nixstor
02-23 04:22 PM
AFAIK States that do not have state income tax do not let H4 visa holders pay instate and make Green Card as a requirement for instate qualification.
WA state is a good example of the above situation. I don't know about TX,FL,SD,NV,AK,WY which also do not have state income taxes. You might want to look at the instate qualification website for the state you are interested in.
MD doesn't allow instate
DC has no instate concept at all :)
VA,NY,CA,MA,IL allow instate as of my knowledge.
WA state is a good example of the above situation. I don't know about TX,FL,SD,NV,AK,WY which also do not have state income taxes. You might want to look at the instate qualification website for the state you are interested in.
MD doesn't allow instate
DC has no instate concept at all :)
VA,NY,CA,MA,IL allow instate as of my knowledge.
wallpaper The Trees, Runswick
desi3933
06-18 12:26 PM
can you guys suggest how to proceed with my cases... where i am totally screwed up.
When I started to work in usa I was working for an employer in NJ after an year I got a better job offer and started to work for another employer(for whom I have been working for last 2 years).
Last Month I applied for my I140 with current employer work experience letter and co-worker letter (of my ex-employer in NJ). Now that I have an RFE for my I140 requesting me to send employer experience letter of my ex-employer. When I called up my ex-employer he was rude to me and firmly denied to provide any letter and hanged up the phone. Due to this RFE I am not able to proceed with my I485. Please let me know how to proceed...Thanking you all in advance.
Please consider asking your lawyer/attorney to send format request for Employment Verification (include job title, Duration, Salary and Skill set) by certified mail and a copy of the request be e-mail.
----------------------------------
Permanent Resident since May 2002
When I started to work in usa I was working for an employer in NJ after an year I got a better job offer and started to work for another employer(for whom I have been working for last 2 years).
Last Month I applied for my I140 with current employer work experience letter and co-worker letter (of my ex-employer in NJ). Now that I have an RFE for my I140 requesting me to send employer experience letter of my ex-employer. When I called up my ex-employer he was rude to me and firmly denied to provide any letter and hanged up the phone. Due to this RFE I am not able to proceed with my I485. Please let me know how to proceed...Thanking you all in advance.
Please consider asking your lawyer/attorney to send format request for Employment Verification (include job title, Duration, Salary and Skill set) by certified mail and a copy of the request be e-mail.
----------------------------------
Permanent Resident since May 2002
murali77
06-16 01:39 AM
Thanks for the reply.
How difficult is to have name changed in SSN ?
and how long does it take.
Thanks.
Murali
How difficult is to have name changed in SSN ?
and how long does it take.
Thanks.
Murali
2011 Original Modern Oil Painting
senthil
02-12 01:11 PM
- lazy folks, are NOT just lazy to contribute $$
- many simply just dont know what mess that are into yet
im sure time will teach lessons to those, but no use - it may be too late. they might think about IV - when they have packed their bags and while at the airport, taring their I-94's one last US departure. yeah going for good is what i mean. see you somewhere in india. may be a good subject to talk when we all retire.
- many simply just dont know what mess that are into yet
im sure time will teach lessons to those, but no use - it may be too late. they might think about IV - when they have packed their bags and while at the airport, taring their I-94's one last US departure. yeah going for good is what i mean. see you somewhere in india. may be a good subject to talk when we all retire.
more...
factoryman
03-15 11:30 AM
through whom I filed my first year taxes in US, that you don't need to declare if your mail-in rebates, apartment referals don't cross USD 1600. I haven't read anything that this has changed.
Note: Once I got USD 400 for an apartment referal and I split it 50/50 with the friend.
I hope someone out there in a similar situation can help me out.
I have given my real estate agent several referrals and for each I receive a cash amount. I'm on an H1B visa, am I able to receive income from someone other than my employer?
I've searched the web and have been able to find out that this should be reported as taxable income, I'm just not sure if I can receive it due to my immigration status.
Any comments or tips are welcome.
Note: Once I got USD 400 for an apartment referal and I split it 50/50 with the friend.
I hope someone out there in a similar situation can help me out.
I have given my real estate agent several referrals and for each I receive a cash amount. I'm on an H1B visa, am I able to receive income from someone other than my employer?
I've searched the web and have been able to find out that this should be reported as taxable income, I'm just not sure if I can receive it due to my immigration status.
