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[quote=phaster][quote=flu]yawn[/quote]
Asleep at the wheel?
10 trillion in bonds w/ a negative interest rate, throw in another 10 trillion yielding less than one percent and IMHO its a “bubble” situation that one should be aware of and prepared for
http://www.wsj.com/articles/negative-yielding-debt-tops-10-trillion-1464915656
the knock on effects are a dramatic rise in asset prices (like commercial real estate) because some types of collateral (like commercial real estate) is no longer constrained by any historic measure from my look at the data in various markets (around the world!)
[quote=loopnet.com]
Current San Diego market trends data indicates an increase of +8.6% in the median asking price per unit for Multifamily properties
http://www.loopnet.com/San-Diego_California_Market-Trends
[/quote]so, in order to pay for higher priced rentals (i.e. cause and effect)
[quote=cbs8.com]
San Diego rent is through the roofSAN DIEGO (CBS 8) – San Diego may be a beautiful place to live, but it has become more and more expensive for renters. San Diego rent has increased three-percent in the past year.
An increase in demand has rent skyrocketing. More and more people are moving into San Diego and are are willing to pay top dollar to live in America’s finest city.
Jamie Pullman, a broker with Downtown Condo Guys, sees brand new properties come online before many in the public do. He said he’s not stunned that rent continues to climb in San Diego.
A study by Apartment List shows San Diego placed fourth for both most expensive rents and highest rent growth in California for the month of June. Rent grew three-percent in San Diego, but it’s not the only pace in the state of California to see rent increases.
Long Beach has also seen rent go up. However, in places like Santa Ana, rent has gone down.
In San Diego it costs a median price of $1,510 for a one-bedroom and $2,020 for a two-bedroom. In San Francisco, renters are paying nearly $5,000 a month for a two-bedroom.
In Pacific Beach, on average a studio apartment will go for about $1,600.
The highest vacancy rates are in East County and South County.
Despite the rent hike, there are new inventory and places coming online everyday – which forces some rental properties to become more competitive and bringing down rates.
According to the San Diego County Apartment Association, the vacancy rate in residential units across the county is only four-and-half percent.
http://www.cbs8.com/story/32359539/san-diego-rent-is-through-the-roof
[/quote]looking at global markets, we see:
http://www.npr.org/2016/07/07/485058709/with-brits-leaving-the-eu-greeks-worry-about-europe-s-future
so given all the horse $hit, my interpretation of the data is,… there exits another bubble (of sorts which is not yet recognized by 99.99% of the population) so best not to be asleep at the wheel![/quote]
I don’t get the point of your paranoia. If things were to collapse, its doesn’t happen all the sudden overnight. If you are really that paranoid about things cratering then leave your money in a 1%CD+, and wake me up 8 years from now to let me know how that worked out for you. My 16+ years in a well diversified portfolio seems to worked alright…Afterall, I doubt I would have been able to live free and clear on a primary and almost all rentals had I left everything in a 1%CD. Just saying…
Ubber bears are just a funny a perma bulls. The later loses money by staying in the markets too long or entering too high. The former loses money by convincing oneself over paranoia and the sky is falling mentality to never to enter, just like housing starting in 2009.
[quote=flu]
I don’t get the point of your paranoia. If things were to collapse, its doesn’t happen all the sudden overnight. If you are really that paranoid about things cratering then leave your money in a 1%CD+, and wake me up 8 years from now to let me know how that worked out for you. My 16+ years in a well diversified portfolio seems to worked alright…Afterall, I doubt I would have been able to live free and clear on a primary and almost all rentals had I left everything in a 1%CD. Just saying…Ubber bears are just a funny a perma bulls. The later loses money by staying in the markets too long or entering too high. The former loses money by convincing oneself over paranoia and the sky is falling mentality to never to enter, just like housing starting in 2009.[/quote]
who knows what the future might bring,… the economy could crash all at once, or it might not (I’ll be the first to admit there is no way of knowing w/ 100% certainty)
as I see things ITS NOT PARANOIA but rather “healthy skepticism” of the system if one considers that ALL “investors” (i.e. you, me, insurance companies, pension funds, etc.) are seeking investment vehicles that at a minimum out pace the cost of living
since there is a finite class of assets that consistently produce returns like real estate rentals in areas with relatively strong job markets (i.e. san diego, the bay area, new york, london, HK, etc.) we see that “money” is attracted to those assets/areas which in turn causes “real estate” prices in prime areas (like SD) to rise!
