3 1/2 Years Later and Trying Again to Sell the Luxury 2/2 in River North: 55 E. Erie
This 2-bedroom at 55 E. Erie, the popular luxury high rise in the Cathedral District of River North, has been on and off the market for 3 1/2 years.
We even chattered about it way, way back in November 2007.
See our November 2007 chatter here (but since this blog was very new at that time- there were, gasp, no comments to the post.)
We also chattered about it in February 2008 and some people actually commented. See the interior pictures here (it’s the second set of pics in the post).
In November 2007, the unit was priced at $779,000, including the parking, after it had been purchased in 2006 for $710,000.
Flash forward to 2011 and the unit is again available and was recently reduced another $17,500.
It is now listed, with parking, for $42,500 under the 2006 purchase price at $667,500.
This North facing unit actually has an entry foyer, which you rarely see in newer construction condo buildings.
It also has 9’6″ ceilings and hardwood floors throughout the living area.
The kitchen has finishes you would expect from new construction in that era, including granite counter tops and stainless steel appliances.
The bathrooms are marble.
55 E. Erie is a full service building with an indoor pool, doorman, sauna and exercise facility.
Nearly 4 years later, will this unit finally find a buyer?
Margaret Baczkowski at @Properties has the listing. See the pictures here.
Unit #2202: 2 bedrooms, 2 baths, 1407 square feet
- Sold in November 2003 for $581,900
- Sold in January 2006 for $710,000 (included the parking)
- Was listed in November 2007 for $729,000 (plus $50,000 for the parking)
- On and off the market
- Was listed in March 2011 for $642,500 (parking was extra)
- Reduced
- Currently listed for $625,000 (plus $42,500 for parking)
- Assessments of $668 a month (includes a/c, gas, doorman)
- Taxes of $9770
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 13×12
- Bedroom #2: 15×12
God forbid this flipper/specuvester has to change skillsets and do something that might actually be beneficial to society.
They’re toast! LOL.
Mr. Flipper you are going to lose more than $42,500. And since you were likely highly leveraged, you’re going to lose your credit score as well when this goes into default. This was likely someone playing with peanuts (minimal downpayment) affecting elephant valuations.
BTW the Bob on the 2008 thread was not me. I joined this blog about a month later. No idea anyone ever used my moniker before me until today.
Wasn’t this building previously an apartment building? Was it a conversion? Or am I thinking of another building close by on Erie. I remeber looking at apartmetns in a glass highrise in this area.
wow this is going to be a tough sell at this price, its not bad but its not super special either.
My guess is it sells around 475k after the bank repos it
Can anyone comment on the 55 N. Erie building? If this unit were ever “right-priced”, is this location worth considering? BTW, that’s quite a nice photo of the building.
“Wasn’t this building previously an apartment building? Was it a conversion? Or am I thinking of another building close by on Erie. I remeber looking at apartmetns in a glass highrise in this area.”
Don’t know about this building (doesn’t seem like it based on the old commentary) but 2 e erie was rental (I looked at apts there) and then converted.
the location is great, near everything you could possibly want in chicago, although its super urban and not for everyone
The building was built new in ’03-04. There was a building on the site but I do believe it was completely torn down to build the new one. It’s a fantastic building. Some really high end condos here and seems to be desirable and sought after. So yes Rick, I think it’s worth considering if this area is for you.
I like this unit. It has the appearance of being larger than 1400 square feet. The only thing that is irritating is there is no tub in the master bathroom. It looks like there would be space for one even with the enormous shower. I would take this unit over the one on Astor any day.
The unit itself looks nice, but (as Sabrina and others have discussed previously), the prices of 2 bedroom condos seems to have been hit harder that other residences. I’m slightly more optimistic than Sonies, and will guess that it goes for $499k (with parking).
You have to remember that people can come a few blocks south to my building and get a similarly sized 2/2 for under $300,000. Sure, those units have rental quality finishes, but if you don’t plan on living in the 2/2 long term (and I doubt most buyers of 2/2’s in River North do), saving $350k is a big deal.
Wow, a lot of negative opinions here with nothing to support them. I think this is listed correct and the 2/2 sales/listings in the building would support that…
http://www.redfin.com/IL/Chicago/55-E-Erie-St-60611/unit-3805/home/12671999
I don’t personally like the place or think it is worth $625k, but if that is what the market supports right now then so be it.
Didn’t the condo right by the clubs with 2 floors and a terrace sell for $650k or so. As a comp this place is no where near as appealing. Smaller, lower quality finishes, and no terrace.
Initially I was think $300 a sq ft and in the low 500’s, but it looks like others are going lower.
This building was never an apartment building. It is one of the nicer buildings in the area and is very well managed. Nice location. It was developed by the Urban Real Estate family and was pretty successful. They still own a bunch of parking in the building for whatever reason.
I looked at the comps in this building a short while ago and this unit is priced right on the money for the floor it’s on. However, the market has deteriorated a bit since I ran that analysis.
Oh…and the MLS shows the parking at only 35K.
Actually, the developer was named Silverman. His wife operates Urban Search (not Urban Real Estate).
Sean is probably referring to unit 1902 that sold at about $396/SF after backing out parking. That was the lowest price/SF in my analysis. More typical would be $450.
Hey, they have the same Ligne Roset Extensia table as me! (Of course theirs isn’t covered with legos).
If I were in the market for a condo in this area, I’d definitely look at this building. Finishes look good and it has all the amenities I’d want. I wouldn’t want the ugly flat screen TV over my fireplace, but that can be easily remedied. I’d also want to be higher up, as I’m guessing this building has spectacular views from the higher floors. The views from this unit are pretty pedestrian, just looking at other buildings.
The price seems about right. I’d probably bid $550,000 and see if they bite.
“I looked at the comps in this building a short while ago and this unit is priced right on the money for the floor it’s on. However, the market has deteriorated a bit since I ran that analysis.”
Really? 3 floors up is worth $30K more with one less pkg space in a deteriorating market? 1902 looks like the best comp in the bldg.
2202 asking $660,000 w/pkg
2602 asking $639,000 plus pkg (no price)
2602 for rent asking $4,000 plus pkg
2702 for rent pending last asking $3,700 plus $250 pkg
3302 for rent asking $4,200 w/pkg
1902 closed 3/18/10 $627,500 w/2 pkg spaces
2502 closed 7/9/07 $715,000 no pkg
2702 closed 4/30/07 $720,000 w/pkg
“unit 1902 that sold at about $396/SF after backing out parking. That was the lowest price/SF in my analysis. More typical would be $450.”
I see. You were mixing superior tiers in your comps.
“This was likely someone playing with peanuts (minimal downpayment) affecting elephant valuations.”
Well isn’t that at least 50% of the whole real-estate bubble story?
“Well isn’t that at least 50% of the whole real-estate bubble story?”
Perfect!
G,
Check out these recent closings
2405
2604
3303
All of them came in at least $425/SF after taking parking out at $35K. You can’t just go off of the lowest sale and I would give 3 floors up about a $15K premium in this price range.
Has anyone brought this editorial up yet? Seems like the appopriate thread since they just bought a 2/2.
http://www.chicagotribune.com/news/local/ct-x-0629-ortiz-healy-column-20110629,0,1583197.story
That article sums things up pretty well, Sidelined Buyer. My wife and I went through all of that and eventually moved to the North Shore when our first kid was 2.
So, $450 is now $425 and you are still comparing to superior tiers? 1902 is the best comp, and it included 2 pkg spaces. Valuing falling knives is tough, so I’ll just stick with they’re still going lower…
Sidelined buyer – the woman in the article is an idiot – and she will see first hand how stupid she is after kid #2 is born. They will be so happy to move to the suburbs. This is a tired story that happens over and over and over again: young people thinking they are so cool and different and can raise a family in the city – then reality sets in and they rationalize the move to the suburbs. So predictable.
“So, $450 is now $425 and you are still comparing to superior tiers? 1902 is the best comp, and it included 2 pkg spaces. Valuing falling knives is tough, so I’ll just stick with they’re still going lower…”
Define “superior tiers”. But the bigger issue is that not all buildings and areas of the city have fallen by 35% from the peak. This building is a good case in point.
I’m actually going to be doing some posts on different parts of the city to demonstrate just how these average numbers can’t be applied in all cases and just how far off they are. Stuff I want to buy for myself is only off 15%.
This building was originally built to be a Mandarin Oriental Hotel. They backed out before construction completion and it was developed as condos– Thus the very nice covered walk all around the entry way side on Erie, and the top of the building was to be different, because of the hotel Branding. This did not happedn as the building was repurposed. I guess it is known for the unattractive top to the building. I believe it is the tallest building in Chicago in use as a condos. It is a well managed building and high service. I have a relative living there. She is impressed with the management and services, and amenities.
“Sidelined buyer – the woman in the article is an idiot – and she will see first hand how stupid she is after kid #2 is born. They will be so happy to move to the suburbs. This is a tired story that happens over and over and over again: young people thinking they are so cool and different and can raise a family in the city – then reality sets in and they rationalize the move to the suburbs. So predictable.”
This is why I used to facetiously joke on here that I wonder if couples like that even know how they became pregnant with the kiddos in the first place.
“She added that once in the suburbs, parents discover other perks that seem ideal for raising children. Big yards with trees. Bike paths with few busy streets to cross. Neighborhoods with block parties.”
No Cathy parents don’t “discover” these things, they tend to overemphasize their importance as a rationalization for not being able to make ends meet raising a family on a middle class income in the city.
In fact most of these urban parents themselves grew up in the suburbs, so big yards with trees shouldn’t be a Hispanoila-esque “discovery”.
“I thought of other advantages: no two-hour lines for Sunday brunch, cheaper gas, lower sales tax.”
1) Dunno where they’re brunching at in the city but it sounds like Navy Pier. Never had anywhere near a 2hr wait. 2) Cheaper gas is more than offset by having to drive longer distances in the burbs.
