[livinincali]

[quote=flu]
I am more curious if they are going to come up with some more creative schemes to offer rent to own plans for subprime people that can’t own otherwise. Seems like if we are expecting a flat resale market in those areas, it would be a way to offer ownership to those who cant under traditional ways and increase profits at the same time.[/quote]

I doubt it. I think they’ll just keep securitizing the under performing assets and dump them on some pension fund like CalPRES. What those eventual owner do with the assets if prices fall or the rental market softens, who knows. If you’re CalPRES you probably just hold on, if your some small hedge fund holding this junk maybe you liquidate or you get liquidated.

At some point there will likely be a negative consequence of the mad dash to gobble up rental properties that we saw the previous 2 years but knows when and how it play out. We’ve never seen a huge institutional investor push into residential real estate before.

[livinincali]

[quote=flu]I don’t see what the problem here is. Blackstone doesn’t seem to be cashing out and selling their portfolio. They were active in high distress areas and bought distressed homes primarily sfh around 200k or lower. If it all, it proves.
[/quote]

They aren’t cashing out in terms of selling the properties on the open market. They are cashing out in the sense that they are transferring their personal ownership to investors buying the bonds. Blackstone no longer owns the properties, the bond holders own the properties. The bond asset prices are priced at the newly appreciated homes belonging to the portfolio. It’s highly likely Blackstone is selling the crappy part of the 41K portfolio to a bunch of unsuspecting investors because the rental market is hot and appreciation is good right now. Just like the banks we’re selling garbage MBS, the rental market investors are doing the same thing.

Will this effect the price of your San Diego home? Probably not. The portfolio probably contains a bunch of junky properties in Stockton, Phoenix, Las Vegas and some Miami condos for good measure. The point is that Blackstone is betting the rate of appreciation in rents and house prices is going to slow down and they are going to unload while the getting is good.

[livinincali]

[quote=cato1974]Thanks for the quick response all… one question:
do you mean that going from Del Sur to Fallbrook will be worse than going from the Northern edge of SD or vice versa. I’m assuming vice versa. 🙂

We will also look in Temecula, but prefer the schools in the PUSD or even the San Dieguito district.

Is carlsbad that close? google maps has me at 35 min from Carlsbad to Fallbrook.. essentially the same time from the Del Sur/Black Mountain area.[/quote]

Carlsbad isn’t that close. Carlsbad to Fallbrook is probably 30 minutes on the 78 or the 76 which tends to have bad traffic and plenty of accidents. As far as I know the 15 express lanes are only open in one direction at a time. Southbound in the morning, Northbound in the evening, but since you are heading against traffic it shouldn’t be a problem.

PUSD has a good reputation in terms of quality, but at the same time the administrators are the morons that sold balloon payment bonds to fund school upgrades. You can find out more about that here.

[livinincali]

[quote=afx114]Andreessen Horowitz just invested $25mil in Coinbase

I like Chris Dixon’s take:

“One of the interesting things about Bitcoin is the contrast between how it is portrayed in the press and how it is understood by technologists. The press tends to portray Bitcoin as either a speculative bubble or a scheme for supporting criminal activity. In Silicon Valley, by contrast, Bitcoin is generally viewed as a profound technological breakthrough.”

Interesting he draws parallels to the HTTP/SMTP protocols. By themselves they are pretty useless — it is the apps built on top of them (the web / email) that make them valuable. The same is true with Bitcoin if you think of it as a protocol rather than as a currency or payment method.

I still think that people writing off Bitcoin as a scam or fad or pyramid scheme are missing the bigger picture. Looks like the big boys in Silicon Valley agree with me.[/quote]

The underlying technology is interesting, but I still don’t think it can interrupt the credit card company translation fees because it doesn’t offer the protections that those transaction have. Nobody works for free so in order to be able to dispute erroneous transactions have recourse when you wallet gets lost of stolen you need a central payment processor that’s willing to handle those type of disputes. Bitcoin doesn’t do this, so yeah you can transact in bitcoins and avoid the transaction fees but realize when you get ripped off it’s permanent. There no middle man to help you. That’s why it’s been popular in the black market because you accept those risks when transacting in that market.

The processing power of completing a transaction is what bitcoin mining is, so are people who are providing the resources to complete transactions going to continue to do that if and when bitcoin mining gets too hard or bitcoin values get too low. Can you even transaction in bitcoins without bitcoin miners. My understanding is no but maybe you have more insight into that.

