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March 8, 2013 at 7:30 PM in reply to: OT: Public Employee Unions Attack the City of San Diego/Prop B #760485
SK in CV
ParticipantWelcome James.
Participant[quote=bearishgurl]Besides, she’s slightly older and therefore slightly more “crotchety” than I am :=][/quote]
I’m glad you said that. I was only thinking it 🙂
Participant[quote=livinincali]How do you propose to reduce wealth inequality when consumer choices drive the wealth inequality in the first place. Every day a consumer goes to Walmart to buy groceries instead of the local grocery it increases the wealth inequality. Every time a consumer goes out and buys the latest and greatest iPhone rather than keeping the one they have increases the wealth inequality. Consumers making choice to consume and to go in debt to consume rather than save increases the wealth inequality. Every time you put more money into your 401K it makes Wall Street a little more wealthy.
What is wealthy? Taking a little bit from a lot of people. There’s plenty of stupid consumers that voluntarily give away a little bit of their productivity everyday.[/quote]
Consumer choices drive inequality? I don’t think so. What’s happened over the last few decades, and magnfied over the last decade is that the share of corporate revenues that end up in the hands of the workers who actually produce that revenue has declined dramatically.
See charts here: http://dispatches.us/post/11571145361/workers-wages-fall-corporate-profits-soar
Corporate profits are at record levels, measured both in real dollars and as a share of GDP. The delta in that income has remained in the hands of business owners, while wages have shrunk. The result is that the wealth built by those record profits remain in the hands of those who own the stock. That has always been the case, except that prior to the last few decades, workers have shared in that growth. That’s not the case now.
It has almost nothing to do with irresponsible consumption.
Participant[quote=bearishgurl]
Ren, I don’t really care about any Piggs’ finances here. It’s not only me, but that old, crotchety Suze Orman would actually advise you not to pass go or collect $200 if you were carrying vehicle loan(s).[/quote]Suze Orman? Really? If I was to advise someone how to learn about finances, I would advise them NOT to listen to Suze Orman.
Participant[quote=sdduuuude]Another reason to put the house in a corp is to shelter from property tax increases.
If you sell the company, which owns the house, it does not trigger a sale event on the house, so the property tax basis stays the same.[/quote]
By law, that’s not accurate. If more than 50% of corporate stock or ownership in an LLC is transferred (in a single year or cumulatively since 1975), and the corporation owns real estate in CA, that transfer must be disclosed and the property is re-assessed. As a practical matter, I don’t now how the state enforces this for foreign corporations, but for CA entities, it’s right on the tax return:
J 1. For this taxable year, was there a change in control
or majority ownership for this corporation or any of
its subsidiaries that owned or (under certain
circumstances) leased real property in California? . . . . . Yes No
2. For this taxable year, did this corporation or any of its
subsidiaries acquire control or majority ownership of
any other legal entity that owned or (under certain
circumstances) leased real property in California? . . . . . Yes No
3. If this corporation or any of its subsidiaries owned or
(under certain circumstances) leased real property in
California, has more than 50% of the voting stock of any
one of them cumulatively transferred in one or more
transactions since March 1, 1975, which was not
reported on a previous year’s tax return? . . . . . . Yes NoParticipant[quote=spdrun]Well, here’s hoping for Israel to invade Iran or something. Should send oil prices through the roof and slam on the brakes. SCREEEEEEEEEEECH![/quote]
Hoping for 10’s of thousands of people to die?
Serious fail.
Participant[quote=bearishgurl]
SK, if you are around, can you tell us if you think Phoenix’s growth rate will be high enough in the coming years to absorb all that is currently being built and slated to be built there, as well as a good portion of the current resale inventory and rental vacancies?
Your opn would be appreciated.[/quote]
Growth was pretty low the last couple years but I just read this week it’s expected to get back up to 2-3% per year through the rest of the decade. That’s pretty substantial growth. (I can’t really explain why.)
Net job loss from USAir/American merger is not expected to be substantial. (Fewer admin jobs, more operations jobs.)
Participant[quote=desmond] I can’t see anything in the near future for a correction other than a correction just for a correction.[/quote]
I agree with this. The recovery is still pretty fragile, so it could turn around. We have never had as many consecutive years of decreased public employment as we’ve had recently without entering a recession. Failure to reach a solution to the sequestration boondoggle could do it. Those risks notwithstanding, corporate profits are at an all time high and justify current market levels.
But corrections for corrections sake do happen. I hang with technical traders and it was almost unanimous among them that the market was going to correct 2 or 3% more than it did starting two weeks ago. Volatility was very low for a long time until then and it’s back down again. And the chart watchers are confused. Anything could happen. But if there’s no bad fundamental news, it’s time to buy the dips, sell the rallies.
ParticipantJFC. The Protocols survive. As does malicious ignorance.
