desi3933
07-06 11:53 AM
This is a very basic question and I need answer on this as early as possible and guidance from you.
I came to this country in Dec 2001 on H1B Visa.
I never applied for green card since then.
Now on Dec1,2007 my H1B expires so I will have to go back to China.
If I file for green card at this point, will I be able to get the yearly extension for next few years till my GC comes?
Am I even eligible to do so?
Can I go to Canada and still work in USA (Since I live close to canadian border)?
If you have gone for out of US vacations etc, you can claim "absence time" to extend H1 beyond Dec 2007. For example, if total time outside US is 3 months then you can extend H1 until Mar 1st 2008.
This gives little more time to get I-140 approved and file for 3 year H1 extension based on approved I-140.
______________________
Not a legal advice.
I came to this country in Dec 2001 on H1B Visa.
I never applied for green card since then.
Now on Dec1,2007 my H1B expires so I will have to go back to China.
If I file for green card at this point, will I be able to get the yearly extension for next few years till my GC comes?
Am I even eligible to do so?
Can I go to Canada and still work in USA (Since I live close to canadian border)?
If you have gone for out of US vacations etc, you can claim "absence time" to extend H1 beyond Dec 2007. For example, if total time outside US is 3 months then you can extend H1 until Mar 1st 2008.
This gives little more time to get I-140 approved and file for 3 year H1 extension based on approved I-140.
______________________
Not a legal advice.
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waiting4gcps
08-15 06:35 PM
Got the CRIS email welcoming the new perm. resident for both me and my spouse
---------
PD: Mar 2005
RD: 7/1/2007
NSC
---------
PD: Mar 2005
RD: 7/1/2007
NSC
learning01
04-12 12:33 PM
As I had already posted in the news article thread (http://immigrationvoice.org/forum/showpost.php?p=8552&postcount=225), this is an exhaustive article with a bold and thought provoking headlines. The article can be accessed here - http://www.newsobserver.com/104/story/427793.html
Many skilled foreigners leaving U.S.
Exodus rooted in backlog for permanent status
Karin Rives, Staff Writer
When the Senate immigration bill fell apart last week, it did more than stymie efforts to deal with illegal immigration.
It derailed efforts to deal with an equally vexing business concern: a backlog in applications for so-called green cards, the coveted cards that are actually pink or white and that offer proof of lawful permanent residency.
Many people now wait six years or longer for the card. There are 526,000 applications pending, according to Immigration Voice, an advocacy group that tracks government data.
Lately, this has prompted an exodus of foreign workers who tired of waiting, to return home or go further afield. With the economies in Asia and elsewhere on the rise, they can easily find work in the native countries or in third nations that are more generous with their visas.
"You have China, Russia, India -- a lot of countries where you can go and make a lot of money. That's the biggest thing that has changed," said Murali Bashyam, a Raleigh immigration lawyer who helps companies sponsor immigrants. "Before, people were willing to wait it out. Now they can do just as well going back home, and they do."
Mike Plueddeman said he lost three employees (one a senior programmer with a doctorate) at Durham-based DynPro in the past two years because they tired of waiting for their green cards.
All three found good jobs in their home countries within a few weeks of leaving Durham, said Plueddeman, the software consultancy's human resource director.
"We are talking about very well-educated and highly skilled people who have been in the labor force a long time," he said. "You hate losing them."
This budding brain drain comes as the first American baby boomers retire and projections show a huge need for such professionals in the years ahead. U.S. universities graduate about 70,000 information technology students annually. Many people say that number won't meet the need for a projected 600,000 additional openings for information systems professionals between 2002 and 2012, and the openings made by retirements.
"We just don't have the pipeline right now," said Joe Freddoso, director of Cisco Systems' Research Triangle Park operations. "We are concerned there's going to be a shortage, and we're already seeing that in some areas."
Cisco has advertised an opening for a data-security specialist in Atlanta for several months, unable to find the right candidate. Freddoso believes the problem will spread unless the government allows more foreign workers to enter the country, and expedites their residency process.
