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Housing: Ackman vs Shilling
It's Housing Day over at Business Insider today, which is running duelling slideshows from Bill Ackman and Gary Shilling in the wake of yesterday's dreadful home-price numbers. Both of them are a little dated—Ackman's is from November 3, while Shilling's seems to be from October, although it's not entirely clear. Since then, prices have fallen, which would do little to change either of the analyses, but also interest rates have risen significantly, which puts a substantial dent in Ackman's math.
Ackman's logic is pretty simple: you can get a lot of leverage in the housing market, and if you make a highly-leveraged bet and prices rise, then you can get enormous returns. At the heart of his thesis is the idea that valuations are low and will rise in future—but to my eyes at least, there are problems with both legs of that argument.
The "valuation" section of the slideshow is a relatively small part of the whole. It says that home prices are 28% off their peak; that houses are more affordable now than they have been in a long time; and that buy-vs-rent calculations work out in favor of buying with relatively low home-price appreciation rates between 4% and 6%.
The first one seems meaningless to me: why should home prices be low at 28% off the peak, as opposed to say 18% off or 38% off? In fact, a glance at the Case Shiller graph shows that prices are still roughly double what they were for most of the 1990s.* And more generally, when the first part of a valuation argument is percentage-off-highs, I always get suspicious, because that's always a really stupid metric on which to base a buying decision.
The affordability calculations, too, are a temporary phenomenon related to artificially low mortgage rates and the fact that the US government is currently providing substantially all housing finance. What I'm not seeing is any analysis by Ackman showing that houses will remain affordable in a future of higher rates and private-sector financing—the future when, I assume, he's looking to exit his residential-property position.
Finally, required appreciation rates of 4% to 6% seem high to me, not low: they say to me that buying is still more expensive than renting unless you assume capital gains on your purchase. Ackman, here, comes close to assuming the very thing he's trying to demonstrate.
As for the reasons for future gains in house prices, there's a bit of basic demographics, in that the number of households in the US is going to rise over time, and is going to outpace the amount of new homebuilding. That's reasonable.
Ackman's other main argument is based on the assumption that homeownership is going to bottom out at 66% and stay there, rather than continuing on the long cyclical decline which started in 2004. If he's wrong by just a single percentage point, a lot of his mathematics starts looking very shaky. I suspect that as America moves out of the suburbs and exurbs and into denser forms of living, we'll see a steady decline in homeownership, which in any case is now seen as being more of a liability than an asset. It's no longer a road to riches: it's a road to possible foreclosure, bankruptcy, and an inability to move to where the employment opportunities might be.
Ackman is a speculator, and he's forecasting a return of his speculative mindset among the population at large—where people buy homes because they're confident in the future and think that those homes will rise in value, and also because they fear not being able to afford a house in future. That mindset fuels housing bubbles, not sustainable home-price appreciation. And investing in bubbles is always very dangerous, and generally ends in tears. Maybe Ackman can make money doing it—but that certainly doesn't mean that homes are a good buy right now for the rest of us.
Ackman does have one intriguing idea about what might drive house-price appreciation: institutional investment in single-family home rental properties. He's right that such things barely exist as a financial asset class, and that even a small global allocation to them could change the demand dynamics substantially. But being a landlord is hard work, especially in suburban and exurban neighborhoods, and I'm not convinced that it scales well: my guess is that the cost of hiring a good rental agent is always going to wipe out returns, and that the only way to make money by renting out single-family homes is for the owner and the rental agent to be the same entity.
If you then turn to Shilling's presentation, things start looking positively depressing: he brings up reasons for pessimism that many of us never even consider, along with the much more obvious ones. At the top of the list, of course, is unemployment, which poisons everything. No one wants to buy a house if they don't feel secure in their job, and people don't feel secure in their jobs if unemployment is over 9%, where it's likely to stay for the foreseeable future. And these graphs just speak for themselves:
This last one is the most powerful, to me: for all the wheel-spinning that we've seen of late in the mortgage-refinance market, the number of people shopping for new homes has been declining steadily for the past five years. I'm sure that Bill Ackman would look at that chart and extrapolate all manner of fabulous mean-reversion, but I can't see where the new demand is going to come from. Buying a home is no longer the American Dream; people are much more interested in being free of debt. And while Ackman might look at the enormous leverage in the housing market and see opportunity, most Americans I think are now much more aware of the downside risk.
No matter what happens in the housing market, Bill Ackman is always going to have more wealth than he can ever spend in his lifetime. But for those of us without his ability to make large speculative bets, housing is a very scary asset class, while renting is cheaper and much more flexible. I wouldn't be at all surprised to see the US homeownership rate fall a lot in coming years, back down below even its long-term mean around 64%. And if that happens, prices—both to rent and to buy—are almost certain to fall from current levels.
*Update: Thanks to ckbryant, in the comments, who points out that this is true only in nominal terms, not in real terms.
>> . . . as America moves out of the suburbs and exurbs and into denser forms of living . . .
You keep waving that around in multiple posts as though it's obvious, but to my knowledge have never offered any data to support it. There's the whole rural-to-not rural thing if you look over 100 years or so, but you're making a very different assertion. I believe it's your own bias rather than anything supported by fact.
Nevertheless, Ackman is doing pretty much the same thing with his argument. There are people who will state that it's always a good time to buy real estate, no matter what the state of the market. People like that are annoying, because there's always a class of potential new home buyers (and eventually speculators) who are willing to swallow the line. It results in a bubble ever time. As I like to say, "Bullwinkle, that trick never works!"
My fundamental macro expectation for the next decade:
(1) Weakening of the dollar index.
(2) Doubling of the CPI, driven primarily by commodities and imported consumer goods.
(3) Increase of 30% to 50% in wages, well short of the pace of inflation.
(4) Squeezed profit margins. The wealthy won't be spared.
(5) Very tight credit conditions, as interest rates react to higher inflation. Corporate borrowing slows to a trickle (and leveraged companies have trouble rolling over their debt). Treasury borrowing continues, but the escalating coupons force dramatic budget cuts.
(6) Economy reacts to the tightened federal budget and reduced corporate expansion with a decade of stagnation. Unemployment/underemployment remains well above 10%.
Rents are influenced by both ownership cost and wages. I wouldn't expect them to fall dramatically from the current level, but neither can they rise significantly in a recessionary environment. The resulting squeeze between rising financing costs and comparatively flat rents will depress new investment, and the limited supply will help keep upward pressure on rents. People won't necessarily be paying more, since they won't be able to afford it, but they may be paying the same and getting less.
This isn't necessarily a bad time to own a home IF you can get one at a favorable cash flow (no worse than the rent you are paying), have a steady income, and have ample reserves. Investment returns are likely to be in the toilet (negative real returns for many investment classes), so owning real property becomes very attractive. As long as you can use the house as a residence, it is an excellent store of value.
Housing prices may drop further. Another 15% drop across the board could happen easily, but that doesn't do you much good if the financing rates increase from 5% to 7%. Nor does it help you if your invested savings (which could have been used to pay cash for the property) drop by 30%. Since I firmly expect inflation to rise, financing costs to rise, and balanced investment strategies to lose large amounts of money over the next few years, I'm not sure that waiting on the housing decline makes any sense.
On the other hand, the housing market is moribund. Nor will it be resurrected any time soon, not in the face of double-digit mortgage rates and high unemployment. If you buy now, you are stuck with the property (either to live in or as a landlord) for at least another decade. Choose wisely.
Felix, I know you place great faith in these calculators. I'm not sure precisely what you would enter for the scenario I described above, BUT you might give it a try? And see what pops out?
All I know is that I'm trying my darndest to get the mortgage paid off before this whole thing blows up. Putting 20% of gross income towards mortgage payments, almost as much as I would be paying if I were renting!
If I can pull that off, then we can afford to lose 40% of our income (combined tax bracket of 50% on self-employment income) and still make ends meet. Couldn't do that by renting, couldn't assure that by investing the capital. I can't think of any better way to prepare for the coming storm, can you?
Excellent analysis TFF.
I usually side with Salmon in that I don't believe in getting into the housing market right now. However, your case is different in that you talk about having a house not as an investment but as insurance, ie if all goes to hell you have a roof over your head. Not an investment thesis, since your scenario suggests no stopping off points to make capital gains at any stage in at least a decade.
If you looking to buy based on those reasons you should be ok, so long as you don't overstretch.
