patrick.net

And what if the government is the majority shareholder?

Then the government has done something it is not supposed to have done.

Then the government has done something it is not supposed to have done.

Good to know you are in favor of Wall Street going out of business!

>>The easy way to make housing affordable is to make rent tax deductible and to offer tax allowance or outright stipends to the poor renters.

I think it will have exactly the opposite effect. One of the reasons that commercial real estate rentals are much more expensive than residentials ($/ft^2/month) are that they are generally paid for by pretax earnings. (as a business expense).

Another example: Healthcare is also largely paid with pre-tax income. Lo and behold, it keeps soaring.

Good to know you are in favor of Wall Street going out of business!

No. I am in favor of Wall Street Darwinism. By all means, good firms should stay in business and thrive!

No. I am in favor of Wall Street Darwinism. By all means, good firms should stay in business and thrive!

What if they are all rotten?

EBGuy:
"Obama seems to understand that."

It is refreshing to have someone in office who genuinely does seem to understand many different interests on issues. He is in an unenviable position, which is why he basically has my overall support even if an issue here or there may not be 'solved' my way.

A survey of commercial real estate released Wednesday by Allen Matkins/UCLA Anderson Forecast predicts Silicon Valley’s market will not improve until 2011.

The valley’s market will lag in Los Angeles and San Francisco, both of which are expected to turn by the end of 2010.

“For the Silicon Valley it appears that 2011 is a turning point, but the data is less clear,” said Jerry Nickelsburg, a senior economist and author of the survey, in a prepared statement.

Nickelsburg said surveying all three Bay Area markets – San Francisco, the East Bay and Silicon Valley – showed that each will show a decline in occupancy and rental rates for the next three years.

In the South Bay, vacancy rates will rise to 17.5 percent by the end of 2010 and rental rates will rise at the rate of inflation, according to models used by the economic outlooks.

Even as the picture improves in 2011 though, the forecast does not predict a return to the “relatively low vacancy rates of early 2007, nor much growth in rental rates.”

The East Bay will fare slightly worse than the rest of the region because it was more exposed to the housing downturn and more reliant on finance and professional service jobs, both of which have suffered losses.

“The panel and the model are both gloomy about the near term in the East Bay,” according to the report.

The 2009 Enten investor fraud was revealed on 5 February 2009 when Kazutsugi Nami, the chairperson of Tokyo's bedding supplier Ladies & Gentlemen (L&G), was arrested by Japanese police. Nami and 21 other executives are accused of defrauding hundreds of thousands of investors of at least US$1.4 billion (£1 billion) over the past eight years. The case involves the invention of a fictional currency, "Enten", which Nami used to fool investors. It is believed to be the biggest investment scam in Japanese history.

Because of the financial crisis, countries will adopt the enten in three years' time. I will start shining and become world famous. I will certainly move the world.” —Kazutsugi Nami talking to the Japanese press.

===========

Chairman arrested in Japan 'scam'

Kazutsugi Nami had offered investors 36% annual returns
Japanese police have arrested the chairman of a Tokyo bedding supplier over an alleged investment scam reportedly worth $1.4bn (£970m).

Kazutsugi Nami, chairman of the now bankrupt L&G, had offered investors 36% annual returns and issued special electronic money termed "Enten".

The 75-year-old businessman had built a cult status among those who invested in his company.

He is reported to have swindled 37,000 investors, but denies any wrongdoing.

Police have confirmed his arrest but not the size of the alleged fraud.

Mr Nami and other L&G executives allegedly collected huge investment funds from clients despite knowing they could not pay the promised investment returns.

He also collected funds by issuing ''Enten'', saying that the quasi-currency could be used at company-sponsored bazaars nationwide and internet markets, according to an investigation reported by Kyodo news agency.

'Enten' fair

Mr Nami has denied any wrongdoing, AFP news agency reports.

"I'm leading 50,000 people. Can they charge a company this big with fraud?" he asked reporters.

Questioned over whether he was sorry for his investors, he was quoted as replying: "No! I have put my life at stake." He was then led away by the police.

