[livinincali]

I wouldn’t get too worked up about this. The bank can still attach a lien to the house so you can’t really profit from the sale. Plus the IRS is going to be coming for that unearned income tax bill. I don’t know if you got all that lucky when the IRS says you owe them $40-50K right now for that $200K house you got for free.

[livinincali]

Philly for me was a visit once kind of place. It was ok it just feels run down in most parts of the city.

[livinincali]

I think the odds are definitely higher than usually for a surprise on the downside. When everybody thinks things will keep growing and the worst case might be flat to little growth I get somewhat nervous. There’s definitely some signs of a coming recession and I don’t see many people paying attention to them. China is slowing, Europe is in recession, Japan is in recession, and I don’t think we remain uncoupled or unscathed forever. I think we will follow the rest of the world into recession and nobody seems prepared for it so I expect some serious volatility once people finally realize it.

That said I’m still inclined to believe a euphoric blow off top in the markets before we see a big time correction. Maybe this fall is when it shows up.

[livinincali]

[quote=CA renter]
We desperately need to direct more public funding to education instead of constantly starting extremely costly wars around the world.[/quote]

No we need to figure out ways to make college cheaper not throw more money at the universities so they can hire more overpaid administrators and build more useless entertainment type complexes. Undergraduate math, undergraduate chemistry, and undergraduate just about anything hasn’t changed much in the past 50 years. Why does it cost so much more to teach the same material in the same classrooms with the same teachers. As online technology improves it should be costing less to learn and take something like Calculus 101, but instead it costs 200,300,500% more than it did just 10-20 years ago.

The question become why? While there might be some nuances and details,it really boils down to an unlimited supply of money that you can borrow and pay back in some distant future.

[livinincali]

You can put whatever you want on your filing status, 0, 1, 9. It doesn’t have to be accurately reflect your real status. If you want a tax refund at the end of the year file 0. You’ll probably end up with a huge tax refund but that will be reflected by how much less you take home on each paycheck. It really boils down to do you want to take home say $2500 every 2 weeks and pay the government $1000 at the end of the year or do you want to take home $2300 every 2 weeks and get $4200 back at the end of the year.

There is the concept of a marriage tax penalty but how much you are effected by it varies. Essentially as you go up the progressive tax code the numbers for single vs married don’t double. I.e. if you and your wife both make 80K adjusted gross income under filling single 44K for each of you would be taxed at 25% so 88K*.25 = 22K. If you filed married 74K would be taxed at 25% and the additional 14K would be taxed at 28%. You do have to exceed 146K adjusted gross income to be effected by this issue.

[livinincali]

If you were super disciplined (definitely banking the money and not using it for some other purpose), believed that inflation will remain low and home prices will come down in the future, option 3 makes some sense. Of course that’s a lot of what ifs that aren’t guaranteed. $500K for 1400 sf even in San Diego feels a little bubbly to me, but I gave up trying the rationalize the housing market, it’s driven by emotion way too much.

[livinincali]

[quote=The-Shoveler]Out side of significant catastrophic events (like war),

I believe the USA is in a very unique and enviable position to control it’s economic destiny.
We REALLY don’t need anyone else.[/quote]

Didn’t we prove the whole control and decoupling thing was a myth 6 or 7 years ago with China and Subprime is contained. They tried everything to contain subprime and they failed miserably. What makes you think this next set of geniuses is going to have everything under control when the bubble starts to pop again.

[livinincali]

[quote=flyer]Many variables will, no doubt, effect the outcome if this is put to a vote. You can bet big bucks will definitely come into play, and the voting public at large, who have no real vested interest in the outcome, other than viewing it as a “new place to shop and eat,” could skew the results in an unexpected way.

Whichever way it goes, I’m all for putting One Paseo on the ballot, and letting “the people,” rather than the city council decide the fate of this project.[/quote]

The big problem for the opponents is that they can probably collect the signatures but I don’t think they want it ending up on the San Diego City ballot. There’s a bunch of voters in Mira Mesa, Clairemont, Golden Hill, etc that really don’t care all that much about those perceived to be rich folk in CV’s problems. It’s not a CV ballot initiative it’s a City of San Diego initiative.

[livinincali]

[quote=The-Shoveler]
IMO TPTB wanted the 2001 and 2008 crashes, but right now they are in a world wide coordinated fight to save the world economy (except bad payers like russia and venezuela) also to save local and fed Gov pensions.[/quote]

That’s an awful lot of faith in the fed and government’s ability to control bubbles and their outcome. I don’t have nearly that much faith in their ability to control things but when the next bubble pops I suppose you’ll always be able to say that’s when they wanted it to pop.