In terms of overall home ownership levels bottoming out, that ignores immigration, demographics and widening income inequality that point towards a large lower class of US citizens who will be completely precluded from the housing market.
"…[P]rices are still roughly double what they were for most of the 1990s…"
And WAY above what they were in the 1960s! But let's keep it real, shall we:
http://cr4re.com/charts/charts.html?Home -Prices#category=Home-Prices&chart=RealH ousePricesOct2010.jpg
With a January 00 index of 100, real house prices in the 1990s were generally between 90 and 100, and today they are at about 115. For the record, I still think housing has a way to fall before the market stabilizes–but there is a mile of difference between "twenty one percent higher" and "double."
Yes, vk, I agree. Home ownership will continue to decline for a while. Too few households have the kind of capital and stability needed to purchase in the face of tightening credit standards. (And many of the people who DID purchase in the last decade probably should not have done so.)
One way to look at it… Would you be more comfortable with $400k invested in an IRA and a $25k/year rent bill? Or without the IRA and a $300k home instead. (These figures from one of the more expensive housing markets. A median house in a median community where I live.) Ongoing costs for taxes, insurance, and maintenance of $10k (if allowed to slowly deteriorate) to $15k (if you amortize major projects every 5-10 years).
In theory, that $400k IRA ought to support (after tax) 4% withdrawals of around $12k/year pretty much indefinitely. Add that to the fully amortized $15k cost of ownership and renting at $25k looks pretty good.
Now raise your hand if you are REALLY confident that you can draw against your IRA at a rate of 4% per year and still keep up with inflation. Felix himself (depending on the article) preaches an expected real return between 0% and 2%.
Best way to withstand a 40% loss of income is to prepare yourself to operate with 40% less cash coming in. Having an IRA with a large number isn't nearly as comforting.
Well, at least the Ackman slides didn't take long to digest:
"A Low Valuation
Lowest valuation in at least a generation."
Um, no. Just no. Unless we're talking about generations of fruit flies here. We generally take human generations to be somewhere between twenty and thirty years. Housing is about where it was nine short years ago, which is to say: generally higher in real terms than it was at any point in the entire 20th Century. Ackman even includes charts in his presentation that give the lie to that bald statement.
I smell a no-good lousy salesman. The remainder of the presentation will be disregarded.
"Finally, required appreciation rates of 4% to 6% seem high to me, not low…"
Think more about the buy-v-rent tradeoff (which economists don't, because they are stupid enough to believe "Roofs Not Ceilings" is research instead of autoerotic asphyxiation).
Renters move less material (even counting unfurnished-to-unfurnished moves), tend to have smaller families (pending second child in Brooklyn means move to the Burbs), and–if they move frequently, downsize(cull) on a semi-regular basis.
What does Kevin Kline say in _The Boring Chill_? "I'm dug in here." After several years in a stable neighborhood, homeowners have a gathering of non-economic factors as well as the "well, we never though we would use that room, but…" effect.
Sunk cost is one thing; sunk cost that adds to carrying cost and other expenses needs to be considered as part of the "costs" that arise on one side of the equation more often than the other.
He's still wrong in concept, but requiring a higher return to make buy a rational decision in the first place isn't the reason.
TFF, excellent analysis.
Permit a few suggestions: first, that IF you have a good paying job, and are either self-employed or can obtain permission to create a home office, you can vastly change the economic dynamics.
Second, IF you maximize the interest/IRS deduction for the first years of your purchase or refi, and create all the permissible "Mary Kay" home/office deductions, you can maximize deductions against income. Including your property taxes. So, that whatever top tax bracket you are in, you make that percentage back on your "income"/money each year.
Third, IF you create, or re-create, all of the home office technology you can justify to the IRS, you can this year "expense" ALL of that cost. New computer, big screen Wifi connected TV, "IPad's galore" for your cell phoneS, bad back required adjustable chair, et al. By also maximizing these expense deductions, you also make THAT percentage back on your money/income.
Fourth, note that since bedrooms & garages are the least expensive costs in building or renting or buying a "new" home, you should always buy/rent an extra office bedroom and a 2nd car garage, for your exclusively business used auto.
If you do maximize all the things that you can do, you will – until you reach the 6-8 year "cross over point", when you need to refi and refresh all of your stuff – drastically reduce the costs of "ownership".
And, then take ALL of the money you saved/earned and invest it wisely. Do NOT pay off the mortgage early. But, when you retire and/or no longer have income, buy a "retirement" home with the money you have saved/earned.
JGBell, your advice may be sound, but it runs opposite to our philosophy. I'd rather contribute my full share to Uncle Sam (no matter how incompetently he spends it) than devote my energies to shaving the tax bill.
We try to live simply, finding greater pleasure in the intellectual and spiritual aspects of life than in material wealth. (Excessive consumption as you describe causes me more stress than anything else.) Doesn't hurt that this philosophy reduces our minimal cash needs to an amount that in theory could be satisfied by any one of our four jobs. Or sustained indefinitely off investment returns on the savings we've already accumulated over the years.
The question, "What is wealth?" comes up pretty frequently on this blog.
In my view, it means never having to take a job you don't enjoy, never having to compromise ethics for money, never needing to worry about making next month's rent or mortgage payment.
We almost certainly have less income than most of the people on this blog, but I'll wager we enjoy it as much as anybody!
@ckbyrant, the Case-Shiller Composite-10 series was in the 70s from Nov 1990 to June 1997. It's now 157. And yes, Jan 2000 is set at 100. (Or 100.75, to be exact. Don't ask me why.)
I think TFF made some very strong points.
I do see housing as being at least fairly valued.
All around the world, the value of hard assets, ranging from gold to lumber to oil has all risen powerfully.
But for most people, isn't the home the ultimate hard asset? Why should oil, gold, lumber, copper and all the rest be priced ever higher while such a crucial hard asset moves lower and lower?
It should be noted that a house is a kind of store of its inputs. All of the copper in the house, all of the metal appliances, all of the lumber, all of the oil for its paints, siding, shingles, insulation, and asphalt driveway and most of all, the enormous amount of fossil fuel that physically powered every stage of its construction.
I feel sure that the replacement cost for a house has risen sharply in the past decade.
Another dynamic is that desirable parcels in good school districts always get a major bid.
TFF – talking his book? Of course those who own homes will trumpet the vast benefits of home ownership. To do otherwise would undercut your need in order for your property value to recover. Good luck, but I'm not buying. Is the housing bubble in Japan a good model for the future here?
http://www.globalpropertyguide.com/Asia/ Japan/Price-History
Silliness, that's a fair question. There IS a natural human tendancy to post-justify their decisions, and I can't pretend to be immune.
That said, we could still sell at a profit from where we bought if we were eager to get out. Even in the worst bubble markets, those who bought in 2000 are probably still above water. I just don't see the point.
The reason I comment (repeatedly) on this topic is that I strongly believe people should STOP thinking about their home as an investment, and START thinking about their home as the second most expensive thing they will ever consume. (Education is the #1, at least for some families.) Evaluate it on a cash-flow basis, not as "expected total return". (That latter figure depends heavily on assumptions of appreciation — assumptions that are a complete fantasy.) Maybe Felix will let me borrow his blog some day and I'll write a more careful argument of my position.
Check out Megan McArdle's blog today:
http://www.theatlantic.com/business/arch ive/2010/12/housing-prices-headed-furthe r-down/68677/#
Amazingly, I agree with almost every point of hers. To summarize, housing prices will likely drop further, and may take decades to recover, but that doesn't by itself mean that buying is a bad decision. (Cash buyers probably ought to wait for the drop. Those who will depend on mortgage financing are at least as sensitive to mortgage rates as they are to the purchase price.)
I also believe that FEWER people should buy, especially compared to recent years. But a sensible buy/rent decision depends heavily on individual circumstances. It is NOT purely market-driven. The most important factors are financial stability and situational stability. If your job can be expected to keep you in one place for decades, if your need for space won't be changing much, then buying becomes sensible. If your situation is unstable, then buying is foolish. My brother has been looking at buying for a few years now, however he can't be certain that he will stay in one place (in fact more likely than not he will be moving). Thus FOR HIM, a home purchase only makes sense if it can be subsequently converted into a profitable rental. Maybe not even then, since it would tie up much of his capital.
Every situation is different. I try to define a paradigm that will lead to sensible choices, not tell people what they should do.
