patrick.net

Last time I talk to a friend, she say that some of her client intentionally give themself HIV by sleeping with people they know to be HIV+. Why, because they get welfare, FREE HOUSING and the drug”alone” cost the state 10K per years.

. :!: 8O :!:

Last time I talk to a friend, she say that some of her client intentionally give themself HIV by sleeping with people they know to be HIV+. Why, because they get welfare, FREE HOUSING and the drug”alone” cost the state 10K per years. If this thing grow, what out.

Such people should be exiled to an island.

Unless we see a stabilisation of metro populations (or at least commuters), commuter incentive lanes, or highway widening won’t reverse bottleneck problems for very long.

It is very easy to solve. The solution is progressive electronic highway toll. Fees should be a function of speed, distance, and weight. We can solve the problem very quickly.

Free housing because you contract an incurable disease? What is that all about?

The society cannot allow people to intentionally contract diseases just to get welfare.

Free housing will be provided in a penile colony. Food will be provided by the "elements" if available. Free mediations: cyanide or fugu poison.

The problem is proving they got the disease intentionally. I can just see the lawyers lining up now to defend the “victims” so they can have their free housing.

True.

WTF!!?? I find it hard to believe this is true (though I won't say it's impossible) What kind of free housing and welfare is worth getting AIDS for? Even if this were uber-liberal Sweden or Denmark, I can't imagine what government "reward" would be worth that!

WTF!!?? I find it hard to believe this is true (though I won’t say it’s impossible) What kind of free housing and welfare is worth getting AIDS for? Even if this were uber-liberal Sweden or Denmark, I can’t imagine what government “reward” would be worth that!

HARM, HIV+ is not the same as AIDS. Perhaps SFWoman can shed some light on this subject.

I agree that people are completely out of their minds. Now I am more inclined to think that welfare recipients must first prove their cases.

How about welfare reform? Welfare can be be merit-based. This way we can reduce the number of abuses. That said, we should instead put resource on improving labor utilization, thus solving the problem eventually.

@Peter P,

AIDS vs. HIV+ - Yes, I know the difference, but HIV virus infection is the necessary pre-condition to developing full-blown AIDS. Thanks to modern medicine, you might or might not get it, but still...

@SQT,

But unfortunately, human beings never fail to do the incredibly stupid.

Truer words were never spoken. ;-)

But I believe that eventually all those who become HIV positive will eventually have full blown AIDS.

I think we need more sexual education indeed. HIV is not quite that easy to transmit. If people remain faithful to one sexual partner and refrain from sharing needles, the disease can be contained. I will let SFWoman to be the expert.

AIDS vs. HIV+ - Yes, I know the difference, but HIV virus infection is the necessary pre-condition to developing full-blown AIDS. Thanks to modern medicine, you might or might not get it, but still…

Very true. But many positives do not develop AIDS for many years. People are very shortsighted, otherwise, why was the demand for ARMs so great amid historically low interest rates?

From Wikipedia:

Acquired immunodeficiency syndrome, or acquired immune deficiency syndrome (or acronym AIDS or Aids), is a collection of symptoms and infections resulting from the specific damage to the immune system caused by infection with the human immunodeficiency virus (HIV).[1] It results from the latter stages of advanced HIV infection in humans, thereby leaving compromised individuals prone to opportunistic infections and tumors. Although treatments for both AIDS and HIV exist to slow the virus' progression in a human patient, there is no known cure.

California need to build more house for its population or this will become a big problem.

Perhaps relaxing zoning regulations will help. On the other hand, welfare reform will solve many problems (yes, illegal immigration too) in the long run.

