Forum Replies Created
-
AuthorPosts
-
livinincali
Participant[quote=CA renter]
Mind you, CalPERS used to manage almost everything in-house and had tight restrictions WRT what they could invest in — almost exclusively Treasuries with some smaller allocations to very highly-rated municipal and corporate debt. Wall Street lobbied hard both to change their allocations to riskier investments (those lovely “innovations” created by Wall Street, included), and then lobbied to have outside managers and consultants at the public pension funds. If not for those changes — the PRIVATIZATION movement at work — the “pension crisis” would be much less significant than it is today, if it were to exist at all.So…how’s that “privatization” thing working for you?[/quote]
Well it would be really tough to assume a 7.5% rate of return if you had to put most of you assets into treasuries and highly rated debt. Most of that is paying somewhere between 2 and 4% now and has been for awhile. If you have to assume 3-5% rates of return you’re screwed anyways.
Participant[quote=FormerSanDiegan]I agree with Hatfield and HLS here.
Going month-to-month is in your favor.
However, if you really want them to choose a 12-month lease, then don;t ask them, just send them a notice of intent to increase the rent under month-to-month agreement and give them a form with a box to check to give them a choice between the increased month-to-month costs or a new 12-month lease at the same rent (or modest increase).
box 1 – Renew 12 month lease at $X (e.g. no increase in rent).
box 2 – continue month-to-month with $X increase (as of a date far enough in the future that you can give 30 days notice, so e.g. 45 dayd from when you send the letter.).[/quote]
If I received a form like this as a tenant it would probably piss me off a bit. I’d certainly go out and look to see if there might be something better out on the market. The thing about sending out a new 1 year lease is it’s going to make the tenant go look at what’s out there. If you’re at or above current market rates the tenant might decide to leave while if they are on month to month they might not even bother to look. Rents in general have been rising but you never know what’s going on it your particular submarket until you look.
Participant[quote=flyer]I wonder if it’s really a question of “what we want,” versus, a confluence of events (some, beyond our control), that have irreversibly positioned us (as a country) in a situation where the financial “winners” in life will slowly, but surely diminish in number?
My wife is an exec in the film business, and we were having this very conversation with regard to a film she has worked on recently. “Elysium” presents a very thought-provoking scenario of what may or may not be in our future. (This is not an endorsement, merely a comment pertaining to the topic of this thread.)[/quote]
Doesn’t America already look like Elysium to a 3rd world rice paddy farmer. It depends on your perspective. I won’t argue that the natural state of an economy tends to concentrate wealth at the top, but if left to it’s own devices that concentration of wealth will collapse on it’s own. It’s when governments protect/bailout large monopolies that we are left with long lasting periods of concentrations of power. During the great depression wealth inequality declined.
It’s the choices we’ve made to bail out the wealthy over the years that has increased the wealth gap more than anything. Of course retirements and pensions depend on maintaining that wealth gap.
If there were no low income housing, no section 8, no rent control would rents be higher or lower. Would companies and landlords have to adjust their rents and wages to some level where people would be able to work in the area and afford to live there. The answer would likely be yes but those holding assets and those owning businesses probably wouldn’t like that solution very much. They’d rather fight over another government program that maintains their place in society and places the resulting burden on somebody else.
Participant[quote=The-Shoveler]Not saying it is correct (or incorrect)
Just saying it’s going to happen.
In Europe they have a tiered system,
High school/college age get a lower minimum
25 years gets a living wage.
You got robots doing what used to be $25-50 dollar an hour work. People need to live, guess what they revolt.
Like I said, not saying it’s right, just inevitable[/quote]
What exactly is a living wage. I hear this statement a lot but very little when it comes to defining what it means. I can probably successfully house, feed and cloth somebody for less than $20/day. Those seem to be the bare minimum to live. What other expenses are required to “live”
Participant[quote=The-Shoveler]
I view low wages as an external cost like pollution. Saying you need to pay low wages is like saying you must be allowed to pollute in order to compete.They’ll whine that ALL those jobs will go away, but they won’t. Only some will. So instead of having the 100 people at the poverty wage paying place all dependent on the dole for food stamps and health care, we’d have some of them on the dole and many of the remainder would be working at the place that paid real wages and still made decent stuff that was worth the price paid. We’d all have to do with less disposable stuff.”