However, not everybody believes in the labor shortage that corporations fret about.
Critics say that proposals to allow more skilled workers into the country would only depress wages and displace American-born workers who have yet to fully recover from the dot-com bust.
"We should only issue work-related visas if we really need them," said Caroline Espinosa, a spokeswoman with NumbersUSA, a Washington, D.C., group pushing for immigration reduction. "There are 2.5 million native born American workers in the math and computer field who are currently out of work. It begs the question whether we truly need foreign workers."
She added that the immigration backlog would be aggravated by raising the cap for temporary and permanent visas, which would make it harder for those who deserve to immigrate to do so.
Waiting since 2003
Sarath Chandrand, 44, a software consultant from India, moved with his wife and two young daughters from Raleigh to Toronto in December because he couldn't live with more uncertainty. He applied for his green card in early 2003 and expects it will take at least two more years to get it.
His former employer continues to sponsor his application for permanent residency, hoping that he will eventually return. But Chandrand doesn't know what the future will hold.
"I miss Raleigh, the weather, the people," he said in a phone interview. "But it's a very difficult decision to make, once you've settled in a country, to move out. You go through a lot of mental strain. Making another move will be difficult."
Canada won him over because its residency process takes only a year and a half and doesn't require sponsorship from an employer.
The competition from Canada also worries Plueddeman, who said several of his employees are also applying for residency in both countries. "They'll go with whoever comes first," he said.
And it's not just India and Canada that beckon. New Zealand and Australia are among nations that actively market themselves to professionals in the United States, with perks such as an easy process to get work visas.
New Zealand, with a population of 4 million, has received more than 1,900 applications from skilled migrants and their families in the past two years, said Don Badman, the Los Angeles marketing director for that country's immigration agency. Of those, about 17 percent were non-Americans working in the United States.
Badman's team has hired a public relations agency to get the word out. They have also run ads in West Coast newspapers and attended trade shows, mainly to attract professionals in health care and information technology.
Dana Hutchison, an operating room nurse from Cedar Mountain south of Asheville, could have joined a hospital in the United States that offers fat sign-on bonuses. Instead, she's in the small town of Tauranga, east of Auckland, working alongside New Zealand nurses and doctors.
"It would be hard for me to work in the U.S. again," she said. Where she is now, "the working conditions are so fabulous. Everybody is friendly and much less stressed. It's like the U.S. was in the 1960s."
Limit of 140,000
Getting a green card was never a quick process. The official limit for employment-based green cards is 140,000 annually.
And there is a bottleneck of technology professionals from India and China. They hold many, if not most, of all temporary work visas, and many try to convert their work visa to permanent residency, and eventually full citizenship. But under current rules, no single nationality can be allotted more than 7 percent of the green cards.
In his February economic report, President Bush outlined proposals to overhaul the system for employment-based green cards:
* Open more slots by exempting spouses and children from the annual limit of 140,000 green cards. Such dependents now make up about half of all green card recipients, because workers sponsored by employers can include their family in the application.
* Replace the current cap with a "flexible market-based cap" that responds to the need that employers have for foreign workers.
* Raise the 7 percent limit for nations such as India that have many highly skilled workers.
After steady lobbying from technology companies, Congress is also paying more attention to the issue. The Senate immigration bill had proposed raising the annual cap for green cards to 290,000.
Kumar Gupta, a 33-year-old software engineer, has been watching the legislative proposals as he weighs his options. After six years in the United States, he is considering returning to India after learning that the green card he applied for in November 2004 could take another four or five years.
Being on a temporary work visa means that he cannot leave his job. Nor does he want to buy a home for his family without knowing he will stay in the country.
"Even if the job market is not as good as here, you can get a very good salary in India," he said. "If I have offers there, I will think of moving."
Let's utilize this write up and start quoting the link in our personal comments / emails to other news anchors, commentators, blogs etc.
I thought this deserves it's own thread. Please comment and act.
Many skilled foreigners leaving U.S.