Scott,

What ABOUT savings plans? I could think of about a million reasons to defend the status quo! (Then again) I can think of about TWO million reasons why you are RIGHT! It's gotten completely out of control and if anything it's getting worse every year. I actually have to attend "CE" (Continuing Education) at least twice a year for a total of 40 hours. This is just to keep up with the CHANGES. Sacred Cow cost? Beyond estimation! Let's see, there's the DOL, EBSA (formerly PBGC) they had to drop the guarantee part, ERISA and annual 5500 filing. All of this infrastucture costs money! Money that should be in the plan, not admin. expenses. This has become an industry unto itself and it has it's own language. They also have intrepters (called TPA's) or Third Party Administrators, yes they also charge a fee. Many in the industry are actually excited about THE NEW ROTH 401K. It's all about anything new to go out there and sell the same limited number of active retirement plans "something new". It's the industry that wants all the changes, not the employers. Because individual or rollover IRA money is no longer considered "sticky assets" (after much of it was liquidated to participate in the housing boom) only 401K dollars provide a reliable revenue stream and that is why we are seeing such a pitched battle for those dollars. We're adrift.

Harm,

"corporate benefit cram downs"

Is that an actual term people in the work force are using? If we're not, we should! It describes the scenario at my wife's employer to the "T". There was a time when the "package" was the package. Now they have us all conditioned to accept this notion of "this years benefit package". We're trying to get weened off of "their" package and start our own HSA (Health Savings Account) but it quickly distills down to this "chicken or the egg" kind of a deal. You have to abandon your company sponsored plan and set up a HDHP (High Deductible Health Plan) and pay those premiums right away! Well, how about we set up the HSA first, gut it out for a year and THEN set up the HDHP? No can do son. Now what? Is this "the sleeves from the vest" or what!

FYI Another glowing report just released this morning from the Federal Office of Housing Oversight:

http://www.ofheo.gov/media/pdf/4q05hpi.pdf

Randy H: Whadday say we do tequila Thurs March 9th? Bidness takes me away from SF for the rest of the week.

Sorry for the absence (or perhaps, you're welcome).

Regarding DBC: IT is heavily waited towards oil (50%). Why not just own high yield energy plays? How about making your own mutual fund that tracks commodities that pays a high yield, and no management fees?

Here's my try:

FDG, PWI, E, PCU, DSX, DUK, VZ.

This mix gives me exposure to Coal, Nat Gas, Diversified energy production, Foreign currencies, Copper and other base metals, Silver, an indirect play on bulk shipped dry commodities, a play on the collapse of the communist system (Duk benefits as high income blue staters flee for protection) and VZ has a good yield, and is in a different type of commodity bidness. Afterall, Enron used to trade bandwidth like energy, so why not?

You could leave off DUK and VZ and have a true high yield fund. I like the added stability. You could swap in WY or even ADM if you want to be strict about it.

--Deo V

OT - but the YOY CAR sales price numbers are out. Cupertino had a 6% decrease YOY, Mountain View .7%.

As you were.

To me, the problem that arises from a income tax that categorizes those who are wealthy and those who are not is the big question: "what signifies a wealthy citizen?" I say this due to the massive increase in housing prices in key area like the Bay Area that make someone making over 100k a year more akin to a lower to somewhat mid-middle income citizen here, while having a completely diffrent status in any other state or spread out counties in the state. This has all occured in the last 5 years, and just like the term " low-income housing", the definition has been vastly altered. If you are going to tax someone based on their wealth, then you need to have a more organic model that takes costs of living and updated status for those who were formerly well off, now finding themselves not so well off. Tax the "wealthy" of circa 2001, and this will cause economic stagnation.

CAR link:

http://www.car.org/index.php?id=MzU5NjU

@lunarpark,

Thanks for the numbers! SF, Marin, SD & San Benito Counties all in single digits now, Placer the only one neagtive. I'm actually surprised at the number of areas still posting strong double-digit YoY gains, but then watching the housing market reverse is like watching grass grow. I believe this will be a long, slow-mo crash much like the last one, which took 7 years to fully bottom out.

@DinOR,

I wish I could take credit for "cram-down", but it's actually a term that's been in use by the media for some time.

Harm,

As in; cram-down our throats?

SFWoman,

I had no idea that much of our medical resources were being used so unwisely! I've always promised my family that if I were diagnosed terminal that I would check myself into a some flea bag hotel in Tijuana and drink myself to death. I am not kidding! As a Fin. Planner I have seen more money squandered on this than you can shake a stick at! I've had clients actually re-affirm that sentiment. Their only fear was that you may not be coherent at the time and we all know the "end game" from there isn't pretty. I hate to sound so mercenary about it and I can't speak for others but I feel it's the least I could do.