Any comments or tips are welcome.
eb3_nepa
07-20 03:49 PM
Hello Gurus,
I have a question about H1 and L1.
Is it possible for one human being to have a simaltaneous H1 and an L1 visa AT THE SAME TIME. Now before everyone starts thinking i am crazy or laughing hysterically, let me explain my logic.
I have an H1 in a company who has a partner in Canada. I am thinking if i can somehow (IFF possible) without giving up my H1, get a simaltaneous L1 from the Canadian company in a sister concern of my US based company, then my wife could get an L2 and hence get a work permit.
So the plan is:
1) KEEP the original H1B
2) Get the Canadian partner to sponsor A PARALLEL L1 for a job in a sister company of my current company.
3) Apply for an L2 for my wife and get her work permit/SSN.
Now my questions are:
1) Is this possible AT ALL?
2) Can the L1 be extended? and is there any problem/caveat with L1 visas as compared to H1B?
3) My 6 years of H1B are up in 1.5 years so would my wife still be able to keep her L2?
Gurus can you give me some guidance. This tactic can be used by more of you as well, if you are a victim of retrogression and your spouse cant work.
I have a question about H1 and L1.
Is it possible for one human being to have a simaltaneous H1 and an L1 visa AT THE SAME TIME. Now before everyone starts thinking i am crazy or laughing hysterically, let me explain my logic.
I have an H1 in a company who has a partner in Canada. I am thinking if i can somehow (IFF possible) without giving up my H1, get a simaltaneous L1 from the Canadian company in a sister concern of my US based company, then my wife could get an L2 and hence get a work permit.
So the plan is:
1) KEEP the original H1B
2) Get the Canadian partner to sponsor A PARALLEL L1 for a job in a sister company of my current company.
3) Apply for an L2 for my wife and get her work permit/SSN.
Now my questions are:
1) Is this possible AT ALL?
2) Can the L1 be extended? and is there any problem/caveat with L1 visas as compared to H1B?
3) My 6 years of H1B are up in 1.5 years so would my wife still be able to keep her L2?
Gurus can you give me some guidance. This tactic can be used by more of you as well, if you are a victim of retrogression and your spouse cant work.
more...
eilsoe
10-03 02:03 PM
hehe, I hear ya! :P
Have fun... :evil:
Have fun... :evil:
2010 Trees Oil Paintings For
jay75
05-06 11:23 PM
Both my wife and myself got soft LUD today on 485. Aug'07 filed, EB3 India, PD 2004.
more...
kevinkris
11-03 08:42 PM
http://www.youtube.com/watch?v=INo69f7f8bo
About CIR.
The CIR bill is definitely coming back. Obama has mentioned it few times that solving the current immigration problem is one of his highest priority. Now we will need to wait and see what changes they can add to the existent CIR bill to help legals. But I would think most of the bill should remain the same since they have wasted a lot of time and effort in coming up with it
About CIR.
The CIR bill is definitely coming back. Obama has mentioned it few times that solving the current immigration problem is one of his highest priority. Now we will need to wait and see what changes they can add to the existent CIR bill to help legals. But I would think most of the bill should remain the same since they have wasted a lot of time and effort in coming up with it
hair Paintings of Trees. Treescape
dixie
08-09 11:26 AM
It is true that big businesses are putting a lot of pressure to initiate legal immigration reform, so while there is certainly room for optimism, we cannot sit still and just wait for things to happen. That is what legal immigrants have been doing for generations and we now know the mess that we are in. In contrast, look at the illegal immigrants. They create a lot of sound and fury, and ultimately even though nobody likes illegal immigration, an amnesty(or something close) is almost inevitable every 20 years or so.
IV is the first organization to initiate activism among legal immigrants. We are not that powerful right now, but we have already seen what activism can do. See the dramatic increase in coverage of legal immigration issues in the media. I cannot recall anything being published about our plight before. Those who say IV has done is ineffective should remember that a journey of a thousand miles begins with a single step.IV has taken that important first step.
I don't know.
My friend same something that it makes sense;
Don't expect to see any real improvement throughout the Pres. Bush Administration. Remember politicians do shows. Even the current SKIL bill seems to be way unilateral and that would not be welcome by American voters either. I think until lawmakers truly stop listening to lobbysts and bring a true balanced bill to the table, we will see lots of "shows", but no real result.
It may happen someday, but I don't count on it necessarily in 2007.
