Rosewater

zero down mortgages.

You have to know, right now, at many banks, they are going to great lengths to get your mortgage business -- the low interest rates present a great opportunity to grab up customers from other banks through re-financing and bring in new customers through new mortgages. Now, they're starting to encourage people to take zero-down mortgages -- higher interest rates, but lower barrier to entry for first time buyers. So, this increases the risks for banks, since they initially have no buffer to protect them against default -- in a state like California, it really is no protection as the bank is only entitled to the collateral (the house) if the buyer defaults. There's no going after the buyers other assets. This is essentially a bet that house prices will continue to rise. Is it rational? Or is this a short sighted maneuver to grab more mortgage businesses? I'd be willing to bet there are more than a few bank employees who's future bonuses are determined by the volume of their mortgage business. This might also explain why mortgage rates continue to go down despite a steady rate from the Fed. Even Greenspan is worried about this one.

thought provoking discussion of group size in social settings

Chris Allen, over at Life with Alacrity has posted a thought provoking discussion of group size. The post takes the Dunbar Number (i.e. the upper bounds on human groups is about 150) as it's starting point and considers the affect of the purpose of the group (ie survival vs other activities) on the optimal size. Along the way, he provides some interesting references to empirical data from the on-line multi-user gaming. Check it out.

Housing Affordability Worsens in California

According to a monthly survey of house prices by the Realtor's monthly housing affordability indexhousing in California has gotten less affordable.

SFGate.com: Bay Area home prices not rising as quickly as other areas

So the Fed has released a study of housing prices nationwide that shows Bay Area home prices not rising as quickly as other areas . Fresno and Riverside, on the other hand, top the list, appreciating at about 20% in the last quarter. House prices in other Bay Area towns also slowed, tho not as much. Alameda and Contra Costa counties slowed the least. One thing that the article that I wasn't aware of was the two ways that housing prices are measured: DataQuick uses median house prices from recent sales. The Fed uses data from Freddie Mac and Fannie Mae. The Fed data seems a bit more restricted (no jumbo loans) and tends to move more slowly. Right now, they disagree about how the Bay Area housing market is performing