Exodus rooted in backlog for permanent status
Karin Rives, Staff Writer
When the Senate immigration bill fell apart last week, it did more than stymie efforts to deal with illegal immigration.
It derailed efforts to deal with an equally vexing business concern: a backlog in applications for so-called green cards, the coveted cards that are actually pink or white and that offer proof of lawful permanent residency.
Many people now wait six years or longer for the card. There are 526,000 applications pending, according to Immigration Voice, an advocacy group that tracks government data.
Lately, this has prompted an exodus of foreign workers who tired of waiting, to return home or go further afield. With the economies in Asia and elsewhere on the rise, they can easily find work in the native countries or in third nations that are more generous with their visas.
"You have China, Russia, India -- a lot of countries where you can go and make a lot of money. That's the biggest thing that has changed," said Murali Bashyam, a Raleigh immigration lawyer who helps companies sponsor immigrants. "Before, people were willing to wait it out. Now they can do just as well going back home, and they do."
Mike Plueddeman said he lost three employees (one a senior programmer with a doctorate) at Durham-based DynPro in the past two years because they tired of waiting for their green cards.
All three found good jobs in their home countries within a few weeks of leaving Durham, said Plueddeman, the software consultancy's human resource director.
"We are talking about very well-educated and highly skilled people who have been in the labor force a long time," he said. "You hate losing them."
This budding brain drain comes as the first American baby boomers retire and projections show a huge need for such professionals in the years ahead. U.S. universities graduate about 70,000 information technology students annually. Many people say that number won't meet the need for a projected 600,000 additional openings for information systems professionals between 2002 and 2012, and the openings made by retirements.
"We just don't have the pipeline right now," said Joe Freddoso, director of Cisco Systems' Research Triangle Park operations. "We are concerned there's going to be a shortage, and we're already seeing that in some areas."
Cisco has advertised an opening for a data-security specialist in Atlanta for several months, unable to find the right candidate. Freddoso believes the problem will spread unless the government allows more foreign workers to enter the country, and expedites their residency process.
However, not everybody believes in the labor shortage that corporations fret about.
Critics say that proposals to allow more skilled workers into the country would only depress wages and displace American-born workers who have yet to fully recover from the dot-com bust.
"We should only issue work-related visas if we really need them," said Caroline Espinosa, a spokeswoman with NumbersUSA, a Washington, D.C., group pushing for immigration reduction. "There are 2.5 million native born American workers in the math and computer field who are currently out of work. It begs the question whether we truly need foreign workers."
She added that the immigration backlog would be aggravated by raising the cap for temporary and permanent visas, which would make it harder for those who deserve to immigrate to do so.
Waiting since 2003
Sarath Chandrand, 44, a software consultant from India, moved with his wife and two young daughters from Raleigh to Toronto in December because he couldn't live with more uncertainty. He applied for his green card in early 2003 and expects it will take at least two more years to get it.
His former employer continues to sponsor his application for permanent residency, hoping that he will eventually return. But Chandrand doesn't know what the future will hold.
"I miss Raleigh, the weather, the people," he said in a phone interview. "But it's a very difficult decision to make, once you've settled in a country, to move out. You go through a lot of mental strain. Making another move will be difficult."
Canada won him over because its residency process takes only a year and a half and doesn't require sponsorship from an employer.
The competition from Canada also worries Plueddeman, who said several of his employees are also applying for residency in both countries. "They'll go with whoever comes first," he said.
And it's not just India and Canada that beckon. New Zealand and Australia are among nations that actively market themselves to professionals in the United States, with perks such as an easy process to get work visas.
New Zealand, with a population of 4 million, has received more than 1,900 applications from skilled migrants and their families in the past two years, said Don Badman, the Los Angeles marketing director for that country's immigration agency. Of those, about 17 percent were non-Americans working in the United States.
Badman's team has hired a public relations agency to get the word out. They have also run ads in West Coast newspapers and attended trade shows, mainly to attract professionals in health care and information technology.
