murali3000
03-04 12:09 PM
I do a short term stock trading with great profits , if you want I can share my stock picks , PM me.
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zephyrr
03-20 10:51 PM
what happens when the I-140 is not approved, if one uses AC21 after 180 days of concurrent filing of I-140 and 485, does a withdrawl by the employer affect anything?
Read the Yates memo...After 180 days of I485 pending, the employer's revocation of I140 has not effect on the GC application. But I know a few cases where this was an issue, so make sure you are armed with proof like pay stubs, employment letter et al.
Read the Yates memo...After 180 days of I485 pending, the employer's revocation of I140 has not effect on the GC application. But I know a few cases where this was an issue, so make sure you are armed with proof like pay stubs, employment letter et al.
acecupid
06-25 11:13 AM
I believe you should be ok since you are travelling and returning before expiry of old AP. You should be physically present in the US during application of new AP. Once you have the receipt for new AP, you should be good to go.
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21stIcon
12-20 08:40 PM
Undocumented amount 33% taken out from monthly compensation then pay roll tax withhold amount went to federal, state tax, social tax and Medicare.
My point is how can employer deduct tax with is not shown on pay slip.
What would be take home for 100k base? He should deposit $8333/pm not $5835/pm then pay roll processing department will deduct appropriate amount not he deducts 33% then sends to pay roll.
My point is how can employer deduct tax with is not shown on pay slip.
What would be take home for 100k base? He should deposit $8333/pm not $5835/pm then pay roll processing department will deduct appropriate amount not he deducts 33% then sends to pay roll.
more...
VDaminator
06-06 04:15 PM
Aright here is my volley
naturopathicpt
06-26 05:32 PM
I appreciate your reply but I cannot understand what you mean on your first response Atty. Prashanthi. Some of my questions on my first statement have not been answered.
more...
lacrossegc
09-06 03:56 PM
keep in perspective that --
H1B Visa is a travel document required for entry into US.
The green Card is for sponsorship towards FUTURE employment.
In all cases I dont see any problem with what you are planning to do ...
as soon as you adjust your status you can move back to US provided your company gives you the same/similar job as you were approved for by the green card.
H1B Visa is a travel document required for entry into US.
The green Card is for sponsorship towards FUTURE employment.
In all cases I dont see any problem with what you are planning to do ...
as soon as you adjust your status you can move back to US provided your company gives you the same/similar job as you were approved for by the green card.
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gc28262
08-27 08:08 PM
Did not know that you can use FOIA for obtaining a document that does not belong to you (or you dont own it)
Here are threads relating to that.
http://immigrationvoice.org/forum/forum80-visa-bulletin-status-tracker-processing-times/219826-use-foia-for-i-140-and-other-immigration-records.html
http://immigrationvoice.org/forum/forum2-retrogression-priority-dates-and-visa-bulletins/1469-foia-to-get-copy-i-140-approval-notice.html
Here are threads relating to that.
http://immigrationvoice.org/forum/forum80-visa-bulletin-status-tracker-processing-times/219826-use-foia-for-i-140-and-other-immigration-records.html
http://immigrationvoice.org/forum/forum2-retrogression-priority-dates-and-visa-bulletins/1469-foia-to-get-copy-i-140-approval-notice.html
more...
javaconsultant
03-28 01:55 PM
This would be a very welcome change ..........
Lets go for it.....I was watching yesterday's bill and could not find this
provision...Correct me if I am wrong....
Let us form a group who are pushing to introduce Ammendment for Filling I485, AP &EAD when I140 approved/pending, eventhough Cut-off dates are not reached for EB category immigration. Please discuss here weather any work being done to introduce this ammendment with present Comprehencive Bill.
Lets go for it.....I was watching yesterday's bill and could not find this
provision...Correct me if I am wrong....
Let us form a group who are pushing to introduce Ammendment for Filling I485, AP &EAD when I140 approved/pending, eventhough Cut-off dates are not reached for EB category immigration. Please discuss here weather any work being done to introduce this ammendment with present Comprehencive Bill.
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GCwaitforever
11-06 11:59 AM
Concurrent H-1Bs are always non-cap.:)
more...
ssnd03
01-02 07:18 PM
Hi Everybody,
I know that nobody has an answer for my question, but still i would like to get the views/inputs from the seniors here , who have experience with USCIS.
When do you think a person with PD of Nov 2007 ,EB3 from India, would be able to file for 485??
Most likely in about two (2) years
I know that nobody has an answer for my question, but still i would like to get the views/inputs from the seniors here , who have experience with USCIS.
When do you think a person with PD of Nov 2007 ,EB3 from India, would be able to file for 485??
Most likely in about two (2) years
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Alien
02-09 11:22 PM
Is Canada an option? Its a safe bet to get it stamped in Canada.You will get your passport back the same day or the next. You shouldnt have any problem related to transit visa as long as you stay inside the airport.Check with the respective consulates.
more...
