This 5-Bedroom SFH Sold at Auction and Is Back on the Market: 4117 N. Western in North Center

We last chattered about this 5-bedroom single family home at 4117 N. Western in North Center in April 2011.

See our prior chatter here.

Back then, the house was bank owned and was going to auction with an opening bid of $149,000. It was a cash only transaction.

From the pictures in the prior listing, it appeared that the kitchen and bathrooms were intact. You can see the prior pictures here.

Most of you were scathing about the value of this house since it was actually ON Western.

The house sold at auction and closed in June 2011 for $161,700.

It has since been rehabbed and now has a new kitchen with dark maple cabinets, granite counter tops and stainless steel appliances.

Built in 1906 on a standard Chicago lot of 25×125, it now has 2800 square feet, up from 1462 square feet previously.

It also has a finished basement and a new 2-car garage.

The old listing also had 2 bathrooms and the new listing has 3 baths.

Originally listed at $449,000 in early October, it has been reduced to $369,900.

Despite its location on Western Avenue, is this a deal for a single family home in the Coonley school district?

What will this ultimately sell for this time?

Robert Tomich at Capital Real Estate Services has the listing. See the pictures here.

4117 N. Western: 5 bedrooms, 3 baths, 2800 square feet

  • Sold in November 1998 for $138,000
  • Lis pendens filed in September 2006
  • Sold in February 2007 for $575,000
  • Lis pendens foreclosure filed in September 2009
  • Bank owned in June 2010
  • Originally listed in January 2011 for $342,000
  • Reduced in February 2011 to $333,500
  • Withdrawn
  • Went to auction on April 16 with the starting bid of $149,000
  • Cash only
  • Sold at auction in June 2011 for $161,700
  • Re-listed in October 2011 for $449,000
  • Reduced several times
  • Currently listed at $369,900
  • Taxes at $8233
  • Central Air
  • Bedroom #1: 15×14 (second floor)
  • Bedroom #2: 13×12 (main floor)
  • Bedroom #3: 10×8 (main floor)
  • Bedroom #4: 8×9 (main floor)
  • Bedroom #5: 14×9 (second floor)
  • Family room: 15×14 (basement)

 

215 Responses to “This 5-Bedroom SFH Sold at Auction and Is Back on the Market: 4117 N. Western in North Center”

  1. I honestly don’t see any value add here by the flipper.

    The kitchen they ripped out seemed just fine, albeit plain. Do dark cabinets and granite really matter for a house of this character and location?

    God I hate flippers. I sincely hope this languishs on the market for 300+ days.

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  2. The only permit they pulled was for a garage.

    In general, what liability is a future homeowner looking at when flippers don’t pull permits?

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  3. Didn’t realize they did a new garage and a roof. So, aparently they did more than the kitchen, sorry.

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  4. “Despite its location on Western Boulevard, is this a deal for a single family home in the Coonley school district?”

    We should totally rename Western Avenue! I hated this house, but when I saw that it was on Western Boulevard, I suddenly got interested! Western Boulevard is where I want to live – it’s so rich sounding. Head west on Belle Plaine Terrace and take a right on the Boulevard – fancy!!! Like Hollywood Boulevard or something. Buy this place now before this trend catches on and everyone wants to live on the Boulevard! Sorry Southport Corridor, Western Boulevard is the new black.

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  5. TB – I disagree with you about flippers. Let’s consider for a moment those that do quality work. They are putting people to work, building value and raising the value of the neighbors homes/condos by returning the home/condo to the market at a higher price than the previous foreclosure/distressed asset, all in a short period of time. At the same time, they are removing a boarded up home from the neighborhood.

    IMO, the government should be financing these guys..

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  6. The place looks ok. There’s a few questionable design moves in my opinion. There a couple places where things just don’t look like they fit right, or they were an afterthought (Fridge – Bathroom Vanity). Between what they bought the place for and what they’re asking is still over 200k. I doubt they spent 100K fixing the place, so I wouldn’t be surprised to see this continue to fall to the $309 – 329 range.

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  7. AK – TB hates flippers b/c he is jealous – don’t try to rationalize with non-action-taking losers. He, like most everyone else here just likes to talk talk talk – very few actually do do do – and then they get jealous when the doers actually make money. What recourse do they have? They call them names and “hate” them. Pathetic, but very transparent.

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  8. “IMO, the government should be financing these guys.”

    Yeah, the taxpayers should back all risk. It’s the American way!

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  9. I personally like flippers. They actually want to sell their property, unlike unrealistic homeowners, or heirs, with tons of equity, who will often wait out the market for YEARS until they get the price they think they deserve (and they never do!)

    Look at these price cuts: $80,000 in less than 30 days. You rarely if ever see that from private homeowners. Yes it’s $80,000 in cuts from a relatively lofty price level but it’s still some pretty hefty cuts and the cuts will keep coming until they sell.

    Date Event Price Appreciation Source
    Oct 26, 2011 Price Changed $369,900 — MRED #07916634
    Oct 20, 2011 Price Changed $389,900 — MRED #07916634
    Oct 09, 2011 Price Changed $399,900 — MRED #07916634
    Oct 03, 2011 Listed (New) $449,000 — MRED #07916634

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  10. you gut the kitchen and leave the refrigerator like that. how much more would if have cost to put some cabinetry around it. when i see things like this i question the quality of the rehab.

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  11. What does it mean when there are zero inspections or permits on file for a 1950s era apartment building? Is it possible that there are buildings in the city which have just never been inspected? Or are they just behind on uploading all the data into the database?

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  12. Milkster — I believe you can only pull permits for the previous 18 months.

    But, you can also check for code violations online, but of course, I can’t find the link at the moment.

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  13. There is a section of Western that is Boulevard, but it’s from 31st down to Garfield/55th, not up in north center. This is on Western Avenue.

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  14. Change the name of Western Ave to ‘Eastern Parkway'; and change the name of Cicero Ave to ‘Western Ave’ and whammo you’ve changed the entire dynamic of the city! WEst of western is now 4801 west instead of 2401 west! Think of what it could do for gentrification?!!!!!1

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  15. I can’t imagine living on Western. If this house was on a quieter block, I could see the price. I just think it’s going to be a tough sell regardless of the upgrades since it’s on Western.

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  16. Hi KS –

    Here’s the city website for violations. It will also automatically pull up permits. Is there where you were looking, or do you have a different source?

    http://www.cityofchicago.org/content/city/en/depts/bldgs/provdrs/inspect/svcs/building_violationsonline.html

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  17. You, like most shills, don’t know what actual work is. Flipping without adding any value to the property isn’t work in any sense of the word normal people respect. It’s actually a form of exploitation, these people are taking advantage of society’s laws and systems, and those do require taxpayer support.

    I place these kinds of people side-by-side with the speculators who drive up the costs of goods like oil and grain that they don’t even have the ability to physically take receipt of. It would be like if someone went to auctions and just tried to stir up a frenzy and the price but who never had any intention of making a purchase.

    “He, like most everyone else here just likes to talk talk talk – very few actually do do do – and then they get jealous when the doers actually make money.”

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  18. I dunno about this place. It is (w/o checking) in Coonley. I have to think it comps in some way against condos for families that can’t afford the SFH off western. Most families in that price range prob go elsewhere rather than live on western, but this may appeal to someone that wants the school. It’s somewhat walkable to lincoln sq and nortcenterish stuff. I’d rather be west of western than on western, if I were looking at Bell/Coonley in this price range, but west of western costs more, I think.

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  19. Finished basement looks like a flood waiting to happen.

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  20. I think we should differentiate between flippers who do rehab work and flippers who passively speculate.

    And while we’re on the topic I think the government should provide cheap financing to individuals who share my first and last name. And for strippers too.

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  21. “I think we should differentiate between flippers who do rehab work and flippers who passively speculate.”

    why? that is so stupid and shows a total lack of understanding of pricing/real estate/business.

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  22. “that is so stupid and shows a total lack of understanding of pricing/real estate/business.”

    How do you judge that when it is a proven fact that you lack an understanding of the same?

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  23. O snap!

    “How do you judge that when it is a proven fact that you lack an understanding of the same?”

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  24. G, let’s compare our real estate portfolios, bank accounts, and money we have made in real estate – then open your big fat stupid mouth.

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  25. Time for a c*ck off!

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  26. Clio as usual misses the point. Sure, if all you focus on is making money, you can do so with no actual value-added or elbow grease – BUT – you’re still making it off of someone else’s labor.

    the quote “if I have seen further it is by standing on the shoulders of giants” is what I’m getting at.

    People who fix up buildings and re-sell them otoh are godsends for a city with old housing stock like Chicago’s. Night and day difference.

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  27. “We should totally rename Western Avenue! I hated this house, but when I saw that it was on Western Boulevard, I suddenly got interested!”

    Sorry- that’s my fault, not the listing agent’s. I was typing quickly in the AM because I’m still having server problems and wanted to get some posts up while it was working. It should be an avenue, not a boulevard.

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  28. “People who fix up buildings and re-sell them otoh are godsends for a city with old housing stock like Chicago’s.”

    Skeptic/moron: these flippers are not angels and are not sent down by God to clean up Chicago’s housing mess – stop glorifying them.

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  29. “G, let’s compare our real estate portfolios, bank accounts, and money we have made in real estate – then open your big fat stupid mouth.”

    Why are you still certain that you are right when challenging me about anything RE related when you have been wrong every time so far? That’s insane.

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  30. Flipping (with or without improving the property) and speculation further the process of natural price discovery, which benefits EVERYONE.

    As hard as it is to say it, I am totally with Clio on this one.

    The idea that money made without doing any “work” is somehow money off another man’s labor is nonsense. Haven’t you ever heard of brain power / critical thinking? Have you heard of the concept of risk & reward?

    Pure speculation and speculation with value added as in this case both benefit the speculator and society at large. Indeed often non-doers get to benefit from the “work” of the speculator because the speculator pays taxes to support the non-doers the minimally productive. So really the non-doer drains society and reaps rewards off the speculator’s back.

    One man’s “speculation” is another man’s “investment” they are one in the same. The term “speculation” is often used to imply a shorter time horizon, and “investment” a longer time horizon, but not necessarily so. It is just a matter of semantics. If I go into the market on Monday and specu-vest in some hog futures it doesn’t matter if I take possession of the hogs or not. Just like when you buy stock. I’m not going to show up and demand to take possession of 0.000001% of GE or Sears Roebuck! Same goes for weather futures. I suspect the simpletons would want speculators to take possession of the underlying weather.

    Anyway everyone should labor, think, manage, speculate, and invest as you can. And reap the rewards as you can. Everyone benefits. Whereas “hating” benefits absolutely no one, not even the “hater.” Good luck.

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  31. “Haven’t you ever heard of brain power / critical thinking? Have you heard of the concept of risk & reward?”

    uhhhh – obviously nobody on cc has heard of those things – have you seen the posts>?

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  32. So Brad F., speculation in the oil market in 2008 that drove prices up to $150.00 a barrel and the resultant crash at $30.00 a barrel in a matter of a few months is a good thing? You call that price discovery?

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  33. Yes, homedelete, commodity prices being determined by a free market of voluntary participants is a good thing. Next. By the way, were you trying to make a point with your last question? If so, what?

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  34. By the way my last statement about a free market determining prices applies to everything, including RE, not just commodities.

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  35. gringozecarioca on October 30th, 2011 at 4:44 am

    Bravo, Brad.

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  36. “Why are you still certain that you are right when challenging me about anything RE related when you have been wrong every time so far? That’s insane.”

    because I still have made more in real estate than you….. and, at the end of the day, that is what we are all talking about. Game over.