[livinincali]

[quote=harvey]
I’m skeptical that the wealth gap is a good measure of anything that really matters, especially going forward.[/quote]

I completely agree. If you do think that the wealth gap is the problem then understand wall street bailouts helped preserve that wealth gap. It’s just math. If wages are growing at 3% per year and asset prices in stocks, bond, and real estate are growing at a rate of 6,7,8% then of course those 2 exponential functions are going to run away from each other. That’s what creates the wider and wider gap.

The problem is those 2 exponential functions cannot stay in that state forever. All exponential functions eventually hit a wall and collapse.

[livinincali]

[quote=harvey][quote=livinincali] Would that have impacted some people in the middle and upper middle class. Yeah it would, but it would have hit those at the top harder than those in the middle.[/quote]

[quote]You’re probably happy that you 401K more than doubled from some hypothetical 100K to 250K but Bill Gates went from 30 billion to over 75 billion at the same time.[/quote]

Your second point completely refutes the first.

When Bill Gates only has “only” $30 billion, he still has incredible power, more net worth than literally millions of people combined, and tremendous opportunity to make more. He can take all sorts of risks, make all sorts of investments (and has access to the choice ones.)

When someone else who is Bill Gate’s age only has $100K, they are essentially trapped, unable to do anything but earn wages to get by and have almost no realistic opportunity to grow their wealth. If they have $250K, they may at least have a few more options.

There are reasons that “the rich get richer.” Making everybody poorer doesn’t change those reasons, it actually makes them more pronounced.

And of course there’s the fact that most of the very wealthy made their wealth long before any bailouts. Sorry, bailouts have nothing to do with the wealth gap. If anything they probably diminished it.[/quote]

Just do the math. If you the average paycheck to paycheck american with a net worth of $20K of saving who cares what happens to the stock market. Say the top 10% have a net worth of $1 million with 50% of that in stocks. So the wealth gap is a ratio of 50/1 or $980K. Say the stock market gets cut by 50%. Now the wealth gap is 750/20 = 37.5/1 or $730K. The wealth gap just shrunk right.

Or just look at this chart. Notice the time frames when wealth inequality shrunk a lot. What happened during those times?

[livinincali]

[quote=harvey]
The vast majority of wealth at the top tier was never bailed out.

It sucks that a bunch of people got a pass on irresponsible behavior after the housing bust, but most of them were in the middle tier. There were some at the top tier, but they only represent a small portion of the extreme wealth at the top.

I’ve mentioned this before many times and it is generally overlooked because it doesn’t fit anybody’s narrative, but take a look at who actually has the money:

http://www.forbes.com/forbes-400/list/#tab:overall

Almost none of these people received bailouts.[/quote]

Of course they were. All of these people have most of their wealth associated with their stock holdings. MSFT was around $16/sh in 2009. It’s 42 and change today. Do you think that price recovery in MSFT stock would have been possible without a variety of Bailouts, QEs and accounting rule changes. If the big investment banking housing like Goldman and others were allowed to blow up then wall street today would likely be trading at a lower multiple. Would that have impacted some people in the middle and upper middle class. Yeah it would, but it would have hit those at the top harder than those in the middle.

You’re probably happy that you 401K more than doubled from some hypothetical 100K to 250K but Bill Gates went from 30 billion to over 75 billion at the same time.

[livinincali]

[quote=flyer]
As far as exploring the possible options available in closing the “wealth gap,” I’m very much enjoying reading the in-depth analysis both you and CAr are providing. This is a big issue, and one that I believe will effect more and more people as time goes on.
[/quote]

The answer to closing the wealth gap is super simple. When the next crash occurs, DON’T BAIL ANYBODY OUT. The end. It’s really that simple. In most cases one man’s wealth is another man’s debt. Let the bad debt go bad and the wealth gap resolves itself.

[livinincali]

[quote=cvmom]I have been depressed to see our zoning processes in action. Money talks, that’s for sure. The voices of residents are much less important. Seems to me that CV homeowners better get ready for the negative impacts to our lifestyle and property values. I am glad our kids will soon be out of school, and we can move if we choose to.[/quote]

If it were up to the current residents there’d never be any development after their property was built. Welcome to NIMBYism. What are the really big negatives of a mixed use density project.

1) Traffic
2) Traffic
3) Traffic
4) Low income housing requirements (aka. I support affordable housing as far away as possible from my million+ dollar property)

[livinincali]

[quote=flu][quote=livinincali][quote=moneymaker]Wow 2.5% mortgage, I’m envious. That’s probably lower than the average car loan out there. Still ok with my 3.5%, but way to go flu.[/quote]

You can always hope we keep getting more like Japan. A 35 year mortgage there is 1.8%[/quote]

35 year mortgage? I’m waiting for 50+ year mortgages…[/quote]

50 year? pfff try 100 year in Europe and Japan. Of course with the way amortization schedules work it’s pretty stupid to go much longer than 30 years. Of course the american consumer is rather stupid, give them the option and some dumbass will take it.

http://homeguides.sfgate.com/longest-mortgage-7677.html

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