patrick.net

Zlxr says

I think it would be nice if someone set up a test house unit with a lights, TV, a dishwasher, Computer gaming unit and a refrigerator and a toaster oven —– ALL powered by Pedal Power (someone riding an exercycle of sorts). There would need to be a gauge of some sort - but I think we would get a better idea of how much energy is needed if we had to ride a bicycle and then see how long any of the appliances would run. It would be really obvious really quick when the lights go out.

You would need to ride this bike a lot, and invite a few friends over to ride the bike as well, like when you are sleeping or too tired to ride. Maybe you could ride enough to power your TV, but not much else (and it would ahev to be a TV that does not use a lot of electricity).

shrekgrinch says

Troy says

The kicker is that the more you TAX and spend, the healthier the economy is since taxes come out of rents and land values.

No. Not unless you were taxing at the source of where the land values where, as in the LTV. But taxing entrepreneurs and those who finance them isn’t. The latter is also patently stupid.

Actually I'm talking about high taxes across the board, not just on the Galts that are beneficiently gracing us with their high-powered labors.

"Taxing Entrepreneurs" is just codetalk among the right.

I believe in rolling everyone's true cost of government services into their taxes. 15% to mandated social retirement plans that "can't" be defaulted on by some corrupt BOD. 15% to universal health care. 30% to running the rest of the government.

This would all come out of rents and land values in the end and we'd have a functioning society like what the high-tax high-service nations of Canada, Scandinavia, and Germany enjoy.

whether Obama is a failure because he caved to Republicans-who-don’t-even-have-the-power-yet

The Republicans have had the power to block bills in the Senate for about a year now. This was last demonstrated on Saturday. This is reality that Obama is acknowledging and that the House Dems are not, yet.

burritos says

Can you redo this calculation with depreciation?

What do you mean by "depreciation?"...do you mean taking the landlord tax deductions for depreciation into account? Like I said, let's keep it simple (too many variables involved there, since the deductions favor those who are in a higher income tax bracket more than those in the lower brackets). I just wanted to show Katy Perry why it's not in a landlord's favor to pay cash for a rental instead of financing, especially with historically low 6% rates.

Or you do mean "deflation"...where rents would decrease? To that, I say, not possible over 30 years...never ever have we had deflation over 30 years, but we have had inflation, as shown by the handy inflation calculator at http://www.westegg.com/inflation/ :

What cost $1400 in 1979 would cost $4083.69 in 2009.
Also, if you were to buy exactly the same products in 2009 and 1979,
they would cost you $1400 and $428.73 respectively.

or another 30 year period:

What cost $1400 in 1949 would cost $4273.23 in 1979.
Also, if you were to buy exactly the same products in 1979 and 1949,
they would cost you $1400 and $516.58 respectively.

As you can see, rent that costs $1,400 today will more than likely increase in the next 30 years, like it has in any 30 year period before us. Your fixed 30 year mortgage won't increase & thanks to prop 13 in California, you in effect have tax control, which will limit your property taxes from increasing no more than 2% per year.

Mark_LA says

As you can see, rent that costs $1,400 today will more than likely increase in the next 30 years, like it has in any 30 year period before us. Your fixed 30 year mortgage won’t increase & thanks to prop 13 in California, you in effect have tax control, which will limit your property taxes from increasing no more than 2% per year.

so that's why we think it's better to buy the house twice over 30yrs , then save and buy it once in 5-10yrs. (yes you have to live in a shoebox I get it)

Or do what my single 40 yr old friends do and spilt the $1800 rent on a 4/3 in Riverside four ways. thats $450 a month each. save the rest and buy once, when cash is really king (five years from now IMO)

don't have the cash don't buy,.we are heading this way anyways IMO.

Katy Perry says

don’t have the cash don’t buy,.we are heading this way anyways IMO.

This thread is dealing with landlords making a rental purchase, not for invididual homeowners, where the calculations would be different, but would still favor financing, as long as you invest the rest of the money elsewhere, such as rental real-estate.

Your advice to buy in cash isn't good when fixed 30 year mortgage rates are at historically low rates . For one, you're not letting the bank assume all inflation risk for you when you do that.