Dana Hutchison, an operating room nurse from Cedar Mountain south of Asheville, could have joined a hospital in the United States that offers fat sign-on bonuses. Instead, she's in the small town of Tauranga, east of Auckland, working alongside New Zealand nurses and doctors.
"It would be hard for me to work in the U.S. again," she said. Where she is now, "the working conditions are so fabulous. Everybody is friendly and much less stressed. It's like the U.S. was in the 1960s."
Limit of 140,000
Getting a green card was never a quick process. The official limit for employment-based green cards is 140,000 annually.
And there is a bottleneck of technology professionals from India and China. They hold many, if not most, of all temporary work visas, and many try to convert their work visa to permanent residency, and eventually full citizenship. But under current rules, no single nationality can be allotted more than 7 percent of the green cards.
In his February economic report, President Bush outlined proposals to overhaul the system for employment-based green cards:
* Open more slots by exempting spouses and children from the annual limit of 140,000 green cards. Such dependents now make up about half of all green card recipients, because workers sponsored by employers can include their family in the application.
* Replace the current cap with a "flexible market-based cap" that responds to the need that employers have for foreign workers.
* Raise the 7 percent limit for nations such as India that have many highly skilled workers.
After steady lobbying from technology companies, Congress is also paying more attention to the issue. The Senate immigration bill had proposed raising the annual cap for green cards to 290,000.
Kumar Gupta, a 33-year-old software engineer, has been watching the legislative proposals as he weighs his options. After six years in the United States, he is considering returning to India after learning that the green card he applied for in November 2004 could take another four or five years.
Being on a temporary work visa means that he cannot leave his job. Nor does he want to buy a home for his family without knowing he will stay in the country.
"Even if the job market is not as good as here, you can get a very good salary in India," he said. "If I have offers there, I will think of moving."
Let's utilize this write up and start quoting the link in our personal comments / emails to other news anchors, commentators, blogs etc.
I thought this deserves it's own thread. Please comment and act.
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chanduv23
09-14 12:23 PM
All the more reason to come, by now, alomst every employer knows about IV and what we do.
Everyone knows that you browse IV anonymously with the fear of getting noticed by employer.
There is nothing to hide. Be proud of whatever you are doing.
IV comprises of people like you and me.
Yes, follow your heart, nothing wrong will happen, only good will happen.
Shed off all your ill thoughts and negative feelings, come join us to the hsitoric event
Everyone knows that you browse IV anonymously with the fear of getting noticed by employer.
There is nothing to hide. Be proud of whatever you are doing.
IV comprises of people like you and me.
Yes, follow your heart, nothing wrong will happen, only good will happen.
Shed off all your ill thoughts and negative feelings, come join us to the hsitoric event
more...
gc67890
11-17 10:34 AM
Why are you so scared of posting by saying that this problem is with you. Why do you have to bring your friend in. If it is really for your friend, then why cant he come and ask himself.
I wish I had a friend like you who will find answers to my immigration problems ....
I am also your friend as you are also member of IV and we all are fighting for the same cause.
I will also help you if there is a need and if I can.
Please check my profile. I have filed my 485 on July 2nd and one of the few who was benefited thru IV flower campaign
I have been a member in IV for a while and I have also made contributions.
I am not afraid to speak out, Please reply if you know the answer.
Thanks once again
I wish I had a friend like you who will find answers to my immigration problems ....
I am also your friend as you are also member of IV and we all are fighting for the same cause.
I will also help you if there is a need and if I can.
Please check my profile. I have filed my 485 on July 2nd and one of the few who was benefited thru IV flower campaign
I have been a member in IV for a while and I have also made contributions.
I am not afraid to speak out, Please reply if you know the answer.
Thanks once again
conundrum
05-25 07:52 AM
Kennedy's immigration council/staffers were there until late last night and currently none of them are in. It seems they would be in only by around 9-9:15
more...
sr1973
08-06 12:28 PM
The only LUD was on my 140, which is on 7/13 - There was no LUD on any other applications H1, EAD, AP - One LUD today after the status change. Hope this helps.