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soneC
06-15 01:10 PM
Dear Ms. Martin:
Hello. Thank you for your timely and to-the-point reply. I will file for I-485 petition (family-based) as soon as my PD becomes current. A couple of questions:
1. I know for family-based I-485, my sponsor (my father) needs to show financial support through I-864 (Affidavit of Support). What should I do in unlikely case that my father lost his engineer position in his company? My parents actually own their house (no loan, about 250K house) and have decent amount of money for retirement. Is this enough to convince USCIS?
2. National Visa Center sent my father a notice when USCIS transferred the approved I-130 application to NVC. The notice stated case number was assigned and asked us not to make travel arrangements. Obviously, NVC still believes I am aboard because in the I-130 form, my father stated that I was aboard. Should I inform NVC that I am in the country and would like to do AoS instead of CP?
3. I assume that I can apply for EAD/AP along with the family-based I-485. Am I right?
4. Do you have an estimate family-based I-485 processing time? I was told about six month. Is it true?
5. Please give me a fee quote for I-485/EAD/AP?
Thank you so much. I am looking forward to your reply.
Sincerely
Hello. Thank you for your timely and to-the-point reply. I will file for I-485 petition (family-based) as soon as my PD becomes current. A couple of questions:
1. I know for family-based I-485, my sponsor (my father) needs to show financial support through I-864 (Affidavit of Support). What should I do in unlikely case that my father lost his engineer position in his company? My parents actually own their house (no loan, about 250K house) and have decent amount of money for retirement. Is this enough to convince USCIS?
2. National Visa Center sent my father a notice when USCIS transferred the approved I-130 application to NVC. The notice stated case number was assigned and asked us not to make travel arrangements. Obviously, NVC still believes I am aboard because in the I-130 form, my father stated that I was aboard. Should I inform NVC that I am in the country and would like to do AoS instead of CP?
3. I assume that I can apply for EAD/AP along with the family-based I-485. Am I right?
4. Do you have an estimate family-based I-485 processing time? I was told about six month. Is it true?
5. Please give me a fee quote for I-485/EAD/AP?
Thank you so much. I am looking forward to your reply.
Sincerely
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raysaikat
10-10 05:58 PM
Thank you very much for all your support. If they are able to transfer his visa, then I am suspecting that they will do fraud with me. Can I inform USCIS about our domestic problem ? If they receive any application about visa transfer. How can I know that ? I don't want my visa used by them at all.After that they can do anything with me. Please help. Thanks!
There is nothing called "VISA transfer". All VISA petitions are "new". In some cases, if the person is already in US in legal status, then USCIS will provide I-94 with the VISA approval notice so that the person does not have to go out; otherwise s/he has to go out of US, get a VISA stamp (if s/he has no VISA stamp for that category) and return on that VISA.
At the time of his new VISA petition, if your dependent wants to claim the he is in H-4 status (so that USCIS gives him I-94), he has to submit copies of primary's (yours) I-797, VISA stamp, etc., with his own application to prove that the primary is in status. In your case, ask your employer to withdraw the H1-B application from USCIS once you leave US. This way your dependent will not be able to use your I-797 to prove his status. AFAIK, usually an employer does not do so since it is additional cost for them. Keep a copy of the letter/email you send to your employer requesting them to withdraw the H1-B petition, and the letter/email you send to your dependent informing him about your departure and that he will be out of status from that time (keep proof of delivery for any physical mail). That should protect you.
You may choose to tip off ICE (1-866-DHS-2-ICE) after your departure that your dependent has not left US, and is out of status. He will not start accruing "illegal presence" until 6 months, but he will be "out of status" from the day you quit your US position. I believe he cannot stay in US as "out of status" (i.e., if ICE wants, they will be able to deport him). In any case, you should take a decision to do such a thing only after considerable thought and keeping aside any anger from the decision process.
There is nothing called "VISA transfer". All VISA petitions are "new". In some cases, if the person is already in US in legal status, then USCIS will provide I-94 with the VISA approval notice so that the person does not have to go out; otherwise s/he has to go out of US, get a VISA stamp (if s/he has no VISA stamp for that category) and return on that VISA.
At the time of his new VISA petition, if your dependent wants to claim the he is in H-4 status (so that USCIS gives him I-94), he has to submit copies of primary's (yours) I-797, VISA stamp, etc., with his own application to prove that the primary is in status. In your case, ask your employer to withdraw the H1-B application from USCIS once you leave US. This way your dependent will not be able to use your I-797 to prove his status. AFAIK, usually an employer does not do so since it is additional cost for them. Keep a copy of the letter/email you send to your employer requesting them to withdraw the H1-B petition, and the letter/email you send to your dependent informing him about your departure and that he will be out of status from that time (keep proof of delivery for any physical mail). That should protect you.