[quote=loopnet.com]
Current San Diego market trends data indicates an increase of +8.6% in the median asking price per unit for Multifamily properties
http://www.loopnet.com/San-Diego_California_Market-Trends
[/quote]it then follows in order to service the debt load for newly acquired RE “investment(s)” in prime areas, that “rents” have to increase!
[quote=cbs8.com]
San Diego rent is through the roofSan Diego may be a beautiful place to live, but it has become more and more expensive for renters. San Diego rent has increased three-percent in the past year.
http://www.cbs8.com/story/32359539/san-diego-rent-is-through-the-roof
[/quote]ALSO (any realistic math model of the real world) one needs to consider the boundary conditions or “limits” (i.e. water, energy like oil for transportation and electricity for manufacturing, skill sets of the people in the area, etc.) because all these ingredients mix together and produce an economy…
as it stands in the san diego area IMHO there are too many $hit for brains individuals who don’t understand basic math, are corrupted to various degrees AND influence policy/operations, so the logical conclusion is the economy will somehow have to reflect the reality of the groups corruption/mismanagement
http://www.leanproduction.com/theory-of-constraints.html
looking at history, its inevitable that the system will have some kind of adjustment like a major deleveraging (i.e asset deflation or weakening of various currencies) because the data indicates a situtation that exists right now HAS NEVER EXISTED and my gut feeling is its unsustainable!
if you think the current situtation is sustainable, then wager accordingly and best of luck w/ that…
FYI another way I’ve thought about the issue (i.e. a bubble of sorts w/ various knock on effects) is to consider the case where higher end RE is a way to is a way to launder “dirty” money:
http://www.cnbc.com/2016/01/14/money-laundering-rules-could-chill-luxury-real-estate.html
http://www.npr.org/2016/06/16/482362934/when-dirty-money-becomes-luxury-real-estate
basically “hot” money has driven RE prices upward (in specific markets), which might be likened to saying the 80%+ of the population that has not benefitted (to a great degree) from the economy since 2009 AND LIKEWISE 80%+ of the RE markets have not see a recovery (to a great degree)…
WRT how to “honestly” navigate/survive an economic environment w/ USA bank CDs returning ~ 1% at best, that’s the question ALL global “investors” (i.e. you, me, insurance companies, pension funds, etc.) are seeking an answer for!