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  37. http://www.letstalkfutures.com/wp/wp-content/uploads/2011/01/Haberkorn-crude-oil2-1-24-11.bmp

    This is a good thing? Rapid ups and downs in the oil market due to speculation – fueled by credit expansion, leverage and possibly manipulation, is a good thing? Hahahaha you must be in finance or something because that is the stupidest thing I’ve ever heard. I hope you don’t go around spouting that absurd nonsense at cocktail parties. The commodities and real estate markets functioned quite well for decades without intense and leveraged speculation from outsiders without intent on taking delivery, including real estate.

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  38. i understand that the commodities markets have always had speculation but it was limited to players and it wasn’t until the investments houses started pushing commodities as speculative investments to their retail customers that the insane price swings we see today have become the ‘norm’.

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  39. clio, but the fact of the matter remains that the properties in your real estate portfolio are mostly dogs…

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  40. Has anyone else seen today’s Tribune article about student debt?

    It’s truly scary and confirms what HD and others have been saying on Crib Chatter the last few years. The debt levels for the 20-something generation are just enormous and the jobs aren’t there. They aren’t going to be buying property for 10 more years (or until they get a second income- and even then- they BOTH will probably have student loans.) Loan amounts used to be pretty absurd- but when you see the levels that the current students have- it’s just crazy. It will burst and it’s going to be nasty when it does. But until that happens, there is a whole generation graduating that will not be able to buy a $400k property any time soon.

    Some examples:

    1. 2009 graduate of Loyola with $49,000 in debt and a degree in journalism. $650 a month loan payment. Works at starbucks making $1500 a month.

    2. Dentist with NO undergrad debt. Took out $275k for Case Western. Has a job in Oak Park making “six figures.” Loan amount is $3000 a month!

    3. Married couple with $30,000 in debt years after graduating. $1027 a month in loan payments combined. Would like to buy a home but no way with that kind of monthly payment. 29 years old.

    Are they going to save for retirement? No.
    Are they going to be able to save anything for their OWN kids college? No.

    It’s just a mess.

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  41. “because I still have made more in real estate than you….. and, at the end of the day, that is what we are all talking about. Game over.”

    Awww, I’ve proven you wrong so many times here that your fragile ego must be shattered. Of course, you are likely wrong yet again. BTW, I’m better looking and more athletic too. Best of all, I’m loved by my family and friends. I doubt you value that much, though.

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  42. Don’t you see how this is supposed to work out? Younger generations will have to pay off big private and public debts while enjoying lower wages, reduced retirement funds, broken down infrastructure AND higher housing costs. That appears to be the plan.

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  43. “BTW, I’m better looking and more athletic too.”

    uhhhhhh – I highly doubt it!!! Now who is living in fantasy land?

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  44. “1. 2009 graduate of Loyola with $49,000 in debt and a degree in journalism. $650 a month loan payment. Works at starbucks making $1500 a month.”

    That is all a degree in journalism is good for. Serves them right.

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  45. wait – people at starbucks make 1500/month?!! Wow, that’s a lot.

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  46. Here is a chart showing, in constant dollars, the historical cost of college education.

    http://nces.ed.gov/fastfacts/display.asp?id=76

    Combine that with historical minimum wage in constant dollars, and its clear why working your way through school is no longer practical. Even saving up for college would take years. Other countries put a higher value on funding of higher education but here all we see the middle class continuing to get squeezed as the American dream dies.

    http://www.infoplease.com/ipa/A0774473.html

    Feeling kind of sorry about the bad weather in NYC. Hoping the OWS movement turns into a real third party to take on the crony capitalists. This aging hippie will join them.

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  47. I have to agree with chuck. Why get loans to get degrees that do not improve ones earning prospects? To claim one is college educated? To party for 4 years?

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  48. Really chuk? What about everyone else in the article. There’s a guy living at home on the south side after graduating with a technical degree from DeVry. He has a very good job paying $50,000. He’ll be “out of the system” to so speak for years as he pays off those loans. He’s paying $800 a month (which sounds like he’s paying a little extra each month to try and pay it off faster.)

    The system is completely messed up now. There’s a dental school in the western suburbs that charges $80,000 a year.

    Let’s take a poll. How many years will it be before some of the graduate schools charge $100,000 a year? 1 year? 2 years? 3 years? It’s not far off. Graduate business schools like Stanford are already over $70,000 if you add in housing/food.

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  49. for all the naysayers: it’s a very recent phenomenon that a college degree in bubble gum chewing would result in no jobs. For most of history, a college degree from a reputable university, regardless of the major, would result in a job in some field, with the employer expecting quite a bit of learning on the job. Of course there were a few fields like engineering or accounting that required a specialized degree but for the most part a college degree is what you needed to get a foot in the door. Today, that’s not the case anymore.

    so what is a ‘good’ degree? Engineering? Where many of our jobs have been offshored? how about computer science? those have been terrible jobs for years too – lots of contract jobs with no benefits even with relatively ‘high’ hourly pay. How about accounting – that’s a 5 year degree now btw. How about business. Aren’t business majors a dime a dozen? What about ‘hard sciences’, don’t the big companies open R&D centers in India/China now rather than the US anyway?

    The only ‘good’ degree I can think of is nursing. That’s about it.

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  50. Funny you should mention “nursing” HD. In the business section of today’s Tribune there is an article interviewing several people who help laid off people find jobs. Basically social workers/psychologists/program directors at several clinics around the city.

    The guy who is the director of the Old Irving Park Community Clinic said this about the types of people he sees who are unemployed:

    15% are architects, nurses, social workers, business owners and various engineers. 20% are middle management and administrators, 65% are clerical, blue-collar and labor people.

    Another guy in the article said “Everybody says that health care is where the opportunities are, but there are layoffs there too.”

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  51. G – I would like to believe in some conspiracy theory that the powers that be have saddled my generation with debt; but in the end, I think it’s just greed from the ‘greatest generation’ and the boomers who have acted in their own self-interest regardless of the consequences. It’s not the youngins who set college tuition prices; nor are we on the boards awarding pensions to insiders; nor are we in charge of multi-national companies offshoring jobs; it’s unbridalized greed of the former generations.

    But don’t worry, in life there is karma, and given the incredible amount of talk of ‘jubilee’ circulating among the younger voting generations, I fully expect student loan forgiveness and massive pension/medicare/social security reductions in my lifetime.

    I’ve been saying for a while that jubilee would eventually happen, but given the OWS demands for jubilees, and the attention its been given, it’s really only a matter of time.

    Don’t forget that gen x + gen y is larger than all the boomers and by the time we’re in our 40’s and 50’s the boomers will very old and dying off. Hahahaha it’s only a matter of time, but we just have to service the debt until then.

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  52. My wife and I have paid off roughly 50% of our student loan debt in slightly less than a decade; and to do so, it’s required:

    1) rock bottom interest rates on all our loans (sub 3%)
    2) a $100,000 + household income since graduation
    3) living well below our means ($900 rent, rarely eating out, driving older cars, keeping overhead low, saving)
    4) delaying having children
    5) not buying a house
    6) and strong determination.

    First, think about that for a second 50% of my household’s law school student loans have been paid off in 8 years! We still have 50% of them left too and we’ve been living far below our means for years. I’ve got another 5 years left if I continue living like I do but I don’t know how much longer I can keep this up.

    Secondly, I know of almost no one under the age of 35 who has accomplished what my household has done. And those who have started out with far far less loans because of mostly parental help. And most of them have a net worth of zero after savings, it’s not that they’ve actually paid off their loans.

    I routinely hear lawyers say “I’m going to have these loans until I die.” and they mean it too.

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  53. “Really chuk?”

    Yes. What is so hard for you to understand? Blow 45k on a journalism degree and you deserve to work at Starbucks. Which part are you having trouble with?

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  54. “how about computer science? those have been terrible jobs for years too”

    Ha, you are clueless.

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  55. “Secondly, I know of almost no one under the age of 35 who has accomplished what my household has done. And those who have started out with far far less loans because of mostly parental help. And most of them have a net worth of zero after savings, it’s not that they’ve actually paid off their loans. I routinely hear lawyers say “I’m going to have these loans until I die.” and they mean it too.”

    Sorry to burst your bubble Homedelete, but I am under 35 and WAY ahead of you. I practically made money going to law school (scholarships and private grants). And the cash I typically keep in my checking account far exceeds my student loan balance. I took out a student loan for $48k not like a typically financially ignorant 20-something, but because the terms were ridiculously in my favor. Had the terms been anything but, I would have turned the money down. I lived frugally at the time, drove a crappy car and didn’t waste money on silly things. I used the extra money to specu-vest in financial markets. Yes, I practically lost everything I invested at the time. When you are in your mid 20’s, smart, and understand basic financial concepts, you can easily afford to loose all your money, knowing you can make it back 100 fold. I learned a lot and I was still on the rise, so of course it wouldn’t matter. Upon graduation I accepted a high paying job. I could have easily used the excess from my first one or two years of employment to pay off my loan, but instead I figured it would be better to use the money for investment purposes, perhaps a little more conservative ones this time, so I voluntarily refied through the government programs at 2.8% for 25 years! When the big shot lawyers heard that they said wow, just keep making payments, don’t pay it down fast. I of course didn’t need their advice, it is so obvious to people with a rudimentary understanding of finance. (They were also gung ho about throwing down big on RE back in 2005. I just listened without telling them they were nuts and about to get creamed. I didn’t want to look like a foolish long term renter after all in their eyes.) So I’ll be paying like a flat $225 a month till I’m about 50, boo hoo. Now through earnings and speculating/investing I am a self-made under age 35 millionaire. And I’m still renting.

    This is tangentially what brought me to cribchatter, as a small part of a life long quest for knowledge. Knowledge that I will hopefully use to continue to grow my modest wealth/financial comfort level if so motivated. And I am not even exceptionally talented or hard working. Many had better grades and tried much harder than me. It’s really just a matter of common sense. If you take out $100k of loans and have no other claim to fame than a crap degree, is that common sense? Most of these students with crap degrees actually knew, or should have known, even before signing up what the dire prospects were. In today’s knowledge/intelligence based economy if you don’t have common sense do you really deserve anything more than a starbucks wage? College degree or not!

    It’s a tad irritating that speculators/investers such as myself and others have to carry a BIG portion of society on our backs through taxes, just to watch them piss away our earned money on thoughtless stuff. (Including $100k journalism degrees and $400k fly-by-night construction 2/2s at the peak of the frenzy.) While at the same while they accept the charity, many spout off uneducated anti-speculator nonsense.

    Yes, HD, it is a good thing that prices are allowed to fluctuate even if that fluctuation is in your opinion “rapid” and caused by people who are in your opinion not “players”. The alternative is to attempt to limit access to the market, control the price, and/or limit its movement. If you knew any economics or financial history you would know the unintended consequences that would necessarily result. Instead of looking ignorantly at a price chart and speculating that it must be bad, maybe you should attempt, yes attempt, to think of why price changes, sometimes relatively rapid changes, are good. Notice that you have given no reasoning for saying the price changes are bad. You have basically said “me thinks big price change=bad. And pure speculation=bad.” Why? Jealousy or ignorance? (the only to reasons I can thing of for such an assertion) Have you ever wondered why our relatively free economy has outpaced any command economy with set prices?

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  56. Brad hope you’ll have a great life and career because given how inflated your ego is, if something goes wrong, you’ll hit the ground hard.

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  57. My concern is systemic risk introduced into our economy through a financial industry that uses leverage to extract wealth. Looking at the amount of resources allocated to the financial sector, as represented by income, over time makes me question whether the financialization of our country is a good thing. IMO, speculators and casino goers should be taxed the same. As it is, speculator “investors” get tax breaks that serve no useful purpose to our economy.
    But its not the little fish like you who like to play at the casino that bother me, it is the sharks. Which is why I have been blabbing on about reinstatement of Glass-Steagall four four years now, to remove taxpayer insurance from the too bigs trading activities. I suppose the problem now is potential financial contagion from collapse of investment banking operations after ring fencing the commercial bank assets.