3) Lower sales tax yes, you save a point or two (its easy enough to avoid in the internet anyway).
“but overall it seems like people end up coming back”
Of course they do: they realize they’re the salmon swimming upstream to get eaten by bears trying to raise a family on a middle class income in the city. The funny thing is they were completely in denial as to this when they overpaid for their 2/2 condo in the greenzone.
One thing is for sure: when the Ortiz Healy family has to sell their condo to move to the burbs, they’ll blame everybody but themselves if they wind up taking a bath on it.
And speaking of HD I bet HD’s lil wifey pressured him into buying recently, probably even gave him an ultimatum. In fact I’ll bet HD is a yes man through and through and basically does whatever she says for any important decision. I bet she even tivos Oprah and makes HD watch it during the evening hours.
Have fun watching ice skating in the fall when real men are watching football HD you tool.
“See our November 2007 chatter here (but since this blog was very new at that time- there were, gasp, no comments to the post.)”
It’s really a great blog, even though I give you trouble from time to time I really respect the hard work and effort you put into it, and it’s the best of its kind.
The subject property seems nice and priced close to where it needs to be. The parking extra approach reflects the incompetence of the agent and/or the foolishness of the seller. I think that it will see now for maybe $615k with parking if the seller actually wants to sell it. It’s wild that it’s basically been on the market for the entire time this blog has been active.
“Have fun watching ice skating in the fall when real men are watching football HD you”
what if we watch soccer, tennis and Formula 1? What is our REAL gender? lol
“what if we watch soccer….and Formula 1? What is our REAL gender?”
Un-American!! Now might as well go read tin-tin to deux deux.
“Big yards with trees. Bike paths with few busy streets to cross.”
Can I like these things if I don’t have a family to raise?
Well Bob, if HD and his SO picked up a place. You have to figure he most certainly didn’t get into a bidding war or lift the offer.
“what if we watch soccer, tennis and Formula 1? What is our REAL gender? lol”
Eurotrash (or euroinfatuated) male.
yeah HD is likely talking his book, I bet he bought a place in Berwyn
“Can I like these things if I don’t have a family to raise?”
Only if you’re some smelly, hippie-dippie, tree hugging, potsmoker. You are at least part way there.
“I bet he bought a place in Berwyn”
Not close enough to the freeway. Niles.
“I believe it is the tallest building in Chicago in use as a condos.”
That is now old information. 340 On the Park is taller and is now the tallest condo building in Chicago.
Trump, the Hancock and Aqua don’t qualify because they are not all residential.
Thanks for the link Sidelined Buyer.
A lot of people realize too late that the 1200 square foot 2/2 just doesn’t fit in with their conception of raising a child- because there is no storage in the unit, for instance. I’m not saying it can’t (and isn’t) done. But for people who grew up in the burbs- the space is just too small for them.
That’s why the 3/2 townhouses on the North Side are VERY popular right now. Cheaper than a house in the same neighborhood- but you get more storage space and usually a family room in the lower level.
I did not buy. However, the market has bottomed out. The market will never run out of ready, willing and able buyers who can purchase like this:
http://www.redfin.com/IL/Chicago/4327-N-Keeler-Ave-60641/home/13481768
Sold on 05/23/2011
$431,000
Executed Recorded Document Type Amount
05/20/2011 06/10/2011 MORTGAGE $409,450.00
This is the floor.
Here’s another one:
http://www.redfin.com/IL/Chicago/4153-N-Harding-Ave-60618/home/13483663
Sold on 05/31/2011
$546,000
Executed Recorded Document Type Amount
05/20/2011 06/02/2011 MORTGAGE $409,500.00
Executed Recorded Document Type Amount
05/20/2011 06/02/2011 MORTGAGE $81,450.00
There appears to be an endless stream of buyers who are willing to purchase like this. Just when you think ‘wow, there is a real dearth of homes for sale’ the two homes that were on your radar get snapped up by buyers with little money down and maximum per month maximum DTI monthly payments.
This is why I’m not necessarily bullish, but I’m not a bear anymore either.
Homedelete- I feel your pain. But what I want to know is this: how are they able to get these loans? The second house is over the FHA conforming loan limit. Why is someone giving them the second mortgage STILL (knowing what we already know has happened in the housing market?)
Who is backing less than 20% down for a jumbo loan? I don’t get it.
The first house is even scarier. Only $22,000 down on a $400,000 asset. Wow. In 2011 as interest rates are about to pop.
Homedelete- unlike you- I see your examples as extremely bearish. I understand you see it as “if people STILL don’t have to bring any money to the table, how will I ever compete?” But I see this as a very, very bad sign going forward.
@ Bob so the whole Asia, Europe, Africa and South America are Eurotrash?…lol
You crack me up. I could not have made up your character if I were writing a story : )
Ze, I am impressed. Are you a tin tin fan? I love those stories. But man they are not exactly PC now that I read them as an adult : )
“snapped up by buyers with little money down and maximum per month maximum DTI monthly payments.”
then it will never end, the failures will just keep coming and coming and this will be a death of a thousand cuts. I really thought 20 down was where people are saying things are heading.
“some smelly, hippie-dippie, tree hugging, potsmoker. You are at least part way there.”
I think watching Curious George and listening to Jack Johnson for the 20th time this evening speaks for itself. But I will argue that the ocean counts as a shower. I figure women pay big bucks for those salts so it should count. Oddly, not at all a fan of the hippies though. Ze’s more like Spicolli, just sent the pizza to the honor class.
If you look at HD’s examples- we are nowhere near 20% down. Not even 5% down.
“You crack me up. I could not have made up your character if I were writing a story : )”
Don’t laugh… Most Americans fit the stereotype MUCH better than Bob. Bob has a surprising worldliness to his limited world.
Big Tin-Tin fan. Like all the Belgian museums of cartoons too. Good beer, good waffles, good chocolate, good mussels. A stop in Amsterdam first is highly advisable.
lol…you know i have never been to amsterdam despite my love and respect for the dutch…too bad for me.
you won’t watch one of the great movies of all time so you are not in on the joke, but careful saying nice things about the dutch in front of anon. hint: mom was a french hooker with webbed feet.
Despite the obvious, great city. Really a very neat place to wander around. You have the Rembrandt and Van Gogh Museums there which really makes it a very worthwhile trip. Their language is just painful to listen to though – kinda like Chinese opera.
“Despite the obvious, great city. Really a very neat place to wander around. You have the Rembrandt and Van Gogh Museums there which really makes it a very worthwhile trip.”
De Hoge Veluwe is a good time. Still upset about the time a cabbie tried to rip me off though.
“You crack me up. I could not have made up your character if I were writing a story : )”
“Don’t laugh… Most Americans fit the stereotype MUCH better than Bob. Bob has a surprising worldliness to his limited world.”
I think bob is the most complicated character on here, even though he doesn’t have as colorful or outlandish a backstory as some. And the full arc of his life is yet to be written.
if you plan on living in the house for a really long time, why tie up all that cash on a downpayment on a likely still depreciating asset?
put it in the go go up up stock market not in some stupid house that you xan just walk away from if you lose your income or get disabled or whatever… not to mention, if you have more liquid cash you can still make your mortgage payments if things go wrong, rates are so low the difference between the monthly payments of an 80% loan and a 96% loan isn’t that much
the way the government is doing things right now, they are making it almost a no brainer to put as little down as possible on your house
“I think bob is the most complicated character on here, even though he doesn’t have as colorful or outlandish a backstory as some. And the full arc of his life is yet to be written.”
Complicated? I’m actually surprisingly simple. I am only complicated to you because many of my views don’t fit into the box of a stereotype those you think those who share my views should have.
I’ve never been a non-conformist, I’ve never been a conformist either–I just live my life and call it like I see it (in contexts where appropriate).
I’m actually quite simple, as any of my ex’s will attest to. “Bob thinks he’s smart but he’s not that complicated or sophisticated” is a probable quote from all.
“In 2011 as interest rates are about to pop.”
But they _haven’t popped yet_ and that is why Wall Street is about to have another round of layoffs.
I am resigned to the belief that predicting interest rates is harder than equities.
yes definitely not sophisticated but complicated for sure. it is amazing how someone pretty smart can be so dogmatic on certain matters. i partially attribute it to your lack of mirror neurons Bob.
“if you plan on living in the house for a really long time, why tie up all that cash on a downpayment on a likely still depreciating asset?”
If you have bulletproof job security (many do in C(r)ook County), there is something to be said for getting a 30-year mortgage for 3.75%. Yeah some people did it last year (not many). But you would need a 20% downpayment (25% condo), the right credit score and to buy down points.
And ‘likely still depreciating’ is speculation, and the downpayment decision should have little to do with this unless you are considering default as an option even before you purchase (nobody does).
Remove the speculation component and I see how it makes sense for many.
“it is amazing how someone pretty smart can be so dogmatic on certain matters.”
And yet when I look at you I see the same thing. Incapable of seeing the longer-term view and how our society today got to the point it did.
You are incapable of extrapolating beyond your current existence, and hence your views and paradigm are detrimental to the long-term health and stability of a society. In short you, like most other progressives, represent arrogance.
Also your offspring might have a better quality of life than your, miumiu, but it’s not looking likely unless you’ve got a pile of cash. Economic constraints typically quash idealism, historically speaking.
“Economic constraints typically quash idealism, historically speaking.”
perhaps. but also historically when a society becomes fanatic and intolerant follows rhetoric rather than reason things don’t turn particularly well. I am just afraid of people denying science (evolution) who thing God is talking to them having control of a nuclear super power. It is a real estate blog though so let’s not get political.
BTW, I agree that things might not look good for the next generation, given the debts, polarization of the country, state of environment, and ever sliding education standards.