The point I was trying to make was that a comparison across decades should use real, rather than nominal, prices. That's why I linked to the inflation-adjusted version of the graph, although admittedly it doesn't run the case-shiller series back before Jan 00 (using CoreLogic HPI instead). Here's a pretty typical one running back to 1890 based C/S historical research:
http://www.multpl.com/case-shiller-home- price-index-inflation-adjusted/
It pegs 1890 to 100, gives a value of 133.1 for the start of the year, and lists values for the 1990′s in the region of 100-120.
ckbryant, one question that you might have some insight on…
We know that home prices tend to be "sticky", resisting decline more than other asset classes. Falling values is reflected by the market drying up as much as by the sales prices declining.
How is this tendency likely to play out in the current environment? Prices are already down ~30% from their peak (albeit a very brief peak), so while they might need to fall another ~15% to reach "normal" valuations, might the "stickiness" kick in to prevent them from falling that far? Or does the "stickiness" simply slow the rate of decline?
Either way, I can't see a rebound coming any time in the near future. Too much inventory to unload, too few people with the resources and interest to buy.
That said, the real estate market is illiquid and inefficient. I suspect an astute investor can find some excellent deals if they are willing to put in the legwork (especially if they can afford the hassle of dealing with less-than-pristine properties and foreclosure situations).
Struck by Chart 12 and Chart 13. There is no sign that the spike in delinquencies (9.9%!!) and houses in foreclosure (4.6%!!) is easing. And especially at this point in the cycle, with so many mortgages underwater, how likely is a delinquency NOT to end up in foreclosure? Or, at best, in a short sale?
Bank of America has lost money over the last nine quarters, is facing large repurchase suits on the deals it brokered, and continuing heavy losses on its own loan portfolio. And that's even without getting into the fact that its records are a mess, throwing each and every attempt at foreclosure in doubt. They've been collecting a fat profit on mortgage refinancing, but now that rates are rising again I would expect that to rapidly taper off. (Anybody who COULD refinance likely already has done so, at lower rates than are available today.)
Are they going to survive without further Treasury assistance? Can the Treasury politically afford to help them after all of these well-publicized problems? If not, what next? Nationalization, along the lines of AIG? Or an arms-length recapitalization such as Citigroup received?
Full disclosure: Was once invested in BAC, back when it seemed a boring/safe investment. Lost some money before the full extent of the crisis became known. Now happily NOT invested in banking.
Raghuram Rajan's latest book, Fault Lines, makes the point that much of the rise in housing prices for better than the last decade has been related to systemic changes in operating behavior by mortgage industry components like the Fed agencies. They dramatically eased credit standards (and that's under both Clinton and Bush so let's not start the finger pointing, shall we), and that lead to market inflation. Unless we're headed down that particular hole again, the major price rise driver is gone.
Out here in the over-thrust belt we went through a massive boom and bust in the mid-80′s that persisted well into the '90s'. That included an oil industry boom/bust at the same time as the whole savings and loan mess. Though technical details vary in correlation, the aesthetics of melt down feel somewhat the same. Except: my 'crumbling suburb' neighborhood (that none the less gets the snow plowed) is much more stable in this one. In '86 we had probably a 20% repo rate. Now, low single digits. People learn, behaviors change, age brings caution, wisdom, and after 30 years in the house, a paid off mortgage :>> Though I have to say the thrill on that passes all too quickly. Also, kiss home equity increase good-by for at least ten.
@ckbryant, my bad, I thought Case-Shiller *was* real.
How can "real" housing values possibly go higher?
James Grant reminds us ("Money of the Mind," p. 352.) that
"Mortgages with federal support of one kind or another, as a percentage of residential mortgages outstanding, rose from 7.7 percent in 1970 to 18.8 percent in 1980 to 38.2 percent in 1989."
http://books.google.com/books?id=-6XUBdx y05UC
Today, the WSJ reports "The government continues to dominate the mortgage-lending landscape, with more than nine in 10 new loans backed by Fannie Mae, Freddie Mac or government agencies such as the Federal Housing Administration."
http://blogs.wsj.com/developments/2010/1 2/29/four-housing-issues-to-watch-in-201 1/
If the federal crutch were removed, housing would plummet.
It seems to me that there are some other factors worthy of discussion:
1. Residential values depend much on location. Thus, areas of shrinking population, high regulation, high costs and aging boomers who want out (e.g. old industrial cities of the northeast and midwest) will fare poorly in any event.
2. Ever since the Feds decided to make "adults only" apartments illegal, many singles, couples and families have avoided apartments. They have a belly full of low income neighbors with unsupervised offspring and transient "boy friends". No one wants to talk about this but it truly influences renting and owning patterns.
3. Over the decades we have seen steadily increasing "hedonic" attributes of housing (e.g. size, features, fancy finishes). This "value" is very often hard to capture when people have lower incomes. With rising problems of government debt at all levels (and the possibility of tax increases and spending cuts) and falling real incomes due to commodity inflation as well as high unemployment, it is hard for me to see a general return to high cost housing. Of necessity, people will opt for a more minimal abode. (Sort of like giving up SUV's for smaller cars.)
4. Often it is said that housing is not liquid. I disagree. IF one is willing to take a big hair cut (as one often must do with stocks) you can sell quickly (though not in five seconds like electronic trading). The problem is that we kid ourselves about value and fail to understand the concept of a huge spread between the bid and the ask. In addition, with leverage, we are constrained in our ability to act, but this is self imposed and not inherent in the market.
5. I would rather rent and have cash or a 401K at any time since I can move the money WITHOUT the high transaction costs of real estate OR the risk of a low "bid" price in my market. Also, if I have bad neighbors or a failing local government then I can get out without getting clipped. An inflation upside is not assured with real estate since it depends so much on local conditions and real incomes. I can easily see us having higher commodity costs and falling rents.
6. Demographics will make much of the recently constructed housing stock functionally obsolete. What retired couple needs a 5000 square foot two story "McMansion" in the burbs? They will want to sell such a property and live in a single story smaller space with lower utility costs, lower taxes and proximity to medical services. In addition, the "safety" of the suburbs is no longer a given for the future. Reduction of local budgets will leave many citizens with the task of defending themselves and that is better done in planned retirement communities. Who will buy from them when they want to move?
Anyhow, these are my random thoughts. I truly expect a further deterioration of housing prices over time, but I do expect the gov't will throw money at the problem to mask the insolvency of our financial industry. My prescription:
1. Cut budgets of all levels of government with a HUGE knife.
2. Cut entitlements for everyone now.
3. Actively recruit new citizens from abroad. Allow those with skills and $$ to join the American experiment.
4. Deregualte the economy…especially the financial institutions. This should begin with ending all deposit insurance. If you want a gov't guarantee on your funds then buy savings bonds. Otherwise take the risk yourself.
5. Go to a flat tax AND a consumption tax but only after setting strong CONSTITUTIONAL limits on spending. I believe we should allow the President or Governors to "impound" funds that are passed by Congress or Legislatures. Impoundment authority will give the executive branch sufficient balance to offset the spending orgy.
6. Attack the health care/education and government complex at every turn. We squander $$ on these sectors with little payoff. This must cease.
PROBABILITY of positive outcome: Lower than 20% in my view. People simply cannot make hard decisions until there is no alternative. Presently, we still live the dreams.
As usual, when a trend is in place, the herd thinks the trend will continue forever. It's the same with stocks, commodities, and now housing. Housing may well decline for the next few quarters, but eventually the inventory of foreclosures will decrease and the market will stabilize. The question is, is it better to buy now and save tens of thousands on interest with mortgage rates at around 4% or wait until prices stabilize but interest rates will be higher. It is easier to get great deals now and a lower rate. Renting is literally throwing away $1500 a month or more. If you like seeing $20,000 of your hard earned money pay someone else's mortgage, year after year, be my guest. Anyone with a third grade level of arithmetic can see that after two or three years, whatever you thought you were going to save by renting is money down the drain. I've been a landlord for 20 years now and I welcome your cash. If I was a bit younger, I'd be snapping up more properties now. The time to buy is when there's blood in the streets. That quote couldn't be more appropriate for the conditions in the housing market today.
Love those questions, bigbuilder!
(1) Residential values absolutely depend on location. There was a period a few years back when EVERY market was grossly overpriced, but the present situation is much more ambivalent. Felix writes that price/rent ratios in NYC are extreme (and rents may be falling). In contrast, there is a very nice new house down the street from me which is dual-listed for rent/buy with a ratio in the asking price of just over 14. (And it is likely easier to negotiate that purchase price than to lock in a substantially lower rent for a long period of time.) Those metropolitan areas with a recovering economy will pull out of this sooner than those that are still in collapse.