IV is the first organization to initiate activism among legal immigrants. We are not that powerful right now, but we have already seen what activism can do. See the dramatic increase in coverage of legal immigration issues in the media. I cannot recall anything being published about our plight before. Those who say IV has done is ineffective should remember that a journey of a thousand miles begins with a single step.IV has taken that important first step.
I don't know.
My friend same something that it makes sense;
Don't expect to see any real improvement throughout the Pres. Bush Administration. Remember politicians do shows. Even the current SKIL bill seems to be way unilateral and that would not be welcome by American voters either. I think until lawmakers truly stop listening to lobbysts and bring a true balanced bill to the table, we will see lots of "shows", but no real result.
It may happen someday, but I don't count on it necessarily in 2007.
more...
beautifulMind
11-03 08:30 PM
The CIR bill is definitely coming back. Obama has mentioned it few times that solving the current immigration problem is one of his highest priority. Now we will need to wait and see what changes they can add to the existent CIR bill to help legals. But I would think most of the bill should remain the same since they have wasted a lot of time and effort in coming up with it
hot Sunset Through the Trees
gc_buddy
07-15 12:46 PM
Hi Friends,
My Wife recently switched from H4 to EAD and started working on the EAD. She is currently doing consulting with a small company. Will she require to file a change of status with USCIS indicating that she changed from H4 to EAD.
Appreciate any assistance !
My Wife recently switched from H4 to EAD and started working on the EAD. She is currently doing consulting with a small company. Will she require to file a change of status with USCIS indicating that she changed from H4 to EAD.
Appreciate any assistance !
more...
house Painting Art-A Red Trees
Berkeleybee
05-24 12:35 AM
Catching up after a long day -- excellent job Salil! Love the idea of using the poster in the photo.
best,
Berkeleybee
best,
Berkeleybee
tattoo Paintings by Mark Shasha
simple1
06-18 06:40 PM
Guys,
you all re jumping to conclusions based on opinions, have you forgoteen what OBAMA had been saying about immigration?
1. Address legal immigration first
2. Illegals will have to stand behind the ones who came in this country legally.
Do you really think, that they will totoaly ignore legal immigrants and work on illegal. Obama has been talking about this process since his days of presidentail campaign,
We all need to have faith and work towards making IV and its goal attainable.
I hope the same.
I agree. It is in best interest of all EB immigrants to stick together. That's all I wanted to say.
Thanks.
you all re jumping to conclusions based on opinions, have you forgoteen what OBAMA had been saying about immigration?
1. Address legal immigration first
2. Illegals will have to stand behind the ones who came in this country legally.
Do you really think, that they will totoaly ignore legal immigrants and work on illegal. Obama has been talking about this process since his days of presidentail campaign,
We all need to have faith and work towards making IV and its goal attainable.
I hope the same.
I agree. It is in best interest of all EB immigrants to stick together. That's all I wanted to say.
Thanks.
more...
pictures aspen paintings,
simple1
06-18 04:50 PM
My intent is not to divide IV. I was just highlighting EB non-ROW.
Forgive my ignorance. Is there any specific Issues that hamper EB-ROW ?
Please enlighten me.
Why would you divide employment based immigration in to ROW vs non-ROW? Do you think folks from ROW don't deserve any relief? This is the kind of mentality which divides this small community of EB immigrants. This community is extremely small as it is in grand scheme of things so please don't try to divide it any further and make this community so small that it becomes irrelevant. Just a piece of advise.
Forgive my ignorance. Is there any specific Issues that hamper EB-ROW ?
Please enlighten me.
Why would you divide employment based immigration in to ROW vs non-ROW? Do you think folks from ROW don't deserve any relief? This is the kind of mentality which divides this small community of EB immigrants. This community is extremely small as it is in grand scheme of things so please don't try to divide it any further and make this community so small that it becomes irrelevant. Just a piece of advise.
dresses Oil Painting Title: Birch
sanojkumar
08-21 11:35 AM
Yes, My checks got cashed as well. We had filed on July 18th to NSC. Now I need one help. I have moved to Chicago area freom Michigan. We had filed from Michigan. So to change address to get FP notice in Chicago area what all I need to do? I had no Alien number on my I140. Please advice. I am looking at LIN number on the back of the checks. But for my wife she has different LIN number on three checks for I-765, I-485 & FP. Which one will be valid. Can I get any handle from these numbers to make a call to USCIS and request them to change my address online? What is the number for USCIS to call?