the only thing I know for sure is that 10+ TRILLION is being held in various accounts w/ negative interest rates AND this tells me there is a shitload of money that is more concerned w/ return of capital than return on capital!! AND/OR have not found an investment vehicle that “they” feel is safe/suitable
looking at the big picture, I note that there are various commitments made by insurance companies and various public pensions funds being in the same boat as all the other money in the world
eventually TSHTF BECAUSE its pretty hard if not impossible for various “honest” public pensions portfolio managers to find investment vehicles that can yield the “high” AND “consistent” returns (as calculated by actuaries) which are needed to maintain portfolio “sustainability” given all the promises made (BTW same idea applies to insurance companies but in general the portfolios are much better managed than public pension funds)
to see bull$hit/corruption/mismanagement one need look no further than the “local” public portfolio which has a long history of a 13th pension payment… which sure as hell looks like a its well on its way to phuck things up in the economic realm
http://www.sandiegouniontribune.com/news/2015/dec/18/13th-check/
BTW the “ubber bear” or “perma bull” reference you made, does not apply in my case since I have not been all out, or all in (and don’t plan to change my style)
so while we wait for the other shoe to drop, I’ve been partial to preferred stock(s) (as a viable alternative to bank CDs that yield ~1%) because shares generally have a dividend >1% (which must be paid out before dividends to common shareholders) AND as an asset class it seems to have an acceptable risk/reward ratio
from what I gather you have various assets to play w/ like equities and RE (DISCLOSURE as do I) so WRT your proclaimed “alright” 16 year return, all I can say is PAST PERFORMANCE DOES NOT NECESSARILY PREDICT FUTURE RESULTS
https://www.sec.gov/answers/mperf.htm
for aspiring “investors” w/out sufficient economic resources to manage actual properties (i.e. play the RE “investment” game) and seek an alternative to 1%CDs try looking @ REIT etf(s) which offer a means of diversification, yield and a possibility of appreciation
DISCLOSURE the suggested “link” that follows:
http://money.usnews.com/funds/etfs/rankings/real-estate
is just part of forum bull$hit and not intended to be taken as “investment” advise! also FWIW yeah I think I’m smarter than everyone else!! (just like everyone else!!!) and I have a certificate to prove it!!!!
http://time.com/4365746/john-oliver-retirement-last-week-tonight/
[quote=SK in CV]
Justice Stephens was talking about obscenity. I have little doubt he knew exactly what he was talking about. You went backwards. Justice Stephens never referred to what he was talking about. You have. And you proceeded to provide what appeared to be evidence to support your conclusion. However, nothing you provided either supports, or even is specifically related to a bubble.[/quote]invoking the “equivalence principle” (which is a concept in physics developed by Einstein) and applying it to economics… what ever name is given the phenomenon of the unavoidable economic blunder due to prolonged low AND/OR negative interest rates compouned w/ other financial system factors, to the man/woman on the street the end result is they are going to feel like being “up $hit creek, without a paddle”
so not being an economist I’ll admit I used the term “bubble” in a non conventional sense (but the logic is solid)
WRT “obscenity”
if memory serves (from high school civics) the traditional context of the expression “I know it when I see it” is acceptable types of PORN and sex” acts depends upon community standards which vary region to region (person to person)
again enlisting the idea of the “equivalence principle” and applying it to the topic @ hand, what I consider an “obscenity” (for example) of corrupt economic mis-management (looking at the sum of the reported parts)… is BAU (Business As Usual) of individuals who influence local policy/operations:
[quote=kpbs.org]
City’s Development System A Major Fraud Risk, Says Auditorhttp://www.kpbs.org/news/2012/jul/03/citys-development-system-major-fraud-risk-says-aud/
[/quote][quote=kpbs.org]
Illegal Campaign Cash Tied To 4 Prominent San Diego Politicians
http://www.kpbs.org/news/2014/jan/21/tech-ceo-and-former-sdpd-detective-accused-funneli/
[/quote][quote=nbcsandiego.com]
Lawsuit Opposes Destruction of Old San Diego City Hall EmailsOn Feb. 27, 2014, interim Mayor Todd Gloria announced the adoption of a policy, known as “AR 90.67,” that would authorize the destruction of city emails that are more than one year old…
“Had someone not leaked the interim mayor’s announcement to the press, the public would not have found out about AR 90.67 until long after the email communications had been destroyed,”
[quote=wsj.com]
San Diego Pension Dials Up the Risk to Combat a Shortfallhttp://www.wsj.com/articles/san-diego-pension-dials-up-the-risk-to-combat-a-shortfall-1407974779
[/quote][quote=sandiegouniontribune.com]
A troubling mess at the City Attorney’s Officehttp://www.sandiegouniontribune.com/news/2016/apr/22/city-attorney-botched-cases-goldsmith/
[/quote][quote=sandiegouniontribune.com]
Azano’s son charged in campaign donations caseSAN DIEGO — The prosecution of Mexican businessman José Susumo Azano Matsura, accused of orchestrating illegal donations to the campaigns of San Diego politicians, has widened to include his son.
http://www.sandiegouniontribune.com/news/2016/mar/04/edward-susu-azano-charged-campaign-donations/
[/quote][quote=sandiegouniontribune.com]
City pensioners get ’13th check’ bonusMore than $6.1 million has been distributed to retired San Diego city employees in the form of a “13th check” — beyond their usual 12 monthly payments — making this year’s holiday bonus the largest such payout in the history of the three-decade-old practice.