(2) Not sure I understand your comment on "adults only" apartments. Families with children have NEVER been able to live in "adults only" apartments, so banning them shouldn't make renting any less attractive for families. If anything, the opposite is true.
(3) Excellent point on people opting for a "more minimal abode". Where I live, there are almost no single-family houses on the market below the median for the town. Most of what is listed is either new construction (uniformly above the median) or larger/fancier properties.
(4) Housing is *not* liquid. It is extremely expensive to buy/sell, with turnaround transaction costs that push 10% (even if not forced to take a discount for a quick sale or carry an empty property while it waits for a buyer). In contrast, I can sell any $15k stock position in my portfolio for turnaround costs of 0.1%. That is a 100:1 ratio in the transaction costs. I carried my previous house for five years after moving out before I was able to find a buyer (at a steep discount). That ain't liquid!!!
(5) Real estate provides a fixed supply of a useful commodity. The value you place on that commodity stream determines the price you ought to be willing to pay. In an environment where real returns are pushing zero, real estate becomes very attractive. Your comments on the "options" associated with renting are well taken, however there are also options associated with owning. The relative value you place on the options in each case significantly influences your choice to rent vs. own. Case in point — I have nine fruit trees on my property, a large vegetable garden that I've been working for ten years, and dozens of mature flower beds. These bring me great joy, yet require at LEAST five years (and a fair amount of back-breaking labor) to install on a new property. Hard to do that while renting.
(6) I wonder if some of those McMansions will end up housing extended families? We're already seeing a reduction in the number of households as people consolidate. I can't see why anybody would need 2000+ square feet if they don't have at least five people living there.
Not sure I like all of your prescriptions, though. In particular, economic deregulation is part of what got us into this mess. Banking is naturally a boom-and-bust industry. Banks will make small amounts of money steadily for many years, then lose everything overnight. Their whole EXISTENCE is based on the concept of leverage, by at least a 10:1 factor. You could lose 10% of your income and net worth and shrug it off. If a bank's assets depreciate by 10% it is bankrupt. (Note the stem of that word. Banks are more likely than any other large institution to go bankrupt.)
I also firmly believe in the value of quality education. And, contrary to public opinion, our educational system does roughly as well as you would expect given the demographics. Consider this study:
http://super-economy.blogspot.com/2010/1 2/amazing-truth-about-pisa-scores-usa.ht ml
To me that suggests we should dump the meme that "American education is overpriced and broken" and instead focus on how we can improve outcomes for those demographic segments that are NOT presently well served. Throwing money at the problem isn't sufficient (though solutions may cost a bit more than we presently spend). You need a different paradigm to serve an immigrant population (or a population whose parents grew up under institutionalized racism) than to serve white suburban America.
@jdl, I agree. Being a landlord can be an excellent investment if handled properly.
That said, the business is a little like banking. Think "Maturity Transformation". Banks borrow short and lend long, and reap a natural profit for that service. Landlords own long and rent short, AGAIN profiting from the difference.
The natural ownership period for real estate is measured in decades. The transaction costs are too high for anything shorter to make sense. Yet as others have noted, the natural period for living in one place is (for many people) three years or less. Under normal market conditions (which we may be reaching in some areas of the country), it is economically sensible for some people to be landlords, it is economically sensible for other people to own their own home, and it is economically sensible for many people to rent.
Response to TFF:
1. I think you use a different definition of "liquid" than I do. Your definition seems to involve an element of an "inherent" value that limits your willingness to sell at whatever you can get. If you consider transaction costs as well, then you are correct. However, I think IF you need cash, you can get it fairly fast but it won't be what you want. The same is true of stocks if you have a very large position like the US holdings of stock in GM or Citibank.
2. With regard to "adults only" apartments, federal law prohibits it unless for senior citizens. That is why so many apartments are so unsavory to singles. This is a regulatory subsidy to single family home sales.
3. Use of the word "education" to describe what is going on today is very misleading. What we are getting is simply information transfer and credential selling. We build lavish facilities and extend huge loans to students who major in subjects with marginal utility. Perhaps if we really challenged students to master skills of language and computation we would be getting our moneys worth, but that is not what I believe we are getting. For more in depth analysis, please read anything written by Richard Mitchell. His works are available for free online. Google "Richard Mitchell Underground Grammarian". His best work on education is "Graves of Academe" and it is free on the website.
4. You are correct regarding the fact that ownership gives more latitude than renting regarding what the property can do for your personal interests and desires. However, my point is that this comes at a price that many can no longer pay.
5. Blaming "deregulation" for our economic mess is a gross mistake. This is a long and involved argument. Essentially, as a libertarian, I oppose ANY government participation in the economy. Much of the housing bust was due to matters that were hardly "deregulated". These include: banks with deposit insurance, accounting rules and conventions that hid reality, rating agencies with special status under laws and regulations, wall street firms that received "bailouts", a tax system that encourages home ownership via tax deduction of mortgage interest, local regulations regarding zoning and housing size, public schools district lines that screw the poor and isolate those who have money behing a protective regulatory structure, federal agency participation in home lending, and so on. Read the Austrian economists for a more full discussion. Though I doubt we will change our system of "state capitalism" it remains a truth that we are not "deregulated". More "regulation" will simply further distort the market and give elected officials a new group to "shake down" for contributions. Just consider the SEC/Bernie Madoff mess. They had him served up on a silver platter and that bunch of Whores and Fools at the SEC ignored it. SURE, let's get some more regulation!!! It would be more fair if we told people they are simply on their own. The illusion of "protection" by regulation is what got us into this mess. Let's stop the lies.
(1) The standard definition of a "liquid asset" is one that can be rapidly converted into cash with little or no loss of value. Generally speaking, a liquid asset is one that you can flip easily and quickly. It is absolutely true that large stock positions are also illiquid. They can be sold slowly with little loss of value or they can be sold rapidly at a steep discount. A little like houses.
(3) There is good education and bad education, often at the same institution. You can graduate with mere credentials or you can take advantage of the opportunities to learn, think, and communicate. I graduated from an Ivy League college many years ago, and can attest to the fact that a large number of my classmates were just there for the paper. They may have been plenty bright, they were certainly wealthy, but they didn't put much effort into learning. I would like to think I approached college differently. Besides, the most significant education happens in grade school. As with college, you often have good and bad education occurring at the same school.
You get out of education no more than you put into it, something too few people on both sides of the debate recognize. The only way to improve educational outcomes is to do something that convinces students to make a greater effort. Anything else is window dressing.
(4) I agree that many people are not in a situation to buy a home. I hesitate to guess at an appropriate homeownership fraction, but I'm pretty certain it is lower than what we've seen in recent years. Especially given the mobility of our society today.
(5) I didn't blame deregulation for our mess. I simply noted that banking is naturally exposed to cycles of boom and bust. This isn't the first banking crisis we've seen, and it surely won't be the last. In banking, you can lose money MUCH faster than you can make money.
As a libertarian, you should embrace periodic banking crises as a natural fact of life. (Perhaps one every 15-20 years?) Without governmental regulation and intervention, a sizable fraction of banks will wipe out each time around the merry-go-round. History proves that.
I have strong libertarian leanings myself, but I don't pretend that regulation is the cause of ALL evil. In this case, banking regulation (and intervention) tends to soften crises at the expense of extending them and distorting the recovery process. And yes, my Austrian half has been screaming about some of the governmental attempts to "fix" this recession.
I really appreciate thoughtful responses such as these.
A reasoned and respectful discussion can advance our mutual understanding. That is missing in much of government.
As to the banking issues, I suppose that I question several basic assumptions regarding the structure of that sector of the economy.
First, I don't approve of the fundamental distinction between debt and equity in our tax laws. This distortion skews investments and is the fundamental basis of the banking industry since debt is favored by the tax code and equity is punished to a degree.
Bankers get the government subsidy of deposit insurance and every 15 or 20 years they dump all their losses on those of us who pay taxes. During good years they profit and later they leave us with the losses. Is this really good in the long run. I think not.
A better system is one where debt and equity are on a par and losses fall only on private investors. Bankers should be like restaurant owners, if they serve bad food (or make bad loans) they go out of business and their private investors take the hit and the tax payers are left alone.