    “It’s a tad irritating that speculators/investers such as myself and others have to carry a BIG portion of society on our backs through taxes, just to watch them piss away our earned money on thoughtless stuff.”

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  58. “Now through earnings and speculating/investing I am a self-made under age 35 millionaire. And I’m still renting.”

    I lost you at “I’m a renter AND a 35 year old internet millionaire with a law degree.”

    I summarily ignored your nonsensical diatribe that followed.

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  59. As a baby boomer I guess I will have to personally accept responsibility for the repeal of Glass-Steagall, which I see as a proximate cause of the financial crisis. The fact that I have to hold my nose to even register a vote that will count, however, makes me feel pretty disenfranchised from the whole mess.

    “but in the end, I think it’s just greed from the ‘greatest generation’ and the boomers who have acted in their own self-interest regardless of the consequences.”

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  60. Could not agree more Juliana. I don’t know when free market economy became to mean playing russian roulette?!

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  61. “how about computer science? those have been terrible jobs for years too”

    We are ALL clueless except Chuk who is an investing genius!

    Anyway- I have a friend with 15 years experience in IT who was laid off about 17 months ago. He’s in the western suburbs. Can’t get ANYTHING. Is extremely depressed. His wife has gone back to work (was a stay at home mom) to bring in something so they can keep paying the mortgage etc. They’ve got 2 kids. I’m surprised he can’t find anything as I thought that area was one of the ones holding up fairly well. But I guess not. Maybe it depends on your specialty.

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  62. “I summarily ignored your nonsensical diatribe that followed.”

    Me too. The law is among the worst of the professional degrees. I know people who have $150k in loans and they get starting jobs paying just $55k. I know someone else who went to Stanford and now he’s working for the government. He managed to pay off his loans while working in the private sector (before they ousted him for having no book of business, as the big firms will usually do) and now he’s making $90k for the feds. He’s not at an agency like the SEC which has the higher pay grade. He’s also living in DC now. It sucks to be him but at least he got the loans paid off. I told him to save as much as possible while in the private sector because he’ll never see that salary again.

    Everyone assumes the “professions” pay all this money- when they really don’t. You’d make more money being a “project manager” for a fortune 500 company (no advance degree required) than getting a law, business or even sometimes a medical degree.

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  63. “I lost you at “I’m a renter AND a 35 year old internet millionaire with a law degree.”

    It should come as no surprise that someone with skeptical views and independent thinking would specifically avoid buying into one of the largest bubbles in recent history. It should also come as no surprise that making effective use of the internet has been one of the best ways to become wealthy since the internet started going mainstream in the mid 90’s, unless you’ve had your HEAD IN THE FREGGIN SAND!

    Anyway, congratulations Homedelete on taking “slightly less than a DECADE” to pay HALF your freggin TUITION! lol Hope you eventually get a lawyer level car too, and make 84 monthly installment payments on it. What are you going to do next, loser, put your next night out on the town on layaway?

    Oh, and by the way your/our generation IS indeed setting prices for higher education because some of the generation (YOU for example) is dumb enough to pay the exorbitant list price, when everyone worth his salt (who should be in law school) gets significant scholarship money. Anyway, have fun paying for the next decade, I’m sure the law school faculty love you, sucker.

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  64. Brad writes like a cokehead.

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  65. “…law is among the worst of the professional degrees. I know people who have $150k in loans and they get starting jobs paying just $55k. I know someone else who went to Stanford and now he’s working for the government.”

    Sabrina it’s true that just getting a law degree alone is NOT the path to easy wealth, short hours, and a corner office, like a lot of those taking massive debts expect it to be. But that does not lead to the conclusion that the degree itself is bad. One of the reasons that having a law degree alone doesn’t cut it is because there is a lot more law schools today, and a lot more fools pouring into it chasing what they think will be easy money. Starting pay for big firms is now $160k and climbing, that’s FIRST year! With most of those guys/gals being 25 or 26 years old, by their forth year most of those will be over $200k and the sky is the limit from there. Not many professions have these kind of numbers for newbies, with no personal risk.

    You mentioned your friend is making $90k. That is hardly a sob story. Especially when you consider a government job carries virtually zero counter party risk, and has high level of job security. Not to mention short hours, and nobody cares if you do crap work, it’s expected! Sleeping or even watching porn on the job, tolerated. Plus public/private sector in Washington is a revolving door, with the ambitious lawyer making more and more with each turn. But if he stays at $90k plus inflation for government work, I don’t think anyone’s going to cry over him. It’s about reasonable expectations too.

    Cokehead writing style, huh? I’m actually anti-drug. Don’t smoke, hardly ever drink. Money is my anti-drug, and I’m looking to get high, so high. hehe

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  66. “We are ALL clueless except Chuk who is an investing genius!”

    Nope. But HD is.

    “Anyway- I have a friend with 15 years experience in IT who was laid off about 17 months ago. He’s in the western suburbs. Can’t get ANYTHING. Is extremely depressed.”

    Does he want to work in the city? What’s his specialty? We’re looking to hire a developer right now. Give me his email address.

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  67. I’m clueless! That’s good chuk.

    and as far as paying half the student loans….i’ve run the numbers, I’ve spoken with plenty of co-workers, peers, other lawyers, etc. and you’re the one telling me that I’m the loser? Hahahah!

    and your naive knowledge of the 1st years making 160,000 and the 4th years making $200,000 and beyond is so childish.

    Did you know that in the class of 2007 there were something like 600 big law attorneys? That’s it. 600 people big entered chicago and got the ‘biglaw’ job.

    And it’s not so rosy the father you get up the ladder.

    Did anyone ever tell you that for example, W&S had major problems during 2009 and they didn’t pay equity partners a draw for over 9 months? Or what wildman harrold laid off nearly half their partners in the last few years and they hvae few if any income partners left? They had to merge to survive….and that they want partners to have over a mil a year or 1.5 mil in business? I can tell you that even in a town the size of Chicago a mil and a half a year in business is the very very top of teh food chain.

    And I”m clueless. sure. you keep believing that.

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  68. sorry halfway through my retort I should be addressing brad f not chuk. I mean seriously, you internet millionaires have no clue

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  69. homedelete on October 30th, 2011 at 10:51 am

    Secondly, I know of almost no one under the age of 35 who has accomplished what my household has done. And those who have started out with far far less loans because of mostly parental help. And most of them have a net worth of zero after savings, it’s not that they’ve actually paid off their loans.

    ——

    Im glad I didn’t go to law school. I had all my loans paid off by 26. And Owned property since 23. Prior employer paid for my MBA.

    You need to get off the sidelines and buy something. There’s a lifestyle owning than renting. And if you want to get into it from an investment perspective – now is a great time. Just sayin..

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  70. By the way, this house is a shit hole location. Looks exactly the same as it does on Google Maps. If it had a double lot it would be much more attractive.

    Drywall, trim and paint is all I see. Good luck Flipper.

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  71. Yeah 600 new big law attorneys in Chicago sounds about right. What not enough for you Homedelete? How many freshly minted new big law attorneys do you think Chicago needs? And none of them really now jack, except how to take tests, look professional, and be polite. I think $160k/yr is more than an adequate reward for that. Oh and some of them don’t even know that last polite part, I interview one and she dropped the f-word during a nice lunch with people she just met 10 minutes prior, yep she still got her big starting pay from another firm. did you know that profits per partner at Kirkland & Ellis were $3.08 million in 2010, or that 3rd year associates are being paid $260k? Oh let me guess, what about all the people too stupid to be in the top 600 and don’t get the big pay and nice office, boo-f-ing-boo-hoo. Oh, yeah great Homedelete that you took 8 years or whatever to pay for half your tuition, should throw a party for that accomplishment or something, pop some freakin Dom Perignon for that one. lol

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  72. “Oh, yeah great Homedelete that you took 8 years or whatever to pay for half your tuition, should throw a party for that accomplishment or something, pop some freakin Dom Perignon for that one. lol”

    I will pop some Dom Perignon, b/c for those tens of thousands of attorney who DIDN’T make big law it’s quite an accomplishment. But for someone who is a fucking idiot, well, you just don’t get it. Douchebag. It’s all fucking income and numbers and simple math.

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  73. iT’s still a bad time to buy it’s just that you mistake the forest for the trees.

    Think shadow inventory :(

    Millions and millions of distressed properties that will trickle into the market for years to come.

    “Im glad I didn’t go to law school. I had all my loans paid off by 26. And Owned property since 23. Prior employer paid for my MBA.

    You need to get off the sidelines and buy something. There’s a lifestyle owning than renting. And if you want to get into it from an investment perspective – now is a great time. Just sayin..”

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  74. “iT’s still a bad time to buy”

    Was 2005 a bad time to sell? After all, it wasn’t THE top.

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  75. 600 new big law attorneys in Chicago?

    What planet are you on? All the big firms have gutted their summer associate programs (if they even have one.) They’re no longer hiring 50 associates a year they’re hiring 25. So they’re really probably hiring 200 to 250 at the “big law” salary citywide. Kirkland is probably among the largest. There are a couple of thousand grads from just the top 10 law schools alone. They’re not all going to get the $150k starting job. Very few are getting it now.

    Also- third year associates are NOT getting paid $260,000 a year at big law firm. Starting pay is around $185k. Bonus might be $40k at a “top” firm (in NY)- and that’s if they’re lucky. Most attorneys are lucky if they make it to year 3 of a big law firm. It’s like the NFL. 3 years and you’re out. Then what do they do? Smaller firm (less money). Government (less money.) In-house (way less money.)

    By the way- they’re also discussing student loans on SFGate in San Francisco because one of the columnists wants to know how a student can get $100k in debt. Here’s what one person wrote:

    “My 24 year old daughter in her final year @Harvard Law School. Her student loans = 72K per year. (Tuition is $47,600, estimated living expenses (standard single student budget including room, board, books, travel and personal ): $25,000. ). She will graduate this spring with ~ 225K student loan debt. When she started HLS in 2008, the average starting salary for graduates was $155K; it’s around 60K now.”

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  76. “iT’s still a bad time to buy it’s just that you mistake the forest for the trees.”

    I don’t really agree with this. If you have steady employment and can find something you love for the next 10 years (minimum)- I’ve seen deals I never thought I would EVER see (mainly in the suburbs though.) Even “hot” areas have deals like Oak Park and Park Ridge. Prices are down to about 2002 in Oak Park now. Sure, the vintage 3/1.5 bungalow that used to sell for $550k might not seem like much of a “bargain” at $375k but it’s a lot cheaper than we’ve seen.

    Could it go lower? Sure. But, again, if you can handle the payment, you love the property and know you’re going to stay there for a long time- I think there are some deals out there.

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  77. Sabrina, we both know price of the ‘bargain’ $375,000 bungalow has nowhere to go but down. Sure it’s cheaper than we’ve seen but it’s still no deal. I’ve seen 1,600 sq ft ranches at $399,000 in some suburbs but it really takes a price of $280,000 to get a sale.

    My biglaw figures were from 2007 , I know there are far less. My firm recently hired a biglaw layoff and other who was a biglaw summer associate without an offer.

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  78. ““My 24 year old daughter in her final year @Harvard Law School. Her student loans = 72K per year. (Tuition is $47,600, estimated living expenses (standard single student budget including room, board, books, travel and personal ): $25,000. ). She will graduate this spring with ~ 225K student loan debt. When she started HLS in 2008, the average starting salary for graduates was $155K; it’s around 60K now.”