“unless you are considering default as an option even before you purchase (nobody does).”
Bob, you don’t read my posts?
Back to HD’s point. Personally, I can’t buy fast enough right now because if we’re not at the bottom at least we are really damn close. What people fail to appreciate here is the vast numbers of potential sellers supporting prices by keeping their places off the market. They simply can’t sell at these prices or refuse to. So they stay put or become a landlord. Lately, 8 out of 10 sellers that contact me fall in this camp.
Consider this example: seller’s equity is wiped out. Could sell without writing a check at closing but at this point their net investment is now minimal. They could rent their place out and break even on a cash flow basis so why not hang on to the place? If it goes up 10% in 5 years they’ll come out ahead.
The logic is only slightly flawed. This overhang of inventory (and in my opinion this is the REAL shadow inventory) is going to keep prices depressed for a long time. As soon as prices show any sign of recovering these places are going to come on the market in droves. So the market is not going to come roaring back.
“As soon as prices show any sign of recovering these places are going to come on the market in droves. So the market is not going to come roaring back.”
You dont even have to go that far to know the market wont roar back, you just need to know that loan underwriting isnt going to disappear completely again for the foreseeable future. Even if the shadow inventory were just a myth used to scare the market ( its not), there will be no lionish “roar” the best we can hope for is a live cat’s meow.
Roaring back, no. But its back. Despite G’s specious stats, anecdotal evidence shows that the market has picked up and first time buyers with little money down are supporting prices.
There is a tremendous shortage of appropriately priced homes on the market – which is why transaction volume is so low. So if you really want to buy you end up paying more than the lowest comps out there. This is the other side of the coin.
And it’s the seemingly never end of low money down first time buyers who will pay over comps.
10% down, first time buy, nearly half a million dollar property – beautiful gorgeous older victorian home in an excellent neighborhood. These buyers are sophiticated and demanding and will pay for quality when quality is demanded.
http://www.redfin.com/IL/Chicago/3922-N-Kostner-Ave-60641/home/13459750
Executed Recorded Document Type Amount
04/04/2011 04/14/2011 MORTGAGE $432,000.00
I Could do this. And I just might. We will never run out of buyers like this. This is why the market has bottomed. This support prices Even with tightened lending standards, this is it. Bottom’s in folks, and
“Gary Lucido on June 30th, 2011 at 6:27 am
There is a tremendous shortage of appropriately priced homes on the market – which is why transaction volume is so low. So if you really want to buy you end up paying more than the lowest comps out there. This is the other side of the coin.”
“I am resigned to the belief that predicting interest rates is harder than equities.”
I won’t pick harder or easier but I have said it is the perspective from which “you must” think about it. If anyone disagrees please save your comments and go to the casino and prove me wrong. For 99.5% it will be an expensive lesson on what should be (and is) a 50/50 bet.
As for shadow inventory… for some reason I find it virtually to totally meaningless, much more focused on rent parity and prices as a multiple of wages.
“I Could do this. And I just might. We will never run out of buyers like this.”
You are correct. And we will never run out of FHA loans losing money. It becomes just one ginormous transfer tax to the reckless and irresponsible.
and anon.. before you correct me.. i see it coming.. by casino i meant CBOT. which you know i meant.
These days, predicting interest rates in the US is easy. They’re going to be low for a long long time.
When again, makes it a good time to buy a home. The old adage ‘i’d rather pay a lower price than have a lower interest rate’ is exactly that: OLD. The new paradigm is low interest rates for an extended period of time and don’t expect prices to fall because rates aren’t going anywhere.
Massive shadow inventory and more low down pymt buyers? Decades low sales volume? Sounds like lower rents and more defaults for years to come. No collapse, just a continuation of the long downward slog to the eventual bottom, with knife catchers all along the way.
Happy 4th to the Americans out there. The weather’s too nice not to start the weekend early.
Now, back to the chronic bottom callers.
“These days, predicting interest rates in the US is easy. They’re going to be low for a long long time.”
cute.
Ze, that shadow inventory is not meaningless to rent parity since it is adding to rental supply.
G – the “massive” shadow inventory isn’t so massive when you consider:
1. sidelined buyers who have been lining up for 2-3 years now.
2. population increases (and no, I don’t believe the shitty census data – not ONE of my friends that live in the city filled out a questionnaire – and none of them was contacting by a census person).
3. stalled new construction (ie no new units being built).
4. demolition and uninhabitable-ness of many many units each year (which are NOT being replaced).
Remember also – that the shadow inventory is heavily concentrated in areas where most people do not want to live (ie south side of chicago and poorer suburbs). The nicer suburbs and areas of chicago (ie god coast, lp, streeterville, lakeview) DO have shadow inventory – but the factors cited above FAR outweigh the shadow inventory. Now, add in the impatience of Americans (who have already waited 2-3 years), continued low interest rates, and increased confidence in the economy (although small) and you will see that we have passed the bottom in most desirable areas and will start seeing small appreciation for the next few years (followed by greater appreciation).
“In fact I’ll bet HD is a yes man through and through and basically does whatever she says for any important decision.”
Bob when you finally drug a chick enough where she will stay, you will learn being a yes man is the key to a happy marriage. they say “pick your battles” in reality only pick one battle every quarter and the rest just say say dear and move along.
and if you have to bite your tongue bad and say yes, remember shyte runs down hill so just go to work and bust the underlings balllz to work out the negitive married anger so you can go home happy 🙂
Clio, your analytical skills led you to believe that June 2011 sales would top June 2010. You even bet on it. They will come in at least 1/3 lower. You are an idiot.
G… I still have the bear claws out on price, don’t get me wrong, just now an older and more tired bear with much duller claws.
I guess I compartmentalized what you call shadow inventory as overbuilt in excess of needs for primary residence and maintainable second residences. Everything else (and maybe part of maintainable second residences) by definition becomes rental. So to me shadow inventory is closer to a constant that has *already occurred*. Not saying this way is right or wrong, just sorta how it falls into place in my f’d up mind.
At some point it is a monetizeable asset and I see no way that a large amount of unwilling/unable sellers is going to effect finding that price, just makes it slower and more painful getting there.
G – wow, now you are name calling? your desperation is beginning to show. Remember that data is only good in the hands of an intelligent person who knows how to analyze it. What the heck do I care that there are foreclosures in Englewood or Aurora? No – the vast majority of people here (and people I associate with) are only interested in the green zone (and maybe some outlying areas) as well as nice suburbs. Anything else doesn’t really make a difference in THESE areas.
“ie god coast”
typo or new name for the neighborhood?
Maybe my sentiments towards shadow inventory is more simple if I said it would be like me telling you there was a huge seller in apple up at $350.
“Remember that data is only good in the hands of an intelligent person who knows how to analyze it.”
Agreed. That’s why you blew that June call. You are a verified idiot. Now it just remains to be seen if you are a man of your word like you have claimed?
“Complicated? I’m actually surprisingly simple. I am only complicated to you because many of my views don’t fit into the box of a stereotype those you think those who share my views should have.
I’ve never been a non-conformist, I’ve never been a conformist either–I just live my life and call it like I see it (in contexts where appropriate).”
No, that’s exactly it. Bob thinks he has a set of logical positions (which are not hard to understand), and that given those he thinks he’s straightforward and consistent. And I think that’s right for the most part (unless he’s trying to con a girl or the EBT system) *at this time*. He has, however, enough intelligence and curiosity for the prospect of significant future change and reevaluation, which he doesn’t appreciate yet. Very hard to predict, unlike for most.
“Personally, I can’t buy fast enough right now because if we’re not at the bottom at least we are really damn close.”
But you also said prices will be depressed for a long time. Why the urgency to buy quickly?
“and anon.. before you correct me.. i see it coming.. by casino i meant CBOT. which you know i meant.”
Correct you for saying what I’ve said here more than once? I’d have to correct myself, too.
The only thing that bothers me about the set-up is that we all, via the Gov’t, have become the ultimate whale.
“But you also said prices will be depressed for a long time. Why the urgency to buy quickly?”
I think he’s saying that the well priced places are going fast. Anytime a seller says “screw it” and drops their price to market value, it sells. But, as we all know, lots of inventory at above market prices.
“But you also said prices will be depressed for a long time. Why the urgency to buy quickly?”
I’m primarily concerned about a rise in mortgage rates, though I’ve hedged that with TBT. However, I’m also concerned about a little bit of a short term bump that might occur if more buyers come into the market before the sellers react. And the longer I wait to buy the shorter my horizon becomes. I also just want to get it over with.
“I think he’s saying that the well priced places are going fast. Anytime a seller says “screw it” and drops their price to market value, it sells. But, as we all know, lots of inventory at above market prices.”
Sure, but the urgency comes from a personal need or desire to buy, not from fear of missing out on a good time to buy (leaving Ze’s point about interest rates aside). I do agree a lot of the reasonably priced (by which I mean at current market) places are under contract in GZ hoods.
“I’m primarily concerned about a rise in mortgage rates”
Fair enough.
“I also just want to get it over with.”
That, I do understand.
“though I’ve hedged that with TBT.”
That is most definitely not a good hedge.
Since we’re on this topic, let me pose a question to anyone interested in providing their thoughts. My wife and I bought a 2-flat in Logan Square in early 2006 with 20% down. Rate was refinanced last year to 4.75%. Late last year we bought a SFH in Oak Park with 20% down with a rate of 4% (paid a little over a point to bring rate down from 4.25% to 4%). Logan 2-flat is fully rented and income roughly equals monthly PITI. Wife left job early this year to stay home with baby, so now on one income. Moving back to Logan in a few months to save money while wife isn’t working, so need to sell or rent Oak Park house. Monthly PITI on Oak Park house is $1,800-1,850 and if we rent taxes/insurance would go up, so may be as high as $2,000. We can rent house/garage for as up to $2,500 per month. Principal reduction each month is currently about $330. We also considered selling and put on the market for about $40k more than we paid last year and got a contract within a week. Would walk away with a decent profit. Trying to figure out if we should sell or rent until baby is ready for school. Any thoughts?
chris… Seems like you’ll need it, not hurting you, mucho costs getting out and back in. Seems you can afford to make the decision in 2yrs.