I suspect, perhaps, that you are familiar with "Running on Empty" by Pete Peterson. His work summarizes our entitlements bubble and its threat to our democracy. Our current orgy of spending and growth of government regulation simply throw gasoline on this fire. The housing mess is just the first small fracture. The next crisis will probably be stagflation and international turmoil that bankrupts the nation.
Anyone who believes that more paper from Washington will remedy these ills simply does not comprehend reality.
I don't detect such illusion on your part, but the popular media and general opinions expressed by the public certainly seem to pursue that mirage. I sure hope I am wrong, but the bottom line is that in order to "square up the books" we will need to declare national insolvency and pay off half of our debts with funny money and repudiate the rest. This will require telling people to work more, play less and die without requiring vast resources for medical treatment on the way out. Nothing else seem capable of working to me.
In that world, I don't want to own anything that I cannot either reasonably defend or trade for something of utility like food or fuel. A large home with a media room and granite counter tops is not such an item. My own degrees from east coast schools are likewise of marginal utility. The sad truth is that our national debt levels are so out of line with history that we are doomed to either go bankrupt or change our wasteful ways and work our way out. Neither choice is easy and few of us can accept the reality that the party is over.
Just like the movie "Animal House" we are down and out and now we are going on a "road trip". Too bad that road leads the wrong direction.
Same here, bigbuilder. I try to eschew political labels, partly for this reason. If I'm wrong, I want to be free to admit it (and change my opinion) rather than feeling like I have to "toe the party line".
Could you please elaborate on the differences between debt and equity treatment in our tax law? I'm guessing you are referring to the fact that interest is paid before corporate taxation while dividends are paid after? This, however, is balanced by a couple factors, including the preferential treatment for dividends and capital gains in the personal income tax law and the ability to delay recognition of capital gains for many years. Think you will agree that the current system is an opaque mess, very difficult to understand. I would much prefer something more straightforward like a VAT or flat tax. (The income tax system is perhaps not the best mechanism for social engineering and wealth redistribution, even if one feels that is an essential role of government.)
The FDIC is supported by a tax on deposits, resulting in lower deposit rates than we would otherwise have available. The federal government does back the FDIC as needed, but the FDIC is expected to pay the money back. That might be difficult following THIS crisis. Is bank participation in the FDIC mandatory? I'm not sure, though there are plenty of non-banks that perform similar functions without the insurance. So I'm not sure it is a critical distinction.
"A better system is one where debt and equity are on a par and losses fall only on private investors."
Do you lump *depositors* in with "private investors"? Because a bank failure is REALLY HARD on the depositors. I'm not saying that such a system is unworkable — banks have lacked deposit insurance for most of history — but I don't see why that is preferable to the current system.
I actually haven't read "Running on Empty", though the thesis sounds familiar. Reminds me of "The Coming Generational Storm", from which I took insight that helped to weather the latest bubble and crash (and highly profitable rebound).
My father puts it more simply. If you add up the claims on our national wealth over the next 30 years, and balance that against the wealth we are likely to produce, you end up with the claims outweighing the wealth by a pretty shocking margin. Somebody is going to be seriously disappointed, and the longer we delay the reckoning the more serious the disappointment is likely to be. The trick is figuring out which form of wealth is likely to collapse next, so you can step out of the way in time.
Personally, I believe that inflationary policies ARE likely to play a key role in the resolution (not "remedy") of this imbalance. Among other things, it is the simplest way to devalue the debt that is strewn throughout society. Moreover, the other ways of destroying wealth either land heavily on a small segment of the population (e.g. entitlement cuts) or create deflation that leads to waves of defaults. A certain amount of inflation is necessary to balance the deflationary aspect of other policies.
Of course, as you say, none of this would be a problem if we weren't drowning in debt. Right now this is a miserable time to be leveraging yourself too heavily (without a LARGE cushion) and an even worse time to be investing in debt.
I'm a little more hopeful about the future than you are. There will be pain and belt-tightening throughout society, but we can make do with FAR less than we have been doing. The real question is how to get there from here without the collapse of society.
The problem I see regarding debt and equity is the tax distinction you identified. This distinction causes "over leverage" which places both corporations and individuals out on a limb when a "black swan" event happens. The ability to endure the storm is reduced and this causes destruction of productive enterprises and personal economic turmoil. When people are encourage to get out on a limb and the limb breaks, the society picks up the cost. If enough limbs break, we get systemic risk to our constitutional, capitalist democracy. Times of great damage and peril sow seeds of potential dictatorship.
With regard to housing, if one looks at all of the incentives to own housing it is easy to see how we got out on a limb. If you track the total value of housing as a percent of total assets in the economy, you will find that we still need another 5 trillion "hair cut" to simply revert to the mean. In the process, people will suffer terrible personal loss in terms beyond merely financial. Basically, the government caused us to place our capital into consumption rather than savings or investment into things that could generate positive future cash flows and serve our future needs. Instead, we served short term wants.
Regarding FDIC, it seems to me that the restoration of bank solvency is being achieved by low cost of federal funds. This subsidy is rebuilding bank balance sheets at the expense of savers who get nothing on their CD's. This is because, the FDIC cannot begin to deal with the reality that the entire banking system is busted. We are kicking this can down the road with no end of kicking in sight. I just wonder what happens when interest rates rise.
Milton Friedman once recommended that deposit insurance be handled by allowing unlimited insurance in banks that invested only in US gov't securities. Other banks could invest in anything, but would get no insurance. Depositors should be thinking like equity investors rather than looking for guaranteed but limited returns.
True, non banks are sources of funds, but we have bailed them out as well and the cost of that is huge as well as hidden.
The sad truth is that we must now do economic battle with not only our own debt, but with a lower cost, highly qualified world. In this engagement, we cannot expect past glory to substitute for lower costs and hard work. The book "The Coming General Storm" is similar to "Running on empty". The balance sheet of future incomes and obligations, discounted to present value yields an negative "net present value" of about 60 trillion. That is about the total value of our private assets. We are insolvent as a nation.
Resolution of this mess will require more than a little "belt tightening" it will require sacrifice from a nation with little, if any, recent history sacrifice. I am of the opinion that only war will motivate people to do what is needed. This war may not be classical military conflict. It may be a war on greed or excess. Whatever the form, only the metaphor of war will stir our survival instincts and motivate extreme sacrifice.
By the way, I had to promise my eldest son to be more upbeat when speaking to my daughter-in-law. She doesn't deal well with harsh news. I guess, the world around her will deliver the message over time.
I really think we have a chance to transcend this materialist orgy and grow as a nation, but it won't be easy and we sure need new leaders to begin the journey.
bigbuilder, I agree that the government went too far in encouraging a reliance on debt. A decade ago, I was somewhat relieved by the recession as I hoped that some of the long-term economic imbalances would improve. Instead Bush and Greenspan tag-teamed a "solution" that made the problem twice as bad. We are now back to where we were a decade ago, but we've lost ten years of time in which we might have dealt with the problem. Ten years of time and many trillions of dollars of additional debt.
Encouraging debt can, to a certain degree, be healthy for an economy. Debt is simply an arrangement in which one person who doesn't need their money immediately shares it with somebody else who does. The ability to borrow is a valuable resource in starting a business, obtaining an education, and (for those in appropriate circumstances) buying a home. In each case this allocates an appropriate amount of capital to a need that serves societal purpose.
The problem, as you observe, is that when debt is used to fuel consumption rather than investment, you end up SUPPRESSING growth rather than feeding it. This happens when the government borrows a trillion dollars and mails everybody an iPhone and a large-screen TV. This happens when people borrow against their home equity to go on an expensive vacation. This happens when people take advantage of low (and subsidized) mortgage rates to buy a 2500+ sq feet palace instead of contenting themselves with 1500 sq feet like their grandparents did. (I guess you need the extra 1000 sq feet to house the large-screen TV and the Xbox?) You read daily about how consumer spending is the critical element of economic growth. If we can just get people to SPEND more, then we'll fix all our problems. Yet when that spending is done, what remains? An economy short on investment and drowning in debt.
You are correct that the restoration of bank solvency depends on ultra-low short-term interest rates and inflationary monetary policy. Recessions involve significant "wealth destruction". While that can be a good thing, and is absolutely necessary in the current situation, it also makes debt repayment difficult unless accompanied by inflation. None of this directly connects to the FDIC, but rather the belief (hard to argue against) that a universal banking collapse would leave our economy in shambles.
