Berkeley CSUA MOTD:2008:February:05 Tuesday <Monday, Wednesday>
Berkeley CSUA MOTD
2008/2/5-7 [Reference/RealEstate] UID:49068 Activity:low
2/4     Need Housing Swami advice #2: Let's say a 30-year fixed mortgage
        is 6%, or $2500/month for this particular condo my wife is dying
        to get. Let's also say a 5-year interest only mortgage is 5%,
        or only $1600/month. Let's also say that I'm 90% sure we'll
        move again in 5-10 years as we'll probably need a bigger single
        family home for additional family members. Would it make sense
        to do the 5-year interest only mortgage? If I pay $2500/month
        on the interest only loan of $1600/month, or $900 extra/month,
        would I be paying more principle (1% more) and thus be in a
        better position than the 30 year fixed rate? Frankly, the
        5-year interest only mortgage is looking more and more
        attractive despite all the bad things people say about it.
        \_ that's a big, heavily leveraged gamble that you are making that
           the property will sell for the same or more when you move.  Is that
           a gamble you're willing to make?  Also have you compared the cost
           of renting an equivalent place?  Rent = no risk.  -- NOTSwami
           \_ Most entrepreneurs today would argue that not taking any
              risk is a losing proposition, especially when you have
              many years ahead of you.
              \_ ^entrepeneurs^real estate agents
        \_ what will fuck you over:
           - value of house #1 drops
           - you lose your job or there is a major medical expense (parents)
           - value of house #2 drops less or increases in value
           - you have no cash cushion
           what ist gut:
           - value of house #1 increases
           - you keep your job and there are no major medical expenses
           - value of house #2 increases less
           - you have significant cash cushion
        \_ Are you the same as the guy below? -GS
        \_ People who say bad things about interest-only mortgages are
           idiots. It's just a product. You can use it wisely or you can
           use it poorly. If you think you have the resolve to actually
           pay $2500/month then do it. However, what happens after 5 years
           with the mortgage you are looking at?
           \_ The op said there's a 90% chance of moving. What did you
              get on your SAT verbal? Your reading comprehension is weak.
              \_ Ergo, a 10% chance of not moving. I am curious what
                 happens to his loan in that instance. Does it reset to
                 fully amortized payments? If so, that's still only
                 ~$2500/month. Does the interest rate vary?
        \_ No one here can tell you if that's good or bad.  Everyone's
           situation is different.  But some things to consider: what happens
           if you don't move in 5 years?  What happens if you can't afford a
           house in 5 years because housing skyrockets again?  Will you really
           be able to afford to move?  OTOH, if prices collapse are you stuck
           with a ballooning rate in a house you can't sell and thus can't
           afford to take advantage of the low market?  The opposite points
           can be made for buying into the $2500/month in various market
           conditions.  When it comes to something important like having a
           roof over my head, I choose the safer route.  If it was a second
           place for income-only then I'd be more risky with it.  Let us know
           what you decide and why.
2008/2/5-7 [Science, Industry/Jobs] UID:49069 Activity:nil
        Salary data points for hotshot programmers.
        \_ Regurgitated TechCrunch anonymous postings don't qualify as "data"
2008/2/5-7 [Reference/Tax, Politics/Domestic/President/Bush] UID:49070 Activity:nil
2/4     Bush's tax cuts/rebates will have beneficial effects on certian
        industries like Phillip Morris, Anheiser Busch, and gambling
        casinos. Pick your stocks wisely!               -stock swami
2008/2/5-7 [Reference/RealEstate] UID:49071 Activity:low
2/5     Swami advice needed. Here is my situation: married, stable job,
        saved up a few hundred thousand dollars in CDs, kid popping out
        towards the end of the year, and wife screaming to buy a house.
        I understand the current volatile situation of the housing
        market as well as the oh-so-low interest rate. When is the nadir
        of the housing market in California? I need solid data to
        convince my wife to WAIT patiently.     -patient but whipped guy
        \_ I hate to say this but she has a better sense of timing than
           you. When people are screaming RECESSION, LAY-OFF, HOUSING
           KATRINA FLOOD, etc etc... that is the right time to buy.