more...
makeup Bob Ross starts his paintings
camilopino
02-13 05:21 PM
-Legally Ignored
-Living in the Legal Limbo
-When Legal is Worse
-The Path to Citizenship, an American Nightmare
-Freedom as a Green Card
-Freedom as a Dream
-Green Card, an American Nightmare
-The Third Rate Citizens
-Living in the Legal Limbo
-When Legal is Worse
-The Path to Citizenship, an American Nightmare
-Freedom as a Green Card
-Freedom as a Dream
-Green Card, an American Nightmare
-The Third Rate Citizens
girlfriend Palm Trees oil painting
pappu
11-14 02:40 PM
Lawyer told me that I cannot contest. They screwed it up some thing
there is always some way...
pls quote the exact sentences of your rejection letter here. we need to know a reason for your rejection.
ask your lawyer or find out exactly what they screwed up.
also let us know
- is your lawyer a company lawyer or your lawyer
- what is the status of your company--- big/small/ many h1b/ what about others in your company on LC applications..etc
- did the comapny do ads? do you have the material or copy of everything that was sent?
- is your company making profits. how many employees?
- eb2 or eb3
- has anyone been rejected before in your company?
- how much time do you have on h1b
there is always some way...
pls quote the exact sentences of your rejection letter here. we need to know a reason for your rejection.
ask your lawyer or find out exactly what they screwed up.
also let us know
- is your lawyer a company lawyer or your lawyer
- what is the status of your company--- big/small/ many h1b/ what about others in your company on LC applications..etc
- did the comapny do ads? do you have the material or copy of everything that was sent?
- is your company making profits. how many employees?
- eb2 or eb3
- has anyone been rejected before in your company?
- how much time do you have on h1b
hairstyles paintings of trees nudes
Motivated
10-27 09:22 AM
to Motivated...
Seriously, .... Are you really thinking about getting this guy :p
Good Job!
at least there is some action involved, you should join too....especially if you are from WI
just saying meragcdedobhai - won't get it.
Seriously, .... Are you really thinking about getting this guy :p
Good Job!
at least there is some action involved, you should join too....especially if you are from WI
just saying meragcdedobhai - won't get it.
dealsnet
08-04 03:28 PM
I think the abused spouse cause is for the people getting GC with family based catagory. The temporary GC holder after marriage can do this with the help of the lawyer. The spouse abuse and all kind od stuff, to get GC if the husband/wife is not supportive. I know a person got that way after he is abused by his wife and got separated after she bring him from India.
For employment based GC, she yet to file I-485, I don't think she can file forcefully without the help of her husband. Employment based GC for the dependants is a permanent one, not like family based upon marriage.
Talk with a lawyer to find out the options.
Best way is to reconcile with the husband.
She/her friends can discuss this with her husband. If he supports apply for 485 and wait till the approval of that . She can file divorce after that.
If her husband is not supportive and doesnt want to add her for 485 then there is a special category (I dont remember the exact thing)/something like under certain circumstances ( which is like you are Abandoned by husband without no fault of your own and if you go back your hubbys family is going to harass you ...) This u need to check with a lawyer
Rajesh
For employment based GC, she yet to file I-485, I don't think she can file forcefully without the help of her husband. Employment based GC for the dependants is a permanent one, not like family based upon marriage.
Talk with a lawyer to find out the options.
Best way is to reconcile with the husband.
She/her friends can discuss this with her husband. If he supports apply for 485 and wait till the approval of that . She can file divorce after that.
If her husband is not supportive and doesnt want to add her for 485 then there is a special category (I dont remember the exact thing)/something like under certain circumstances ( which is like you are Abandoned by husband without no fault of your own and if you go back your hubbys family is going to harass you ...) This u need to check with a lawyer
Rajesh
alkg
08-13 08:41 PM
see the paragraph in bold letters.................
Greenspan Sees Bottom
In Housing, Criticizes Bailout
August 14, 2008
WASHINGTON -- Alan Greenspan usually surrounds his opinions with caveats and convoluted clauses. But ask his view of the government's response to problems confronting mortgage giants Fannie Mae and Freddie Mac, and he offers one word: "Bad."
