[The-Shoveler]

Word to the wise ? (from the CNBC link)

let’s bring in another guest here who saw red flags and decided to get out of all small city bonds, marilyn, thank you for joining us, you know what i find amazing and shocking is the rating agencies are not reflecting this financial risk, are they? they are not and that’s a big bullseye. many people look at their monthly statements and say oh, aa 2, no problem

Here is the rest of it.

it’s the ultimate subprime loan. and it works like this. poway gets that $105 million today. it doesn’t have to pay a dime for — wait for it — 20 years. then it starts paying $50 million a year in interest and principle for the next 20 years. so what you’ve got here is a 40 year loan that is so toxic that the los angeles treasurer wrote a letter to school districts last year saying he will not support any loans saying he will not support any loans like these. herb, stay right there, let’s bring in will, the staff writer at the voice of san diego, he broke this story, do you have any new details? it’s canis. okay, fair enough. ive heard it all before. i guess the newest details, we started to look at some of the other school districts in san diego county, it’s not an isolated incident. we’re seeing bonds at the biggest school districts. san diego unified is over a billion dollars, some are borrowing $30 million and paying back $260 million. how can it be allowed. i know michigan banned it’s school districts from this kind of bond. our children and grandchildren will get screwed, shouldn’t this banned everywhere? well, you know, there are people who back this and think this is a good idea. we think the property values we keep increasing all over california. they never go down and in the future this will be worth all of the homes will be worth more money and that will mean we’ll be able to pay for this out of our existing taxes. we’re pushing the repayments further and further ahead with spending money today and placing the burden of this on future generations. i think they will start ake a look at this. there was legislation last year talking about making these more transparent to the school districts would have to tell the public what they’re going to do and what this will cost. hopefully we’ll see more changes going forward. let’s bring in another guest here who saw red flags and decided to get out of all small city bonds, marilyn, thank you for joining us, you know what i find amazing and shocking is the rating agencies are not reflecting this financial risk, are they? they are not and that’s a big bullseye. many people look at their monthly statements and say oh, aa 2, no problem, and they go off on their merry way. so it is really disingenuous that people do not know what’s below the surface. can it be renegotiated? bonds like this? i don’t know the answer to this unless it was under a structured bankruptcy which is what we’re seeing in stockton, california and san bernardino. but herb, you know southern california, it’s not a growing area there, even if it quadruples, that’s not enough taxes to pay these off, no way.

[The-Shoveler]

It seems the real Idiots are the ones who loaned them the money thinking they were going to clean up.

If it sounds too good to be true…

Yea I have learned this one a few times myself.

[The-Shoveler]

[quote=ocrenter]the amazing thing is PUSD blew $150 million on Del Norte. How in the world do you waste that much money on just a high school???[/quote]

Well that’s different, were only talking what maybe
6 or 7 high schools.

[The-Shoveler]

sdr,

As was stated on the first thread I think this is more of a max out the cards because you know BK is coming type of thing,

It’s a lot harder to make a case for Long term inflation being over 8% (but that would work as well).

Besides I think there was something about a promise of no new taxes.

[The-Shoveler]

Maybe there is a plan,

One wonders if the debt can be done away with through BK.

Plan A, Future BK to wipe out bond holders
Plan B, Future inflation to be over 8% YOY.

If you know your going to have BK in your future anyway, Max out the Cards now….

Just kidding sort of.

[The-Shoveler]

Ha!!
Maybe if you live in Europe or own you own biz.

Anyway good luck with that.

[The-Shoveler]

I think it will have a lot more to do with if you (or you spouse) are moving up in your career or you have a stagnate career,

I can tell you that you may think you are satisfied right where you are forever, but unless you are working in a dead end career you will most likely get the yearning to live like the other half lives.
Also if you are moving up you are more likely to be experiencing 15-20% increases than 3-5%, that puts a whole other perspective on where you want your family to live.
I know people, who are Mechanics and construction workers and live in the same house forever,
I know people starting out as Product verification people and work their way to Director of engineering.
Different ball games.

[The-Shoveler]

So you put your kids through school over the next 15 or so years, then sell and move to a different state, what’s to hate…
Just kidding.

[The-Shoveler]

If this guy is correct,

Look for thinks to get much worse fairly fast…
Most CA local gov’s and the state itself are currently design to run at 2005 cash flow or above..
They are bleeding and excessive amount of red ink and cannot maintain the drain much longer.

[The-Shoveler]

WHAT!! all the 401K money coming in at month start or what…

No fun being a bear right now (or even on the side lines).

Oh well…

[The-Shoveler]

Tuition Free Universities in Germany/ Norway.

If I was of college age I would try to emigrate to Norway or Germany..
Universities there are supposed to be “Tuition Free ” by law.
Don’t know if they have student loans for the living expenses like Beer,

oh maybe someplace to sleep as well.

[The-Shoveler]

The Path California City to bankruptcies is being paved by these guys.

It’s just a matter of when now.

I doubt even super inflation would be enough at this point.

[The-Shoveler]

Normal, the New Normal etc…
What’s Normal ?
I don’t think there is anything normal about SoCal.
I think the nearest thing we had to a Normal housing market was before OER (Owners Equivalent Rent) IMO.
But I remember when it was 3 Dollars to camp at the beach, That was great when you were a twenty something beach bum, so what has that got to do with being normal ? (nothing but I remember it).

Oh I was seeing they were taking up raising Minimum wage to just under 10 dollars a hour, Well there’s a start.

[The-Shoveler]

CAR does have a point about the unions being stronger in the 70’s and 80’s, but also the Gov was much more willing to raise minimum wage back then as well.

And people were used to inflation, they expected it.

Now everyone goes through the moon if Costco jeans were to go up 50 cents a pair.

By the way Levi’s were about $16.00 a pair back in the late 70’s, cereal was about the same price as it is now.

Oh, and inflation (wages) they were tied to the price to (BUY) a house, not rent it.

[The-Shoveler]

Oh,

I was never unemployed from 1976 till 2000.

Those I knew who were, well they were kind of, well let’s say they were high flying beach bums for the most part, I don’t remember them crying on my shoulder.
But then again this was SoCal, and not the mid-west.

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