DZ.. My argument is always one of replacing how you satisfy a need, shelter.
chris:
I’m with ze on that one, too, assuming you can reasonably easily locate a solid tenant. Sign a 3 or 4 year lease, then move back in at preschool time. If you really can get ~$6k/year out of renting it, you’d get only ~1/2 that value in your $40k gain (which is mostly going away for transaction costs).
“though I’ve hedged that with TBT.”
“That is most definitely not a good hedge.”
And why don’t you think so? Not sure if you’re the one that I’ve debated this with before – the notion that TBT “decays” over time. I’ve studied this in depth. It definitely does not. The only factor to consider is tracking error from the 2x leverage and the compounding. Better than nothing, though I want to check out treasury futures at some point.
“mucho costs getting out and back in”
I know there are other costs but Chris is a realtor. Chris, are you in a good elem in OP? Seems like a easy option to keep if you like the house/location.
Right, I’m a self-sponsored broker, so received a commission on the buy and no listing agent commission on the sell.
The elementary school is Beye, which seems pretty good. House needs a little bit of work, so that is a consideration, but the neighborhood is nice. Would hate to give up such a low rate, especially since we bought the rate down, but if prices really do fall further there was the thought we would come out ahead in 4 years. Maybe not, with the interest rate risk.
If you have a contract with someone, you should really go through with it. You can probably find a way do so without financial of legal penalty but it’s a dick move to go under contract with someone and then find a way to back out of it because you changed your mind.
If both properties are cash-flow positive at this point, I would definitely hold on to the house in Oak Park and rent it out. You’re making $800 a month from it, it sounds like (some of which is required principal repayment), so that’s very good. A decent profit in your pocket sounds nice, but if it is cash-flowing that well that’s going to pay you that profit over the next 5 years anyway, and then maybe you’ll want to move back there.
I have just a few rentals and was thinking about getting rid of some of them, but they’re cash-flow positive and I think that it would be tough to get what I paid for them, so I’m definitely holding on to them.
“Maybe not, with the interest rate risk.”
If the rate goes to 7, you need prices to drop ~28% to payment match. Your taxes *might* go down, and your interest deduction will go up, but dunno if -28% (plus your transaction costs on both sides) is a good bet, especially if you can cashflow the property, even with a $40k gross gain.
“If you have a contract with someone, you should really go through with it. You can probably find a way do so without financial of legal penalty but it’s a dick move to go under contract with someone and then find a way to back out of it because you changed your mind.”
I agree, except that we’re at a standstill in the A/I period.
“If you have a contract with someone, you should really go through with it. You can probably find a way do so without financial of legal penalty but it’s a dick move to go under contract with someone and then find a way to back out of it because you changed your mind.”
If you ever want to work with someone in a professional capacity again I’d recommend following through if able to do so. The problem realtors face is these are largely one-off transactions so people think it’s inconsequential to not follow through. Not a lawyer, but I don’t associate with people who don’t honor bets/contracts/their word.
clio: “G – wow, now you are name calling? your desperation is beginning to show.”
You owe me one monitor. Mine’s covered in coffee.
I know you have a new, ultra-chill persona, but your posting history is riddled with mud-slinging, personal insults and name calling. Is that desperation or just a bad attitude?
I say rent it Chris.
If the property is cash flowing or even if you are taking a small hit, I would keep the OP property. You are in a good area with a great elementary school. Maybe convert to a single family at some point. As others have said, just rent it and move back when you need to put the little one in school.
Unless you are moving to another burb, you are going to have the school roulette problem in Chicago if you aren’t moving to one of the well known districts.
“If you ever want to work with someone in a professional capacity again I’d recommend following through if able to do so. The problem realtors face is these are largely one-off transactions so people think it’s inconsequential to not follow through. Not a lawyer, but I don’t associate with people who don’t honor bets/contracts/their word.”
Like I said, we’re stalled in the attorney/inspection contingency. It’s not uncommon for deals to fall apart during the contingency periods. They’re primarily in place for the benefit of the buyer(s), but just because a buyer wants a credit for X amount post-inspection doesn’t mean seller must succumb to their demands. The contract leaves both seller and buyer with an out should they not come to an agreement on proposed modifications.
what kind of financing is the seller doing?
FHA
Sell the Oak Park house, save money in the meantime by living in teh Logan Square house, revisit the market in a few years. Any way you look at it, you’re carrying probably around half a million dollars in debt. probably some CC debt, probably some student loans, a wife who doesn’t work right now and another liability i.e. your new baby. That’s just me. No need to keep a house today that you want to live in later. There will be plenty more homes in the future and who knows, you may not want to live in Oak Park in three years when you can find a better deal in River Forest instead. You got the ‘double down’ on RE going right now and you’re not really making much cash flow per month. what’s the point?
And you’re a realtor too! There’s still room for volume to go down (although my new personal opinion is that volume has nowhere to go but up up up!) but like someone on here once said “nobody knows anything”
“And why don’t you think so?”
This is why:
http://finance.yahoo.com/echarts?s=^TNX+Interactive#chart1:symbol=^tnx;range=2y;compare=tbt+ubt;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined
TBT sucks. All of these “ultra” ETF’s are scams and should be shut down. Instead of going long TBT, go short UBT.
For JJJ and Bob, here’s the attorney review language in the multi-board contract. JJJ is surely familiar with this but Bob is probably not.
69 9. ATTORNEY REVIEW: Within five (5) Business Days after the Date of Acceptance, the attorneys for the
70 respective Parties, by Notice, may:
71 (a) Approve this Contract; or
72 (b) Disapprove this Contract, which disapproval shall not be based solely upon the Purchase Price; or
73 (c) Propose modifications except for the Purchase Price. If within ten (10) Business Days after the Date of
74 Acceptance written agreement is not reached by the Parties with respect to resolution of the proposed
75 modifications, then either Party may terminate this Contract by serving Notice, whereupon this Contract
76 shall be null and void; or
77 (d) Propose suggested changes to this Contract. If such suggestions are not agreed upon, neither Party may
78 declare this Contract null and void and this Contract shall remain in full force and effect.
79 Unless otherwise specified, all Notices shall be deemed made pursuant to Paragraph 9(c). If Notice is not
80 served within the time specified herein, the provisions of this paragraph shall be deemed waived by the
81 Parties and this Contract shall remain in full force and effect.
“Sell the Oak Park house, save money in the meantime by living in teh Logan Square house, revisit the market in a few years. Any way you look at it, you’re carrying probably around half a million dollars in debt. probably some CC debt, probably some student loans, a wife who doesn’t work right now and another liability i.e. your new baby. That’s just me. No need to keep a house today that you want to live in later. There will be plenty more homes in the future and who knows, you may not want to live in Oak Park in three years when you can find a better deal in River Forest instead. You got the ‘double down’ on RE going right now and you’re not really making much cash flow per month. what’s the point?”
Not all the specifics are right, but in general that’s the thought process behind selling.
“If such suggestions are not agreed upon, neither Party may declare this Contract null and void and this Contract shall remain in full force and effect.”
That’s a *major* typo in the version you pulled that from. Hope you aren’t actually using that file for any transactions.
Well, actually all of that is right except for the CC debt.
Chris probably already knows what he’s gonna do but wanted some opinions to back it up.
Basically you have to decide if its better to hold onto two properties now or if it will cost more (or less) to buy a second property later, with or without unloading the Logan Square 2 flat.
“That’s a *major* typo in the version you pulled that from. Hope you aren’t actually using that file for any transactions.”
I noticed the same thing and was scratching my head. But every version of the multi-board contract that I’ve found has the same language. Perhaps it’s the difference between a “proposed modfiication” and “proposed suggestion”?
Here’s a copy of it online:
http://www.4salerealty.com/Offer%20to%20Purchase%20Real%20Estate%2050.pdf
“If such suggestions are not agreed upon, neither Party may declare this Contract null and void and this Contract shall remain in full force and effect.”
“That’s a *major* typo in the version you pulled that from. Hope you aren’t actually using that file for any transactions.”
What’s diff between suggested changes and modifications? That is the same language as a version I got from an attorney a year or two ago.
“That’s a *major* typo in the version you pulled that from. Hope you aren’t actually using that file for any transactions.”
Also, buyer’s agent prepared the offer. I always use the CAR contract, which is pretty different.
I do this stuff everyday. I’m way more familiar with the financials of the typical buyer/seller in the 25th – 75th percentiles than people give me credit for. And when I crunch the budgets, it’s always tight, very tight, leaving not much left over. Well, except for my budget, but then again, I don’t know anyone that lives like my wife and I. She says she’s embarrassed to have friends over to our apartment because compared to all her friends who live in condos in LP and homes in lakeview, we live far west in a dump. I say ‘well then let’s do something about it today!’ and she responds ‘no, I like having the money in the bank instead.’ so that answers that question.
“Chris M on June 30th, 2011 at 10:12 am
Well, actually all of that is right except for the CC debt.”
TBT is a terrible long term investment gary, you should be in TBF if you plan on holding more than a month
Well, I was going to say that nothing tightens a budget like a spouse quitting their job to stay at home with baby, but of course that’s not true at all. With the cost of childcare, it’s almost a wash.
“That’s a *major* typo in the version you pulled that from. Hope you aren’t actually using that file for any transactions.”
You can totally strike anything objectionable out in a contract with pen and write something else in.
“Well, I was going to say that nothing tightens a budget like a spouse quitting their job to stay at home with baby, but of course that’s not true at all. With the cost of childcare, it’s almost a wash.”