Wandmaker,
Wondering if you ever checked if your namecheck was cleared or not.
Wandmaker,
Wondering if you ever checked if your namecheck was cleared or not.
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Dipika
03-26 11:21 AM
why will it retrogate again? we will see forward movement. be +ve and optimistic.:)
more...
senk1s
10-04 05:31 PM
or is it the same question you wanted an answer to?
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sk2006
07-04 11:48 AM
Answer to original question: YES any legal resident can buy Guns in CA. There is a test to be passed at authorised Gun dealer and there is a 10 days waiting period before you can be issued a gun.
However What about learning to use the weapons? Are there places where one can learn it?
No point buying a gun when you don't know how to use.
However What about learning to use the weapons? Are there places where one can learn it?
No point buying a gun when you don't know how to use.
more...
dbevis
June 4th, 2004, 08:32 PM
Who remembers "The Prisoner"?
You are Number Six
I am not a number . . .
I'm a free man!
You are Number Six
I am not a number . . .
I'm a free man!
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bmoni
07-12 03:57 PM
Good write up . Being on EB3 you know my pain. I strongly believe if we need any change that can come through only by a lawsuit.
pm me if you need any help from me.
pm me if you need any help from me.
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chanduv23
03-04 11:36 AM
The answer could be
"I have unrestricted employment authorization that allows me to work for any US employer just like green card holder" [example]
Employment can ask for valid employment authorization, but not for kind of employment authorization.
U.S. Department of Labor - Find It By Topic - Equal Employment Opportunity - Immigration (http://www.savingmatters.dol.gov/dol/topic/discrimination/immdisc.htm)
[From the link]
The Immigration and Nationality Act (http://www.savingmatters.dol.gov/cgi-bin/leave-dol.asp?exiturl=http://uscis.gov/graphics/lawsregs/INA.htm&exitTitle=Immigration_and_Nationality_Act&fedpage=yes) prohibits employers (when hiring, discharging, or recruiting or referring for a fee) from discriminating because of national origin against U.S. citizens, U.S. nationals, and authorized aliens or discriminating because of citizenship status against U.S. citizens, U.S. nationals, and the following classes of a aliens with work authorization: permanent residents, temporary residents (that is, individuals who have gone through the legalization program), refugees, and asylees.
________________________
Not a legal advice.
US citizen of Indian origin
Well - we all know this but if the question is "Do you have a Green Card? Yes or No ?" if you give the above answer, you have not provided a specific answer.
If you notice - job sites like dice etc... have drop downs that make you choose your work authorization (GC, EAD, H1b .....) and your work authorization is automatically visible there.
Monster, careerbuilder and some job sites do the right thing by asking "Are you authorized to work for any employer? or do you need sponership" - which makes sense to ask. An employer always has a choice to sponsor or not because additional costs are associated.
"I have unrestricted employment authorization that allows me to work for any US employer just like green card holder" [example]
Employment can ask for valid employment authorization, but not for kind of employment authorization.
U.S. Department of Labor - Find It By Topic - Equal Employment Opportunity - Immigration (http://www.savingmatters.dol.gov/dol/topic/discrimination/immdisc.htm)
[From the link]
The Immigration and Nationality Act (http://www.savingmatters.dol.gov/cgi-bin/leave-dol.asp?exiturl=http://uscis.gov/graphics/lawsregs/INA.htm&exitTitle=Immigration_and_Nationality_Act&fedpage=yes) prohibits employers (when hiring, discharging, or recruiting or referring for a fee) from discriminating because of national origin against U.S. citizens, U.S. nationals, and authorized aliens or discriminating because of citizenship status against U.S. citizens, U.S. nationals, and the following classes of a aliens with work authorization: permanent residents, temporary residents (that is, individuals who have gone through the legalization program), refugees, and asylees.
________________________
Not a legal advice.
US citizen of Indian origin
Well - we all know this but if the question is "Do you have a Green Card? Yes or No ?" if you give the above answer, you have not provided a specific answer.