In a conversation this week, the former Federal Reserve chairman also said he expects that U.S. house prices, a key factor in the outlook for the economy and financial markets, will begin to stabilize in the first half of next year.
"Home prices in the U.S. are likely to start to stabilize or touch bottom sometime in the first half of 2009," he said in an interview. Tracing a jagged curve with his finger on a tabletop to underscore the difficulty in pinpointing the precise trough, he cautioned that even at a bottom, "prices could continue to drift lower through 2009 and beyond."
A long-time student of housing markets, Mr. Greenspan now works out of a well-windowed, oval-shaped office that is evidence of his fascination with the housing market. His desk, couch, coffee table and conference table are strewn with print-outs of spreadsheets and multicolored charts of housing starts, foreclosures and population trends siphoned from government and trade association sources.
An end to the decline in house prices, he explained, matters not only to American homeowners but is "a necessary condition for an end to the current global financial crisis" he said.
"Stable home prices will clarify the level of equity in homes, the ultimate collateral support for much of the financial world's mortgage-backed securities. We won't really know the market value of the asset side of the banking system's balance sheet -- and hence banks' capital -- until then."
At 82 years old, Mr. Greenspan remains sharp and his fascination with the workings of the economy undiminished. But his star no longer shines as brightly as it did when he retired from the Fed in January 2006.
Mr. Greenspan has been criticized for contributing to today's woes by keeping interest rates too low too long and by regulating too lightly. He has been aggressively defending his record -- in interviews, in op-ed pieces and in a new chapter in his recent book, included in the paperback version to be published next month. Mr. Greenspan attributes the rise in house prices to a historically unusual period in which world markets pushed interest rates down and even sophisticated investors misjudged the risks they were taking.
His views remain widely watched, however. Mr. Greenspan's housing forecast rests on two pillars of data. One is the supply of vacant, single-family homes for sale, both newly completed homes and existing homes owned by investors and lenders. He sees that "excess supply" -- roughly 800,000 units above normal -- diminishing soon. The other is a comparison of the current price of houses -- he prefers the quarterly S&P Case Shiller National Home Price Index because it includes both urban and rural areas -- with the government's estimate of what it costs to rent a single-family house. As other economists do, Mr. Greenspan essentially seeks to gauge when it is rational to own a house and when it is rational to sell the house, invest the money elsewhere and rent an identical house next door.
"It's the imbalance of supply and demand which causes prices to go down, but it's ultimately the valuation process of the use of the commodity...which tells you where the bottom is," Mr. Greenspan said, recalling his days trading copper a half century ago. "For example, the grain markets can have a huge excess of corn or wheat, but the price never goes to zero. It'll stabilize at some level of prices where people are willing to hold the excess inventory. We have little history, but the same thing is surely true in housing as well. We will get to the point where there will be willing holders of vacant single-family dwellings, and that will no longer act to depress the price level."
The collapse in home prices, of course, is a major threat to the stability of Fannie and Freddie. At the Fed, Mr. Greenspan warned for years that the two mortgage giants' business model threatened the nation's financial stability. He acknowledges that a government backstop for the shareholder-owned, government-sponsored enterprises, or GSEs, was unavoidable. Not only are they crucial to the ailing mortgage market now, but the Fed-financed takeover of investment bank Bear Stearns Cos. also made government backing of Fannie and Freddie debt "inevitable," he said. "There's no credible argument for bailing out Bear Stearns and not the GSEs."
His quarrel is with the approach the Bush administration sold to Congress. "They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted -- with necessary taxpayer support to make them financially viable -- as five or 10 individual privately held units," which the government would eventually auction off to private investors, he said.
Instead, Congress granted Treasury Secretary Henry Paulson temporary authority to use an unlimited amount of taxpayer money to lend to or invest in the companies. In response to the Greenspan critique, Mr. Paulson's spokeswoman, Michele Davis, said, "This legislation accomplished two important goals -- providing confidence in the immediate term as these institutions play a critical role in weathering the housing correction, and putting in place a new regulator with all the authorities necessary to address systemic risk posed by the GSEs."
But a similar critique has been raised by several other prominent observers. "If they are too big to fail, make them smaller," former Nixon Treasury Secretary George Shultz said. Some say the Paulson approach, even if the government never spends a nickel, entrenches current management and offers shareholders the upside if the government's reassurance allows the companies to weather the current storm. The Treasury hasn't said what conditions it would impose if it offers Fannie and Freddie taxpayer money.