    Tell this mom to shut the fuck up and be proud that her daughter made it to Harvard Law School. My parents could have said the same thing about me (except w/ medical school). Starting salary for a newly minted doc is 50k – wow!!! Does that mean things are going to stay like that? of course not!! That Harvard Law degree is your key to many many things/jobs in life. If she is smart (and she probably is), she will easily parlay that into a million plus a year job – no problem (or, if she has political aspirations – a great public office). Only someone who didn’t go to a good school would bring up tuition costs – you don’t know what you don’t know. Learn to listen to people who have been there

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  79. “When she started HLS in 2008, the average starting salary for graduates was $155K; it’s around 60K now.”

    Bullshit.

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  80. “That Harvard Law degree is your key to many many things/jobs in life.”

    This is the biggest myth EVER created. Harvard has done a great job for the last 50 years convincing middle class Americans that if they only get a Harvard MBA, JD or whatever, they will be set for life. The Harvard JD used to be called the “golden ticket”- only it hasn’t been “golden” for well over 2 decades now.

    I posted this article from Esquire that was published in 2000 before. It’s worth reading. The guy describes his fellow grads (they graduated in 1990.) Wonder what they’re up to now that it’s been over 20 years? The 2000 grads probably have it even worse. At least the 1990s were fairly good to lawyers (except the first few years of the decade during the 1991-92 recession.) Imagine getting out with $225k in debt and few job prospects now?

    http://www.esquire.com/features/killing-lawyers-harvard-0800

    Clio- you’re right- at least it’s Harvard. It would be worse if it was John Marshall. But either way- it sucks right now. And no, out of the 500+ a year Harvard Law School grads she will likely NOT parlay it into millions.

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  81. “Sabrina, we both know price of the ‘bargain’ $375,000 bungalow has nowhere to go but down.”

    Does it? Even in the “good” areas?

    I don’t know. I see plenty of the $375k homes selling (IF they’re in move-in condition) and selling quickly (within a few weeks) as long as they’re priced around 2002 prices and updated. I’ve heard of multiple offers on houses in Oak Park now (and they’re NOT the foreclosures.) The sellers aren’t making a dime- but they’re selling at where they bought 10 years ago. So unless a whole bunch of homes come on the market in these same areas that are foreclosures- what’s going to pressure prices? What’s going to make them fall another 10% or 20%?

    Maybe higher interest rates. But they would have to go a lot higher.

    I’m just talking about the highly desirable areas and school districts. We all know what they are. Maybe Chris M who sold his house in Oak Park not too long ago fairly quickly can comment more intelligently on that market.

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  82. “When she started HLS in 2008, the average starting salary for graduates was $155K; it’s around 60K now.”

    “Bullshit.”

    Chuk- I don’t know if this is true. It sounds awfully low to me. But it’s clearly NOT $155k because they’re only placing something like 55% in Big Law jobs. Nothing else pays that much. So a bunch of people in the class are probably making $50k to $100k (and $100k is at the upper end) which will bring it way down. And a bunch have no jobs at all (or are working at Starbucks for $20k a year). Not all “big law” jobs pay $155k or $160k starting either. Many larger Chicago firms only pay $120k now. It’s hard to get accurate data because the law schools are still advertising 2009 (why wouldn’t they want to? Times were still pretty good then.) Some of the law schools are also being sued by students for falsely advertising employment data (Harvard isn’t one of them.)

    So- who knows? She probably exaggerated but there’s no doubt it’s come way, way down. Lots of students would be lucky to be like my friend who has a Stanford JD. His initial pay was $75,000 at a federal government agency (after 5 years of experience) and now he’s making $90k. Yeah- good times.

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  83. “Clio- you’re right-
    Clio- you’re right-
    Clio- you’re right-

    I….just….love….this!!!

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  84. All I’m saying is that the average starting salary for Harvard lawyers did not fall 60% in the last 3 years.

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  85. “Harvard has done a great job for the last 50 years convincing middle class Americans that if they only get a Harvard MBA, JD or whatever, they will be set for life”

    uhhhh – again, unless you have been there, you don’t know…..
    Harvard and Stanford (and even U. of C.) have head hunters, recruiters, etc. lining up around the corner to get at ANY of these harvard/stanford graduates. EACH one of these students has their pick of jobs – some (actually many) CHOOSE not to take high paying jobs for whatever reason – but it is NOT because they can’t get them. YOU WOULD BE AMAZED AT HOW MANY COMPANIES THROW THEMSELVES AT THE FEET OF THESE SOON-TO-GRADUATE STUDENTS!!! It is truly amazing.

    The only myth is that people believe that Harvard/Stanford graduates have a hard time finding jobs!!!

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  86. Many of my fellow colleagues at Harvard and Stanford were very well rounded people and had many many interests. Some took jobs in very poor areas to help poor people. Some chose to stay in academics. Many took time off. It was actually looked DOWN upon if you took a lucrative job – people would call you a sell-out.

    But please don’t feel sorry for these Harvard/Stanford graduates. If any of them complain about getting jobs – it is all an act (munchausens of the business/law world).

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  87. “His initial pay was $75,000 at a federal government agency (after 5 years of experience) and now he’s making $90k. Yeah- good times.”

    But how bad is that? He’s probably making 30k per year more than his friends that didn’t go to law school. I would guess that as a result he could have his loan paid off at the same time if not sooner than them. And after that, he will be making a higher salary than most of his non law school friends as well. Seems OK to me.

    Believe me, I think that schools are overpriced. Many people should not go to college ever (just like many people should not ever buy homes). But I still think that if you choose a good degree (hint: not journalism), go to a good college, and get good grades, that is your best chance at getting a good paying job. But certainly not the only chance.

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  88. Clio- you clearly haven’t been attending any of these schools for the last 20 years. Talk to some people who have. (how do you know I haven’t????)

    My friend who has the Stanford JD graduated in 2002. So he is now 10 years out. He lasted at big law for 4 years. He was a federal clerk for 2 years. Oh- he also got out of school right after the dot-com layoffs. Many of his classmates no longer had job offers waiting. Silicon Valley sucked then. He’s done better than most because he managed to pay off some of the loans. And as Brad F. said- at least he’s in the federal government where it’s hard to get laid off. Oh- the stories he tells me about Harvard/Yale and Stanford lawyers all applying for those $90k a year jobs like he has (when they DO have an opening). All are desperate for work. The legal profession has been gutted. It’s not what it used to be. I feel really, really bad for those who aren’t at the top 10 law schools. If it sucks for Harvard grads it’s 10 times worse for those at DePaul, Kent etc. Yikes. I’m glad I’m not in that profession.

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  89. I don’t know Chuk. The “average” can be tinkered with in so many ways. They only report 9 months after. And they report that you are working if you’re in ANY job- not even legal related (which is the point of the lawsuits against some schools.) I doubt it’s down to $60k. But this is just a mother reporting what the daughter is telling her. Basically- that it sucks to be graduating from Harvard Law School with $200+ in student loans right now.

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  90. Again everyone – don’t believe the hype. These Harvard/Stanford graduates can do just fine if they want to – there are plenty of employers who would LOVE to have them – these graduates, however, are very picky and very spoiled – if they can’t make 200k starting, they are going to keep looking. They EXPECT and DEMAND very very good jobs – that is why they complain that they can’t find anything. They spent their whole life being the best, and now they have to settle for 2nd or 3rd best – and they aren’t going to do it so they complain/whine about it. THAT is the truth of it. Don’t feel sorry for them……they CAN get a good job if they want.

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  91. clio on October 30th, 2011 at 9:36 pm
    Again everyone – don’t believe the hype. These Harvard/Stanford graduates can do just fine if they want to – there are plenty of employers who would LOVE to have them – these graduates, however, are very picky and very spoiled – if they can’t make 200k starting, they are going to keep looking. They EXPECT and DEMAND very very good jobs – that is why they complain that they can’t find anything. They spent their whole life being the best, and now they have to settle for 2nd or 3rd best – and they aren’t going to do it so they complain/whine about it. THAT is the truth of it. Don’t feel sorry for them……they CAN get a good job if they want.

    ———
    Harvard or Stanford Law I get but an undergrad doesn’t have the same weight.

    You need street smarts too Pal not just the diploma. Case in point – friend of mine who graduated MIT in the early 90’s (and she doesn’t fail to let you know that within the first 5mins of meeting her) She has been laid off in NE for going on 3 years now.

    Just Sayin..

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  92. homedelete on October 30th, 2011 at 6:35 pm
    iT’s still a bad time to buy it’s just that you mistake the forest for the trees.
    Think shadow inventory
    Millions and millions of distressed properties that will trickle into the market for years to come.

    —–

    Just make the jump and get on board. Buy in a good location and you’ll be OK skip the pioneer areas like Humbolt or Rogers etc.

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  93. “Case in point – friend of mine who graduated MIT in the early 90?s (and she doesn’t fail to let you know that within the first 5mins of meeting her) She has been laid off in NE for going on 3 years now. ”

    uhhh – the layoff may not have to do with her degree – maybe it is her personality……

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  94. By the way- in case you haven’t already noticed- I am making some site changes in anticipation of the new website so things will be kind of crazy on the site for the next few weeks. I’m trying to have the “latest comment” restored so that everyone can see what everyone else is talking about.

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  95. Jeesh, a daughter told her mother who told her cousin who posted on a blog who told this guy named Vinny that Harvard LS grads are only averaging $60k! What the heck are you people smoking? Even if half of them left to do pro bono work in Bangladesh the average will probably still be over $75k.

    Here are recent figures on what Kirdland is paying btw.
    1st year $160,000 + $52,000 Bonus + $10k stipend
    2nd year $170,000 + $68,000
    3rd year $185,000 + $75,000
    4th year $210,000 + $95,000
    5th year $230,000 + $110,000
    6th year $250,000 + $125,000
    Partner $3.1 million
    http://en.wikipedia.org/wiki/Kirkland_%26_Ellis

    I didn’t get an offer at K&E but you are talking to someone who at least scored an on site interview, and an offer from a different yet also prestigious firm. Closer to the world that most of you naysayers. I’ve done well without any big firm on my own though.

    Clio is right, the top grads Harvard/Stanford heck even Michigan Law get their pick of the top jobs if they are willing to accept them. And Chuk is right a lot of people shouldn’t even have gone to law school or even college to begin with.

    For everyone else, oh no! Heaven forbid that a young person actually have to struggle. Oh the inhumanity! People think the world owes them something because they have a JD or a 4 year degree or a high school diploma or because they are breathing. I had fancy credentials, but I didn’t sit back expecting anyone to hand me anything. The world doesn’t work that way now and it never should have, the boom years were an anomaly. I went out there and made it, on my own back, taking my own calculated risks. The world doesn’t owe you jack s. People need to stop crying, shut the f up and get out there and make some mf’ing money. Like me. And if you get a boss who talks to you the way I’m talking now and you don’t like it then tough s. If you want to sugar coat everything and hand out money to people who don’t deserve it then you can try that when you have your own mf-ing company and money to hand out.

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  96. Thank you Brad!!! – now get ready for the onslaught of negativity from the pussified liberal gen x/y millenial whiners out there…..

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  97. “I went out there and made it, on my own back, taking my own calculated risks.”

    or so you claim on a website. After all “On the Internet, nobody knows you’re a dog”.

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  98. @Sabrina

    Perhaps the data was for ALL law school graduates and not specifically Harvard Law School.

    From the bureau of labor:

    All graduates $68,500

    http://www.bls.gov/oco/ocos053.htm

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  99. @Sabrina & @HD

    Alternatively, there is also this graph

    http://www.nalp.org/salarydistrib

    IMO, Law is a tough field in terms of the salary curve.