March 4, 2013 at 9:48 PM in reply to: OT: Public Employee Unions Attack the City of San Diego/Prop B #760306Participant[quote=CA renter][quote=livinincali]It certainly looks like the public unions will win in the courtroom on prop B. State law concerning collective bargaining seems to trump the proposition city voters passed. Of course with that said if the public unions ignore the will of the voters they could face some wrath down the line. If you really piss off the voters it wouldn’t surprise me to see an attack on collective bargaining at the state level.
In my eyes the problem is defined benefit plans where you assume an above market risk free rate of return where the tax payer makes up the loss. Even in the rare event where the risk pays off the tax payer doesn’t get any benefit and instead the public sector employee gets an increase in benefits based on the better than average return.
If the unions members want to set up a defined benefit plan where they bare the risk that’s fine but right now they get to gamble on the risk curve and then force somebody else to make up the losses. Of course we all know what’s going to happen in the future. It will be easy to throw that small minority of the beneficiaries under the bus when the funds run out whether it’s legal or not.[/quote]
Not true. When the investment returns outpace expectations, contribution rates go down. This tends to happen at the same time that tax revenues are at their highest, too, giving public employers a massive influx of new/unexpected money to spend. That leaves more money for other projects, tax cuts (like when the extra taxes on auto registration was repealed, or when Prop 13 is left untouched), and savings.
http://articles.latimes.com/1998/may/08/news/mn-47602%5B/quote%5D
I think you missed the most important part that was wrong in the bolded part. Employees never get an increase in benefits solely as a result of better than average returns. That’s the whole idea behind defined benefit plans. Benefits are “defined”, and must be paid irrespective of the return. Only employers (in this case, the public entities) benefit with higher than expected returns. Hence the decade of the 90’s when many municipalities and other public entities made no contributions at all.
Participant[quote=bearishgurl]
I’m curious, SK. What did builders want to know from the results of your project? And, if any of them learned that SD (or CA) was “overbuilt,” did they then leave the state in search of buildable land as a result of your report?[/quote]Essentially they wanted to know probable absorption rate for new housing based on a gazillion assumptions. Three of the four that contracted for the work paid attention and removed work from the pipeline primarily after 2007 and stopped buying land inventory. And one is bankrupt.
ParticipantBG, It was the older commercial districts I was referring to. The older cities in SD county had them (La Mesa, Lemon Grove), as opposed to the suburbs that didn’t (Clairmont, Allied Gardens). I’m not sure why I even brought it up.
I don’t know a single development name in the newer part of Chula Vista. I’ve driven through the area maybe a dozen times since eastward expansion started 25 years ago. It was just my probably unqualfied observation that there is a pretty large price point mix. Even after your comment, I’m not sure if it’s mostly lower or mostly higher price points.
I guess where we really differ is how much the CFD’s contributed to the problems. Surely if the homes hadn’t been built, it would have been a non-issue. But it was the lenders making all those loans. And the builders facilitating. Should the cities and municipalities that approved the CFD’s known what was going to happen? In hindsight it looks pretty obvious. But in 2000-2004 when many of them were approved? I don’t know the answer to that. By the end of 2004 I was pretty sure that absorption levels were going to be an issue by 2007, and the state would be overbuilt. But I had over 3,000 hours in my project studying it, and it was done for builders, not cities. I’m not sure they should have known just because I did.
That doesn’t mean I don’t think there weren’t foolish mistakes made.
ParticipantIn 1960, National City and Chula Vista were bedroom communities, unlike most of the newer developments, with their own commercial districts.
My apologies, the “CV” I was referring to as a higher income area was Carmel Valley. I should have made that clear.
Price wise, correct me if I’m wrong, new Chula Vista is all over the place. Everything from starter condos to homes that sold for well over $1M, no?
(and I think you’re jaded by your disdain for “those people” who ruined Chula Vista. I don’t doubt it was as you say, I just doubt that those same circumstances were near as common across the rest of the state as you think.)
ParticipantIt’s possible now. You’re a hard working buyer. I don’t expect it last much longer. Out of curiosity I just looked at some of the condo complexes where I’ve owned units.
This one caught my eye.
http://www.sdlookup.com/MLS-120049239-7757_Margerum_Ave_148_San_Diego_CA_92120
It’s a 35 year old complex. The HOA should be in pretty good condition. I’m guessing it could rent for $1400/mo. Other than interest rates being much lower now, the numbers look a lot like they did when I bought a few units there in the early to mid 80’s, selling for about 100 times monthly rent. (the numbers are just about double then, I paid around $70K and they rented for $700 to $750.) No idea what kind of financing is available. I was buying then with 10% down. That seems unlikely now. Cash flow was maybe a little better than break even. (I ended up selling all of them around 1990, when my kids were little. Just too much of a pain to collect 25 checks a month, write 25 HOA checks, 35 mortgage checks, plus repairs and vacancies. After sales costs, probably netted a whopping $1500 profit per unit. Timing wasn’t perfect.)
But what I’m talking about is historical price/rent ratios. In 2005 this unit sold for $328K, and I doubt rent was much different than it is now. That’s probably the two extremes. Somewhere in between is probably more normal. And not a real good cash flow investment.
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