           If you follow the crowd like a sheep you're already too late.
           \_ what are you buying now?
              \_ GOLD... vote Ron Paul!
              \_ I've done really well on energy in the past 2 years.
                 Energy discovery hasn't really kept up with demand and
                 it's a really deal even now.
        \_ you should probably be looking now to see if you can find a
           despereate seller or a good foreclosure deal.  Buying is generally
           a slow process, especially if you are in no hurry to do so,
           and you can have the time to find the deal you want. -NotSwami
        \_ you in Santa Clara?
           \_ no.                                       -op
              \_ if you don't plan to move for > 5 years then it might make
                 sense.  personally, I can't stand a mortgage larger than
                 $417K (total).  buy a townhouse and upgrade later.
                 $417K (total).  buy a nice townhouse and upgrade later.
        \_ What are you waiting for?  You really seriously expect the motd to
           accurately predict the future of the housing market for you so you
           can make your life's largest financial decision?  Based on motd
           advice?  This *has* to be a troll.  Please please please tell me
           it's a troll.
           \_ No. Swami has given me a lot of good directions in life.   -op
        \_ If you have a few hundred K in CDs you've already waited too long.
        \_ Swami already answered this question: your family tranquility
           is worth more than any minor gain you might make by timing the
           real estate market. If you can find a place you can afford and
           like right now, then buy it. The real estate market will most
           likely be stagnant for many years, longer than your marriage
           will last if you are not careful. -Great Swami
2008/2/5-7 [Politics/Domestic/California] UID:49072 Activity:nil 66%like:49063
2/4     Shriver is vomiting for Obama.
        \_ For whom do you expect her to vote?  A Republican?
        \_ He got her pregnant?
2008/2/5-7 [Academia/Berkeley/CSUA/Troll] UID:49073 Activity:high
2/4     I've warned you guys before, and I'll warn again:
        GLOBAL RECESSION IS HERE.                       -recession swami
        \_ Uhm ok, let's assume we're in a global recession.  You seem to think
           this is a good thing.  Why?
           \_ why do you think I think this is a good thing? big boom,
              big bust, it's been like that for decades.
              \_ because you 'seemed' gloaty about it.  if you say you're not
                 then you're not.  i'm not trying to put words in your mouth.
                 \_ ob i've got something for your mouth
                 \_ he seemed gloaty about prediction ability, not the fact
                 \_ he seems gloaty about prediction ability, not the fact
                    that it may happen.  this seems pretty clear to me.
              \_ Yes, big bust historically is a good thing.
              \_ Of course big bust is a good thing!  -- motd boob guy #2
                 \_ above link NSFW, if the hint about 'big bust' wasnt enough
                 \_ Agreed. Slow growth is good. Tampering with the
                    interest rate to moderate/encourage growth-- dumb.
        \_ Probably not. The rest of the world will keep perking along, even
           if the US falls into a recession.
2008/2/5-7 [Recreation/Travel/LasVegas] UID:49074 Activity:nil
2/4     New Planet Hollywood Hotel totally sucks. No theme whatsoever.
        The old Aladdin Hotel was much better.
2008/2/5-7 [Computer/SW/Database] UID:49075 Activity:nil
2/4     Think this has been asked before on motd but how does one select
        X elements out of a stream of N, where N is unknown?
        \_ Pick the first X elements.
        \_ Assuming your question really is "how do I pick x elements from a
           stream of n, where n is unknown and the chance of any element being
           picked is x/n:
           Pick the first x elements from the stream.
           For each element afterwards if a random number between 1 and
            currently seen elements is < x replace a random element in
            your picked list with the next element from the stream.
           Repeat until the stream is empty.
           This alg probably has an off by 1 error or two in it, but it
            is the basic idea.
           \_ Wow, this was an interview question where X is 1 (how to
              pick a random line from a text file reading the file
              only once). But I never throught about a generalized
              version. Thanks!
Berkeley CSUA MOTD:2008:February:05 Tuesday <Monday, Wednesday>