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  100. Lastly to specifically address Harvard Law school and more recent data instead of say 2006 – 2008, we can look to payscale

    1st years about at 90k

    http://www.payscale.com/research/US/School=Harvard_Law_School/Salary/by_Years_Experience

    And based on my personal observations and some limited google-fu (WHERE ARE YOU ANON???), I don’t think it’s a stretch to say that 75% associates are gone by big law year 5.

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  101. gringozecarioca on October 31st, 2011 at 4:13 am

    “I fully expect student loan forgiveness and massive pension/medicare/social security reductions in my lifetime.
    I’ve been saying for a while that jubilee would eventually happen, but given the OWS demands for jubilees, and the attention its been given, it’s really only a matter of time.”

    The tea leaves are very clear on this right now. There will not be forgiveness per se. The intention is to deflate existing debt away. What this will do to un-incurred deficits and prices will be very interesting. I guarantee the word ‘Trillion’ is going to see it’s internet presence increase more and more.

    And HD.. the people who want the speculators in the market, are the physical producers and users. Odd that the very guys who should be complaining the most, are not. But heck, easy scapegoat when the gov’t clicks another few tril into the banks, and oil rises.

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  102. gringozecarioca on October 31st, 2011 at 5:01 am

    ” I could have easily used the excess from my first one or two years of employment to pay off my loan, but instead I figured it would be better to use the money for investment purposes, perhaps a little more conservative ones this time, so I voluntarily refied through the government programs at 2.8% for 25 years!”

    Yep! Well done. Particularly at the time.

    Oh, and don’t tell HD that there are 26yr olds sitting at Citadel with 2yr/5-10m guaranteed minimums. They do not exist!!!! Do not!!! Pink Elephants!!!

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  103. The intention is also to ignore OWS until they go away. Not so sure that will work or anything else the “tea leaves” have planned. Looks like Japan just devalued their currency like the Swiss did not too long ago. Moves like that mess up all kinds of plans. Liquidity traps get in the way sometimes too.

    “The tea leaves are very clear on this right now. There will not be forgiveness per se. The intention is to deflate existing debt away. What this will do to un-incurred deficits and prices will be very interesting. I guarantee the word ‘Trillion’ is going to see it’s internet presence increase more and more.”

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  104. gringozecarioca on October 31st, 2011 at 6:17 am

    “Moves like that mess up all kinds of plans.”

    Not if you make it a piece of your plan.

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  105. gringozecarioca on October 31st, 2011 at 6:20 am

    …and Juliana.. I hope they do not go away.. I really would like to see, at a minimum, some damn convictions.

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  106. I think the central planners are in uncharted territory and seeing how their formulas failed to predict a financial crisis I have no faith in their theories or their methods of “control”.

    “Not if you make it a piece of your plan.”

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  107. But there’s old Larry Summers saying we should double down.

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  108. gringozecarioca on October 31st, 2011 at 6:37 am

    “I have no faith in their theories or their methods of “control”.”

    Neither do I, therein lies the fun.

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  109. Now that I’ve had the weekend to ponder it:

    I still hate flippers. Not true RE developers (who build properties and communities), but the kind of flipper who gets an inside deal, paints a room, puts an orchid on the counter, and tries to make $200,000 for his trouble.

    Flippers are parasites, akin to ticket scalpers. They serve no economic function.

    This property should have been MLS listed at $149,000. There would have been a bidding war: Better for the bank owner. Better for true price discovery. Better for a family who could afford it. Worse for the parasite.

    I do not have MLS, but from the last Cribchatter post, it was listed at $333,500 to the public on MLS, not $149,000.

    For the parasite who would like free government leverage to flip: F* you. Insane leverage and speculation got us into this bubble problem. I suspect you became a fat parasite off the system. Guess what: Game over. Get a job, if you can qualify for one.

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  110. gringozecarioca: for every trader at citidel with student loans there are 5 others working at starbuck, you dummy.

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  111. Oh, denial ain’t just a river in Egypt… where’s the “Occupy Crib Chatter” gathering?

    HD is right – once upon a time, specifically to agriculture markets, some futures/speculators made sense.

    But your weird rant is so far removed from the original concept of investing in stock (ie, the IPO to get a good idea off the ground) it’s sad.

    Working smart > Working hard. But too many people confuse being clever and finding loopholes in a system with work.

    “One man’s “speculation” is another man’s “investment” they are one in the same. The term “speculation” is often used to imply a shorter time horizon, and “investment” a longer time horizon, but not necessarily so. It is just a matter of semantics. If I go into the market on Monday and specu-vest in some hog futures it doesn’t matter if I take possession of the hogs or not. Just like when you buy stock. I’m not going to show up and demand to take possession of 0.000001% of GE or Sears Roebuck! Same goes for weather futures. I suspect the simpletons would want speculators to take possession of the underlying weather. “

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  112. You CAN get a witness – testify!

    “I still hate flippers. Not true RE developers (who build properties and communities), but the kind of flipper who gets an inside deal, paints a room, puts an orchid on the counter, and tries to make $200,000 for his trouble.

    Flippers are parasites, akin to ticket scalpers. They serve no economic function.”

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  113. Amen, skeptic!

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  114. More on the parasitic activity…

    RE: the “auction” sale instead of MLS listing at or near the same price. Oh yes, let’s give these scum free government financing. They’re doing us ALL a favor:

    WASHINGTON – A real estate investor pleaded guilty today in U.S. District Court in Sacramento to conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions held in San Joaquin County, Calif., Sharis A. Pozen, Acting Assistant Attorney General of the Department of Justice’s Antitrust Division, and Benjamin B. Wagner, U.S. Attorney for the Eastern District of California, announced.

    Robert Rose pleaded guilty to conspiring with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County. The primary purpose of the conspiracy was to suppress and restrain competition and to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices, the department said in court papers.

    http://www.stopfraud.gov/news/news-09232011-1.html

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  115. Brad F – those Kirkland bonus numbers are from a peak year. They are probably closer to 1/4 to 1/3 of that now (though Kirkland does not publish a grid, so who knows).

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  116. “Working smart > Working hard. But too many people confuse being clever and finding loopholes in a system with work.”

    exactly and these are the people who constantly nag about taxes.
    I know this old guy (70+) already retired from a job getting a huge salary who joined as a faculty and does not bring any research money, sucks at teaching, wastes his poor grad students time and has no problem getting $200K+ salary for doing nothing, but is constantly nagging about taxes and class war fare the president has launched. The mendacity is nauseating to sat the least!

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  117. Polling question to the student loan and speculator peanut gallery – what do you guys think about negative carry on student loans?

    My wife has significant med school debt which are consolidated at around 6%. We could pay a considerable portion of this off, which would leave us with very limited financial flexibility, but we stop a good portion of the negative carry. It seems like a harder decision when the rate is 6% vs. the 2.8% referenced above.

    Income stability is uncertain – I’m still looking for a post MBA job (another 100k in cash out the window) in the corporate world (not high finance), and she’s going into fellowship for another 3 years making 45k. I doubt Obama would ever let us discharge the debt, we’re practically “millionaires and billionaires.”

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  118. Negative carry for any debt in my opinion is bad. I did it during my educational years and it cost me a hefty sum of money I’m still stuck repaying today. The problem is that the money is so easy to borrow yet extraordinarily difficult to repay. You make decisions in life at a young age and then you become a debt slave for the rest of your life.

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  119. Brad F. on October 30th, 2011 at 10:25 pm
    Jeesh, a daughter told her mother who told her cousin who posted on a blog who told this guy named Vinny that Harvard LS grads are only averaging $60k! What the heck are you people smoking? Even if half of them left to do pro bono work in Bangladesh the average will probably still be over $75k.
    Here are recent figures on what Kirdland is paying btw.
    1st year $160,000 + $52,000 Bonus + $10k stipend
    2nd year $170,000 + $68,000
    3rd year $185,000 + $75,000
    4th year $210,000 + $95,000
    5th year $230,000 + $110,000
    6th year $250,000 + $125,000
    Partner $3.1 million
    http://en.wikipedia.org/wiki/Kirkland_%26_Ellis

    ———-

    $3.1 must be for an equity partner. There is no way every partner at Kirkland is getting $3M

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  120. Back on topic – this house still sucks.

    One of my top “haters” I’ve seen on Crib Chatter.

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  121. “I doubt Obama would ever let us discharge the debt, we’re practically “millionaires and billionaires.”

    Hold on, so you people have problems with taxes paying for putting food on poor people’s table, but the government should discharge the money you borrowed to do an MBA and your wife to go to med school?!

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  122. “Here are recent figures on what Kirdland is paying btw.
    1st year $160,000 + $52,000 Bonus + $10k stipend
    2nd year $170,000 + $68,000
    3rd year $185,000 + $75,000
    4th year $210,000 + $95,000
    5th year $230,000 + $110,000
    6th year $250,000 + $125,000
    Partner $3.1 million”

    “Recent” figures???

    How about 2006! BEFORE the recession. Going on 6 years ago. LOL!

    No way they’re making anywhere even close to this. In fact, in 2009, the bonus was $5,000 (and that’s if you kept your job.) So quit putting out false information. The kirkland associates aren’t making anywhere near the money in this chart now. The starting salaries are probably pretty accurate- but the bonuses – not so much.

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  123. Average partner $3.08 million in 2010. Yep, not every partner gets $3 million, some get $1 some get $10. That’s why it’s called an average.

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  124. Btw, there are fields of law that are counter to the general business cycle. Bankruptcy is an obvious one. Litigation is also counter cyclical in the sense that during hard times there is more an incentive for companies to fight it out over relatively scarcer resources, whereas during the good times there’s more an incentive to play nicer, settle more quickly, focus on new business, and let the good times roll. K&E happens to be strong in both bankruptcy and litigation. But if it makes people feel better to keep thinking that top lawyers are hurting, go ahead.

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  125. Did Kirkland not lay people off in 2009 just like everyone else?

    Enough said. I have friends sitting over there billing nothing- waiting to be fired. But sure- some groups will be busier than others. Just like at an advertising firm. Maybe you work for McDonald’s and you’re doing fine. Maybe you work for Ford and your whole group is laid off because they slashed their budget. But the Great Recession crushed the law firms. Tons of my friends were let go or were on the chopping block.

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  126. gringozecarioca on November 1st, 2011 at 1:12 am

    HD, if you are going to call me by my middle name, get things correct. More like 5,000 to 1. Just sayin, there are people below the age of 35 that have no shortage of money.

    Now still waiting for either you or skeptic to explain why speculators are bad. Not just a generic posting of how they were once necessary but no longer are. Please explain specifically how they are responsible for price movements -since i CAN explain how they often add stability as well as how speculators still fill their original historic role. As i said, they are the physical markets best friend.

    Truth is, all bubbles end with entry into the market of large amounts of new ‘speculating’ retail customers. So logically it must be fair to say they are the problem.

    Then go study shit like crashes from the late 1800’s. Not much changed..not much will. It will always be fear and greed…

    Joe I.. For what it’s worth.. If i had debt at 6percent i wouldnt be happy with it, i’d be focused on paying it down, but not at the cost of making myself too illiquid. But i think you know this. Rock and hard place in your situation, sorry to hear it.

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  127. Obviously, all high paying law jobs have not gone away. Obviously, not everyobe under 35 is broke. To bring it back to RE, neither group can stop the tide. It is obvious.

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  128. There are more broke under 35 than not broke under 35. This is obvious to all except for idiots like brad F who keep posting that K&E salaries will save the market.

    “G on November 1st, 2011 at 6:04 am

    Obviously, all high paying law jobs have not gone away. Obviously, not everyobe under 35 is broke. To bring it back to RE, neither group can stop the tide. It is obvious.”

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  129. Nothing wrong with speculators. We just need to create a new tax bracket for them so they can share. That way any negative impact they have on consumers can be smoothed a bit. And flash crashes don’t look too stable to me. Electronic trading changed that argument.