Kazutsugi Nami had built up a cult-like following among customers.

Mr Nami wooed his so-called "shareholders", saying he had a "divine decree" to "eliminate poverty from this world", according to lawyers representing victims.

"Enten" was fed into investors' mobile telephones and used to buy items ranging from vegetables to futons, clothes and jewellery.

The name "Enten" is apparently a combination of the Japanese words for the yen currency and paradise.

The NTV network aired footage of an "Enten fair" where participants sang the praises of the investment plan.

L&G was established in 1987, at first selling bedding and health products.

It began its investment scheme, including the issuance of "Enten", in 2001.

The company stopped paying cash dividends in February 2007, and by September of that year had sacked most of its employees, Kyodo reported.

It folded in November 2007 and is now undergoing a court-led bankruptcy process.

EBGuy, on your first points about the serfs, it is indisputable what you are citing in history. My observation differs in the sense that while the gap between rich and poor is vaster than ever, (I see it as a good thing) the 'poor' in this country are rich by those same historic standards.

It happens that two days ago, I went hiking on a new trail I found, which took me through a cabbage farm. There were migrant workers picking the crops and I started thinking of discussions here and also thinking, (by many opinions here), that this was pretty much as bad as it gets in this country. While I sympathize with their conditions I also have to present the simple fact that those people have come over here because those conditions are better than their alternative.

Peter P Says:
"February 5th, 2009 at 2:48 pm
And what if the government is the majority shareholder?

Then the government has done something it is not supposed to have done."

Only because it would corrupt the system. Imagine the lawmakers trying to pass fair laws, or enforce laws equally in an industry where the government has a large interest in a major industry player? Pretty scary.
However, on the other hand, I absolutley love the model where the government is a true stakeholder and doesn't derive its revenue from taxation but as dividends. I kind of see what's going on as a social experiment so I'm being less vocal and just watching events unfold. It's a good time to be alive.

It is hard to believe that having the government as a shareholder would corrupt the government any more than has already taken place under republican free-market rule.

What's with the jealousy towards hereditary wealth and landlords? None of those people are holding you back. How can people proudly tout their JBR status and then knock the very people who furnish the service they consume?

Fight for laws that support maximization of your abilities. Forcible redistribution is a tool of the underachiever and the lazy. There is nothing wrong with building something that will last generations. Warren Buffet probably never worried about what the rich folks had easy... He only worried about working hard and smart. But there are those who cherish the rat race.

Equalize it all forcibly! *eeee-eeee-eeee*

Brand,

I don't know who exactly you are speaking too.

Nevertheless, is it reasonable to attribute someone's sense of what is right and wrong as being motivated by jealousy?

I am utterly speechless (again).

They eff'ed up and blew $350 billion of the TARP money, so now they are going to use the remaining $350 billion to reward the rotten a-holes that created this mess.

No consequences for un-responsible lenders and borrowers - just revalue the mortgages on the backs of the people that actually pay taxes.

Gobama and his "Mo Mod" - you got to be kidding me!
Hope and change my ass.
Barack is the ultimate Uncle Tom for selling entire future generations into debt and tax slavery, because, by damn, "Yes we can!"

http://tinyurl.com/cl6wxd

"In a nod to Main Street over Wall Street, sources familiar with the plan say Treasury Secretary Tim Geithner plans to allocate almost half of the remaining $350 billion in funds from the Trouble Asset Relief Program to the so-called "Mo Mod," or mortgage modification, platform.

"Mo Mod" is an algorithmic mortgage processing program that can rewrite up to 500,000 loans a month, and will be a major part of Treasury's plan to help repair tattered bank balance sheets.

The 21-day "Mo Mod" program works by structuring a new mortgage that more accurately reflects a home's worth so that a troubled borrower no longer owes more on their home than the property is worth."

Peter P Says:

> Better yet, flat tax without deductions!

Then sriramgopalan Says:

> I support a flat tax that is simple with no deductions.

