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Mobius Strip

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Everything posted by Mobius Strip

  1. Good point on your mention that yours was not an extension of previous research. As a co-author, it's probably fairly expected that the "original idea" may have come from the Professor or Economist. That is was purely your idea speaks volumes about your potential to come up with your own question as opposed to extensions.
  2. This is a bit confusing: Overall Assessment of Broader Impacts: Good Explanation to the applicant: This applicant has consistently demonstrated an interest in income inequality, whether through his tutoring in low-income neighborhoods, research on efficacy of early childhood education programs, or research on mortgage lending to low-income borrowers. His research proposal and other work on mortgage lending has the potential to shape the public policy in disadvantaged areas and also to aid understanding of the effects of the subprime crisis. This grader gave me probably the best-sounding "Explanation" for broader impacts, yet the worst mark of the 3. In fact, I was pretty disappointed with these explanations in general. I received only 1 Excellent, and all of the explanations sounded pretty good. I feel like if they're going to give you a mark under excellent, there could be at least one or two lines on where you could have improved.
  3. $50-60k matches about the starting salary for Econ assistant profs at my small LAC (top 15). I did research on professor salaries as an RA at the LSE, and of course looked up my school. Top, top professors in departments maxed at a little over $120, the pres of the school made $300, and the average prof was around $50-60. Pretty sad given that my RA position at the Fed nearly reached that level. Relating to life, professors at my school seemed genuinely happy. Teaching skill was regarding as most important by the students; I don't think many undergrads even paid attention to what the Professors were working on. We were more concerned with how well they taught us the material and made class interesting. In the department, things might have been different. There was an uproar my freshman year b/c a very popular (with the students) professor didn't get tenure and was basically told to leave. So, I guess research will eventually trump teaching.
  4. PROFILE: Type of Undergrad: B.A. Mathematics and Economics from a top 10-15 liberal arts college Undergrad GPA: 3.87/4.0 Type of Grad: NA Grad GPA: NA GRE: 800Q, 570V, 5.0AW Math Courses: Calc I-III, Linear Alg, Modern Alg, Adv Modern Alg, Real Analysis, Game Theory (in Math Dept), Topology, Chaos Theory. Received department honors in Math. Econ Courses: Basically all of them, 4.0 GPA, Thesis (A), Department Honors, Brownell Prize for Distinction in the Study of Political Economy Other Courses: NA Letters of Recommendation: 2 from Federal Reserve, 1 Math from Undergrad Research Experience: RA for 3 years at FRB in DC. Co-authored published paper on racial discrimination in credit markets. Teaching Experience: NA Research Interests: Labor (Education), Real Estate, Financial Markets SOP: Talked about my volunteer activities in tough, urban schools and how it shaped my interests in research in education. Transition to work at the Fed regarding discrimination in the credit markets. Final, throw-away paragraph naming some profs at schools who I'd be interested in working with. Other: Crushed by NSF RESULTS: Acceptances: U Michigan (off waitlist, after 0-14 start) Waitlists: NA Rejections: MIT, Harvard, Stanford, Yale, Berkeley, Princeton, Chicago, Chicago Booth, Northwestern, Wharton, U Penn, NYU, Columbia, Duke Pending: NA Outside Fellowship: Received a $20k fellowship from undergrad college to supplement lack of funding from UM What would you have done differently? After receiving NSF results and reading Jeeves's posts, spelling out the broader impacts to make it easier to checklist. I scored fairly well on intellectual merit, but only average on the broader impacts. Other than that, it's hard to say. I had nearly a 3.9 GPA with a Math and Econ double major, 3 years at the Federal Reserve, a published paper, and a presented working paper. I did spend 3 years in the private sector at a major bank, which probably hurt my admissions results, but gave me a broader personal, real-world experience that I do not regret taking. Attending: U Michigan - Ann Arbor
  5. Utility of homeownership can easily be overestimated. If you're 25, single, and mobile -- does homeownership versus renting necessarily give you additional utility? Why does it? Most cities have rental laws that make it illegal to be evicted, so if your mortgage is $2,500/month versus rent of $1,000/month (e.g. in NYC and SF), couldn't you get more utility by saving that $1,500/month and traveling, eating out more, etc.? Plus, when you own, there's no calling up the landlord to fix the heater. Personally, I have more utility when I have more cash in my pocket, whether that comes in the form of buying, renting, or investing. Of course others may actually get additional utililty from that "I own my home" feeling, but I don't quite understand it unless you're looking to settle down and raise a family.