From today's FT:

"Housing frenzy fades as US confidence dips"

A couple of relevant points--

* Resales fell 2.8% in Jan, 5th consecutive monthly decline
* Decline in condos fell 10%
* Backlog is 5.2 months of inventory, the highest level since 1996
* New homes fell even more, with highest number of cancelations in over 20 years
* quote "demand is dropping and supply is rapidly rising. Unless something happens soon to correct the supply/demand imbalance, prices are likely to decline sharply in the future"
* consumer confidence index is also dropping sharply, the lowest level of "bouyant economic conditions but cautious consumer sentiment about the future since 9/11"

Price stickyness:

* Median prices still growing at 6% per year (down from 14% in 2005). SFH median prices still growing at 13%.
* Economy.com says future rates rises coupled with narrowing credit restrictions must cause a price correction in the near future. "Without riskier mortgage products, buyers in expensive markets simply cannot afford homes now in inventory"
* Further, it may be likely that sticky prices may begin to finally decline in as few as 2-3 months. Support to prices now may be soley in the form of in-progress purchase contracts, especially in new homes.

DeoV,

I can't make this week. I've got daddy-daycare-duty with a sicky out for the week. I did put your stock picks into my spreadsheet and if I get a chance I'll run a stawman Black Litterman portfolio optimizer. I don't have access to any decent backtesting tools anymore, so I can't do much else.

I can't start a fund, lol; I'm not NASD or Series licensed. I'm more of the quant-econometric-dork in such matters.

Randy H,

Good stuff! Price stickyness? Declines in as little as 2-3 months? Well if we could get some tamper proof data it might well indicate that we are already there! SQT has "gravity defying" numbers from Sacto yesterday that I frankly found beyond belief. 50 and 75%+ declines in sales but median prices flat or slightly up? Please! Then of course we all know that FT isn't all that revered a publication.

Scott made some solid observations about the complexity of "savings accounts" 401K, Roth 401K, SEP, SAR SEP etc. Out of control or are we just looking for a one size fits all solution?

Scott made some solid observations about the complexity of “savings accounts” 401K, Roth 401K, SEP, SAR SEP etc. Out of control or are we just looking for a one size fits all solution?

We do not need any of those saving accounts if we switch to consumption-based taxation.

Fewlesh,

No debate. Bikers are stingy! Pedestrians should be able to use some of their paths but it doesn't seem to be working. We've had this radical "Critical Mass" Bikers Rule mentality and it's taking a toll. Last summer I believe 4 cyclists were killed, scores of injuries and almost daily confrontations. In short it was just another reason I elected to go independent and walk away from the "commute" and what I fell is a mess in the making.

Peter P,

So I'm assuming we're doing away with short/long term cap gains and the AMT in fell swoop? That's a trade I'd gladly make but if that isn't happening in our lifetimes isn't a consolidation of "plans" more effective in the interim?

So I’m assuming we’re doing away with short/long term cap gains and the AMT in fell swoop? That’s a trade I’d gladly make but if that isn’t happening in our lifetimes isn’t a consolidation of “plans” more effective in the interim?

True.

Yesterday night, Mardi Gras turned rowdy in San Jose downtown. I guess there is no way I am staying there.

What is Mardi Gras anyway? I used to think that it is a type of Foie Gras but it turns out to be some festive day.

Either we go completely free market or completely rationed state controlled health care. This 50% government 50% freemarket doesn’t work. The way the money works, because the cost of a treatment is set by the government, vendors compete to make the most expensive most feature packed treatment for the fixed cost. The vendors then lobby government to allow cover more diseases with fixed costs.There is no incentive to create cost effective treaments, because to the consumer, you pick the best treatment available, and are not subjected to the cost. The profits are privatized, while the risk is socialized. If you actually had to pay out of pocket for each treatment, you’d pick the most cost effective/cost efficient solution.