More like nothing tightens a budget like having a baby. Other than coke habit or something.
“With the cost of childcare, it’s almost a wash.” In many cases, yes, but it really depends on what your wife makes and if she carries the health insurance or not. If you have a wife who pulls in a decent income, its often worth the sacrifice to put the child in daycare because it becomes difficult to reenter the workforce after 5 years out and command that pay again. Women who stay at home spend all their time networking and hanging with other women who also stay at home. Stay at home moms in the GZ, unless they have a husband consistently pulling in the mid 100’s or higher, generally bitch about not having enough money to do anything; while working women feel guilty putting their children in daycare or with a nanny. The fact of the matter is that man is supposed to be living in a small village with two tents – a men’s tent and a womans tent, and all the women raise the children while the men go out and hunt and forage for food all day. any other societal construct more than this ten thousand year old way of raising children is artificial
“TBT sucks. All of these “ultra” ETF’s are scams and should be shut down. Instead of going long TBT, go short UBT.”
It’s just the effect of the 2x leverage and compounding. Nothing inherently flawed with it.
“TBT is a terrible long term investment gary, you should be in TBF if you plan on holding more than a month”
You are correct that that would better match what I’m trying to do but then I have to put up twice as much money. I’m willing to take the risk that the leverage and compounding will average out in the long run.
“It’s just the effect of the 2x leverage and compounding. Nothing inherently flawed with it.”
Doesn’t matter why it performs so poorly. The fact is, it is useless in a hedge against rates. Shorting UBT works much better.
“TBT sucks. All of these “ultra” ETF’s are scams and should be shut down.”
I dunno if it’s their fault that most people can’t seem to get a grasp on path dependency. I know I certainly didn’t until I took a bath on these levered ETFs 😀
All they guarantee is to lever to the changes in their benchmark each day. Nothing inherently evil in that. It’s just most people think oh it levers 2x to the underlying each day so that means each week/month/year it should also…WRONG!
“More like nothing tightens a budget like having a baby. Other than coke habit or something.”
I was thinking involuntary job loss hits the budget just as hard as voluntary job loss–probably more so. But a coke habit would fit the bill, too.
“I’m willing to take the risk that the leverage and compounding will average out in the long run.”
I can almost 100% guarantee that it won’t
if you want to see a real world example look at ZSL
but seriously gary, we are doing you a favor, you can choose to ignore us professionals if you want but there is a reason FINRA and the SEC are cracking down on these leveraged ETF’s and placing huge restrictions on the amount you can own
“I’m willing to take the risk that the leverage and compounding will average out in the long run.”
Gary I’ve lost a lot of money (well, to me) in these things, so take it from an insider: it’s all about path dependency.
You can ultimately be vindicated in your view of the market/direction, but still lose loads of $.
Whats the ol’ saying? Right in the long run but dead in the short term.
Sonies,
I do appreciate the perspective. Not ignoring you. I debate this with myself all the time. If could ever figure out how the bond futures work I might pursue that instead. I just have no idea what the underlying really is.
“I was thinking involuntary job loss hits the budget just as hard as voluntary job loss–probably more so. But a coke habit would fit the bill, too.”
I’d bet there’s quite a bit of positive correlation and causality between the two.
“That’s a *major* typo in the version you pulled that from. Hope you aren’t actually using that file for any transactions.”
I don’t see an issue with it and it’s the usual standard one current version 5.0 or whatever it is.
“we live far west in a dump.”
I thought you lived in a studio in uptown. 😀
“I don’t see an issue with it and it’s the usual standard one current version 5.0 or whatever it is.”
Okay, then, not a “typo”, but stupid, useless, surplus provision. I can “suggest” to any contract counter-party that we renegotiate the terms of the contract, but it remains binding if they don’t accept them. It’s restating a truism.
It’s just defining–in advance–the difference b/t “deal breaker” revisions and *non* deal breaker provisions. Stupid, and worthless, as it is surrendering any negotiating leverage–“I’d like these changes, but if you say ‘no’, I’m telling you in advance that there will be nothing I can do about it”. Does anyone really do that?
well the maternity leave in this country is pathetic. There are places where each parent gets a year off with 90% of their salary. After the 2 years are over then you can use day care. Actually few of my friends transferred to European office’s of their employer just before having the baby to get better maternity leave policies.
As for feeling guilty taking a child to daycare or having a nanny, that seems like BS to me. Some women just prefer staying home and come up with all possible excuses. I wonder if they felt guilty when they took the epidural, eat junk during their pregnancy and switched to bottle as soon as the waking up 3-4 times through the night got tough or they just feel bad about the child care part.
That being said if there are multiple kids and the wife or husband is not a high earner, staying home makes sense.
“as it is surrendering any negotiating leverage”
It’s just lawyers being silly and stating the obvious. You still can negotiate all you want thanks to all the contingencies involved. There’s no need to renegotiate the contract unless something comes up (and whatever that something is should be covered by the contingencies, mood swings dont count of course). If you want changes right away negotiate that before you sign.
I think the modifications language creates a new offer which can be accepted and therefore is a binding and accepted offer again or denied in which case the original contract is over. The suggestions language is intended to get around the fact that if you propose changes the other party can treat it as though you’ve denied the offer and cancelled the contract. They are just suggestions – you haven’t made a new offer. But hey, I don’t claim to be a lawyer.
Rejected the offer. I should have said rejected instead of denied.
I think that sidelined buyer is right about the effect of that provision.
Chris M, sounds like you are acting in good faith and have not just changed your mind, so I’ve got no issue with your behavior. Obviously a lot of properties fall out of contract for reason of a party reasonably enforcing their rights and not simply rolling over for the other side. I think that buyers in this market may think that they have a lot of power and that no one wants to let something fall out of contract, so it doesn’t surprise me that some buyers are really pushing to get a let back through negotiating based on the contingencies.
“Chris M, sounds like you are acting in good faith and have not just changed your mind, so I’ve got no issue with your behavior.”
Thanks–that’s exactly the case here.
“well the maternity leave in this country is pathetic. There are places where each parent gets a year off with 90% of their salary. After the 2 years are over then you can use day care.”
That’s not free. The cost is lower wages and/or lower stock prices and/or bigger government deficits. We can have any benefits we want if we are willing to pay for them every day of the year.
bob… I think it’s more like 50 percent path dependency and 50 percent drug dependency.
“well the maternity leave in this country is pathetic. There are places where each parent gets a year off with 90% of their salary. After the 2 years are over then you can use day care.”
This is one thing I do not get…why should any company be required to pay the new parents salary because they feel the need to breed?
If you can’t care for kids (financially or otherwise) on your own, without the help of a nanny or day care, perhaps you should not be having kids in the first place.
High class welfare? Who is expected to pay a 90% portion of a workers salary?
because a healthy society is built on functioning family units. otherwise, only the uneducated on actual welfare end up having kids and smart educated women postpone or just forgo having kids which is not a good thing westloopelo.
“functioning family units”
Wow, that exists outside of photo albums?
“because a healthy society is built on functioning family units. otherwise, only the uneducated on actual welfare end up having kids and smart educated women postpone or just forgo having kids which is not a good thing ”
Childless couples also contribute to a healthy society and you don’t need anyone subsidizing everything that contributes to a healthy society. We’ve done just fine up to now without reproductive welfare. People always point to Europe as an example of great social welfare but the reality is that their productivity is lower than ours. Check the GDP per capita numbers.
Gary absolutely as do same sex couples.
As for productivity, Norway (because of oil) ranks higher than US or at least used to.
But there are many countries in the same ball park as US and they have way better welfare structure. I just find it sad that so many women have to quit their jobs as often times it costs more to get childcare for even 2-3 kids than their salaries. This cannot be a just thing in a progressive society. Also many women (my sister included) had to go back to work after 2 weeks. If you have had a newborn, you’d know that is crazy. It also make breast feeding (best food option for a newborn) almost impossible if not quite difficult. I think a 6 month leave with pay should be mandatory at least for first 2 kids. Of course I understand if they don’t want someone to do this 10 times : )
Yeah, I know about Norway. Unbelievable. But as you say that doesn’t reflect productivity in that case because they are depleting a gift from the universe.
My brother and his wife had to deal with the whole childcare thing and it’s tough but life is not just. What’s happened in this country is that in an effort for people to get everything they want they’ve decided to put both spouses to work. My brother, and countless others like him, live much better than my parents did. In an earlier generation only one person worked. But then along came houses with 2 – 3 x the square footage and cars with 100 gadgets that didn’t exist in the 50s and MRIs and CAT scans and microwave ovens and smart phones with Internet access and central air conditioning and HDTV and cable TV and video on demand. And people decided they wanted all that stuff more than they wanted a stay at home spouse.
“I think a 6 month leave with pay should be mandatory at least for first 2 kids.”
I accept being paid when I make money or provide someone a service. Lots of stuff I’ll even do for free if it entertains me. I have no desire to be paid if I am not contributing. Actually the concept offends me as much as a valet coming to help me with 1 or 2 bags of groceries will piss me off.
It’s nice that a company can *offer* that as a hiring incentive, but entitled to pay without work for a decision you yourself make, knowing beforehand that it will result in time out? I can logically understand at a max accepting it as a seriousness illness. Maybe 100% for 3 months with the allowance of 3 more months off at your expense. I’ve seen some talented women drop a pup and be back in there kickin ass in waayyyy less time than you suggest should be allotted. Women have to make that decision… career – family – both
“What’s happened in this country is that in an effort for people to get everything they want they’ve decided to put both spouses to work.”
Um, both spouses working is also a big part of the US’s huge productivity edge. Can’t have it both ways.
“Maybe 100% for 3 months with the allowance of 3 more months off at your expense.”
That is pretty typical, more or less.
“That is pretty typical, more or less.”
where? in US?