  6. For real estate agents, see: Levitt, Freakonomics. My experience (as well as other friends who own multiple properties from the easy credit days of 2004-2006) is just as Levitt describes. That is, they want to get the deal done. Many agents working with the seller pressure the seller to lower his price while agents working with the buyer are pressuring him to offer more -- just to get the deal done. Know their incentives and stick to your guns. In this market, you should be able to negotiate. With a studio or 1-BR, true, you're not going to be getting any help from roommates or tenants to lower your payments. Typically, a major advantage of buying a 1-BR (or studio) is the tax deduction. Mortgage interest is fully tax deductible, so if you're in the 28% tax bracket, you'll "get back" 28% of your interest payment at the end of the year. IN those first few years, the interest is nearly all of the payment. However, as a student, you may not even make enough to get taxed in the first place. Perhaps someone with a better accounting background than I have could talk about accruing these deductions over time, if that is allowed. I can't really give a buy/rent recommendation without knowing the area really well. Personally, I wouldn't buy unless I lived there at least 1 semester. For example, in Washington DC, 16th St is quite a wealthy/safe block while only 3 blocks away (in some parts), the area drops off quickly. These days, it's hard to count on capital appreciation; states like FL, MI, OH, and some cities in CA, AZ, and NV may not see real estate gains for years in many neighborhoods. So, if your mortgage payments plus insurance plus condo association dues (maintenance) plus taxes are much more than renting -- you may not be in the best position to buy. If all of that would cost you only $1000/month and renting would cost you $800 for a similar spot, then perhaps it is worth buying, especially if you're in a neighborhood close to campus that would be easy to rent in 5 years. In short, don't count that you can sell for much more than you bought it for (keeping in mind that when you sell you have to pay 6% in real estate fees plus the costs to get it move-in ready). However, if you think rents might be higher than your payments, you could certainly have found a deal! Regarding the painting, you may be surprised that many small management companies are open to that idea so long as you either paint it back at the end of your tenure or pay for them to do so. The apt I'm moving into was painted by the tenant who's there now, and I actually liked it more the way she had it (so she doesn't have to pay to have it repainted white). A former tenant of mine did the same to a room in my place back East. It's actually a decent signal that the tenant will take care of the apartment, but a signal large management companies may care less about. True point, $10k down will likely get you no more than a $90k loan -- so unless you're in Kansas or something ... you may simply not have that option. If I had to make a suggestion it might be this: Wait a semester, know the neighborhoods really well, study Craigslist for expected market rents, find someone you could live with, and get at least 2 bedrooms to defray costs. Check out the total costs of owning and compare them to renting in that area; however, it is likely that any less than 2 BR likely won't be an "investment" but rather a luxury. If a deal isn't there, don't force it. While I was excited to get a 2nd property after I moved to SF (and watched my friends pick up their 2nd and 3rd), the market wasn't there for me. Prices were sky high and rents could never in a million years make up the mortgage in a decent location. Good luck!
  7. Why not talk to professors in the B School? Talk to 1 or 2 privately, perhaps, and see what course of action they might recommend.