This is fine for Joe six pack that makes $1,000 a week working at the plant, but the tax code still needs to be complex if Joe has a side business as a DJ since you will need to define the "income". For business the tax code will be the same since you can't make a Ferrari dealer pay a flat tax on sales since the actual profit is very small...

Malcolm Says:

> If the goal is to stop the idle rich from passing idleness
> on to their children then tax the hell out of large inheritances

When taxes on inheritances get real high people just transfer the assets before they die or put them in to a trust or corporation (that can not die). Very few very wealthy families ever pay any inheritance tax and most is paid by the "working rich" who happened to have some assets appreciate above the tax free cap...

FAB, if instead of inheriting an asset, I inherit ownership in a corporation, why would that not be taxable?

Peter Schiff's view on the stimulus

http://finance.yahoo.com/tech-ticker/article/169781/Peter-Schiff%3A-Stimulus-Bill-Will-Lead-to-%22Unmitigated-Disaster%22

I agree with most he said, except for the hyperinflation part because we are too resourceful to get into that situation.

However, we are now right on track for stagflationary depression or inflationary depression. We are going from bad to worse, worse to worst very quickly.

The only hope for the US is to drag as many countries into this as possible, if not, that is really the worst case scenario for all Americans.

+resource rich - resourceful, the fat ass Americans are anything but resourceful.

If ... I inherit ownership in a corporation, why would that not be taxable?

Because a corporation is actually something created by people.

I don't think there should be any inheritance tax at all. If you created something, you should be able to pass it on to your children whole and complete.

But nobody created land. It was simply taken at gunpoint (or swordpoint) and then bought and sold after that. So it's very fair to tax land.

And a tax on land is easy to enforce too. Try smuggling land out of the country. Hard to do.

However, on the other hand, I absolutley love the model where the government is a true stakeholder and doesn’t derive its revenue from taxation but as dividends. I kind of see what’s going on as a social experiment so I’m being less vocal and just watching events unfold. It’s a good time to be alive.

Malcolm, that would be interesting to see. But any government involvement still needs heavy regulation.

Taxation = dividends on profits ?

Taxing on inheritance is hard to execute.

The biggest driver for human productivity is to protect their bloodline. We are programmed to do all sorts of crazy things for our offspring, the whole human evolution (and evolution of all species) revolves around reproduction and the preservation of resources for the next generation.

That is why the more socialist countries like Canada and Australia have NO death tax, because it is too hard to tax. In countries with heavy death tax penalties, people either transfer before they die, or transfer assets overseas and acquire a foreign passport altogether. Instead, they tax the transaction, not inheritance. Let's say you inherit $10M worth of shares from your daddy, you pay no tax. But if you are going to sell these shares (put it into consumption or other productive use), then capital gains tax will be levied. Accumulation of capital should not be taxed, the application of the capital can be more easily taxed. If someone inherits $100M and let it sit rotting without touching a penny of it, then it shouldn't be taxed. Once he decides to re-balance his $100M portfolio, or cash out, you tax him at that point.

In fact, if not for the invention of trusts, more money would have been lost by the 2nd, 3rd generations by "voluntary" redistribution of wealth even without inheritance tax. There's a Chinese saying, wealth doesn't stay within the family past 3 generations, because wealthy people tend to have much more intra-family conflicts, and attract far more attention from financial con artists, not to mention the inevitable breeding of squanders. An encounter with Madoff can squander generations of accumulation.

I'd say let nature take care of such a redistribution of wealth. If a family can keep and accumulate wealth for generations (which is very rare), that means they have good genes and good education, let them have it.

Remember, any attempt to reverse "people exploiting people" will get you exactly that.

The Fed balance sheet fell by $150billion this past week, with the Commercial paper facility falling by over $50billion. It looks like $77B of that decline was from Central Bank liquidity swaps which were subsequently renewed. Treasury general and supplemental accounts continue to be paid down.
I still hold a little bit of SLV, and it is starting to look a little bubblicious to me (or else the end really is near -- pick your interpretation). The New York-based trust, which issues securities backed by physical stocks of silver, now holds a record 7,530.2 tonnes of bullion, up 737 tonnes or 11 percent since Jan 2. I've always been concerned that when the selling starts, there may not be enough demand for SLV, so they will be forced to "dump" physical on the market. Look out below!