If you notice - job sites like dice etc... have drop downs that make you choose your work authorization (GC, EAD, H1b .....) and your work authorization is automatically visible there.
Monster, careerbuilder and some job sites do the right thing by asking "Are you authorized to work for any employer? or do you need sponership" - which makes sense to ask. An employer always has a choice to sponsor or not because additional costs are associated.
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go_guy123
11-03 06:57 PM
I disagree. I think that we will see an another attempt at CIR bill. Dems will want to capitalize on their surge among the hispanic bloc; see the comments by Nancy Palosi [sp?]. An attempt will be made to cast it as an aid for economy: to bring people out of shadows so that they can buy houses etc.
But then this is just my opinion which, like yours, is just an opinion. Heck even my 5 year old these days does not seem to hold my opinion in any regard :)
Thats the concern. CIR pits illegals vs legals. The CIR bill allocates quotas from legals to illegals.
But then this is just my opinion which, like yours, is just an opinion. Heck even my 5 year old these days does not seem to hold my opinion in any regard :)
Thats the concern. CIR pits illegals vs legals. The CIR bill allocates quotas from legals to illegals.
more...
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TO BE OR NO TO BE
05-18 12:14 PM
Great work IV core team! EB immigration will be benefited by the work done by IV core team sooner or later. Keep it up!!
One will wonder that Indian Government will do something as the India and her economy are benefited by EB immigration big time in last decade. In the global economy the overseas workers are the greatest strength India has and as usual they are completely ignoring the problems faced by EB immigrants in the USA.
Just a thought,
One will wonder that Indian Government will do something as the India and her economy are benefited by EB immigration big time in last decade. In the global economy the overseas workers are the greatest strength India has and as usual they are completely ignoring the problems faced by EB immigrants in the USA.
Just a thought,
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gc_kaavaali
11-21 07:00 PM
In my view it is risky to change employer when I-140 is pending....it is my suggestion only...talk to your attorney
hi-
What will happen if 140 still penidng agter passed 6months 485 recipt date,can i cahnge the jobs in this situtation also
Thanks
Aj
hi-
What will happen if 140 still penidng agter passed 6months 485 recipt date,can i cahnge the jobs in this situtation also
Thanks
Aj
more...
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eilsoe
10-03 01:15 PM
:::snicker:::
SPAM*INFINTY+1!!!!!
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SPAM*INFINTY+1!!!!!
::::runs like h*ll::::
:::::evil laughter scares peasants:::::
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rjgleason
June 4th, 2004, 08:40 PM
Who remembers "The Prisoner"?
Patrick McGoohan............Number 6...........The Village.........mid 60's I think.
Patrick McGoohan............Number 6...........The Village.........mid 60's I think.
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yak2121
03-25 12:36 AM
We are most fortunate, thanks to Mr. Bill Gates, Rep Smith's current bill will triple our h1b cap and it will pass. all 3 american candidates support us. we are winning:D:D:D
EndlessWait
06-18 04:54 PM
Mr. EndlessWait -
You extended your status, not visa. Please get your basics correct.
1. Nonimmigrant Visa number
Visa Number for the last issued visa (does not matter if is expired)
2. Date Visa Issued
Date of Issue for Visa in #1
3. Consulate Where Visa was Issued.
Place of Issue for Visa in #1
Good Luck
Please check and verify details with your attorney/lawyer. This is NOT a legal advice.
----------------------------------
Permanent Resident since May 2002
Is the visa number the red colored number on the visa stamp or something else?
thanks
You extended your status, not visa. Please get your basics correct.
1. Nonimmigrant Visa number
Visa Number for the last issued visa (does not matter if is expired)
2. Date Visa Issued
Date of Issue for Visa in #1
3. Consulate Where Visa was Issued.
Place of Issue for Visa in #1
Good Luck
Please check and verify details with your attorney/lawyer. This is NOT a legal advice.
----------------------------------
Permanent Resident since May 2002
Is the visa number the red colored number on the visa stamp or something else?
thanks
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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