  8. An economist I worked for at the Fed said the exact same thing, using the old joke with an economist and the $20 bill (if there really was a $20 bill on the street, someone would have taken it). However, there are other factors at play: 1. Many landlords do not want to live with their tenants. 2. There are budget/time constraints to how many properties an investor can take on. 3. Risk aversion and people who don't think you can do this. So yes, there are opportunities. Are there trade-offs? Of course, the main one being particularly that it makes it harder to move. Either you have to continue to rent out rooms (potentially at a loss depending on the marketJ) or sell (again, potentially at a loss depending on the market). These risks are obviously why there are gains to be had. What I noticed immediately outside of DC was that I could get a mortgage for about $1400/month (my original rate, with a refi it's now down to $1200), add in $250/month for HOA, taxes, insurance, etc and have total payments of $1650. Roommates would conservatively add $1100-1200 / month, meaning I only had some $450 to pay each month. Nowhere would I find my 20x20 master bedroom with bath and walk-in closet for only $450 / month (it's currently renting out at $750). So right off the bat, I'm saving $300/month versus the rent I would pay for a comparable room in a comparable townhouse. Then, and this is where principal paydown is important, the more principal you pay, the less interest you owe the next month. Regardless of amortization schedule, while the payment owed stays constant, the interest owed is only based on your current balance -- pre-pay principal and each month your payment knocks out even more principal than before. So you have increasing returns over time. In 2004, loans were being given out with $0 down -- so the gains were absolutely immediate from month 1. Today, no way is anyone going to get something with $0 down -- you'll need 10% minimum. But if you can find a 3 BR apartment for $200k in an area close to a university, no question can you make money -- especially over a 4-5 year period. There are certainly argument to be made for both sides; my only point is that it doesn't have to be a bad investment b/c markets are certainly not perfectly efficient. There is particular fear in real estate markets now -- and combined with record low interest rates -- this is as good a time as any to buy for someone willing and able to handle risk. Under no circumstance do I recommend buying based on assumed capital appreciation -- no way in this market! However, if you can make money based on cash flow (rents + rent saved + tax savings - mortgage and fees), then at least you have another option to consider. Many investors rarely look beyond a 5-year time horizon anyway (too many unknowns), so the 4-6 year time period should hardly be a constraint. And they say real world experience is bad :)
  9. You forget that you get to write off mortgage interest on taxes. This is not so important as a student (low tax bracket) but particularly important to consider when working.
  10. As I said, some economists are quite risk averse :) If it's not for you, then it's not for you. That's fine. But I really hope that you don't think I've owned an investment property for 5 years and haven't considered maintenance, taxes, insurance, HOA, and other things. 1. You don't have to follow the amortization schedule. I pay an additional $200 every month in principal. After nearly 5 years, I'm at the point where each mortgage payment pays down $315 (and growing) each month. Add in the $200 extra and principal goes down over $500 / month. Most economists assume that we've come close to the bottom, so if house prices even stay flat, you come out ahead. 2. THe market is key. In places like SF or NYC, you can almost never make up the mortgage payments with rents. In MD, close to the University of MD, it's quite easy to. It looks to be the same in Ann Arbor. As for SD, which I believe is where smart_ana is headed, I'm really not sure. 3. Rent goes right down the toilet, but you know what you're getting. In places like NYC and SF, it's likely that you're better off renting and saving/investing the money you would have paid for a mortgage. 4. The $$/room goes down tremendously as rooms increase. If you're willing to get a 3- or 4-BR townhouse and rent rooms for $500 a piece and deal with all those roommates, you'll likely make money in weak housing markets. 5. Who says you have to sell when you leave? I didn't.
  11. Stephen Colbert might mock US News for a lack of ... nerve. 4 #1 rankings?? Aww, we're ALL winners here! C'mon US News, nobody likes a tie!
  12. One thing I learned at the Fed: Economists can be WAY too risk averse some times :)
  13. Actually, I completely disagree that 5-6 years isn't enough time -- it's plenty of time. I bought a 3-BR townhouse close to U MD in 2004, rented out two of the 3 bedrooms and lived practically free for my 2 years there. I still own the the house, have all three rooms rented out, and am making enough monthly profit to pay for 1/2 of my ann arbor rent each month. So, smart_ana, if you plan on being there for 5 years, I think it *can* be a great investment. Especially now, prop values are low, interest rates with ING are as low as 4.5% -- you could make a killing if you're willing to share a townhome with other students. The thing is this, don't expect any appreciation on your property. Put together a spreadsheet and compare the costs of renting each month to the cost of a mortgage minus any rents you can expect from the other tenants PLUS keep in mind that you'll have other people paying down principal for you. So, even if you break out even each month, you're still ahead as your principal gets paid off. Indeed, you'll have the first 5 years fairly easy as you can manage it yourself, which is a great deal. On the other hand, studio apartments and 1 BR apartments in large condo units are almost always a rip-off due to absurdly high "maintenance" fees. I'll likely buy a 2nd investment property in Ann Arbor in my 2nd year, once I know the neighborhood better.