If inflation is rampant like it was during many past periods in our history, you don't "pay twice" as you mistakenly believe...you pay a lot less than you borrowed over 30 years in real, inflation-adjusted dollars.

In addition, you can invest the other 80% that you didn't put into your personal home purchase and make a large profit by purchasing rentals as I detailed above. Sure, put 20% down on your home, but not 100%, that makes no financial sense when fixed interest rates are below 6%.

theoakman says

Currently, I’m betting on bottoms in Natural Gas and The Nikkei. I think the big home run in the future will be to find a way to play the slaughtering that’s ahead for all these bond funds.

What are you doing to invest in natural gas, if you don't mind?

E-man says

Or do what my single 40 yr old friends do and spilt the $1800 rent on a 4/3 in Riverside four ways. thats $450 a month each. save the rest and buy once, when cash is really king (five years from now IMO)
Katy, you’re too practical. Most people don’t want to make this short-term sacrifice for long-term gain. That’s the problem

Thanks E-man! nicest thing i've ever heard.
but try and keep the Va jay jay happy with my plan. not going to happen in So Cal.

ch_tah says

theoakman says

Currently, I’m betting on bottoms in Natural Gas and The Nikkei. I think the big home run in the future will be to find a way to play the slaughtering that’s ahead for all these bond funds.

What are you doing to invest in natural gas, if you don’t mind?

FCG ETF I don't really have much time to investigate specific companies right now, so I just play the ETF. It's a pretty decent representation of the market. I consider it a small side bet. 75% of my money is sitting in physical gold/silver and mining stocks.

Mark_LA says

burritos says

Can you redo this calculation with depreciation?

What do you mean by “depreciation?”…do you mean taking the landlord tax deductions for depreciation into account? Like I said, let’s keep it simple (too many variables involved there, since the deductions favor those who are in a higher income tax bracket more than those in the lower brackets). I just wanted to show Katy Perry why it’s not in a landlord’s favor to pay cash for a rental instead of financing, especially with historically low 6% rates.
Or you do mean “deflation”…where rents would decrease? To that, I say, not possible over 30 years…never ever have we had deflation over 30 years, but we have had inflation, as shown by the handy inflation calculator at http://www.westegg.com/inflation/ :

What cost $1400 in 1979 would cost $4083.69 in 2009.
Also, if you were to buy exactly the same products in 2009 and 1979,
they would cost you $1400 and $428.73 respectively.

or another 30 year period:

What cost $1400 in 1949 would cost $4273.23 in 1979.
Also, if you were to buy exactly the same products in 1979 and 1949,
they would cost you $1400 and $516.58 respectively.

As you can see, rent that costs $1,400 today will more than likely increase in the next 30 years, like it has in any 30 year period before us. Your fixed 30 year mortgage won’t increase & thanks to prop 13 in California, you in effect have tax control, which will limit your property taxes from increasing no more than 2% per year.

I meant depreciation, the landlord tax of deducting 1/27.5 off the structure of the property. I know you want to keep it simple, but it's a significant amount. From what I understand if you can have one property paid off, but if you have enough other leveraged properties, you can deduct enough depreciation to offset the income from the fully paid property.

@TechGromit
I still stay that 70% of oil comes from North America. That leaves a 30% gap to close up.

While trucks might consume 20% of the oil, and products consume some large portion as well, car efficiency can provide fairly large savings. Making decent sized jumps in efficiency with cars will definitely bring that number down.

Trucks have made some headway towards energy savings as well. Intercity trucking is being viewed as a good place to put out electric fleets. Fedex was looking at it. Large trucks now have secondary generators on board to keep truckers from idling their trucks over night. Those wind breakers ontop of trucks that were introduced 15 years ago or so are supposed to have 10% gas savings. It's out there, they'll find some creative ways of fixing it up.

Burritos is correct that in real estate investing, the best measure of performance is Funds from Operations, which is basically adding non-cash expense like depreciation to get the cash yield.

Katy Perry says

EastCoastBubbleBoy says

The irony is, it may take 30 years to save up enough to buy in cash

when you finance (30 year @5%-6%) you buy the house nearly twice. In cash you only buy it once. try to explain away that fact.
most Morgage holders like to sweep this one under the rug.