Also Ze that is a very misogynist thing to at: “either career or family”.
“where? in US?”
In the US, at the sort of orgs that offer such things, for those employees who get such benefits. I’d bet Ze had some vague recollection of that leave policy from someplace he once worked.
“Also Ze that is a very misogynist thing to at: “either career or family”.”
No, I threw in an “or both”. If I’m a small business owner with 4 employees and I make a bet on you and require you there, and you are seen 8 months later, in good health, by the other 3 employees now covering your load, while having lunch and shopping, problems are going to arise -all around-. Like I said, I’ve seen those that were back in the conference room before the umbilical cord was cut. We all have these decisions to make. Nothing misogynistic about it – simply a reliability/commitment/planning issue.
Big corporate entity, I couldn’t care less if you pop out 3 new ones every 11 months, but promotions will reflect it.
Believe me ze feeding a baby 10 times a day for 40-50 mins, changing diapers, and all the other rituals, plus discontinued sleep at short fraction is not less than a serious illness. Also to maintain economical growth a society must maintain a steady birth rate and make sure those kids in fact are healthy and become productive hence the need for good education resources. It is not a good thing if only the low income folks on welfare have kids and middle class postpones or cannot afford this. BTW, there are now studies that show even father’s biological clock is attributing to health issues in children. I wonder what will happen with all these kids being born to parents over even 40 using IVF and such. We will see the consequences in 20 years or so I’ll say. I want to see what will happen to GDP as these kids with ton of issues (think autism for one, obesity, diabetes,…) will become he work force. Short sightedness in societal planning is not a good thing.
“Like I said, I’ve seen those that were back in the conference room before the umbilical cord was cut.”
And how were they feeding they baby? This is not feasible unless you formula feed and get someone else to take care of the kid Sure I have friends who shipped their kid to China for two years to the grandparents to bring them up, but parents should have reasonable options. I am sure her colleagues were amazed by how quick she got back to work too.
My sister is a pharmacist and she had 2 weeks leave.
“how were they feeding they baby?”
The rich woman’s traditional method? Wet nurse?
“My sister is a pharmacist and she had 2 weeks leave”
I’ve worked more than one place that offered more than that for Paternity leave.
the problem is not rich women as much as the middle class. also who uses wet nurses any more. sure at my grandmas time. Even royals breast feed themselves these days. ze you have to move to 21st century : )
@ anon, good to hear that.
“Um, both spouses working is also a big part of the US’s huge productivity edge.”
Agreed, but that’s my point. As a nation we decided the tradeoff was worth it. We chose higher GDP/capita over a stay at home spouse. If we mandate maternity leave GDP/capita will go down by necessity. It’s not free.
The point is that government can not force society to pay for something that individuals have decided they don’t want to pay for themselves. Every time they try they misallocate resources in a big way.
“This is not feasible unless you formula feed and get someone else to take care of the kid”
Like I said.. there are choices… why would you expect, come promotion or bonus time, for you to be comped as well as the person that went back after only 3 months. How would you feel if you were the person that came back after 3?
“I am sure her colleagues were amazed by how quick she got back to work too.”
3 kids- 1 autistic…runs marathons, Sits on multiple Fortune 500 boards… don’t kid yourself and think you can do that with a year off for each kid. Life is much about accepting the trade/off between commitments and there consequential sacrifices.
ze you have to move to 21st century : )
and you need to look at things from another position from time to time. 🙂
Gary.. it amazes me when I travel, or for that matter where I live, how few Americans I see. Very sad the not taking time off to enjoy life. Looking back, later in life, its gotta be a bad trade-off.
“As a nation we decided the tradeoff was worth it. We chose higher GDP/capita over a stay at home spouse.”
There is an in between solution. Women can have a career and contribute to GDP and have a family. Two six month leave periods at say first 3 month with paid and the other 3 without pay is not so extreme to require women to become house wives!
“and you need to look at things from another position from time to time. ”
I think i do that more than most at least on CC : )
muimui – “Believe me ze feeding a baby 10 times a day for 40-50 mins, changing diapers, and all the other rituals, plus discontinued sleep at short fraction is not less than a serious illness.”
I have to agree. I worked 80 hours per week in a very high earning occupation…having a child, nursing the baby exclusively , and the lack of sleep for the first 3 months was far more difficult than working. Fortunately, unlike most women, I had a 16 week paid maternity leave which was unheard of. Exhausting…worth it, but a tremendous amount of work. Nothing that an ivy league grad school can compare you for. I don’t think its a woman’s choice as many on this board think…its a family decision…babies have fathers too. Don’t think for a second that my husband was not exhausted. Oh, and women can get back to work soon if men would do their share….the only think a man can’t do is nurse….but he can bring the baby to your office to nurse or you can pump.
I think its short cited not to have good maternity and paternity leave policies…it does seem as though the poor and uneducated are having babies at a much greater rate than the educated. Couple that with declining public schools and we will pay for this in the future. I think it also is part of the reason why the middle class is dying out…we are getting extremes (rich and poor) in this country.
a local i could not agree more.
“it does seem as though the poor and uneducated are having babies at a much greater rate than the educated.”
My personal opinion is that this will not change regardless of maternity leave policies.
In order to keep stretching and to stay in the upper middle class in a big city, people often have no choice but to have both spouses work, regardless of their companies’ leave policies. This is why people in big cities have kids later in their life and often have fewer children, unless one of the spouses is significantly older than the other and has had more time for their income to grow significantly, or if one spouse “hits it big” in terms of a promotion or is in a family business that is doing well. The alternatives to both spouses working is often seen as a spartan lifestyle in the city, or living way out in the burbs with one spouse having a super long commute and never seeing their family.
“Oh, and women can get back to work soon if men would do their share”
So, others should pay for a woman choosing to get knocked up by a loser?
Dave M: it’s more than just that. First of all, living in the city like you explain, is a fairly new concept for young couples. My grandparents fled to the ‘suburbs’ the first chance they could get in the 1950’s and its been that way for 50 years. Even prior to that, many city neighborhoods were actually gasp! suburbs before being annexed into the city in the late 1800s or early 1900’s to get into the city’s sewer and water system.
There are so few areas in the city acceptable to ccer’s that the cost of family housing is astronomical, and even fringe areas without decent schools (Logan, Uke village) still regularly see sfh sell in the $400’s and $500’s. Once you start heading NW or SW where housing is a bit cheaper it’s not so much the city as former suburbs annexed into the city and is unacceptable for GZ’ers.
Secondly, many women choose to stay in the work force because when they quit and return, many of the same career opportunities are not available to them. If my wife left her good job, they could replace her in a heartbeat and the person in that job would never leave (unless they found a better job somewhere else). My wife would not be able to find a comparable job, with comparable pay in a comparable environment.
Finally, she wants to work because she has an advanced degree and it seems to her to be an extreme underutilization of her capabilities to stay at home 40 hours a week. So she tries to have it all, and it’s a juggle but it can be done. Nothing is perfect.
Finally suburban living isn’t all that cheap either. A medium sized updated home in a nice suburb with top quality schools will a decent chunk of the wage earner’s budget. Even when you get farther out, much of the newer housing out there is mcmanions – drive along highway 130 IIRC past Oswego, or st charles, or kendall county and it’s all these enormous homes on former farm fields. Some of the smaller original homes are around and for sale but that’s not what peeople want.
http://www.redfin.com/IL/Geneva/3269-Knollwood-Cir-60134/home/16877139
3269 Knollwood Cir GENEVA, IL 60134
3 car garage, 4 bed/3 bath 3,800 sq feet, $11,000 taxes, built in 2002, on the market for 232 days
$384,000
“In order to keep stretching and to stay in the upper middle class in a big city”
If you are stretching to stay, you’ve already fallen out. The problems we face now are due to people believing debt is the solution to this problem.
“but the reality is that their productivity is lower than ours. Check the GDP per capita numbers.”
I don’t think you know what GDP means.
Also women are already discriminated against in the workplace and get paid lower than the male equivalent, so the higher insurance costs and maternity leave are priced in already anyways. Why don’t you tell your mom someday that she should have only had 2 weeks with you as a baby and tell her how unamerican it would be to require longer cuz gdp would suffer. wtf
Bob 2.. To be fair, this arguments original framework developed around the comparison of 1yr.
“I don’t think you know what GDP means.”
Uh…yeah I do.
“Uh…yeah I do.”
No you don’t. GDP is not a measure of worker productivity, and it’s not an indicator of standard of living either. So no, you don’t know what GDP means, or at least you don’t know how it relates to the real world.
“GDP is not a measure of worker productivity”
Agree that I’d think of it on a per worker or per hour worked basis (if labor input were the focus) most naturally, but productivity to refer to a country’s productivity is not unheard of.
“it’s not an indicator of standard of living”
Kinda is (as an indicator or a rough proxy).
GDP per capita is a decent measure of what a society produces per person. And I would argue that it is reasonably correlated to standard of living since what is produced is available for either consumption or saving and a society produces what is valued by its inhabitants. I will guarantee you that the standard of living is approximately twice as good in a country with 2X the GDP per capita – as valued by its inhabitants.
And I said GDP per capita, not GDP, is related to productivity.
“GDP per capita”
Good to know that Qatar has a standard of living approximately twice as good. If our standard of living is so great, why for example are we number 36 in life expectancy? There are many ways to measure standard of living, GDP isn’t one of them. Income inequality is another good one where the US fails miserably.
““Oh, and women can get back to work soon if men would do their share”
So, others should pay for a woman choosing to get knocked up by a loser?”
wow G you have out done yourself. We all pay taxes in the society for say schools even if we have no kids. My insurance premium pays for ton of folks who have unhealthy life styles…. get real we live in a society hence do things for each other. who do you think pays for the retirees? it is the next generation.