But it’s become a source of conflict as the city’s pension system faces a $2 billion shortfall in promised payments, which remains a taxpayer burden and has led to budget crises in the past at City Hall.
http://www.sandiegouniontribune.com/news/2015/dec/18/13th-check/
[/quote][quote=books.google.com/books]
Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership (edited by Serge Matulich, David M. Currie)Though SDCERS investments were earning well above the 8 percent rate of return estimated by the system actuaries, under normal conditions investments surpluses are required to make up for below-average returns in other years to achieve the average rate of return. Therefore, unless the actuaries’ estimates are grossly incorrect, in the long run true “surplus earnings” are impossible. The use of surplus earnings for the purposes other than maintaining the pension system, such as to expand existing benefits should be viewed as a loan from the system THAT WILL REQUIRE REPAYMENT IN THE FUTURE.
page 286
[quote=CA renter]
“Standard And Poor’s Gives San Diego County Its Highest Rating
San Diego County has earned the highest possible rating from all three of the top credit agencies—Fitch, Moody’s, and Standard and Poor’s.”[quote=NPR]
After the stock market crash of 1929, the agencies began to also rate bond investments for banks — at the request of the U.S. government. But things began to change in the 1960s and 1970s. Instead of charging investors for their ratings information, the agencies began to charge the bond issuers themselves for the ratings.“People were quite critical of this and said it could create a conflict of interest,” Partnoy says. “You can imagine what the difference between ratings of restaurants and movies might be if instead of the Michelin Guide or the Zagat guide, if the restaurants or movie companies themselves were paying the raters to be rated, it’s an obvious conflict of interest. And now it’s very commonplace that companies and GOVERNMENTS — anyone who wants to borrow money — THEY ARE THE ONES WHO ARE PAYING FOR THE RATING.”
http://www.npr.org/2011/08/17/139675717/rating-the-wall-street-ratings-agencies
[/quote][quote=TIMESOFSANDIEGO.COM]
Financial Outlook Shows San Diego’s Revenue Will GrowRevenues to the city of San Diego are projected to “modestly improve” over the next five fiscal years, while expenses will continue to rise, according to a financial outlook to be delivered Thursday to the City Council’s Budget Committee.
The five-year outlook, released annually in November by the mayor’s financial staff, projects steadily increasing general fund surpluses through Fiscal Year 2021.
The anticipated surpluses begin at $200,000 for the next fiscal year, and grow in subsequent years to $7.9 million, $25.1 million, $46.4 million, and $73.7 million.
THE PROJECTIONS DON’T INCLUDE FACTORS THAT OCCASIONALLY POP UP, like increases in contributions to the employee pension system.
[/quote][quote=LATIMES.COM]
PUBLIC “Pension liabilities must be included on the balance sheets of the agencies responsible for funding their employees’ pensions. Until now liabilities have been buried in arcane footnotes that few read and even fewer understood”http://articles.latimes.com/2014/apr/09/opinion/la-oe-fritz-pension-liability-california-20140410
[/quote]sadly “idiocracy” isn’t a bubble that is going to pop and go away anytime soon, actually at all levels of government it seems to be the ever growing “new normal” trend (and this will have profound economic consequences)
idiocracy [id-ee-ok-ruh-see]
noun
(1)a form of government in which a country or territory is run by fools, (2)an act or actions that come from ideas or beliefs that are not smart
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