You may choose to tip off ICE (1-866-DHS-2-ICE) after your departure that your dependent has not left US, and is out of status. He will not start accruing "illegal presence" until 6 months, but he will be "out of status" from the day you quit your US position. I believe he cannot stay in US as "out of status" (i.e., if ICE wants, they will be able to deport him). In any case, you should take a decision to do such a thing only after considerable thought and keeping aside any anger from the decision process.
more...
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usdreams
05-25 02:01 PM
Hi kzinjuwadia,
Thank you for your reply, made me relaxed, hopefully, things will go smooth and without any RFE on my side, already had so many problems with my wife's case and hopefully, we will get her GC very soon thru the court (She was out of status on H4 and I-485 denied and she was put in deportation proceedings and we got retroactive H4 NPT Approval and filed the I-485 in the court and hopefully will get her GC soon since my PD is current).
Thanks Again.
I don't think infopass does any harm to you. it may give more info ahead of time. I had infopass on may 12 as one of my friends with later PD got the approval email. the IO told me the case is approved and approvals are mailed already. got the GC next day :) This is my experience. I don't know if anyone had a bad experience at infopass or something that caused additional problem for their case. I think your's is a genuine case as your PD is current and it's almost month end and many with PD after you are already approved.
Thank you for your reply, made me relaxed, hopefully, things will go smooth and without any RFE on my side, already had so many problems with my wife's case and hopefully, we will get her GC very soon thru the court (She was out of status on H4 and I-485 denied and she was put in deportation proceedings and we got retroactive H4 NPT Approval and filed the I-485 in the court and hopefully will get her GC soon since my PD is current).
Thanks Again.
I don't think infopass does any harm to you. it may give more info ahead of time. I had infopass on may 12 as one of my friends with later PD got the approval email. the IO told me the case is approved and approvals are mailed already. got the GC next day :) This is my experience. I don't know if anyone had a bad experience at infopass or something that caused additional problem for their case. I think your's is a genuine case as your PD is current and it's almost month end and many with PD after you are already approved.
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dtekkedil
07-03 10:47 AM
I guarantee you they won't do a thing with it. in fact they won't even be able to take it home (the workers that is) because they are not allowed to, it's almost like accepting bribes, right? Hey I have an idea, let's all apply lipstick and kiss a piece of paper and send that :D yes, even guys, it's for the greater good:D
LOL!
You are missing the point! Those flowers aren't meant for them! It is to show our protest in a unique way that will attract attention from the media! Till date there are only 3 websites that I have come across that covers this fiasco... Don't you want our plight announced in the media???
It may not make a difference today... but it will definitely make a difference tomorrow if we keep it up. Let the public know more about this broken immigration system. Raise awareness about every pain that we go through!
LOL!
You are missing the point! Those flowers aren't meant for them! It is to show our protest in a unique way that will attract attention from the media! Till date there are only 3 websites that I have come across that covers this fiasco... Don't you want our plight announced in the media???
It may not make a difference today... but it will definitely make a difference tomorrow if we keep it up. Let the public know more about this broken immigration system. Raise awareness about every pain that we go through!
more...
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Winner
05-16 09:56 AM
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GoGreen
07-18 10:32 AM
If EAD is not filed along with I485 application, Do we need to wait for I485 reciept to file EAD or a copy of 485 application is enough?
Thanks,
Rajeev
Can someone who might have some information help me and Rajeev by answering Rajee's question..thanks.
Thanks,
Rajeev
Can someone who might have some information help me and Rajeev by answering Rajee's question..thanks.
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chanduv23
12-25 11:30 AM
Great Idea!
I'm thinking of printing some and leaving it in local worship places mostly visited by immigrants(in my case its a hindu temple)
You can post it on the notice board. Generally temples charge $2 or $5 for putting up a notice.
I'm thinking of printing some and leaving it in local worship places mostly visited by immigrants(in my case its a hindu temple)
You can post it on the notice board. Generally temples charge $2 or $5 for putting up a notice.
immilaw
09-17 12:05 PM
Explain your comments more clearly - do you mean EB1 unused is not getting used by EB2 India/China? If so, this is a matter of grave concern, and yes, we need to find out more information on this. We have to wait till DOS publishes Visa number usage this year. All EB1 and EB2 numbers should be used by over-subscribed countries in those categories and by no means by EB3.
Find out/research as much as you can on this - we need to understand what is going on.
I will in the next few days and will let everybody on the forum know. As I said my knowledge is based on the information from this form and from immigrationportal.com. I will read the section thoroughly, I think it is Sec 201 of INA and will also try to get the information from other sources.
Find out/research as much as you can on this - we need to understand what is going on.
I will in the next few days and will let everybody on the forum know. As I said my knowledge is based on the information from this form and from immigrationportal.com. I will read the section thoroughly, I think it is Sec 201 of INA and will also try to get the information from other sources.
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."
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