Katy, the one key thing you don't understand is financing a home with a mortgage is by far the cheapest way to get financing. This is boosted by that the interest is deductable as well, which may reduce after tax yield to 3-4%. There is no chance in heck you will find anyone will lend to you at that rate long term. Freeing up the $$ may offer bigger opportunity elsewhere. In fact, in other posts, a lot of folks are getting 10-20% cash yield on the recent purchase. Does it stand to reason that if I pay the bank 5-6% but keep the $$ to make 10-20% annually, my net worth is better off in 30 years?

E-man says

Katy Perry says

Or do what my single 40 yr old friends do and spilt the $1800 rent on a 4/3 in Riverside four ways. thats $450 a month each. save the rest and buy once, when cash is really king (five years from now IMO)

Katy, you’re too practical. Most people don’t want to make this short-term sacrifice for long-term gain. That’s the problem.

I lived like that in college!

Given that your friends are 40 yrs old doing this tells me they're slackers and will never, ever save money to pay cash for any home, unless it's a mobile home. They'll just use the low $450 monthly rent payment as an excuse to work less, have less ambition, less stress, like most hippies love to do. Either that or they'll spend more on bar tabs or useless junk.

The most important thing I learned from my human resources class in school: The best predictor of future behavior is past behavior.

I am starting to wonder if alternative energy for transportation is going to come in the form of a cart pulled by a mule.

Those carts require a hell of a lot of work to make them go anywhere. Forget about speed. Just making them go takes up a lot of time and energy! I've seen owners going at them trying to make them move.

burritos says

I meant depreciation, the landlord tax of deducting 1/27.5 off the structure of the property. I know you want to keep it simple, but it’s a significant amount. From what I understand if you can have one property paid off, but if you have enough other leveraged properties, you can deduct enough depreciation to offset the income from the fully paid property.

Like I said, there's too many variables involved and the savings from depreciation will be wildly different from one income level to another.

The best advice I can give you is to purchase Turbotax to easily run all these scenarios, perfectly tailored to your personal situation. It's ridiculously simple to use, yet extremely powerful. You can fill in all your tax information as if you're ready to file your return. When you're done, then you can go back and plug in details from your rental properties and instantly see your tax payment/refund adjust in real-time.

Eventhough I still have my CPA review my personal 1040 tax return since he files my corporation 1020 taxes, I always prepare them myself in Turbotax. Doing so automatically teaches me invaluable lessons on how to save on income taxes in future years since it teaches me the mechanics of it all.

The nice thing is that if in June or September I have "what if" type questions regarding taxes, I just open my previous year's Turbotax file, "Save As" a new scenario name and plug in the new variables I'm playing with in my head to see quick real-time results.

One more thing...I've always used the desktop version of Turbotax...I don't know if the online version would allow you to go back several months later and plug in different scenarios.

TechGromit, I guarantee you that 30 amperes is the current in my apartment now:

http://www.flickr.com/photos/49793436@N06/5248092531/

> I believe the code for a typical 15 amp lighting circuit is 10 outlets max (this includes fans and lights).

This sounds about right. Our old place had (I think) 6 or 8 outlets (3 or 4 pairs), and now we have... let me count... 2 in the kitchen (fridge and microwave), 4 in the living room (2x2; both have surge protectors on them and I wish we had 2 more there), 2 near the toilet, and 2 near the shower. I might be missing one somewhere; maybe the total is 14 or 16.

Our old TV gobbled up something like 600 watts of power (much more than the flat screen we have now), and so did the microwave, so if the refrigerator started to run, that was where we ran out.

Voltage x current (amperes) = power (watts), so 110 volts and 15 amperes means we could only be consuming 1.65 kW at any given time. Am I doing it wrong? (Probably. ^_^)

In that apartment we typically consumed about 70 kWh in a given month; now we use 80-120; more when we turn out our heater in the winter, which is electric and requires 400-800 watts all by itself. Electricity costs 23 yen (26¢) per kWh here, so it is not to be consumed recklessly.