    “Now still waiting for either you or skeptic to explain why speculators are bad. Not just a generic posting of how they were once necessary but no longer are. Please explain specifically how they are responsible for price movements -since i CAN explain how they often add stability as well as how speculators still fill their original historic role. As i said, they are the physical markets best friend.”

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  130. I’m convinced that, since the best and the brightest made sure they paid for all the proper loopholes and lame regulators with which to loot our economy, the quickest way to tame them is to tax their trading profits at 90%. And I call myself a libertarian socialist, not a commie.

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  131. I think you are vastly overgeneralizing the topic here.

    I can’t believe any regular poster here could be this completely oblivious of the gravity of the economic calamity all around and the role of real estate speculation in exacerbating it. When speculators are pulling more wealth out of a system than the people who actually produce goods, there’s a big problem.

    If you think this economy is stable in any shape or form, I’m speechless. Bubble economies are bad news.

    Read Kevin Phillip’s Bad Money and come back to me – it’s the only well-researched publication I’m aware of that called the financial collapse almost to the month, using a statistical analysis (which of course, runs contrary to yours). Here’s a good review:

    http://www.latimes.com/entertainment/la-et-rutten16apr16,0,4634814.story

    >Over the last three decades, financial services have expanded from 11% of America’s gross domestic product to a record 21%, while manufacturing has declined from 25% to 13%. The author rejects the notion that this shift simply reflects a healthy adaptation to a “post-industrial” economy. Instead, he argues that the emergence of hedge funds and ever-more exotic bundles of financial derivatives amounts to a “financialization” of the American economy that has facilitated a ruinous expansion of private, as well as public, debt. Failed energy policies — or rather, the avoidance of any policy — have made the United States vulnerable to what may be the coming peak in oil production, thereby further weakening the dollar, which is essentially backed by the global petroleum economy.

    “My summation,” Phillips writes, “is that American financial capitalism, at a pivotal period in the nation’s history, cavalierly ventured a multiple gamble: first, financializing a hitherto more diversified U.S. economy; second, using massive quantities of debt and leverage to do so; third, following up a stock market bubble with an even larger housing and mortgage credit bubble; fourth, roughly quadrupling U.S. credit-market debt between 1987 and 2007, a scale of excess that historically unwinds; and fifth, consummating these events with a mixed fireworks of dishonesty, incompetence and quantitative negligence.”

    “Now still waiting for either you or skeptic to explain why speculators are bad. Not just a generic posting of how they were once necessary but no longer are. Please explain specifically how they are responsible for price movements -since i CAN explain how they often add stability as well as how speculators still fill their original historic role. As i said, they are the physical markets best friend.”

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  132. Gringo, history remembers speculators in tulips in the 1600’s. It’s disingenuous to say that speculators are the best thing for the market. On some levels they provide stability and price discovery, yes, but when there is overspeculation you get something called ‘bubbles’ and our economy has been a rapid succession of the same for years now.

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  133. What changed was the slow and steady erosion of all of the protections Teddy Roosevelt and FDR enshrined into law under the delusion that “globalization” was a panacea that allowed the impossible – everything being dirt cheap while everyone made more and more money.

    It’s been a corporatist assault, it’s bi-partisan, and it has been going on since Reagan.

    And juliana hits the nail on the head how making trading electronic took this all to a new (and unregulated) level.

    “Truth is, all bubbles end with entry into the market of large amounts of new ‘speculating’ retail customers. So logically it must be fair to say they are the problem.

    Then go study shit like crashes from the late 1800?s. Not much changed..not much will. It will always be fear and greed… “

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  134. Pfft. Even that is too generous- they provided some stability specific to agriculture, but since that is now “Agri-business” they aren’t even needed for that.

    “On some levels they provide stability and price discovery, yes, but when there is overspeculation you get something called ‘bubbles’ and our economy has been a rapid succession of the same for years now.”

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  135. miumiu wrote “Hold on, so you people have problems with taxes paying for putting food on poor people’s table, but the government should discharge the money you borrowed to do an MBA and your wife to go to med school?!”

    My comment was tongue in cheek along the lines of the demands the Occupy Wall Street people are making about pursuing debt relief for their basket weaving degrees. Although, if nationalized healthcare destroys my wife’s earning potential, you better bet I’m going looking for a bailout.

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  136. Did your wife go to med school or get a certificate to run a healthcare firm? Sigh… do you think doctors in the EU countries that kick our asses on providing healthcare are working 2 jobs to pay the bills?

    “Although, if nationalized healthcare destroys my wife’s earning potential, you better bet I’m going looking for a bailout.”

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  137. gringozecarioca on November 1st, 2011 at 12:05 pm

    skeptic.. Did u just accuse me of thinking things were stable? Have you ever read anything i have ever posted?

    But i really think u don’t understand speculation or fraud.

    I mean you really can’t think of reasons that airlines and power generating companies need active liquid and deep markets to stabilize their cash flows? No reason coca cola might care about the temperature risk in earnings on july 4th weekend, and want to do some weather futures? Maybe a small farmer sees a great price for his sept corn, in july, and wants to lock it in… Maybe a builder pre-sold homes and is open to material price risk in 6 months so he buys a few lumber contracts… Just like the textile plant buys in some cotton against the order it owes in 6 months…. Nope no reason for liquid deep markets… Skeptic said so!

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  138. Don’t worry, Brad F will quiet down once his first semester 1L grades come out, they always do.

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  139. yes ze, but the arguement arises, should people (or corporations, lol, same thing, right?) be allowed to use borrowed money or leverage to buy those futures you speak of?

    I say no, it should be cash only

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  140. gov’t bailing out speculators is where I see the problem

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  141. sonies: “yes ze, but the arguement arises, should people (or corporations, lol, same thing, right?) be allowed to use borrowed money or leverage to buy those futures you speak of?

    I say no, it should be cash only”

    Wait, are you arguing that the futures/options themselves shouldn’t be leveraged? Or that the money used to pay for them shouldn’t be leveraged? I’d agree with the second, but it might be a hard rule to enforce, especially for privately held companies.

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  142. ch: “gov’t bailing out speculators is where I see the problem”

    Bingo.

    Speaking of bad leverage: any bets on the outcome of MF Global blowup. It’ll effect a lot of prop traders in Chicago and NY, that’s for sure. A few less trader pads will be selling this quarter with their money tied up in a tanking company.

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  143. money used to buy futures/options/swaps should not be leveraged, thats why the banks went insolvent when the real estate market crashed… think about taking out a 100k mortgage to go long on some SPY call options, thats pretty much what the banks were doing back in 2005/6/7/8

    Leverage to an extent is fine (such as fracional deposit lending), but leveraging to buy leveraged instruments for nothing more than greed, can be catastropic, as you can see

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  144. I think you have “needs” and “wants” confused.

    Getting that straight of course ties into whether or not the government should intervene, but the bigger picture is not whether company A stabilizes their cash flow or hedges their bets in a supply-chain scenario as you describe.

    No, the problem is whether people are gaming the system.

    What a world we live in when one of the most lucid reporters on this issue works for the Rolling Stone:

    http://www.democracynow.org/2009/3/25/aig_and_the_big_takeover_matt

    “I mean you really can’t think of reasons that airlines and power generating companies need active liquid and deep markets to stabilize their cash flows? No reason coca cola might care about the temperature risk in earnings on july 4th weekend, and want to do some weather futures? Maybe a small farmer sees a great price for his sept corn, in july, and wants to lock it in… Maybe a builder pre-sold homes and is open to material price risk in 6 months so he buys a few lumber contracts… Just like the textile plant buys in some cotton against the order it owes in 6 months…. Nope no reason for liquid deep markets… Skeptic said so!”

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  145. I’m letting Ze carry the torch for a while and he’s doing a fine job. I was so happy to see him revisit the fact that not one of you jag-offs can give a coherent argument as to why you think or assume that speculation is bad. Maybe you should start from a different preconception and try to think of why speculation might be good for society.

    Also can anyone on here (except for Ze) tell me WHY price discovery is good for society? What is the benefit? And I’m not talking about knowing how much money to hand the barista at Starbucks.

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  146. As for bubbles, let’s not forget the bubble of immigration to America from Europe, or the bubble of railroad investment which set our country on a course from wilderness to global superpower. Or the Internet bubble, which sparked thousands of American companies. Maybe naysayers and simpletons would want a law passed that new developments or breakthroughs must happen gradually, so they can understand better or feel less threatened. I wonder how that would work. The fact is speculation built this country, and it will continue to build our upward future. The speculator, though he works for his own ends, should be celebrated by all. For it is overall society that benefits from his individual profit seeking.

    And let’s also not forget the greatest bubble of them all – humankind. Haha.

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  147. What is your point, Brad? A definition? The word isn’t bad, it’s the implementation. Why don’t you, or Ze, explain to us how housing speculation in 1997-2008 was good for the US economy? What were those overall societal benefits that you claim were achieved through all that individual profit seeking? Why aren’t we all for more liar loans and taxpayer backstops since they are proven to increase speculation, thus maintaining our upward future? Will price discovery occur? Please help us jagoffs and simpletons to understand.

    BTW, you would have learned a lot more had you spent the student loans on travel, strippers and blow.

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  148. what’s wrong with travel, strippers and blow? He’s gonna gets a biglaw job, he’s going to pay it all back, and being low interest, it’s like ‘free money’ right?

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  149. “Why don’t you, or Ze, explain to us how housing speculation in 1997-2008 was good for the US economy?”

    and while at it please explain how the housing bubble of Japan another result of speculation was good for their economy.
    Oh and btw, not the whole European economy is a mess to as result of housing speculation and deregulation started in this country.

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  150. No, they have massive social benefits borne and burdened by the state and a large class of pensioners paid for by an ever decreasing number of workers and employers. The unemployment rates in Greece and Spain are what, 20%? I read the unemployment rate for the youth in Spain is upwards of 50%. That’s great depression level style unemployment. This IS their great depression that will be remembered for generations to come. Let’s hope those socialist europeans don’t start another world war out of this.

    “Oh and btw, not the whole European economy is a mess to as result of housing speculation and deregulation started in this country.”

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  151. HD, you might want to read a bit before you start your rhetoric:

    http://repowatch.org/2011/08/15/economists-repos-underlie-financial-crisis-in-europe/

    BTW, think Ireland and Iceland for credit fiasco too. It has nothing with socialism!

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  152. Also HD, from wiki:
    “According to the Financial Times, Spain has succeeded in trimming its deficit from 11.2% of GDP in 2009 to 9.2% in 2010″
    so at least they are trimming their deficit, while here tea baggers are worried if a gay nurse is attending to their child in the hospital and they have made the folks drink the Kool-aid that giving tax breaks to the rich will have a trickle down effect. Yeah, right we have seen that one in the works for at least a decade now.

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  153. Here’s a one-liner for you: We have institutionalized speculation a plenty – do YOU think the economy & society are in good shape?

    I could post dozens of studies showing how the USA is falling way behind the rest of the civilized world across a broad spectrum of quality of life issues, but you clearly won’t get it.

    “Maybe you should start from a different preconception and try to think of why speculation might be good for society. ”

    Now THIS is comedic gold. Go visit Thomas Edison’s home and learn the meaning of innovation.

    “Maybe naysayers and simpletons would want a law passed that new developments or breakthroughs must happen gradually, so they can understand better or feel less threatened.”

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  154. I wonder if Brad has been in a coma and just awoke and thinks it’s still 2005…

    A tranched subprime in every pot! yessir, that’s the ticket…

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  155. I think Iceland is a good model to look at. They seem to be surviving screwing the bondholders fairly well. Greece may end up thinking so too. If bank contagion brings about what alarmists will call armageddon, I think it should be looked at as an alternative to QE. Sure it will destroy a lot of wealth; the middle class knows what that looks like and are living with it every day. But at least we know we’ve hit a bottom and can start over. With very basic safety nets that won’t destroy the American dream.

    http://www.theglobeandmail.com/report-on-business/international-news/global-exchange/icelands-no-bailout-stance-hasnt-chilled-investors/article2060163/

    “BTW, think Ireland and Iceland for credit fiasco too. It has nothing with socialism!”