[livinincali]

Obviously if the bankruptcy proceeding results in a pension haircut I would expect the unions to sue the state. They would use this clause in the constitution to say the parent (i.e. the state) is responsible for the debts of the subsidiary in this case Detroit. Bankruptcy law doesn’t seem to stop the creditors from going after the parent even once the subsidiary bankruptcy has been completed. I would guess that whatever the state court decides would be the end of it. The USSC probably doesn’t get involved because I can’t think of a way that Michigan’s constitutional pension guarantee violates anything in the federal constitution.

Now say the unions win and enforce Michigan to make up the debts of Detroit. That would force Michigan to raise taxes and I would guess that you’d end up with a referendum to overturn that constitutional guarantee.

[livinincali]

[quote=SK in CV]I’m not sure where it says the state’s obligation can be dismissed. The state isn’t even a party to the bankruptcy.

If two parties owe a debt, and one of them is bankrupt, that doesn’t dismiss the other party. I don’t think the bankruptcy judge has the power to dismiss any obligations of the state.[/quote]

The problem is bankruptcy is a federal proceeding and in section 8 of the constitution it says

“To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;”

The federal constitution trumps the state constitution and this bankruptcy proceeding is in federal court not state court.

[livinincali]

[quote=harvey]Although I’m not surprised by this ruling, it’s difficult to say to what extent it can be used to predict the outcome of California’s pension crisis. States cannot file for bankruptcy, and many of our municipal pensions are legally entangled with the state pension system.
[/quote]

States can’t declare bankruptcy but they can default. Look at how the state resorted to paying bills in IOUs a few years back. What if the state just skips a pension payment, and then another every time it doesn’t have the money. You’ll never get that missed payment back because the payments stop when you die. What if they pass a special pension income tax. We honored the promise we just paid for it by taxing the recipients.

The net result is the same. Even if we get the inflation solution that some here like to claim is a solution. They will play with the CPI numbers so that your payment won’t go up as much as the inflation. Bottom line is most public employee pensioners are not going to get the 60%+ of highest salary in purchasing power during retirement. They’ll likely get something unless the current beneficiaries and courts decide the pension fund balances need to be zeroed before doing something.

[livinincali]

I had my bumper replaced at torreypinescollisioncenter.com when I got rear ended. I do believe the quote was right around the $800 you mentioned but insurance paid for it.

[livinincali]

[quote=EconProf]Perhaps a lot of Gate’s and Buffett’s increased generosity later in life is due to a natural inclination to be more reflective and giving as we age. Their consumption appetites are satisfied by a tiny fraction of their wealth, so they look around and discover how much good that wealth could be doing.
Come to think of it, the world might be worse off if they had decided at a younger age to discover philanthropy. All the money Gates and Buffett piled up in their 40’s and 50’s would not have materialized and be doing good things now.[/quote]

The generosity could also be for more selfish reasons like leaving a legacy. We talk about Ford, Carnegie, and Rockafeller today, but will we be talking about Buffet, Gates, and Jobs 20, 30 40 years into the future. Without someway to establish a lasting legacy you can certainly be forgotten. Did Jobs establish a legacy or is he just a going to end up as a cult hero that those geezers in their 70’s are talking about 50 years from.

[livinincali]

[quote=6packscaredy]
if we taught nothing but mathematics all day long, it would still not be “valueneutral”. im not sure exactly what value that would be expressing, but im pretty sure it would be some technocratic nightmore and it’s not neutral.
[/quote]

The fundamentals of reading are “valueneutral”.

“The cat is sleeping.”

Has no moral value behind it. It’s just a simple statement. If the cat is sleeping it’s a fact, if the cat is not sleeping then it is a lie, but it doesn’t impose some sort of cultural view. Does the selection of cat versus dog create some sort of underlying “value”.

1 + 1 = 2 no matter what, unless you’re economist searching for a free lunch.

[livinincali]

[quote=afx114]
Don’t get me wrong, I’m not saying Bitcoin is the greatest thing ever or that it will take over the world. It obviously has issues like any new thing does, but I’m not ready to write it off as a Ponzi scheme or the Friendster of finance either. As a h4x0r it kinda gives me a stiffy. I’d just like to hear some cogent arguments against it other than “it’s a ponzi scheme” or “it’s a fad” or “who cares?”[/quote]

I think you provide the answer right here.