Well said. Excellent summation of the conundrum of the current status quo. Given America's cultural distaste for socialized medicine in combination with out-of-control (and unsustainable) deficit spending, I am inclined to believe we more likely end up with something closer to a free market approach, maybe along the line's of a HSA, as Scott recommends. A bankrupt federal government is not likely to be in any position to launch a massive new entitlement progam like universal/single-payer coverage anytime soon, nor is there much political will there to do so. As the Boomers come ever closer to retirement age, this should get "interesting' --in the Chinese sense.

Scott/Peter P,

I'd love to see the necessity of IRA's/Plan X or the "latest greatest thing" just go away! If that's just not possible at this juncture why not streamline this mess. I have seen software simulations on end that show employee A and employee B one in a Roth, the other in a Regular 401K virtually end up in the same place. Either a zero sum game or not nearly enough of a difference to justify the additional expense/hassle. There is no tangilble benefit other than it gives guys like me something new to sell! It's just not worth it!

If California does not overturn the uber-silly law to ban foie gras by 2012, I may have to leave.

How can a state commit such gross violation of human rights!?

Perhaps this Foie Gras law will further depress the housing recovery.

Harm,

I nor Scott to my understanding are necessarily advocating running out and setting up an HSA. The short term benefits are of questionable value (however attractive the L/T benefits might seem). I believe this transition could be painful if not disastrous.

Scott,

I'd have to agree, HSA's WILL rock! The truth is I wouldn't want anyone to come back on me and say, "I opted out of the co. spons. health plan to start up my own HSA and 6 months in I was was diagnosed with terminal X disease!" Now I have NO health coverage, or was diagnosed "pre-existing". Big liability! I have spoke w/HSA providers and they are very careful to "tap dance" around this issue. So it can be something of a gamble.

Scott, can't you just buy treasury instead of treasury funds? I find no reason whatsoever to buy treasury bond fund because you can usually participate in auctions for free anyway.

If you are younger, yeah the Roth 401K can a lot make sense. I guess it's great to be offered the option. However when looking at the "plan participants" at large? It's usually a wash given todays brackets. Remember, when offering it to the employer he will have to make the judgement call as to whether ENOUGH employees will be able to take advantage of it to justify the additional expense. Picture a PC where most are already in the 50+ crowd. Yes, it's about the money! You talked a little about addressing the "debt" and that will be key. Some folks are already saying it may make more sense to only contribute up to your co. match!

Scott,

I had thought it SHOULD work that way as well! After further review I learned that it's firstly best to get a COMPLETE physical before doing the transition. Then have your old insurer take care of any issues you may have. Then as you move to the HDHP make sure that they can't "drop" you in the first year or have a similar clause in place. It can be a touchy issue. One way or the other I am doing it this filing year and I did find an HSA that will let you "trade" your account so while I'll have to report that, it would still be worth it to me!

but yeah buying direct would also have one other advantage: no cap gain on sale of fund (assuming there were any gains).

You still have to pay capital gains on the bonds, if they have appreciated. You do not need to worry about cap gain distributions though.

BTW I used to think our debt was outrageous, but MISH’s blog made me reconsider:

It makes our debt seem, well, quite reasonable actually.

Maybe, maybe not....
Several points (from Mish's Comments section):

1 the main difference between japan and the USA is of course consumer debt. Consumer debt is MUCH lower in Japan.

2 US federal debt, is only the "federal" debt. There's also the state debt. There are no equivalent of states in Europe, and Japan. This explains why national debt in Europe and Japan is higher relative to GDP.

3 On top of the preceding point, Europe and Japan are more "socialized" economies. The government taxes more and provides more services, while in the US the Fed and the states together tax less and provide fewer services. The same services that are available from the government in Europe and Japan (for instance university courses, health care) are available on the market in the USA.

What is really important is the public deficit relative to the public tax base. This deficit is really really high in the USA vs. tax base.

4 finally, and very important, the saving-investing gap, is something very different from the debt/GDP increase.

For instance, Japan and China save a lot. Those are saving countries. household savings are at around 40%, USA is 0%. The gap between total savings is lower, probably around 30% in China & Japan, -5% in USA.

5. Government debt vs. GDP tells nothing about who owns this debt. It is entirely possible that Japan is a net creditor nation and at the same time running high government debt, which is entirely financed domestically. The U.S. by contrast, cannot finance its own debt and relies heavily on FCBs.