquake warning systems that are being developed.

    I forget if it was that fault I was reading about, but there’s one locally where the change in elevation after a major quake was on the order of 20 feet. And I think a Tsunami on Lake Washington would even be possible.

    Edit: This has some useful information. https://www.youtube.com/watch?v=oSSxdogrv1s&feature=youtu.be

  18. 18

    Start at about 9:15 of that video to see the information on the fault. The last major quake there was over 1,000 years ago.

  19. 19
    Blake says:

    RE: Kary L. Krismer @
    Thanks Kary… very interesting video. I used to live next to Seward Park and took training to lead tours and we would always point out the old earthquake scars… I didn’t realize there was such a large east-west fault running through the region as well! Yes… given all the landfill, even a magnitude 7 would cause a ton of damage.

  20. 20

    RE: Blake @ – During the Nisqualy (sp?) Quake Boeing Field was damaged. The runway! It’s built on fill and the ground underneath started to liquefy in what could only be described as a fairly moderate quake.

  21. 21
    ChrisM says:

    I don’t know how in the world you could get this information, but I would *love* to see the underwriting risk model for earthquake insurance. Before I purchased a policy I would want to be certain the company would be solvent after a payout. It seems to me the universal damage (in the local area) from earthquake (far worse than flood) would result in a massive amount of payouts.

    A quick internet search revealed a dubious website that claimed earthquake insurance was backed by the federal gov’t, but this appears to be false.

    Here’s an article saying Allstate pulled out of earthquake insurance.
    http://www.showme.net/~fkeller/quake/lib/allstate.htm

    This sounds like a great Microsoft interview question – is earthquake insurance feasible? I have my doubts. At the state level (which is where insurance is usually regulated) I would think not. Bonus points to insurance companies who structure themselves at the state level so that state bankruptcies contain the damage (this is speculation – I’m don’t know that this is legal).

    Fun fact, models for Seattle earthquake indicate something like more than four feet of broken glass from the high-rises in the Seattle downtown in a 9+ earthquake. If we had a Cascadia event the disruption and human suffering would be far greater than anything we’ve seen since at least the 19th century (a lot of bad stuff happened during the Civil War).

  22. 22

    RE: ChrisM @ – I’ll see what I can find, but you’re right the risk of a company going under from a massive earthquake is significant. That’s why a lot of companies have pulled out. Most the coverage now seems to be from a company called Geovera. But they probably share the risk from there through reinsurance (companies like Lloyds of London). And I think the state may even offer some additional benefits if an insurer of any type becomes insolvent.

    Beyond the insolvency risk, a lot of condos seem to have some sort of pooled insurance bought by their management companies, because it’s cheaper, but in a really big one they might more easily reach their limits. Keep in mind though that damage is oven very localized. After that big World Series earthquake maybe 25 years ago I drove through a town (Santa Clara???) and the damage looked like some sort of a road building project. There was just a meandering line through the town where houses had been torn down, but usually only one or two on each street. Unfortunately that line did go through their downtown, which had a lot of older brick buildings. But the point is even in a fairly significant quake it’s not like every house in the area is going to be destroyed or even damaged.

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