  14. I started a Ponzi scheme. If you want in, it'll be $5,000 to play but I guarantee an 8% annual return. Interested?
  15. I got info from some friends of mine that I met when I was down there. He suggested that I live in Kerrytown, about 3-4 blocks from campus and 1 mile from the Econ building. Kerrytown is more grad-student oriented, away from the frat rows, but close enough to restaurants, bars, cafes, and importantly for someone coming from San Francisco, a fresh food and farmers market. This area was suggested by nearly every grad student I talked to. I walked around calling the places with "For Rent" on their buildings; as it was Easter Weekend, it wasn't the easiest getting a hold of property managers. Fortunately, I got in to see a few places. 1. Confirmed by a number of off-campus-housing residents: The large management companies (wilson white, etc.) are more about getting residents in and out than managing the properties. This is similar to any city I've lived in -- large property management companies get you on marketing and little else. 2. The first 2 places I saw were absolute dumps -- they smelled, the carpeting was cheap, it looked like rust/mold everywhere, just disgusting. Don't sign on for the first place you see, check out at least 5. A number of places seemed willing to negotiate on rent. It seemed the apartments in complexes and within 1-2 blocks of the Union were overpriced and/or dirty. 3. I heard gas/heat can get *really* expensive; one guy in a tiny basement studio (efficiency) told me he's paid up to $100 for gas in a single month. When comparing, find out if they include heat (gas or electric?) or not. 4. Parking spots can run about $40-50. For a nice-sized 1-BR with hardwood floors, I'm paying $850 with all utilities and parking included -- sp about $700-725 for the apartment a la carte. From friends, this was reasonably priced, though not a spectacular steal. I had only 3 days to find a place since I didn't want to deal with hotels and a crush of apartment hunters this summer. Good luck and get started early! I hear the good ones go quickly!
  16. By the way, congrats again, and thank you for all of your continued feedback on the process. It'd be easy and understandable to think you'd take a TM break and relax somewhere in Costa Rica for a while :) Actually, forget us, go take a break somewhere in Costa Rica for awhile.
  17. I just put the deposit down on a sweet apartment in Ann Arbor, so no going back now :)
  18. Is NSF only available to incoming 1st years? That is, can you re-apply for funding between year 1 and 2?
  19. It looks like at least 1 TM'er received word today of receiving a tuition waiver today -- anyone else?? Should we expect the funding offers to come pretty much at once or spread out for the next month or so?
  20. This seems to hit one of John List's points that differentiating people with top scores may come down to a LOR stating X candidate compares favorably to Y candidate, who went to Z school in YYYY. This makes going to a school not known for economics (some large state, small LAC, etc.) particular difficult. Very good points about trying to RA at outside Universities if you find yourself at such an undergrad setting.
  21. I-banking (Wall St) versus Banking. I even remember an interview with AmEx in NYC and the guys told me that they rarely worked more than 45 hours/week. Plus, both our companies give 25 days paid vacation each year. You just may get bored really quickly building models you could care less about.
  22. Institution: Wells Fargo Bank Program: Analytics Funding: More than I'll see for at least 5 years Date: Spring 2009 Reasons: Intellectual stimulation Comments: Well, the private sector is certainly cush: good pay, normal hours, not a whole lot of stress -- but I feel like a cog in a wheel and that my talents are wasted on trivial projects. My brain has deteriorated in the years I've been out of school and it's time regenerate the mind :)
  23. Harvard Law has been recruited to see with what legal means they may drag Jeeves to Cambridge: Digital Natives ยป Searching for Jeeves Atop a High Google Mountain
  24. No question that econ grads are increasing in numbers each year -- but where are they going? When I graduated in the last market downtown ('02-'03), I had been struck by the massive private-sector salaries that recent grads had been pulling in only a couple of years earlier. There were a TON of econ majors from the Ivy League interviewing at every single I-bank in NYC. Where are they going now? Top MBA programs tend to hire people with work experience to help inflate the post-MBA salary, so it's hard to imagine that many harvard/mit/etc. econ undergrads are going straight to an MBA. If not an MBA and if not to Wall St (as those numbers have been decimated), then to where? Why apply for a Master's program when you can get a PhD for free with the option of leaving debt free after obtaining the MA? Top-ranked Econ undergrads have nothing to lose by going after the PhD: Wall St isn't offering the same lucrative positions, MA programs cost money, and MBA programs favor the older crowd. How can the crushed NYC job market NOT significantly add talent to the pool, even beyond the typical growth?
  25. GO jeeves! you had that nsf feeling two days ago, now we know why!
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