[/quote]Low wages are subjective. Why should we attempt to set the minimum wage at a level where you can support a family of 4 on a single income. Clearly there are numerous members in our society that work part time for some discretionary income that are not supporting a family of 4 and do not require a wage that supports a family of 4. Honestly is retail clerk, or pizza delivery driver, or burger flipper a career that we should inspire people to start a family around. When was the last time you walked into one of those places and saw mostly people that looked like family breadwinners on the other side of the register.
As you can see from Europe when you set various employment standards and work rules the result seems to be locking the inexperienced youth out of the work force. Youth employment is tremendously high in many European countries and a lot of that has to do with work place rules and wages that make it way to risky for business to hire inexperienced youth. If you make it risky and cost prohibitive to hire inexperienced youth where are your future experienced productive employees going to come from.
Do you think target and walmart are going to raise prices when minimum wage goes up to maintain what are small profit margins (<10%) or do you think one of them will take to opportunity to explorer more self check out stations and new technologies that bill your credit card as you walk out the door.
Participant[quote=FlyerInHi]
Beyond the polemics, immediate reparations to blacks would be great economic stimulus, haha[/quote]That would depend on where you get the money from. Everything is a balance sheet so in order to give reparations you’d have to take that money from some other group. The question becomes is that other group investing in something more productive or less productive.
Here’s an example. Suppose you would get the money to pay the reparations via removing tax credits for Electric Vehicles. So Tesla would be forced to invest less in production of Tesla cars and fewer manufacturing jobs would be created at Tesla. Suppose then that the people that receive the money go out and buy cheap junk made in China at Walmart. Is that a net economic stimulus for the economy here in the United States. I can make a reasonable argument that that would be a negative for economic progress in the US and a net benefit to China. Is that what we want?
That’s been the problem all along for Bernanke’s stimulus efforts. He can make it cheap to borrow but he can’t make people do productive things with the borrowed money. Almost everybody here would probably borrow $500K at 2% interest if they could but how many would actually do something with the money that produced jobs or economic activity. Most would probably try to grow it in the stock market or buy and rent real estate. How many would put in the hard work to start up a new company and create jobs. At the same time if it cost 10% interest to borrow $500K then people that did choose to borrow would likely be forced to do something innovative and productive with the money. There would be no other way to earn a return otherwise.
When interest rates get really low people borrow to do easy things like speculate in asset prices. Of course that leads to bubbles which eventually blow up.
Participant[quote=FlyerInHi]
Think of it in terms of workers’ rights. The slaves did work and were not paid. Money is due. The heirs have a claim to that.
[/quote]This is one of the reasons why we have statue of limitations for many types of crime. Both sides of the slavery equation are long gone. The heirs have claims against parties that longer are alive. Do you want to be held responsible for your parent’s debt when they pass away? It’s time for personal responsibility to make a come back in this nation.
Participant[quote=squat300]If we just passed a law prohibiting white people from having children with other white people, problem could be solved in one generation.
Might be legal challenges tho.[/quote]
That’s thinking way too small. Let’s just genetically modify all children so that they are smart, beautiful, and relatively homogeneous. Then we won’t have to worry about race, poverty, and everything else that is unfair about the world. Sounds like a Marxist Utopia.
Participant[quote=squat300]appropriating an additional $400 million to ensure all remaining internees received their $20,000 redress payments, [/quote]
This is the key right here. None of the members of the current black community suffered from slavery. Why should we think that current Americans who weren’t responsible slavery should pay repercussions to people that weren’t victims of slavery. Even if you did decide to do that, do you really think that solves problems in the black community. Food stamps, section 8, and other forms welfare don’t seem to be solving the problem why would checks for $20K help?
ParticipantAt some point somebody has to take the loss. I figure it will be the pensioners. Even if you do manage to force the losses onto the bond holders the bond holders are likely somebody’s pension fund, so a Detroit pensioner maybe gets paid while some other pension fund has an increase in unfunded liabilities.