"The Coming Generational Storm" tosses around that $60T figure, yet there are some large assumptions baked into that number. The formal debt (Treasury obligations held by the public) is comparatively small. Social Security is *easily* fixed by simply slashing payouts by roughly 25%. People might scream if they expected $40k in Social Security and end up receiving $30k, but they'll find a way to survive. And Medicare? Those promises will simply be modified. Full-freight-no-questions-asked medical care will likely not survive another decade.
These "solutions" are going to be painful, but not unsupportable. If it makes anybody feel better, working-age families are also likely to be making do with much less. American workers (at forex conversions) are among the most expensive in the world, and we don't NEARLY have the best educated population. That cannot be sustained. Thus the dollar will necessarily inflate, wages will stagnate, and people will be buying more expensive goods with the same (or less) money.
I don't know that we've grown so far from our forefathers that "war" will be necessary. The riots in Greece (over relatively minor belt-tightening) don't seem to fit with the American ethos. But I do agree that we won't accept these changes easily, not without a crisis. And that's a shame, because waiting for a crisis ALWAYS makes things worse.
Leaders? What leaders? I haven't seen any leadership in this country for decades. Surely not referring to Clinton, Bush, Obama, or Palin?
I agree with almost everything you said TFF. Our condition is acute and the cure will be painful. I will watch with great interest what new Governor Brown in California does with his budget mess. I sure hope there are large tax increases since that may run the jobs to other more worthy states.
A small breath of fresh air is Gov. Christie in NJ. He is locking horns with all vested interests and talking the talk. Jury is still out, but it sure has high entertainment value. Check him out on You tube.
New leaders will rise up when things get bad enough. I just hope the disease is still curable when they do.
Good luck with your inquiry into the causes and cures of what ails us. We need more citizens who question things.
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text:
Got Cheese?
The way these grown men are falling all over themselves, you'd think they are vying for some great treasure. However, the prize at the end of this rough and tumble race is a 7 pound wheel of Double Gloucester Cheese! Welcome to the wacky annual cheese-rolling contest that took place in Gloucestershire, England, last week.
The race, which supposedly dates back to the 1800's, involves fearless men and women who run/tumble down 200 meters of a really steep hill trying to catch a cheese wheel. The person who catches it first, wins the race. Over the years, the race has become so popular, that there are now five races, including one for women, each with about 20 competitors. Children get to compete by walking uphill, which is as difficult though not as dangerous.
Injuries of all sorts are so common that 25 members of St. John's Ambulance volunteer for the event, ready to ferry the injured away. This year was no exception. 20-year old Christian Anderson, who won his third race in four years, had to be wheeled out on a stretcher after he hurt his back during the race. Luckily, it was nothing serious and he soon returned to cheer the rest of the contestants. This does not however deter the contestants from coming year after year. One young man who broke his leg and had to spend four days in the hospital, promised to come back next year and win.
This year, over three thousand people braved heavy rains and strong winds to come watch this increasingly popular event. The wet weather however was good for the contestants, as it helped soften the ground of the hill, resulting in fewer injuries. As would be expected, most of the prizes went to the locals, but the other contestants didn't seem to care - it was just too much fun! Incase you are interested in going, the countdown for the next Cheese Rolling Competition has already begun. Check it out on http://www.cheese-rolling.co.uk/
10 Comments
- john5/14/2013cool
- Name5/14/2013lol Cheese ;)
- tabby3/27/2012lol i want to do that
- kk1/22/2012I LOVE CHEESE!!!!!!!!!!!!
- cool+boy=coolboy5/10/2011whoa!!!!!!!!!
- pickle20015/9/2011yeah! thats like,so totally cool!!!!!
- Faith3/10/2011Im doing my CE on this!
- bnmhv3/10/2011CHEESE ROLL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
- Ellie Evans6/3/2008Thats weird.
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Teaching and learning in the 21st Century - meeting the challenges of digital learning and the iGeneration
Tom D'Amico (@TDOttawa) 's insight:
Click the Follow button on the top right of this page
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You can also find archives at: http://www.twylah.com/TDOttawa
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Selin Gelinci's curator insight, October 27, 2013 3:09 AM
This scoop it profile by @Tom D'Amico (@TDOttawa) includes many useful blogs and articles that aim to teach in the 21st century. This includes learning with the use of technology. What he refers to as the 'iGeneration' includes many useful updates that can be used for both the students and teachers in the classroom. A few i came across that sparked my interest were a description on how to set up a blog with wordpress for teachers, this can be very useful to me as a student now and also in the future. I enjoy D'Amico's profile as he scoops quite interesting topics.
Jane Weston's curator insight, February 16, 8:58 PM
When curriculum resources are limitless due to the access we have to on-line materials, then the question we ask about those materials become more important. Values Education helps us all to ask the right questions! See some innovative whole school projects at:
From www
GroupMap's easy and effective online group brainstorming tools with visual templates puts your ideas against everyone's ideas on one single unique platform.
The choices are endless. Should I set up a class blog or a Twitter account? Should I use Edmodo? Test out cell phone use in the classroom? How about Google Docs? Prezi? Throughout my nine years in ...
From www
Cloud storage isn't just for your own personal files. You can use it to easily share files without any hassle. Share files back-and-forth with your friends and colleagues, or make them available to the entire Internet.
From blog - Today, 5:06 PM
It's important to recognize that a growth mindset is an overall paradigm for personal development rather than a pedagogical tool for measuring academic accomplishment.
The Resource for Education Technology Leaders focusing on K-12 educators. Site contains a Software Reviews Database, articles from Technology & Learning Magazine, articles from Educators in Educators' eZine, Event and Contest listings, Reader suggested Web sites, and weekly news updates on education technology leaders.
From lifehacker
Today, Google unleashed a new, overhauled version of its well-loved (and little known) custom maps tool, called My Maps. It's pretty powerful and cool.
Videonotes allows you to paste in any YouTube video and then you can take notes as you watch the video. The notes then become clickable, so you can click on the notes and it immediately goes to that part of the video.
From www
Blogger Elena Aguilar proposes that teachers make positive phone calls home common practice.


text:
Employee Engagement
Over the last decade the business world has shown significant interest in the concept of employee "engagement." Identified as an internal state of being – physical, mental and emotional – employee engagement brings together concepts of work effort, organizational commitment, job satisfaction and optimal experience. But does the social engagement of employees lead to a lasting and successful marriage? Yes, says this author.
Employee engagement is about being positively present at work by willingly contributing intellectual effort, experiencing positive emotions and meaningful connections to others. This gives employee engagement three dimensions:
- Intellectual: related to the job and how to enhance it;
- Affective: linked to feeling positive about doing a good job; and
- Social: concerned with taking opportunities to discuss work-related improvements with others at work.
Deloitte's Volunteer IMPACT 2011 survey found that Millennials who frequently volunteer are more likely to be proud, loyal and satisfied employees as compared to those who rarely or never volunteer. The same research showed that those who participate in employer-sponsored volunteerism were 52 percent more likely to feel very loyal toward their company than those who did not participate. The report also found that 70 percent of Millennials want to work for a company that is committed to its community. Of all Millennials surveyed, 61 percent said that whether an organization were committed to its community and sponsored volunteerism, would have an influence on whether they accept a job offer or not (Deloitte, 2011).
Extensive studies have demonstrated the importance of employee engagement to organizational performance as a business concept that addresses employees' levels of interest and commitment to the job, resulting in a positive attitude towards one's occupation and firm and consequently leading to greater productivity. Gallup's Q12 Meta-analysis of 1.4 million employees conducted in 2012 and examining business performance, shows a positive correlation between employee engagement and business outcomes despite tough economic conditions. More specifically, Gallup found that engaged employees are more productive and customer-focused, as well as more likely to stay with their employers (Gallup® and Q12®, 2013).
Enter the Millennials
The study, which covered different dimensions of employee engagement, shows that employee engagement with corporate volunteerism is increasingly being identified as a key element in attracting and retaining top talent (see box). This correlates tightly with a prevailing characteristic of the current Generation Y, or the Millennials: defined as being between the ages of 21 and 35, the fastest growing segment in today's workforce and the most sought after talent despite the prolonged recession. Perhaps one of the most distinctive characteristics of Gen Y is their search for meaning in the work place, a platform that encourages them to contribute to society. It is important to understand and engage with members of the Millennial generation as they will represent the bulk of the workforce, the future of economic and social life and the future of business.