“Good to know that Qatar has a standard of living approximately twice as good. If our standard of living is so great, why for example are we number 36 in life expectancy? There are many ways to measure standard of living, GDP isn’t one of them. Income inequality is another good one where the US fails miserably.”
As we discussed earlier in this thread you have to discount resource depletion. Hence Qatar is an anomaly.
But in terms of life expectancy the differences are small at the top of the rankings and life expectancy is not the only measure of standard of living. Obesity is a big problem with this nation’s life expectancy. Apparently people have decided that eating whatever they want makes their life better than living longer.
As for income inequality…well we are talking about averages of standard of living vs averages of GDP per capita. On average we have a high standard of living.
@ anon:
http://www.ehow.com/list_7172391_illinois-maternity-leave-laws.html
don’t know where you work but most women around me had 2-3 week leaves.
“There are many ways to measure standard of living, GDP isn’t one of them.”
Not generally a measure of standard of living, but very much used as an *indicator* of standard living (which is part of what you were disputing).
“don’t know where you work but most women around me had 2-3 week leaves.”
2-3 months paid has been pretty typical where I’ve worked.
“On average we have a high standard of living.”
On average we have a high GDP per capita. Problem is most of that GDP trickles right up to the mega rich, while the middle class is slowly disappearing and income inequality rises. Something as complex as a society of hundreds of millions of people can’t be handwaved with one number.
“On average we have a high standard of living.”
if it is defined by size of ones house or car yes or portion of the food. Otherwise for all else believe me those yes terrible French, Dutch, Italians, Spaniards, Scandinavians, Japanese, … have far better lives. Now if you are talking about folks that make over 200K sure US is the place, but they make what 5% of the population?
Also GDP is distribution blind, it is an average statistic so really means very little in terms of what an average person’s income is as the wealth distribution is quite uneven in US. Finally money is not everything Gary. Divorce and illness for instance make people unhappy and they both prevail here. Look at the mental disease rate in US:
http://www.webmd.com/mental-health/news/20040601/rate-of-mental-illness-is-staggering
“Look at the mental disease rate in US:”
As the article notes or suggests, hard to believe you can make a lot of the cross country comparisons given likelihood of diagnosis issues.
americans have an incredibly high standard of living and the greatest availability of cheap goods that i have ever seen. Much of this is on borrowed money though.
“Much of this is on borrowed money though.”
Booooo to credit card limits and debt limits!
“those yes terrible French, Dutch, Italians, Spaniards, Scandinavians, Japanese, … have far better lives.”
I disagree. Spain just threw out their socialist government because it’s failing. Italy might become another Greece. Norway benefits from a geological gift. And the Japanese drive themselves crazy. If I thought Europe was a better place to live I’d move there in a second.
“Finally money is not everything Gary.”
So then we shouldn’t worry about it being distributed unevenly.
“Booooo to credit card limits and debt limits!”
Here is an interesting one from collectivist and socialist Brasil. Took over mother in-laws finances due to some health issues and a thief for a sister in-law. Saw her first statement with a credit card. MONTHLY rate was 13+% (fortunately her charges were getting paid automatically). Do the annualized on that one, the number will look wrong even though it’s right.
“Look at the mental disease rate in US:”
the only thing that means is that we have more access to shrinks than anywhere else in the world
most mental diseases are made up so you can occupy your therapists couch for 200 bucks an hour and get on some medicine that if you get off it you go crazy for another 100 bucks a month when all you need to cure what ails you is to smoke a J or go on a vacation
Gary again you mix government’s finances with standard of living. Spain is a wonderful place to live and its people have way better relationships (family, friends), eat better, live longer, and are far less depressed. My sister worked in a pharmacy as a student and she told me she was shocked how many young mothers with 2-3 kids in a suv would pull off to get prozac,… and then the number of kids who were getting drugs for ADD and so on.
As spanish cannot deny having a terrible economic situation, American’s have to realize they are having a social crisis. no two ways about it.
as for moving to europe, believe me if i were earning less than 100k would move there in a heart beat. in fact, once kiddo is older and we have positioned our careers, we are for sure moving.
sonies, why the ‘or’ ????
“the only thing that means is that we have more access to shrinks than anywhere else in the world”
keep telling yourself that darling and you’ll eventually believe it.
“Income inequality is another good one where the US fails miserably.”
we have 300 million people and milions of immigrants coming to this country every year, do you really expect everyone to have equal income? Sorry thats not how capitalism works.
And yes large corporations have amazing power right now but so what? They provide great jobs for millions of people. Quit always dwelling on the smallest most negative aspects of certain “gotcha” media headline statistics. Yeah 9.1% unemployment SUCKS, but the other 90% that have jobs are very likely doing better standard of living wise than they were 10, 20, 30, etc. years ago
remember when information wasn’t so accessible just a mere 10 years ago? remember how much time you would waste looking for stuff before the internet? Yeah the paradigm shift to the online universe has killed lots of crappy blue collar jobs, but our standard of living is WAY up overall.
do you know that you pay 40% income tax in canada and the top income bracket is 80k a year? in addition to that insane income tax, you pay property tax, a 13% sales tax, a pension tax (like SS), and a medicare style tax too… in the US a household of 80k pays like 10% in taxes on their income… which one sounds like a better deal to you? And you wonder why we have so many people flocking to our great country every year?
http://www.nationmaster.com/graph/peo_div_rat-people-divorce-rate
i am sure the divorce rate is so high too because every one remarries a super model after their divorce and lives happily ever after.
“sonies, why the ‘or’ ????”
damn TSA thats why! 🙂
The divorce rate is so high because women don’t know their place and want to be everything they were told in their feminist liberal arts school and eventually wind up unhappy from being overworked trying to climb up a man sized hill in the corporate world, therefore husband dumps them for a supermodel when they lose their desire to have coitus.
oh sonies… Fed ex ahead…
Miu, best i ever heard ‘americans are so unhappy they don’t even know they are unhappy.
“in fact, once kiddo is older and we have positioned our careers, we are for sure moving.”
Then why the heck are you considering *buying* a new in-town?
We won’t leave for 8-10 years or so and it will be an investment. It is Chicago after all, I think long term the market with get to rent parity and we can always rent our place out. I am with Clio on not putting one’s life on hold. Also depending on where we move, we might already have a home so it is good to have some property in a different country.
yes Sonies it is always women’s fault. I think since Adam’s time, we have blamed them for everything so why not now. Because men are perfect, society puts no pressure on couples, education system is so great that does not stress the parents about their kids either, nor the high expenses say tuition, or anxiety of losing one’s job. Being constantly in war is fine too. It is only those liberal women are doing all the damage : )
Sonies:
“Yeah 9.1% unemployment SUCKS, but the other 90% that have jobs are very likely doing better standard of living wise than they were 10, 20, 30, etc. years ago”
Eh, maybe, maybe not.
http://acivilamericandebate.files.wordpress.com/2011/04/growth-in-income-inequality1.jpg
So, pretty small income gains over the last thirty years, and that is “real” income (i.e., adjusted for CPI), while CPI excludes things like health care and education, which have seen massive increases in prices over that time frame. It’s very possible that the great majority of the country is no better off than they were 30 years ago, and if they are, it’s not by much.
thats not what I said
I said women think they can do everything at the same time (such as be a good mom, good employee, good wife, etc) when in actuality that isn’t the case except for the very few extremely lucky and fortunate.
pick something and go with it, despite popular myth, women can’t multitask for shit because they overthink everything
Sonies, we have more “vampire expenses”. Thirty years ago, we didn’t have cell phone bills, $200/mo cable bills, high speed internet, and all the other misc expenses that seem to suck up people’s budgets. This doesn’t even count the extreme healthcare and education inflation.
Even though I don’t have any hard numbers, I would say the true middle class is worse off than previous generations from my observation. The overall cost of living just seems much much higher now, especially if you live in or near a large city.
“Yeah 9.1% unemployment SUCKS, but the other 90% that have jobs ”
That 9.1% doesn’t include people who have exhausted their unemployment compensation, those who work part time but want full time work or those who have retired or simply given up looking for work. It’s more like 16%.
And that’s of the labor market, which only includes 1/2 of the population and excludes those that are too old, too young, retired, on disability, stay at home mothers and the like. So 16% of the half the country that works is un or underemployed and at these rates it causes long term damage.
“Gary again you mix government’s finances with standard of living. Spain is a wonderful place to live and its people have way better relationships (family, friends), eat better, live longer, and are far less depressed.”
I don’t know how you can determine conclusively that the Spanish are less depressed and have better relationships. And my point about the government is that when a nation has a socialist agenda it fails – again and again. There is a cost to providing those benefits and some of that cost falls on the government and then the government fails.
Regarding equality of income…people obsess on inequality of income but that’s not what matters. Look at inequality of consumption. High earner income does not disappear from society unless it’s consumed and people who make a ton of money only consume a tiny fraction of what they earn. The rest is available for investment and charitable contributions that all of society benefits from regardless of the fact that one person made the income. Look at all the public assets created by the wealthy. And let’s not forget that the big earners are basically supporting the bulk of this country with a disproportionate share of the income taxes.
“when a nation has a socialist agenda it fails – again and again.”
not true. fyi:
http://www.forbes.com/2011/01/19/norway-denmark-finland-business-washington-world-happiest-countries.html
from the article:
“And yet joining Norway in the top 10 prosperous countries are its Scandinavian sisters Denmark, Finland and Sweden, with equally small and civilized Switzerland and the Netherlands also in the club. None of these countries are blessed with great hoards of oil and gas.”
“They are all borderline socialist states, with generous welfare benefits and lots of redistribution of wealth. Yet they don’t let that socialism cross the line into autocracy. “
Yes Gary, if only the ultra-rich became even richer, everyone would be much better off.
“Even though I don’t have any hard numbers, I would say the true middle class is worse off than previous generations from my observation. The overall cost of living just seems much much higher now, especially if you live in or near a large city.”