[quote]
For the record and full disclosure, I don’t own any Bitcoins. And given that it just passed $1000 I probably won’t be owning any anytime soon.
[/quote]

It’s too volatile in it’s price swings to operate as a currency. Essentially the bitcoin economy is in massive deflation right now. I.e. it used to cost 50 bit coins to buy a new car now it takes 20. Sometime in the future it will likely suffer massive inflation. It’s just incredibly hard to operate in an economy where the currency is subject to massive price swings.

[livinincali]

[quote=flu]QCOM being at a 52 week high surely doesn’t help low prices here….[/quote]

I think CV is driven by the massive medical complex surrounding UCSD. QCOM engineers and even the mid level managers aren’t making the $200-250K it takes to buy in CV. MM is probably more reliant on QCOM health than CV.

The reality is that homes around a high paying job center are always going to be more expensive no matter what kind of shape they are in because there’s always going to be some workaholic that’s willing to pay 50% of his/her gross to be close to work. They don’t do anything other than work so they can afford to budget 50% of gross to housing. Of course highly paid job centers can change.

Who knows what happens with a place like MM. Will QCOM keep hiring $100K a year engineers to buy homes from retired military personal that bought in the 1970’s. Mobile growth appears to be slowing down. QCOM has had lower QoQ earnings every quarter this year.

[livinincali]

[quote=paramount]The world has had enough of dollar domination.

That’s one reason bitcoin is taking off; central banks will try to shut it down if it becomes to much of a threat.

And yet, open source money (bitcoin or it’s successor) is here to stay.[/quote]

Bitcoin is no different than me printing up a finite supply of livinincali bucks. Are you going to take livinincali bucks as payment for your goods or services. You’ll likely only do so if many people in your network of goods and services suppliers do so as well. Bitcoin is intrinsically worthless, and will likely go the way of many pyramid schemes eventually. If you got into bit coin back in 2009, 2010 now would be the time to cash in to the new suckers that are going to find these things out as the worthless security certs they are. You’re better off buying bottles of whiskey than bit coins.

[livinincali]

[quote=CA renter]Social Security is a defined benefit retirement plan/insurance, and while employers contribute to it (which would likely always be the case), it is a public plan. I am a staunch supporter of DB pension plans…for everyone. Always was, and always will be. 🙂

I should amend my comment by saying that the employer would contribute to the plan, but that the plan is fully portable, and not on the employers’ books.[/quote]

You’d have to radically redesign most DB plans because it would be incredible difficult use a percentage of highest or average of highest salary and transfer the benefit. If you had a job that was averaging around $50K and the actuaries were planing for a $35K DB, and then went to a $100K which would correspond to a $70K DB there’s not a way for the DB to pay. The money to pay you $70K annually wasn’t planned for and doesn’t exist.

I favor defined contribution that can be switched to a defined benefit using something like an annuity. That way you don’t have any of the incentives for various abuses by employees and employers. Want the safety of a DB put your total defined contributions and investment earnings into a risk pool that guarantees a fixed payment.

The reason nobody getting a defined benefit pension likes that idea is because they know that they can get more by gaming their defined benefit than an annuity would pay from their defined contributions. The problem is that somebody has to make that difference up and the reality is that nobody will so defined benefit pensioners are going to get screwed somehow. Most likely it will come through bankruptcy imposed haircuts.

[livinincali]

[quote=CA renter][quote=spdrun]I’m saying that people staying out of work is a GOOD thing — I consider one-to-1.5 (i.e. one is part time, or both work 30hr/wk) working parent families (assuming two parents) to be ideal. You’d have fewer people working just for the insurance, and insurance/benefits would become less of a tool for employers to tie employees to jobs with crappy conditions of employment.[/quote]

Could not agree more, spdrun. By taking healthcare (and retirement) off of the employers, it enables them to be more nimble and focus more on getting the job done. As you’ve said, it also gives workers the flexibility to go where they are best suited since they’re not tied to the job for healthcare (or retirement) reasons. IMHO, employers should have nothing to do with healthcare or retirement issues.[/quote]

CAR I think somebody hacked your account. Your giving up on defined benefit retirement plans? It can’t be true.

[Author]

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