At one outlet for every 6 feet of wall space, do inner walls count, or only exterior ones? If not, we're easily in the clear now (14 outlets in an apartment of 20 feet on a side, or 80 feet around). I suspect you're vastly overestimating the size of an urban apartment. This isn't a 2000-sf house!

Mark_LA says

never ever have we had deflation over 30 years

What cost $1 in 1870 would cost $0.66 in 1900.

Granted, that was pre-Fed and while we were on the gold standard.

shrekgrinch says

See above.

haha, honestly: No offense to the people who do, but I don't see why anyone here even bothers to continue to argue with you. Its a wash. Please start writing your arguments in ALL CAPS, it would be more 'in character'.

shrekgrinch says

You just won’t get the revenue you think you will by raising income taxes on the top 10% or even top 20%, period.

I will add that under Eisenhower the tax rate on the top earners was something like 90 percent (more diligent folks can look the exact numbers up) and the economy was doing great.

So... ?

oh, and I will also add:

you dumbtarded!

Your chosen party is stripping the country dry and you argue technicalities. Rock on Shrekgrinch, army of one, rock on.

Troy says

whether Obama is a failure because he caved to Republicans-who-don’t-even-have-the-power-yet

The Republicans have had the power to block bills in the Senate for about a year now. This was last demonstrated on Saturday. This is reality that Obama is acknowledging and that the House Dems are not, yet.

One more note on my part...

This is all is assuming that Barack Obama and his cabinet's values are based on those of 'typical democrats' (as viewed from the Republican point of view)...

But based on his actions and his cabinet structure Obama is simply representing the wealthy, his donors, according to the US system, no more no less.

Which is of course what the republicans are doing...

So really, "its" no longer a Republican vs. Democratic party issue, its an "America" vs. 'wealthy donors' (the Bankers) issue.

So get educated and drop your party affiliations. Your quality of life is going down while theirs is going up. We argue technicalities while they build walls.

Troy says

never ever have we had deflation over 30 years

Never say never.

If the unemployment reaches 20%, we might.

kentm says

This is all is assuming that Barack Obama and his cabinet’s values are based on those of ‘typical democrats’ (as viewed from the Republican point of view)…

Neither Pelosi or Reid had the whip counts to pass the bills to meet Obama's campaign pledges wrt the 98% and the 2% (former keeping the 2001/2003 tax cuts and the latter losing).

The blue dog dems did not want to be attacked as tax raisers this cycle. They lost anyway.

I don't know what Obama's game is but so far I think he's simply doing the best he can in a very difficult political/media environment.

The S&P 500 is up 50% since the day of his inauguration but half the country believes he's a closet marxist.

One of his bigger mistakes was appointing the deficit commission last Feb. I think he got blindsided by that in a couple of ways, not seeing that it would go rogue, and having the "Summer of Recovery" go MIA. I also think the appropriate people have been fired over this.

IMO2, Obama has had to play a very cautious public image game of being the moderate, due to the general history of black American politics of resentment and strife.

Oddly enough, while he is certainly African-American, he, unlike the First Lady, is not really Black American, though he's shared some of that experience.

So going out on the all-out attack would leave him vulnerable to smears like Howard Dean got, but worse given the racist angles involved.

So get educated and drop your party affiliations.

I see it as a conservative/moderate/liberal split more than a Party split, yes.

The Dems lost a lot of conservatives this go around and they will lose more in 2 years.

AFAICT the Dems are 30% liberal/ 40% moderate / 30% conservative, while the Republicans are 5% moderate / 75% conservative / 20% insane.

I don't think the people are ready to return 80% Senate majorities that FDR enjoyed in 1936 or the 66 seat majority LBJ enjoyed in 1964.

There's going to have to be a lot more pain distributed.

FWIW, I see strong parallels between Obama and Jerry Brown. Both run on the Hope thing but both are also hard-core realists.

The ugly truth is that we are a very, very stupid people. We blame the banks but it was we who borrowed all that money we can't pay back, and it was we who voted in spendthrift politicians and the whole neocon BS.

Troy says

never ever have we had deflation over 30 years

I sure *hope* we have deflation over 30 years. I'd prefer sound money, but if the government can somehow manage to keep prices either stable or decreasing, they've got my vote no matter which party is in power. Money that retains its value once was, and should now be, a basic human right.