Let’s say you inherit $10M worth of shares from your daddy, you pay no tax. But if you are going to sell these shares (put it into consumption or other productive use), then capital gains tax will be levied.
For those of you keeping score at home, this is only for TY 2010, after which the Bush tax cuts will sunset (unless renewed by Congress -- which could make for an interesting Congressional elections in 2 years).

Go daddy, go :-)

In a way, high housing prices were self-inflicted by the consumer who completely bought the hype. Not just those self-indulgent Boomers, but how many smug BayArea hipsters thought it was unstoppable, even after the local dot-bomb carnage? Can government really beat common sense into people? The public reacts negatively to moral suggestions from on high that we downsize our expectations/consumption: be the first on your block to live within your means! Yeah, they're going to jump on that!

Similarly Wall St. had little inclination to do anything but maximize their returns, and leverage the hell out any real equity--who would stop them? Why manage stable portfolios when the other guy can "promise" 10X the return to investors? Here lies part of the core problem--why conduct real business development if you can spin bubbles for higher short return?

In the not-so-distant future, a cabal of economic elites who control the nation's banking and credit systems conspire to destroy the structure of the financial system, so they can transfer vast amounts of taxpayer funds to themselves through government assistance programs set up to "rescue" the very financial system they destroyed.

http://www.minyanville.com/articles/tarp-paulson-bac-c/index/a/21019/from/yahoo

If I were a bank I would refinance the house if I could keep an equity stake on the deed for the remainder of the loan as a second position.

Here is a price reduction for an SF mid-rise development in Mission Bay:

Radiance? All reasonably-sized units are still priced above $900K.

I don't think so... :) No thanks!

I agree completely.

I actually went and looked at the model one day I happened to pass by there before Christmas. They had a snotty saleslady (you know the type) who put on the air of "you should be so lucky to live in this exclusive development". Bleh. I'm not falling for it. Look for further reductions.

and how much are these going for? (In Emeryville, does EBGuy ave some inside info ??)

http://www.vue46.com/

They advertise on the radio. Doesn't look all that great to me.

I vote for people exploiting people. Because f--- it, we might as well make it official. Justme and Patty, the issue is "arbitrary". You can gaze up at Buffet and that's unfair, but there's a whole fanout of J6P behind you who think you Bay Ayrean SW salaries are a grotesque anomaly.

Society should rode the coattails of its greatest, not revert to the LCD.

Bleh. I’m not falling for it. Look for further reductions.

Yep. :) I think so.

If you are interested in SF, nowadays there are quite a few choices in Pac Heights.

Also, the spell checking on my iPod makes me wants to scream. ;o

(In Emeryville, does EBGuy ave some inside info ??)
Click on "Details and Registration" from the main page... $200k off... what a bargain... I'll bring my checkbook. Pretty funny, someone on Socketsite just called Mission Bay (Radiance development) the Emeryville of San Francisco.

TOS,

Unbelievable. Why would a "successful" 65 year old need to borrow so much to buy a home? By that age, she should should have saved enough to pay cash. Instead, she used the wannabe tools of a variable rate mort combined with a HELOC.

Notice all the comments on her blog that sympathize with her. Unfortunately, that dipshit mentality affects Washington, too. They will pass that second bailout bill under the guise of aiding the general economy (that is, allow the public to continue borrowing to support consumption at thier "entitled to" level). In reality, this bailout will just transfer wealth from our decendents to the current banking elite. The overextended among us do not care about the long range affects of the bailout, just as long as they see a chance to be rescued from thier folly.

Note Washington's current catering to the lowest common denominator with the extension of the Digital TV transfer date from Feb to Jun. We will see 4 more years of similar action, where the short-sighted and irresponsible are held out as victims, needing government to force the prudent and responsible to bail them out.