Fear that financial markets would react poorly if the U.S. government nationalized the companies and assumed their approximately $5 trillion debt is unfounded, Mr. Greenspan said. "The law that stipulates that GSEs are not backed by the full faith and credit of the U.S. government is disbelieved. The market believes the government guarantee is there. Foreigners believe the guarantee is there. The only fiscal change is for someone to change the bookkeeping."
In the past, to be sure, Mr. Greenspan's crystal ball has been cloudy. He didn't foresee the sharp national decline in home prices. Recently released transcripts of Fed meetings do record him warning in November 2002: "It's hard to escape the conclusion that at some point our extraordinary housing boom...cannot continue indefinitely into the future."
Publicly, he was more reassuring. "While local economies may experience significant speculative price imbalances, a national severe price distortion seems most unlikely in the United States, given its size and diversity," he said in October 2004. Eight months later, he said if home prices did decline, that "likely would not have substantial macroeconomic implications." And in a speech in October 2006, nine months after leaving the Fed, he told an audience that, though housing prices were likely to be lower than the year before, "I think the worst of this may well be over." Housing prices, by his preferred gauge, have fallen nearly 19% since then. He says he was referring not to prices but to the downward drag on economic growth from weakening housing construction.
Mr. Greenspan urges the government to avoid tax or other policies that increase the construction of new homes because that would delay the much-desired day when home prices find a bottom.
He did offer one suggestion: "The most effective initiative, though politically difficult, would be a major expansion in quotas for skilled immigrants," he said. The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy.
He estimates the number of new households in the U.S. currently is increasing at an annual rate of about 800,000, of whom about one third are immigrants. "Perhaps 150,000 of those are loosely classified as skilled," he said. "A double or tripling of this number would markedly accelerate the absorption of unsold housing inventory for sale -- and hence help stabilize prices."
http://online.wsj.com/article/SB121865515167837815.html?mod=hpp_us_whats_news
Greenspan Sees Bottom
In Housing, Criticizes Bailout
August 14, 2008
WASHINGTON -- Alan Greenspan usually surrounds his opinions with caveats and convoluted clauses. But ask his view of the government's response to problems confronting mortgage giants Fannie Mae and Freddie Mac, and he offers one word: "Bad."
In a conversation this week, the former Federal Reserve chairman also said he expects that U.S. house prices, a key factor in the outlook for the economy and financial markets, will begin to stabilize in the first half of next year.
"Home prices in the U.S. are likely to start to stabilize or touch bottom sometime in the first half of 2009," he said in an interview. Tracing a jagged curve with his finger on a tabletop to underscore the difficulty in pinpointing the precise trough, he cautioned that even at a bottom, "prices could continue to drift lower through 2009 and beyond."
A long-time student of housing markets, Mr. Greenspan now works out of a well-windowed, oval-shaped office that is evidence of his fascination with the housing market. His desk, couch, coffee table and conference table are strewn with print-outs of spreadsheets and multicolored charts of housing starts, foreclosures and population trends siphoned from government and trade association sources.
An end to the decline in house prices, he explained, matters not only to American homeowners but is "a necessary condition for an end to the current global financial crisis" he said.
"Stable home prices will clarify the level of equity in homes, the ultimate collateral support for much of the financial world's mortgage-backed securities. We won't really know the market value of the asset side of the banking system's balance sheet -- and hence banks' capital -- until then."
At 82 years old, Mr. Greenspan remains sharp and his fascination with the workings of the economy undiminished. But his star no longer shines as brightly as it did when he retired from the Fed in January 2006.
Mr. Greenspan has been criticized for contributing to today's woes by keeping interest rates too low too long and by regulating too lightly. He has been aggressively defending his record -- in interviews, in op-ed pieces and in a new chapter in his recent book, included in the paperback version to be published next month. Mr. Greenspan attributes the rise in house prices to a historically unusual period in which world markets pushed interest rates down and even sophisticated investors misjudged the risks they were taking.
His views remain widely watched, however. Mr. Greenspan's housing forecast rests on two pillars of data. One is the supply of vacant, single-family homes for sale, both newly completed homes and existing homes owned by investors and lenders. He sees that "excess supply" -- roughly 800,000 units above normal -- diminishing soon. The other is a comparison of the current price of houses -- he prefers the quarterly S&P Case Shiller National Home Price Index because it includes both urban and rural areas -- with the government's estimate of what it costs to rent a single-family house. As other economists do, Mr. Greenspan essentially seeks to gauge when it is rational to own a house and when it is rational to sell the house, invest the money elsewhere and rent an identical house next door.