20 years down the road when this pension things has been washed out pensioners will look back in hindsight and realize that accepting promises for deferred compensation from people that aren’t going to be around when they want to collect was the dumbest thing they ever did. Many public sector employees got trapped in a job they didn’t particularly like to guarantee themselves a comfortable risk free retirement. It’s starting to look like that risk free retirement was a myth. They’ll likely be wishing they had a defined contribution plan they managed themselves.
Participant[quote=squat300]
Question: Is the black guy here as innocent as Zimmerman? Clearly the white kid here was more blameworthy in terms of his criminal intent for being in the location. But what about the black male. We definitely don’t want “feelings” to intrude, only facts…Bonus points: you’re the prosecutor. Do you think it will be easier to get a conviction on the above facts than on George Z.?[/quote]
Hopefully the jury would come to the same conclusion and find him innocent. Or some appeals judge would eventually come to that conclusion.
Participant[quote=The-Shoveler]It’s more about reducing the years in labor it takes to pay off your current debt than anything else.
Or reducing the value of your current debt.[/quote]
That’s only one side of the balance sheet. For someone who’s in debt that’s favorable. For the person holding that debt as an asset it’s a negative. The reason I feel deflation and default is a better outcome is because at least in that scenario some debts will still be worth something. In a hyper inflationary situation all debts are worthless.
The problem that we have when looking for economic solutions is we tend to ignore the repercussions on the other side of the balance sheet. Would it be good to reduce our overall debt. Yeah it would of course that means the people on the other side of the balance sheet have to take losses. Who are those people, well it’s going to pension funds, retirement portfolios and wall street.
Participant[quote=The-Shoveler]Livin, SDR,
Anyway I think You also have to throw in the Gov’s (local and Fed) interest in paying (or monetizing) it’s debt into the equation.
You got CalPers already behind and getting further while demanding Pay me first and expect 7% or better returns from it’s investments. FED not doing much better job.think there will be keen interest in getting wage inflation higher somehow(My two cents).
This should be interesting.
I don’t see how you can get too much higher mortgage rates without wage inflation and keep the all the balls in the air.[/quote]
The government could certainly monetize it’s debt but that just means purchasing power gets destroyed. It’s certainly possible for congress to print up money and give it to everybody in the untied states and get Weimer hyper inflation. Of course does a retiree really care that he’s getting his $70K per year government pension if gas costs $20/gallon and a minimum wage worker makes more than him. Maybe that’s easier in a legal sense but it doesn’t change the fact that you just screwed the pension holder. Honestly what’s the difference between telling him you going to get 20% less money or we’re going to reduce your purchasing power by 20%. The result is the same in that he’s getting less goods and services.
I suppose that scenario is better for those that made bets on house prices and other asset prices going up but the years of labor it takes to buy the house will likely go down.
Participant[quote=SD Realtor]You make a good point cali. Unfortunately I don’t believe there is reliable data to quantify the effects of higher rates on the San Diego submarket.
[/quote]I don’t think there is either. In a particular submarket who knows. Somebody could invent the next big thing in Carlsbad and create a Facebook like IPO. That would send prices in Carlsbad and some of the sounding areas up, but it probably doesn’t do much for 4S and certainly doesn’t help Bonita.
[quote=SD Realtor]
The question is, what will be the decline? Is it linear? Doubtful. Hard to say what it would look like. I don’t think looking back at say rates in the mid or late 90s is a good barometer either because that was a much more robust economy.[/quote]I don’t know what the decline would look like. It could be rather volatile like we’ve seen recently or it could be a less pronounced slow grind lower. I just know that the carrying cost of somebody’s total debt is the wall that going to limit home price increases. I also know that it’s much easier to see asset price inflation in a declining rate environment because most assets are leveraged and speculation in assets increases as rates come down. We’ve had a positive feedback loop for assets over the past 30 years. If rates are going to steadily rise than that positive feedback loop is going to turn into a negative feedback loop, especially at the margin which is where price is determined.
Now you could certainly argue that we might get the best case scenario and the fed can successful maintain rates at 4-5% and incomes continue to rise at 3-5 percent. That at least opens the possibility of a continued rise in asset prices. The rise will be limited by the increase in incomes rather than incomes + declining interest rates.
-
AuthorPosts
