Profound John Hussman Column Today

[haha]

The number is just something that stuck with me. So, it may not be accurate any more. I found one link from google.

Baby boomers drive second home market

"About 25 percent of baby boomers own one or more types of real estate in addition to a primary residence, and boomers own 57 percent of all vacation and seasonal homes and 58 percent of rental property, according to a survey conducted by Harris Interactive for the National Association of Realtors trade group."

Right here on this board we have a thread named "Is a second vacation home a good idea?" I am still not clear that a first vacation home is a good idea.

 

[Purron]

Real estate has become a very unpopular investment. Even as a way to build net worth by owning your own home. This makes me look at it in a new way. When people rush away in hoards, this may signal some real opportunities.

I think we have a ways to go before we hit bottom. Even so, peeps gotta live somewhere. My Kansas grandpa always said land was the best thing to own. There's only so much of it to go round.

 

[FIREd]

One of my sons is a manager in a high tech firm and the other one is a developer. Neither of them has a native born American on his team. Once the Chinese and Indians and Russians start returning or staying home, what are we to do for a brainforce?

Ha

My wife manages a group of scientists. All Chinese and Indians. Hard working and loyal too. When I was in graduate school, about half the students were foreign and the foreign students had a much higher graduation rate than the native born students. For whatever reason, Americans don't seem to have much enthusiasm for sciences anymore.

 

[mb]

My wife manages a group of scientists. All Chinese and Indians. Hard working and loyal too. When I was in graduate school, about half the students were foreign and the foreign students had a much higher graduation rate than the native born students. For whatever reason, Americans don't seem to have much enthusiasm for sciences anymore.

I agree to some extent but here's another way to look at it.

According to the following reference 36 of the top 50 research universities in the world are in the US. (I was to lazy to count the number in the top 100.)

This is a study done by a Chinese university so I don't think that it is necessarily biased toward the US and it is based on quantitative metrics such as citations in peer reviewed publications rather than opinion.

Academic Ranking of World Universities - Wikipedia, the free encyclopedia

It just isn't possible to staff (professors and grad students) that many top universities (72% of the 50 best in the world) from a pool (the US population) that is less than 5% of the world. population.

I suspect that good students world wide will continue to want to go to the best schools and those students will in turn help maintain the quality of the schools.

MB, a native born American with a Ph.D. in engineering from the #3 school on the list who is happy to have foreign students come and study in the US.

 

[haha]

MB, a native born American with a Ph.D. in engineering from the #3 school on the list who is happy to have foreign students come and study in the US.

So are we all. What we fear is what happens when they come to study, but return home afterward, as many will undoubtedly do. Indians mostly prefer living in India.

You may be a brightest person in the entire United States, but that does not change the fact that American-citizen hard science majors and advanced degree candidates are pretty scarce. Certainly not unknown, just less common than foreign students.

Ha

 

[kcowan]

Looks like proper number is 15%

Exposed: the Truth About Baby Boomers’ Second Homes | Finance Articles Collections

I think when all the cabins on lakes are included, and ski chalets, the number could be higher.

 

[REWahoo]

I think when all the cabins on lakes are included, and ski chalets, the number could be higher.

I won't argue the total percentage of those who own second homes could be in the 25% range. I'm still very skeptical of the claim one out of every four baby boomers owns a second home/cabin/ski chalet. That would exclude anyone over the age of 64 and under the age of 46 from the calculation.

 

[Gone4Good]

What I find interesting is the notion that we have rising defaults, delinquencies, and charge offs while we are somehow simultaneously avoiding dealing with leverage.

 

[MichaelB]

So are we all. What we fear is what happens when they come to study, but return home afterward, as many will undoubtedly do. Indians mostly prefer living in India.

You may be a brightest person in the entire United States, but that does not change the fact that American-citizen hard science majors and advanced degree candidates are pretty scarce. Certainly not unknown, just less common than foreign students.

Ha

Maybe sky-high cost of college will motivate students to focus on hard science and engineering. $100K+ and families are already over leveraged by mortgage.

 

[Independent]

Maybe sky-high cost of college will motivate students to focus on hard science and engineering. $100K+ and families are already over leveraged by mortgage.

This would be a positive result of the Great Recession. Maybe HS students will decide that "any generic" college degree isn't worth the cost of tuition, but a degree that directly qualify for higher wage jobs (and engineering degrees consistently top the lists of highest entry level salaries) is worth the effort.

Of course, we've got bright kids who expect to be millionaires in Finance. I don't know if there are enough such students to materially reduce the number of engineering grads, but that is a possibility.

 

[Independent]

Back to the OP. I wonder if some investors are essentially relying on a gov't put. They're saying that the downside is limited because if things get really bad, the gov't will step in and bail them out again.

I'm not sure if that's true, but I could imagine a lot of people reasoning that way.

 

[FIREd]

Of course, we've got bright kids who expect to be millionaires in Finance. I don't know if there are enough such students to materially reduce the number of engineering grads, but that is a possibility.

True. Plus finance is cool and science is geeky. I was admitted to both business school and graduate school (chemistry) and I must say that the allure of "easy money" in finance was strong. I ended up going for chemistry though, and it turned out to be more rewarding financially than I ever thought possible. DW, with her science degree and a few years of experience, probably makes more money than a lot of finance people.

 

[haha]

Back to the OP. I wonder if some investors are essentially relying on a gov't put. They're saying that the downside is limited because if things get really bad, the gov't will step in and bail them out again.

I'm not sure if that's true, but I could imagine a lot of people reasoning that way.

I would imagine that you are correct. As Chuck Prince of Citigroup said back in the summer of 2007-"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,”

Ha

 

[Running_Man]

Buffett Expects ‘Terrible Problem’ for Municipal Debt (Update1) - Bloomberg.com

Well even Warren Buffet thinks the government is going to be forced to back up other debts