"It's the imbalance of supply and demand which causes prices to go down, but it's ultimately the valuation process of the use of the commodity...which tells you where the bottom is," Mr. Greenspan said, recalling his days trading copper a half century ago. "For example, the grain markets can have a huge excess of corn or wheat, but the price never goes to zero. It'll stabilize at some level of prices where people are willing to hold the excess inventory. We have little history, but the same thing is surely true in housing as well. We will get to the point where there will be willing holders of vacant single-family dwellings, and that will no longer act to depress the price level."
The collapse in home prices, of course, is a major threat to the stability of Fannie and Freddie. At the Fed, Mr. Greenspan warned for years that the two mortgage giants' business model threatened the nation's financial stability. He acknowledges that a government backstop for the shareholder-owned, government-sponsored enterprises, or GSEs, was unavoidable. Not only are they crucial to the ailing mortgage market now, but the Fed-financed takeover of investment bank Bear Stearns Cos. also made government backing of Fannie and Freddie debt "inevitable," he said. "There's no credible argument for bailing out Bear Stearns and not the GSEs."
His quarrel is with the approach the Bush administration sold to Congress. "They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted -- with necessary taxpayer support to make them financially viable -- as five or 10 individual privately held units," which the government would eventually auction off to private investors, he said.
Instead, Congress granted Treasury Secretary Henry Paulson temporary authority to use an unlimited amount of taxpayer money to lend to or invest in the companies. In response to the Greenspan critique, Mr. Paulson's spokeswoman, Michele Davis, said, "This legislation accomplished two important goals -- providing confidence in the immediate term as these institutions play a critical role in weathering the housing correction, and putting in place a new regulator with all the authorities necessary to address systemic risk posed by the GSEs."
But a similar critique has been raised by several other prominent observers. "If they are too big to fail, make them smaller," former Nixon Treasury Secretary George Shultz said. Some say the Paulson approach, even if the government never spends a nickel, entrenches current management and offers shareholders the upside if the government's reassurance allows the companies to weather the current storm. The Treasury hasn't said what conditions it would impose if it offers Fannie and Freddie taxpayer money.
Fear that financial markets would react poorly if the U.S. government nationalized the companies and assumed their approximately $5 trillion debt is unfounded, Mr. Greenspan said. "The law that stipulates that GSEs are not backed by the full faith and credit of the U.S. government is disbelieved. The market believes the government guarantee is there. Foreigners believe the guarantee is there. The only fiscal change is for someone to change the bookkeeping."
In the past, to be sure, Mr. Greenspan's crystal ball has been cloudy. He didn't foresee the sharp national decline in home prices. Recently released transcripts of Fed meetings do record him warning in November 2002: "It's hard to escape the conclusion that at some point our extraordinary housing boom...cannot continue indefinitely into the future."
Publicly, he was more reassuring. "While local economies may experience significant speculative price imbalances, a national severe price distortion seems most unlikely in the United States, given its size and diversity," he said in October 2004. Eight months later, he said if home prices did decline, that "likely would not have substantial macroeconomic implications." And in a speech in October 2006, nine months after leaving the Fed, he told an audience that, though housing prices were likely to be lower than the year before, "I think the worst of this may well be over." Housing prices, by his preferred gauge, have fallen nearly 19% since then. He says he was referring not to prices but to the downward drag on economic growth from weakening housing construction.
Mr. Greenspan urges the government to avoid tax or other policies that increase the construction of new homes because that would delay the much-desired day when home prices find a bottom.
He did offer one suggestion: "The most effective initiative, though politically difficult, would be a major expansion in quotas for skilled immigrants," he said. The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy.
He estimates the number of new households in the U.S. currently is increasing at an annual rate of about 800,000, of whom about one third are immigrants. "Perhaps 150,000 of those are loosely classified as skilled," he said. "A double or tripling of this number would markedly accelerate the absorption of unsold housing inventory for sale -- and hence help stabilize prices."
http://online.wsj.com/article/SB121865515167837815.html?mod=hpp_us_whats_news
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