BUT 50 years ago, the *richest* person in the world could not at any price have a mobile phone, or the internet, or cable tv or a dvd, or, or, or, or.
And the number of things available cheaply to the middle class has absolutely exploded–just think about the year-round availability of cheap(ish) produce, which just did not exist even 35 years ago.
There are soooo many things that a middle class person can have today that weren’t available–at all–in the “golden era” that it’s not really a fair comparison. Strip your life down to what you could have in 1960, and–except for post-secondary education–one can live pretty cheaply.
yep… Never been a better time to be alive… Life expectancy too.
I’m sittin by the beach now thinking how sad it is that this group playing volleyball, in front of me, doesnt realize they could be happier if only they were contributing to GDP instead. Well at least the blonde with the long pony tail is assisting tourism, one may argue.
Yeah, I can’t figure out Scandinavia. Could it be that it’s easier to manage a homogeneous society with common values and make policy decisions?
BTW, we have a serious disadvantage with our military spending. What percent of our GDP goes to that? We’re the world’s policeman.
well I tell you what if we didn’t have to spend 20% of our budget on 50% of the worlds military spending, I guarantee you we would be far better off than any of those Scandinavian countries, but those Scandinavian countries also have a few other advantages, a relatively intelligent, homogeneous Caucasian population and nearly zero poor, and poorly educated immigrants entering their country every year, where we have millions.
And coincidentally their society values on the job training as well as apprenticeship type education systems where we basically are filling quotas with useless other classes that have nothing to do with the degree you are getting all in the name of “becoming more worldly” (and probably justification of some teachers jobs)
I tell you what, I would have much rather gone to two years of college with all classes relating directly to my major than 4-5 years of classes with barely 1/4 of credit hours relating to my actual major.
you are wrong again sonies, sweden has ton of immigrants mostly extremely poor and uneducated. They are one of the top asylum granting countries. Many kurds who fled middle east for instance live in sweden. There are also many east european immigrants and unlike US that gets a huge benefit from immigration of brains in the world, sweden only gets the unfortunate in need of labor or seeking political asylum. I wish the news covered a bit about the world instead of someone killing their pregnant wife so you guys had a clue about the world.
“I tell you what, I would have much rather gone to two years of college with all classes relating directly to my major than 4-5 years of classes with barely 1/4 of credit hours relating to my actual major.”
Aren’t there a lot of schools where you could get out after three years with more focus on your major if you wanted? (I’m not completely positive, that’s as much a of sincere question as a statement.)
“sweden has ton of immigrants”
Their migration rate is about 40% of the US rate.
And we’ll see how long that lasts. Or are reports of a growing anti-immigrant sentiment overstated?
“Regarding equality of income…people obsess on inequality of income but that’s not what matters. ”
You’re right–it’s wealth/assets.
And do you _really think_ all these hedge fund managers get rich off of their 20% take? Nope its the 2% of assets under management.
Most Americans are too shortsighted to see it is not the income statement that determines wealth but the balance sheet.
“Yet they don’t let that socialism cross the line into autocracy. “
You have completely ignored demographics, as have they in those countries. They’re wising up that some people are perfectly okay with exploiting the welfare state and doing nothing with their lives. Hint–it is the same demographic that has 70% of its births out of wedlock in the US.
“Despite tougher border scrutiny after 9/11, nearly 8 million immigrants came to the United States from 2000 to 2005 – more than in any other five-year period in the nation’s history. Almost half entered illegally”
yeah lets compare that to
“In 2009, immigration reached its highest level since records began with 102,280 people emigrating to Sweden. In 2010, 32000 people applied for asylum to Sweden, a 25% increase from 2009, the highest amount in Swedish history.”
and I bet with these increased numbers of immigrants, sweden’s socialist paradise will also start to have problems in about a decade or so
It sounds like Sweden may be rethinking some of their immigration policies:
http://www.nytimes.com/2011/02/27/world/europe/27sweden.html
“and I bet with these increased numbers of immigrants, sweden’s socialist paradise will also start to have problems in about a decade or so”
Of course. Their socialism model was based on the assumption that Sven was the same as Pookie. Pookie just don’t give a f with his 85 average IQ.
“And do you _really think_ all these hedge fund managers get rich off of their 20% take? Nope its the 2% of assets under management.”
Both. Do you really think the base of assets doesn’t go rapidly to 0 if you don’t return enough and return it regularly? The home run is the 20+%. But yes you are correct, it is being able to leverage a balance sheet and play on very favorable credit terms that helps quite a bit.
“yeah lets compare that to”
So in America population 300m yearly immigration was 1.6m, in Sweden population 10mil they got 100k.
Might wanna do the math on that.
Bob: “And do you _really think_ all these hedge fund managers get rich off of their 20% take? Nope its the 2% of assets under management.”
They aren’t “getting rich” off the 2%–that pays for office space, private school and the summer share, but not private jets and 100 foot yachts. The jets and the yachts are off of the 20 and the co-invest.
$1b under management = $20mm in annual fees, taxed as OI–barely enough to pay rent in Greenwich and bonus out the staff. $1b doubled into $2b = $200mm in fees, taxed as LTCG, which pays for a yacht and a nice Hamptons house with money left over for the jet share.
So, yeah, I think they *ARE* getting rich off the 20, and not the 2.
Bob: “Their socialism model was based on the assumption that Sven was the same as Pookie.”
So, all the folks who disappeared from the south and west side in the last decade went to Sweden? “Pookie” ain’t a stereotypical name for Syrians or Zaireans.
100K/9 mil is around 1%
8 mil/(5 X307 mil) is 0.5%
so relative to population sweden had twice as much immigration!
now difference between Sven, Axel, and Per as opposed to Bob, Bob junior, Bob the second, etc… is that those guys actually read, are knowledgeable and intelligent and believe in evolution and don’t claim to see Russia from their back yard…lol
“Both. Do you really think the base of assets doesn’t go rapidly to 0 if you don’t return enough and return it regularly? ”
Yes I do really think the assets don’t go rapidly to zero if you don’t return enough. Read a story about a trader at Deutsche Bank that lost a billion or a few during the financial crisis and he is successfully fundraising his newer (armageddon/black swan) fund.
I hear about people blowing up funds all the time (ie: Meriwether) who just go on to start a new one and don’t seem to have trouble raising capital. I don’t think the markets are as efficient as you presume. People assume big names = performance (beyond randomness) and its not usually the case.
Per the CIA World Factbook, estimated net migration for 2011:
USA: 4.18 migrant(s)/1,000 population (#23, globally)
Sweden: 1.65 migrant(s)/1,000 population (#44)
Zimbabwe is #1 at 24.83/1,000
Northern Marianas last at -57.46/1,000
Of course, those number net out emigrants, against immigrants, so there’s that.
Miumiu,
The people on the eastern edge of Finland (with houses facing west) would most certainly claim to see Russia from their back yard!
“I hear about people blowing up funds all the time (ie: Meriwether) who just go on to start a new one and don’t seem to have trouble raising capital.”
So, what does that have to do with the operators take? Assets under management =/= personal wealth, which is what was being discussed.
we were talking sweden not finland.
Oh…and the people in the far east part of Norway too.
“People assume big names = performance (beyond randomness) and its not usually the case.”
Except when it is.
Douche Bank is not a fund, traders that lose billions always seem to find a job- just a strange truism, and I assure you most funds are small, a few dominate, lose money for them and your stay is so short you won’t even know you were there, just cause you get picked up elsewhere doesn’t mean shit. These are not the guys you are talking about. And if you think people give you money when you can’t show previous return, nope. You want the hedge fund thing.. top your class… go to goldman or similar.. work many years, be a star, THEN you get to play. Maybe I was confused all this time and thought the barrier to entry and success was near impossible which is why everyone isn’t doing it.
“Of course. Their socialism model was based on the assumption that Sven was the same as Pookie. Pookie just don’t give a f with his 85 average IQ.”
well its more of a model based on sven being the same as Abdullah but yeah…
” taxed as LTCG”
well if it’s section 1256 you only get 60% as LTCG, 40% has to be STCG.
The bastards!!! btw. I hate to say it but the LTCG thing, it may be the single most unfair part of the entire tax code.
“top your class… go to goldman or similar.. work many years, be a star, THEN you get to play”
Will be interesting to see if this changes now that the banks are dropping their prop desks due to new regulations.
Btw Bob.. I could see you at Millenium Partners.. they have a mezuzah on EVERY door. “Hey Izzy.. ask this one what he thinks about us Jews” ROFLMAO!!
“I don’t think the markets are as efficient as you presume”
…and I am the last person to presume such. I piss on Malkiel and his Random walk.
“…and I am the last person to presume such. I piss on Malkiel and his Random walk.”
Unless I’m waaaay off base (doubt it), you should send Malkiel a nice fruit basket of something, as others’ faith in efficiency gave you something to exploit.
Ze what is your degree in? I am impressed with your stochastic knowledge.
some of you guys spend way too much time reading zerohedge…
“Will be interesting to see if this changes now that the banks are dropping their prop desks due to new regulations.”
Public announcements.. quiet re shifting. In 2002-03 post Enron, every energy company dropped their prop desks. By 2005 they were all back. Truth is they should all be dropped. I am convinced they all lose the banks money. By banks I don’t mean the Goldmans and Morgans…
Oh to clarify prop desks serve a purpose, it’s when the prop desk becomes a spec desk the bank needs to say bye bye. The difference is big.
“Ze what is your degree in? ”
my academic days are not much to speak about, I caused a lot of trouble. 3 yrs pre-med with a last minute transfer to business finance. I got hooked into this stuff when I was about 11 though and always had a thing for math (conceptually much more than formulaic)
and sonies.. failed firework nutshot.. thank you for that, I still have tears.
lol ze I almost died laughing about that one