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  156. Juliana is right. Also lets not forget the top five banks control 86% of the derivatives market. With a notional value of over 700 trillion, with a t. It is a big boys game and club so I cant figure out why they need frank-dodd in lieu of liquidation auctions. But shh…cuz frank-dodd fund won’t be nearly big enough when time comes and big boys will want another bailout.

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  157. And screw the Fannie and Freddie bondholders too. Anywhere that control fraud was practiced to extract wealth should be exempt from taxpayer funding.

    http://neweconomicperspectives.blogspot.com/2011/02/wallison-is-far-too-kind-to-fannie-and.html

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  158. Juliana-

    Nice reference to William Black! He is one of my heroes.

    Maybe Brad F should learn about Mr. Black during his free periods at school. He’d better understand the naked greed and fraud that perverse speculation brought to the housing market.

    http://www.youtube.com/watch?v=J8CqaHTygSc

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  159. A little more cred than zerohedge, I agree. Wish there were more like him.

    “Nice reference to William Black! He is one of my heroes.”

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  160. gringozecarioca on November 2nd, 2011 at 12:35 pm

    “Why don’t you, or Ze, explain to us how housing speculation in 1997-2008 was good for the US economy?”

    I never said it was good. I think everyone who lied on their loan forms should go to jail as well.

    I simply disagree with the broad brush skeptic paints with. One that says all speculation is not of any value. Speculators provide liquidity into a market that can not exist without them, or would exist with enormous price gaps. So if you are a producer of ammonium and you sell Wal-mart a 2 yr supply of amonia at $2 a liter with your current prosuction costs at $1.50, without buying in a shit load of Natural Gas contracts, and the winter gets crazy, you can be looking at costs of production of $4 and having to fire all your employees cause there clearly wasn’t a ‘need’ for any time of market allowing a manager to manage his fuckin business. No go fire 1,400 people!

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  161. gringozecarioca on November 2nd, 2011 at 12:38 pm

    ..and sonies.. when was the last time a clearinghouse went belly up. Contracts traded on an exchange require sufficient maintenance margin to cover a good amount of losses, full pmt seems extreme. As for options.. you do have to pay premium, which doesn’t reflect risk anyway, so you pay risk margin as well.

    Problem is off exchange contracts, not all contracts.

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  162. gringozecarioca on November 2nd, 2011 at 12:40 pm

    “I could post dozens of studies showing how the USA is falling way behind the rest of the civilized world across a broad spectrum of quality of life issues, but you clearly won’t get it.”

    And if that is directed to me.. I got it, I left! Thing is in many developing countries.. Life has never been so good. feels rough to be on the wrong side of mean reversion, even when you are crying thfrom a perch that looks better than 6.2 Billion other peoples perch. Ride ain’t over..

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  163. gringozecarioca on November 2nd, 2011 at 12:52 pm

    “Also lets not forget the top five banks control 86% of the derivatives market.”

    Bob.. can you link to that somewhere. I find that extremely hard to believe. Particularly on what scale? As for notional value 700t, impressive number, but in and of itself – meaningless.

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  164. 700t is high. but number is still more than i’ve got saved

    http://www.ritholtz.com/blog/2011/09/derivative-size-concentration-threaten-global-economy/

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  165. gringozecarioca on November 2nd, 2011 at 6:33 pm

    CH, thanks for the link. I knew Bobs statement made no sense. It is 86% of the derivative market amongst large banks. There are MANY other players. My bet is that’s not 1% of the entire global market.

    The reason I say it’s a meaningless number is simply it does not tell you the risk. i.e, I can buy 10 January Crude contracts for a notional value of about 930,000. I can buy Assume contract moves $1.00 a day.

    I can buy a January Crude contract and sell a February contract against it creating a spread that moves about 5 cents a day. To have equivalent risk I would have to do 200 spreads or 400 contracts with a notional value of 37,000,000 dollars.

    So the 930k is as risky as the 37 million. So the number in and of itself tells ya nada!! Unless you are skeptic or Matt Tiabi, of course, then just throw out a big number and people will have to assume it’s dangerous and everyone involved is guilty.

    Ze might smokes a lot of weed, but wonders why pretty much everyone else appears to be lost in a cloud…

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  166. “There are MANY other players. My bet is that’s not 1% of the entire global market.”

    Really? You’re saying the virtually all derivatives transactions do not involve one of these banks as the nominal counterparty?

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  167. gringozecarioca on November 2nd, 2011 at 7:20 pm

    “Really? You’re saying the virtually all derivatives transactions do not involve one of these banks as the nominal counterparty?

    Yes. Absolutely.

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  168. “Yes. Absolutely.”

    I have some random (and admittedly incomplete) knowledge of commodity derivatives (which I know are a small portion of the notional values that get thrown around), but thought that most transactions involved a financial institution counterparty (which may then engage in further transactions to offset).

    Who can you go to for a CDS for example?

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  169. gringozecarioca on November 2nd, 2011 at 9:15 pm

    DZ.. i.e, Deutsche Bank matches with BNP and that doesn’t make that list… Lord only knows how many big funds NYC-LONDON-SWISS trade massive size, direct with one another, through brokers. Exchange traded can make the list and that has to be enormous – CME, ICE… Those 4 banks should be a pimple on the elephants ass when ya think about it a bit.

    Just pointing out that the headline makes it seem like some ‘iron fisted’ monopoly control of markets by 4 banks..

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  170. “Deutsche Bank matches with BNP and that doesn’t make that list… Lord only knows how many big funds NYC-LONDON-SWISS trade massive size, direct with one another, through brokers.”

    Agreed, but I didn’t think that would make the top 5 US (inclusive of their worldwide operations) de minimis. There’s a lot of room between 86 (or whatev) percent and 1 percent.

    “Exchange traded can make the list and that has to be enormous – CME, ICE…”

    Fair enough if that’s included (haven’t looked). I had non exchange traded in mind.

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  171. “Go visit Thomas Edison’s home and learn the meaning of innovation.”

    The ironic thing about this naive statement is that Thomas Edison himself was a freakin’ speculator! Oh you thought the light bulb was invented to help poor people or something didn’t you? And guess were those hundreds of millions (in today’s dollars) came from which was poured into getting an unknown technology (electric lighting) to work. Must have been those evil speculators looking to make a buck off others without doing any “work.” Too bad you guys weren’t there to shut down those speculators or tax them prohibitively.

    ——
    “I got it, I left! Thing is in many developing countries.. Life has never been so good. feels rough to be on the wrong side of mean reversion, even when you are crying thfrom a perch that looks better than 6.2 Billion other peoples perch. Ride ain’t over..”

    ZE: You are outside the US? Where are you operating from? What do you do or are you retired? Please do tell. I’ve been thinking about getting money out of the US, in preparation of potentially bailing myself if things turn really bad. People, if you think things are bad now, just imagine large numbers of the entrepreneurial / speculator class fleeing the United States, then the naysayers/jagoffs/simpletons will really get what they deserve.

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  172. “ZE: You are outside the US? Where are you operating from? What do you do or are you retired?”

    Brad F: Do you read the site? Hello????

    Z is in South America.

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  173. gringozecarioca on November 3rd, 2011 at 11:40 am

    Sabrina..don’t you read Clio’s posts. I am in my parents basement in Cleveland.

    Brad, as a lawyer, I shouldn’t have to advise you on how beneficial it is for one to keep the location of their assets seperate from where they are most likely to incur personal liability. See HD’s reason for having a big insurance policy.

    Ze got sued back when he was all of 24 after someone forged his sig onto a non-compete agreement. Absolute mess to think of a 24yr old hiring forensic handwritting experts. Learned then, that even a win is a loss. And been playin diminish the bullseye ever since.

    As for employment.. I kinda like the cc consesus of dumbass, unemployed, farmer, stoner… Works for me!

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  174. “The fact is speculation built this country, and it will continue to build our upward future. The speculator, though he works for his own ends, should be celebrated by all. For it is overall society that benefits from his individual profit seeking.”

    A simpleton is someone who believes this is always true.

    A jagoff is someone like Brad F.

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  175. gringozecarioca on November 3rd, 2011 at 12:45 pm

    DZ… http://financial-dictionary.thefreedictionary.com/Derivative+security

    Once again,the intent of the headline was to create the impression of a colluding cartel. Plays well to the Skeptiks and HD’s of the world. Anything but the truth.

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  176. “http://financial-dictionary.thefreedictionary.com/Derivative+security”

    I was thinking OTC for whatever reason, but isn’t OTC most of notional dollar volume?

    “Once again,the intent of the headline was to create the impression of a colluding cartel. Plays well to the Skeptiks and HD’s of the world. Anything but the truth.”

    Markit, and by extension the banks, have been under a lot of scrutiny by antitrust and regulatory agencies…

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  177. gringozecarioca on November 3rd, 2011 at 1:12 pm

    “I was thinking OTC for whatever reason, but isn’t OTC most of notional dollar volume?”

    Yes. But then you get many players you never heard of that throw around absurd amounts of size. Guys that the Goldman boys hope to graduate to some day.

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  178. “But then you get many players you never heard of that throw around absurd amounts of size.”

    Who are trading primarily with non financial institutions (for lack of a better term)? These guys are trading CDSs with each other, not with goldman etc.?

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  179. gringozecarioca on November 3rd, 2011 at 1:29 pm

    “These guys are trading CDSs with each other, not with goldman etc.?”

    Yes. That is the purpose of ISDA.

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  180. “Yes.”

    I had thought it wasn’t the case for commodity OTC and CDS.

    “That is the purpose of ISDA.”

    I thought the purpose of ISDA was to allow the banks to exercise even more control (mostly kidding).

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  181. Relisted at 350

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  182. So where is the best place to keep one’s assets outside of the united states?

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  183. Can’t let this baby die. Bringing up the ISDA reminded me of their taking this reporter to task for his “harshly worded blog”. Course if the man from brahZEEL says its all good, I guess I have nothing to worry about.

    http://www.businessweek.com/news/2011-11-01/credit-default-swap-risk-bomb-is-wired-to-explode-mark-buchanan.html

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  184. gringozecarioca on November 4th, 2011 at 7:17 am

    “So where is the best place to keep one’s assets outside of the united states?”

    Brad, anywhere that if push comes to shove, you would have no problem living. Preferably multiple locations. Preferably maintaining at least dual citizenship. There is nothing illegal about moving money out of the country so long as you declare it. If you so choose to pick up a place, furnish it with 16h Century antiques, cover your walls with artwork, and fill your book shelves with rare print collectible books (all of which are appreciable and surprisingly liquid assets) who is to say you can’t? All within the law. All out of reach.

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  185. gringozecarioca on November 4th, 2011 at 7:33 am

    Juliana,
    The boy from Brasil definitely did not say that. This is a disaster waiting to happen, again and again, until this stuff is forced onto a clearinghouse. You write trillions in insurance without the capital to back it. You belong in jail.

    What truly amazes me are the resumes behind the study of the obvious here. Amazing! and to follow it with this gem:

    “This isn’t the kind of insight you can get just by sitting and thinking carefully; it’s revealed only with detailed analysis backed by computer simulations.”

    Or simply remembering how Enron took down the entire energy industry back in 02/03.

    Economists truly are jokers.

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  186. The internet is a wonderful way for intelligent people to spread truth. Or for people with an agenda to spread untruths. The trick is to recognize the agendas.