While many have claimed that employee engagement predicts employee outcomes, organizational success and financial performance, a considerable number of leaders question the return on investment (ROI) in terms of the amount of time and resources spent trying to address employee concerns. In fact, some observers warn that fixating on ever higher engagement survey scores is wrongheaded and may backfire if employers fail at improving the metrics and ensuring that their more "engaged employees" are behaving in ways that promote higher productivity.
The importance of social engagement
Recognized or not, without a motivated and engaged workforce, even the most brilliant business strategies can falter. The affinity that employees feel toward an employer has the power to create a competitive advantage that can be hard to imitate and is inextricably linked to organizational performance (Deloitte, 2011). Studies indicate that organizations that have engaged employees actually outperform those who do not. In fact, employers who take into account the connection between corporate volunteerism and employee engagement can reap substantial rewards. By sponsoring volunteerism, a company has the opportunity to communicate the values it shares with its employees, which in turn can result in a more engaged and committed workforce that drives the firm's competitive advantage (Madison, 2012).
Companies seeking to enhance organizational commitment by means of volunteerism may have more success if their employees have the freedom to select from a wide array of volunteer opportunities. This is driven by the increased agreement with organizational values and increased perception of the organization that employees report as a result of participating in employer-sponsored volunteerism (Madison, 2012).
I do. Do you?
At the moment, employee engagement initiatives addressing community involvement and corporate volunteerism are being incorporated into the backbones of leading organizations. Forward-looking companies seeking a lasting "marriage" with their employees are encouraged to embrace the trend and establish social engagement as a differentiating agent of their firms. These organizations should emphasize the importance of employee engagement through offering a holistic kind of experience to their workforce and aligning with their passions if they wish to retain the talent that other firms are competing for.
by Soughit Abdelnour, senior manager, Human Resources, Deloitte Middle East
Barton, F. E. (2012) The Millennial consumer – debunking stereotypes. The Boston Consulting Group.
Deloitte, D. L. (2011) 2011 Executive summary Deloitte volunteer IMPACT survey. Deloitte Touche Tohmatsu Limited.
Frauenheim, E. (2011, September) A skeptical view of engagement, workforce. Retrieved from Workforce Website:
Gallup® and Q12® (2013) Engagement at work: its effect on performance continues in tough economic times. Gallup, Inc.
Harter, N. B. (2011) Majority of American workers not engaged in their jobs. Gallup® and Q12®.
Khan, W. (1990) Psychological conditions of personal engagement and disengagement at work. Academy of Management Journal, Vol.33, pp. 692-724.
Madison, W. R. (2012) Corporate social responsibility, organizational Commitment, and employer- sponsored volunteerism. International Journal of Business and Social Science, Vol. 3 No. 1


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Reader Comments (Page 1 of 1)
Jack Mynock said...
Don't be dense. Compare WotLK engame content to Cataclysm end game content and tell us which had more. Even if you exclude Wrath's extra tier, ToC, you're left with 3 12-boss raids with 1 extra heroic mode only boss, and 2 single boss raids. Cataclysm had 12 bosses and 1 heroic only boss in the first tier, then a 7 boss raid, and an 8 boss raid.
Obviously, there's more to raid content than just bosses. Don't get me wrong--I've enjoyed Cataclysm raiding, but you have to admit the raids have been somewhat lazily designed. BWD was basically a circle with a room for each boss. FL was a monochromatic mess (more boring than lazy really), and DS is almost entirely composed of pre-existing areas (using not one but two old god maws like we saw in highlands). Every Cataclysm raid put together doesn't feel like it took as much work and soul as Ulduar alone.


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Molecular Biology and Genetics
Molecular Biology
Statistics of barcoding coverage
Specimen Records: 339
Specimens with Sequences: 276
Specimens with Barcodes: 242
Species: 61
Species With Barcodes: 51
Public Records: 62
Public Species: 30
Public BINs: 20
Barcode data
The Cixiidae are a family of fulgoroid insects, one of many families commonly known as planthoppers, distributed worldwide and comprising more than 2,000 species from over 150 genera. The genera are placed into three subfamilies, Borystheninae, Bothriocerinae and Cixiinae with sixteen tribes currently accepted in Cixiinae.[1]
Cixiid species are typically comparatively small (body size less than a centimeter) and usually inconspicuous. Nymphs live underground, feeding on roots. Adults feed on herbs, shrubs and/or trees; some are polyphagous, while others are specialised on their host plants (monophagous). A couple of species are cavernicolous, feeding on roots in volcanic caves. Females occasionally bear impressive "wax tails" produced by wax-producing plates at the tip of their abdomen.
Several species are of economic importance (e.g. Hyalesthes obsoletus, Haplaxius crudus). Phytoplasma are common parasites in these insects, causing diseases in coconut palms and foliage, grapevines, sugar beets, and lilies.
The fossil record of Cixiidae is limited, and a number of taxa which have placed into the family may need to be reexamined and moved to different families. The oldest confirmed taxa are from the Early Cretaceous with 'Cixius' petrinus described from Barremian deposits in England, Karebodopoides aptianus from Hauterivian to Aptian Lebanese amber and Cretofennahia cretacea plus an unnamed specimen from the Aptian of Brazil.[2] Due to the abundant nature of Cixiidae as inclusions in Eocene Baltic amber a number of taxa have been described, including Glisachaemus jonasdamzeni and Autrimpus sambiorum. Several taxa have also been described from Miocene Dominican amber including Oligocixia electrina and Oliarius kulickae.[2]
- ^ Ceotto, P.; Bourgoin, T. (2008). "Insights into the phylogenetic relationships within Cixiidae (Hemiptera : Fulgoromorpha): cladistic analysis of a morphological dataset". Systematic Entomology 33 (3): 484–500. doi:10.1111/j.1365-3113.2008.00426.x.
- ^ a b Szwedo, J. (2007). "Glisachaemus jonasdamzeni gen. et sp. nov. of Cixiidae from the Eocene Baltic amber (Hemiptera: Fulgoromorpha)". Alavesia 1: 109–116.
Hoch H. 1994: Homoptera (Auchenorrhyncha Fulgoroidea). In: Juberthie C. & Decu V. (Eds): Encyclopaedia Biospeologica, Tome I, pp. 313–325.
Holzinger W. E., Emeljanov A. F., Kammerlander I. 2002: The family Cixiidae Spinola 1839 (Hemiptera: Fulgoromropha) - a review. Denisia (Linz, Austria) 4: 113-138
Wilson S.W. 2005: Keys to the families of Fulgoromorpha with emphasis on planthoppers of potential economic importance in the southeastern United States (Hemiptera: Auchenorrhyncha). Florida Entomologist 88(4), 464-481
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Welcome to Grafton Community Television
Home Page
Studio Hours: Mon - Thurs 10AM-10PM & Fri 10AM-6PM - Closed 1PM-2PM
296 Providence Road, South Grafton, Massachusetts 01560
email@example.com - (508) 839-2983
Welcome to GraftonTV.org, the web home for Grafton Community Television, providing Public, Government and Education Access Television for Grafton, MA!
Grafton Community Television, Public Access, can be seen on Charter Communications Cable Channel 11 and on Verizon Cable Channel 34, Grafton Government Television, Government Access, can be seen on Charter Communications Cable Channel 12 and on Verizon Cable Channel 33, and Grafton Education Television, Education Access, can be seen on Charter Communications Cable Channel 13 and on Verizon Cable Channel 32. Please visit our Program Descriptions page to find out more about our Public Access programs, or visit our Program Schedules page to find out when a specific program is playing on any of the 3 Access Channels.
Click the link above to check out our Real-Time Live Streaming for Grafton Community Television!
Board of Health, Conservation Commission Meetings Now Shown On Grafton Community Television
Grafton Community Television's Government Channel (Charter Channel 12 / Verizon Channel 33) has begun
showing taped broadcasts of the Town's Board of Health and Conservation Commission meetings. For broadcast times, check out our Program Schedules Page
"Grafton Minute By Minute" Begins Second Year of Broadcasts
August edition of "Grafton Minute By Minute"
begins the second season for this monthly half hour program showcasing
events held throughout the community.
The show is hosted by GCTV Lead Access Assistant Bob DeToma and features video footage by Access Assistants Rick Schultze and Bill Robidoux.According to host Bob DeToma, "All of us involved with Grafton Minute by Minute have enjoyed working on this project. We're happy to cover as many different events as time permits, and we enjoy being greeted warmly by the towns citizens. For show times, check out our Program Schedules Page.