    “What truly amazes me are the resumes behind the study of the obvious here. Amazing!”

    And that goes for the Bernank, too. Hoocoodanode doesn’t work anymore. Time to find my tinfoil hat…And why do I keep thinking of Hitler clones?

    “Economists truly are jokers.”

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  187. gringozecarioca on November 4th, 2011 at 8:06 am

    “And why do I keep thinking of Hitler clones?”

    Jewboy here, saw the irony in that as well :-)

    “The trick is to recognize the agendas.”

    I just expect everyone to do what’s in their best interests and am rarely surprised.. Those that surprise you to the positive, you keep close. Life is really kinda simple if you allow it to be.

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  188. Have you ever visited Edison’s home and gotten the tour? The guy was a “freakin’ WORKAHOLIC,” his innovations and inventions came from living in his lab, literally.

    Now the electric COMPANY required some venture capital. But that’s not the same thing, and that’s NOT SPECULATING, you idiot, – that’s investing.

    Get this through your head:

    Speculating is gambling. You’re betting a price is going up, but you aren’t doing shit in terms of actually improving the product or service.

    And yes, there are some decent cases that can be made how farmers specifically need to hedge their bets due to the unpredictability of nature and the fact we all need to eat.

    But there’s nothing society gains by traders making millions of trades and taking a small commission on each one after the initial IPO. The system got its needed lubrication from the IPO, the rest of the activity just adds to inflation.

    Seriously, you have to be dense beyond words not to get this. We’ve replaced our manufacturing sector with people who don’t make anything – and when they do “make” things, we get crap like tranched subprimes.

    No thanks. If Wall Street disappeared tomorrow we’d all survive, it’s just a glorified middleman.

    “The ironic thing about this naive statement is that Thomas Edison himself was a freakin’ speculator! Oh you thought the light bulb was invented to help poor people or something didn’t you? And guess were those hundreds of millions (in today’s dollars) came from which was poured into getting an unknown technology (electric lighting) to work. Must have been those evil speculators looking to make a buck off others without doing any “work.” Too bad you guys weren’t there to shut down those speculators or tax them prohibitively. “

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  189. gringozecarioca on November 4th, 2011 at 8:14 am

    “But there’s nothing society gains by traders making millions of trades and taking a small commission on each one after the initial IPO. The system got its needed lubrication from the IPO, the rest of the activity just adds to inflation.”

    So then close down e-bay!!! If I buy Nabisco because I like eating cookies when I am wasted, but then they get involved in Tobacco, and I ain’t into tobacco. I would should have no place to sell my piece of the company? I must own it forever and ever? If I need cash to pay an unexpected hospital bill, I can’t sell an ownership interest in a company that I have? I can sell my Dapper Dan doll sitting in my attic since I was 4 on e-bay, but GE is for life!

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  190. gringozecarioca on November 4th, 2011 at 8:17 am

    “We’ve replaced our manufacturing sector with people who don’t make anything ”

    Or we just got beaten on price of production and one became larger by simply the other becoming smaller. Same argument can be used for gov’t vs. manufacturing ratio. Makes gov’t evil too! Oh dat be sum statistical thinkin!!

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  191. good grief, i’m glad I have an econ degree

    some of youz should go back to school

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  192. Ever take a class in logic, Sonies? Ever hear of “argument from authority”? Works as well as ad hominem. Are you defending Keynesianism?

    “good grief, i’m glad I have an econ degree”

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  193. “G – I would like to believe in some conspiracy theory that the powers that be have saddled my generation with debt”

    The problem is government intervention in the university market with “easy money” student loans to everyone. All that does is drive up prices.

    What if the US government said that every American deserves to own an SUV, including every illegal, I’m talking everyone. If the government decided to make easy money loans (at low interest rates) available for this program, what do you think would happen to the prices of SUVs? (clio’s supply and demand)

    The prices would of course go up, which is exactly the same things that’s happened to tuition costs. Peter Schiff explains this very well. The worst thing Obama has done recently is REDOUBLE is efforts at making student loans available. Those of us who hoped for deflation in tuition costs won’t get it.

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  194. Same thing with housing, and same with healthcare. Most Americans and even politicians are too blind to see this.

    I seriously do wonder about the ROI of most degrees at post-secondary institutions these days. I suspect 90+% aren’t worth it.

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  195. juliana – wtf are you talking about, me a Keynesian? hahaha good one

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  196. “good grief, i’m glad I have an econ degree,
    some of youz should go back to school”

    Sonies has a point, a lot of you need basic econ 101. Especially if you don’t have common sense 101 to fall back on. And just because someone knows a few logic terms, doesn’t mean that person knows anything about economics.

    It was Skeptics comment, “the system got its needed lubrication from the IPO, the rest of the activity just adds to inflation” that had me rolling with laughter. Wouldn’t surprise me if that’s also what prompted your ‘back to school’ call Sonies.

    The financial idiocy among the general populace is astounding. I’m against the big banks. But when it comes to how they screwed everyone over, you can’t say that the general population didn’t have it coming. You know what they say about a fool and his dough. And it would be hard to deny that at least 50% if not 75% of the US population are financial fools.

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  197. Brad F is still a jagoff.

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  198. This is off-topic but what isn’t in this thread?

    There’s a new show on HGTV this week called “My House, Your Money”. It’s about, what else? The Bank of Mommy and Daddy (or maybe Grandpa and Grandma) helping someone buy a property.

    It’s on Tuesdays at 7:30 central.

    The first episode is on a medical student who wants to buy a condo instead of rent. His parents are helping him buy the condo.

    A sign of the times that they are devoting a whole series to this?

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  199. Also- did anyone else see the House Hunters with the two 30-something California teachers who bought the 1200 square foot $550,000 house in the San Fernando Valley?

    You think you have problems, HD. That’s nothing compared to that couple. They’re going to be broke for their lives after purchasing a home at that price.

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  200. Also- here’s the usual roundup of weekend shootings.

    The one at 1100 N. Ashland (Ashland and Division) in West Town sounds like a wild west shoot out with the police actually shooting one of those in the car commiting the drive-by.

    http://www.chicagotribune.com/news/local/breaking/chi-two-injured-in-separate-south-chicago-rogers-park-shootings-20111104,0,228472.story

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  201. “Also- here’s the usual roundup of weekend shootings.”

    lol… this is funny. We are living in the wild wild west.

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  202. Sabrina: I don’t have cable teevee!

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  203. Back on the market! This dapper Don ain’t interested in livin’ there he’s interested in SPEKULAYYTIN’! It sure beats workin’ for a living!

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  204. HD- it’s just for the best that you don’t have cable. The house hunters episodes can sometimes be very interesting (like the 2 teachers buying a $550,000 little cottage that you’d be lucky to have one kid in.) There was no talk about how they were doing it financially.

    The other show is interesting (about the parents supplying the money) because HGTV sometimes CAN find trends in real estate (like the flipping shows- that no long exist.) But, again, you’re not missing anything.

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  205. Sabrina check out “The Gift Apartment From Mom and Dad”:

    http://www.nytimes.com/2011/06/19/realestate/more-parents-buying-apartments-for-their-children.html

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  206. this story is more unbelievable:

    http://www.nytimes.com/2011/10/16/realestate/rents-in-manhattan-rebound-to-record-highs.html

    “Across New York, rents have not only rebounded from the depths of two years ago, but are also surpassing the record high of 2007 during the real estate boom,

    “vacancy rate in Manhattan that is hovering around 1 percent,

    Over all, the average rental price for a Manhattan apartment in September was $3,331,

    “In doorman buildings, the average rent for a two-bedroom is $5,857, compared with $5,321 a year ago.

    “ ‘We are going to see double-digit rent increases over the next four years’ in New York and major metropolitan areas like Boston, San Francisco and Washington.”

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  207. danny (lower case D) on November 6th, 2011 at 4:27 pm

    I remember a House Hunters that had this young gay couple from Portland. One was a teacher and the other worked for a not-for-profit. The houses they were looking at were all POS. The one they settled on had sewage and water heater trouble. They still purchased it for some insane price ($350+). It looked like a “Roseanne” type fugly house.

    Almost every episode in every city that I’ve seen, I think that the buyers pay too much.

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  208. danny (lower case D) on November 6th, 2011 at 4:34 pm

    New York is a cool place to visit, but definitely not worth $3000+ for rent. The financial industry has skewed the distribution of income among professions, such that regular worker family can’t afford a decent quality of life on the island.

    I’d be glad to see CME make good on their threat to leave town for Texas or some other free-market paradise. Good Riddance!

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  209. Oh, right, Chicago school of course. Bill Black has this to say about your guys:

    “On our panel (on private-sector fraud and corruption) the other panelists’ (all Chicago-school) principal concern was that we reduce the prosecution of elite white-collar criminals, reduce the incentives to blow the whistle on the CEO, and reduce the incentives to bring a qui tam civil fraud actions against corporations. We inhabit alternative universes. In our reality-based universe, the problem is elite fraud. In their faith-based theoclassical economics universe the problem is that the “mob” is seeking to murder innocent bank CEOs by bringing back the weapon of the French terror, the “guillotine.” These are the exact terms used by one of my co-panelists. We may never be able to convince the theoclassical Chicago-school faculty to cease their identification with and apologias for the one percent, but we are read by at least some of their students because of the visibility provided by Naked Capitalism.”

    http://www.nakedcapitalism.com/2011/11/bill-black-the-high-price-of-ignorance.html

    Yves Smith’s blog is essential reading for serious economists, imo. Been on my daily read for years, and I don’t even have an econ degree. Having a blank slate can be very useful in overcoming confirmation bias.

    “juliana – wtf are you talking about, me a Keynesian? hahaha good one”

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  210. I see by this & the moronic follow up that I’m complaining about eBay that some of you still don’t get it.

    We have systemic problems related to a government that is being run by multinational corporations and driven by nothing more complicated that a desire for quarterly profits – which does not lead to intelligent long term planning, hence the giant friggin’ mess & bubble economy we’re in.

    We don’t have a free market, never have – and Adam Smith would be out there screaming his lungs off about the oligarchy running the show as far as banks, telecoms, the media, etc.

    The general populace may be pretty ignorant, but that isn’t going to save the 1% when they get tarred and feathered and their heads put on pikes.

    Rich people truly don’t get it – they pay astronomical taxes to preserve a system that is giving them astronomical wealth. No society = no wealth. The people with nothing don’t have a problem seeing it all come down – what do they have to lose?

    “The financial idiocy among the general populace is astounding. I’m against the big banks. But when it comes to how they screwed everyone over, you can’t say that the general population didn’t have it coming. You know what they say about a fool and his dough. And it would be hard to deny that at least 50% if not 75% of the US population are financial fools.”

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  211. Brad, did these customers “have it coming”?

    http://blogs.reuters.com/unstructuredfinance/2011/11/05/mf-global-and-the-rubber-check/

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  212. Yeah “Skeptic” they took the risks and they stood to reap the rewards (good or bad). I highly doubt that those traders with $1m or more tied up or lost in their MF trading accounts are going to be crying some sob story about how capitalism is wrecked.

    The wealthy .01%-ers aren’t going to have their heads on pikes, we all know that the modern day ‘head on a pike’ (prison) is for any of the bottomers who step too far out of line. By the way, ‘head on a pike’ was often used by the king to demonstrate his power over the commoners. The pikes with heads were posted at palace walls.

    But anyway, back to reality and modern times. Or keep dreaming about that uprising. But its starting to get a little cold to be camping in protest with a bunch of smelly unemployed types.

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  213. This renovated house is finally pending at $328,700.

    What will it actually sell for?

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  214. This house sold in January 2012 for $295,000.

    Originally listed in Oct 2011 for $449,000.

    Wow. Just a little off.

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  215. They still made money – barely.

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