Grafton Community Television Welcomes New Video Producers
Grafton Community Television's spring production course saw the successful graduation of nine new certified producers for Grafton's cable access station. Students worked on completing a final, edited project that they shot individually and edited for presentation at the Monday, June 2nd graduation ceremony. The graduates are: Dennis Perron, Edward Cornell, James Cadman Kenneth Grew, Kellie Nash and Apprentice/Junior Access Producers; James Cherry, Sami Sandakly, Kevin Brown, and Christopher Cadman
Grafton Community Television To Rebroadcast Grafton High School Graduation
Grafton Community Television staff were at the DCU Center in Worcester on Thursday evening, June 5th for the 2014 Grafton High School graduation ceremonies. The graduation will be rebroadcast on the GCTV's Educational Channel - Charter Channel 13 / Verizon Channel 32 throughout the month of June. For specific show times on Grafton Education Television. Please visit our Program Schedules Page.
Town's Memorial Day Program On Grafton Community Television
"Memorial Day 2014" is set to air on Grafton Community Television during the week of June 2nd to June 8th. GCTV Producer Bob Detoma
captured video from the traditional cemetery ceremonies and from along the parade routes on Memorial Day morning in Grafton. A fifteen minute presentation highlighting
the day's activities will be broadcast on Charter Communications Channel 11 and Verizon Cable Channel 34. For broadcast times, please visit our Program Schedules Page.
Selectmen Candidates Interviewed on Grafton Community Television
The five candidates for the Grafton Board of Selectmen got together on April 29th at the Grafton Community Television studios for "A Conversation With The Candidates," a one hour program set to be broadcast on Charter Communications Channel 11 and Verizon Cable Channel 33 beginning May 5th. For broadcast times, please visit our Program Schedules Page.
Grafton Minute By Minute Features Interview With Jay Cummings
The March edition of "Grafton Minute By Minute" features an interview with Grafton Superintendent of Schools Dr. Jay Cummings. The March episode also includes segments on the GCTV Video Production Course starting on March 24th, the Grafton Breast Cancer Awareness Program using pink colored recycling bins,
and an interview with Pam Jones of the Grafton Historical Society about their organization's March 15th Sock Hop. For broadcast times of Grafton Minute By Minute, check out our Program Schedules page.
Grafton TV Open House Set For March 10th-Producers Class Set To Begin March 24th
Grafton Community Television and Charter Communications will host an open house and tour of the town's cable public access TV facilities on Monday evening, March 10th from 6:00 PM to 9:00 PM. The open house also serves as an introduction to the Spring 2014 Television Production Course which runs from Monday, March 24th to Monday, May 12th. The open house and production course are held at the Grafton Community Television studios at 296 Providence Road in South Grafton. The GCTV television production course is available at no charge to Grafton residents, town employees and local business owners who are 18 years of age or older, regardless of whether or not they are cable television subscribers. The course is held on Monday evenings from 6:30 PM to 8:30 PM. Completion of the class certifies you as a GCTV producer with authorization to produce your own television shows on Grafton Community Television. For additional information on the March 10th Open House and the television production course, please call (508) 839-2983 or email at email@example.com
One Grafton Common Townhouse Forum to Rebroadcast on GGTV
Grafton Community Television Staff were on hand to capture the One Grafton Common Townhouse Public Forum on Saturday, February 1st, 2014 at Grafton High School. The forum will rebroacast on Grafton Government Television beginning on Tuesday, February 4th at 2:00pm. The public forum is also available to view on Grafton Community Television's Video On Demand and You Tube Channel. For additional broadcast times for Grafton Government Television, please visit out Program Schedules page.
Grafton Public Library's "Storytellers" Debuts On Grafton Community Television
GRAFTON: "Storytellers," a new Grafton Community Television program produced in cooperation with the Grafton Public Library, debuts on
Monday, December 16th on Charter Channel 11 / Verizon Channel 34. The half hour program showcases members of the Grafton Library staff
reading stories from books available in the Grafton Library. For broadcast times, check out our Program Schedules Page.
A Tribute To Captain Steve Roney Airs On Grafton Community Television
A Tribute To Captain Steve Roney will air on Grafton Community Television Charter Channel 11 / Verizon Channel 34 beginning the week of Monday, November 18th. The program honors Fire Captain Roney's forty four years of service to the Town of Grafton as celebrated at a testimonial held on Saturday, November 9th at Highfields Country Club. The program was filmed and produced by Bob DeToma, Lead Access Assistant for Grafton Community Television. For show times, check out our Program Schedules Page.
Regional Health Services Meeting Rebroadcast On Grafton Community Television
The Central Massachusetts Regional Health Alliance and how Grafton may become involved in this health services collaborative were discussed at a meeting held at the Grafton Police Department training room on Thursday evening, October 3rd. The information meeting, hosted by Grafton Town Administrator Tim McInerney, was taped by Grafton Community Television and will be rebroadcast on Charter Channel 12 / Verizon Channel 33 during the month of October. For a list of broadcast times, you can check out our Program Schedules Page.
More New Programs in September on Grafton Community Television
Grafton Community Television debuts six additional public access programs during the month of September on Charter Channel 11 / Verizon Channel 34. One of which is a brand new look at vintage television programming entitled "TV Classics with Jim Gallagher". The broadcast schedule for TV Classics and others can be found at the Grafton Community Television website www.GraftonTV.org at the "program schedule" link and on the GCTV Facebook page.
Grafton Community Television Debuts Grafton Minute By Minute
GRAFTON: A new program featuring current events in Grafton debuts Monday, August 5th on Grafton Community Television.
Grafton Minute By Minute is a monthly half hour program showcasing video of events held throughout the community. The show is hosted by GCTV Lead Access Assistant Bob DeToma and features video footage by Access Assistants Rick Schultze and Bill Robidoux. The program airs on Grafton Community Television's public access channel - Charter Communications Channel 11 and Verizon Cable Channel 33. For more information on Grafton Minute By Minute, visit our Press Releases page.
Grafton Community Television Introduces Expanded Video on Demand Services
Grafton Community Television announces a major upgrade to the way it delivers video on demand services. The GCTV website www.GraftonTV.org now links to a TelVue CloudCast system loaded with more than 215 video offerings that have aired on Grafton's three public access, government access and educational access television channels. Video on demand programs include Grafton Selectmen meetings, School Committee and Planning Board Meetings, High School graduations, Concerts on the Common, Superbowl and Thanksgiving day football games, and many other offerings!


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State Treasurer Martha Shoffner has been arrested and is being held in the Pulaski County jail.
Arkansans should not and will not stand for corruption in their state government. It's important to note that republicans have worked to put in place legislative safeguards to prevent this type of abuse of power in the future and we look forward to 2014 when we can replace Martha Shoffner with an honest fiscal conservative in the state treasurer's office.
Sen. Jason Rapert:
Justice must be served and no one is above the law and no one has the right to turn a blind eye when another public official is doing something that they know is illegal or unethical.


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Christie turns table on bridge lane closure accuser
New York, NY, United States (4E) – New Jersey Gov. Chris Christie went on the offensive Saturday against the port executive accusing him of knowledge in the Washington Bridge scandal.
Christie's camp circulated an e-mail to friends and allies saying David Wildstein, a former high-ranking official at the Port Authority of New York and New Jersey, oversaw the four-day closure of two lanes of the bridge that outraged motorists in September and was trying to exonerate himself by passing the blame to the governor.
The e-mail also said that Wildstein was asking for immunity from prosecution, was held in contempt by the New Jersey legislature for refusing to testify, failed to provide 'evidence' to the NJ Legislature, and asked the Port Authority to pay his legal bills.
The e-mail was released a day after the New York Times reported that Wildstein said there is evidence that Christie knew about the bridge closure. In January, Christie denied knowing the lanes closure and ordering it in retaliation to the Fort Lee mayor's refusal to endorse his re-election.
The lanes closure was reported in the newspaper on Sept. 13, when the lanes were reopened. Wildstein instructed bridge workers to close the lanes as part of a traffic study. In response to the subpoena from the NJ legislature, he showed last month personal e-mails sent to him in August by a deputy chief of staff to Christie, Bridget Anne Kelly, calling for "some traffic problems in Fort Lee.
The executive director at the Port Authority and bridge officials testified in December that there had been no traffic study. Christie fired Kelly later.
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