If we want to get off of imported oil, we first have to ban the use of home heating oil! That's a complete waste of oil when you can easily be using natural gas, heat pump, pellet stove (or pellet furnace), etc.

I don't know where you guys are getting your numbers from. According to the petroleum institute 63% of crude oil used by US refineries is imported. Are we going to make Canada and Mexico states? If not then why does it matter if they are in North America? They aren't giving the oil away because we are such good neighbors, they sell it to America just like any other foreign country.

Give me a break. Hauser's "law" is simply an empirical observation. There's nothing sacred about it. And it's been proven wrong recently. In 2009 tax revenues were far below what Hauwer proposed...

Troy says

What cost $1 in 1870 would cost $0.66 in 1900.

Granted, that was pre-Fed and while we were on the gold standard.

It also had a lot to do with the productivity gains from the Industrial Revolution, prices normalizing after hiking up during the Civil War period, and a bountiful source of cheap labor from European immigration to the U.S.

It's like the price of books after the printing press was invented, the price of books dropped dramatically since they no longer had to be hand-copied.

Like you mentioned, now we have the Fed which can just run those same dollar printing presses 24x7 to prevent deflation.

shrekgrinch says

And that range has remained, on average, consistent no matter whether we had 91% top tax rates, 70% or 25%. Sometimes collections are lower than the average, sometimes they are above.

Except that it hasn't. 2009 proved that. Hauser was wrong.

Wow--there's a huge difference between 14.4 and 20.9% of GDP.

2009 GDP = 14,000,000,000,000

at 20.9%, tax receipts = 2,926,000,000,000

at 14.4%, tax receipts = 2,016,000,000,000

that's a difference of 910,000,000,000

just short of a trillion dollars there. If you consider a trillion dollars to be at or about the same as zero, then I think you need some remedial math classes.

If Hauser's law really encompasses anything from 14.4% to 20.9%, then it is useless.

The notion that government owns your money and you don't is absurd. The rich pay a huge amount of money to support the spending that government does for the benefit of many who pay no income taxes, including extending unemployment benefits to pay people not to work for another year. Government needs to slow down spending and stop taxing people to death and encourage investment, business, jobs, growth, energy, innovation, savings, manufacturing and economic strength. Spending, debt, and taxes are all drags on the individual and business which hurts the USA.

Thank you Captain Capitalism

I suspect that Antioch Rent on San Jose Ave. will drop to 850 - 900 dollars in 2013 or so.

so I've been checking out the filings. No relief from stay has been filed.

There was a filing for "loss mitigation". Subsequent paperwork indicates the debtor is still trying to gather the documentation requested by the primary lien holder.

if you rent for $1400, it is a good deal. Monthly rent = 1% of purchase prices = sweet.
In my area, it is like 0.4% of purchase price...

shrek--

You really aren't this stupid. I just showed how ridiculous Hauser's law is--it says that revenue is constant. Oh yeah, with an error bar of only $1Trillion. Wow, that is earth shattering wisdom there.

I just came up with a new law of my own. Call it tatupu's law:

The Colorado Rockies win-loss record is completely independent of the players on the team. It's pointless for the owners and GM to try to find good players--it makes no difference. Since their inception, they have won at or about 48% of their games (41.4% to 56.8%).

They should just field a team of scrubs and pay them all the minimum, right? It makes no difference in the standings, after all.

tatupu70 says

They should just field a team of scrubs and pay them all the minimum, right? It makes no difference in the standings, after all.

Well done tatupu. The only problem is you're getting caught up arguing with a guy who won't hear you and who takes pride in the fact that most all he has to share is ignorant bluster. Pretty sure in fact that he's Ray under a different name. I enjoy this site a lot more when I have them both on ignore.

This guy is even worse. At least I can understand what Ray and Shrek are trying to say.

Tenouncetrout says

You Libs could give a Rats ass about the American people, and aspire to fix the right financial positions for your political utopia, of unspoiled profit, in the sectors and verticals your party can wield.

As upset and disappointed as I am with Obama's tax deal, it's mostly because I wanted the fight to inform more of the ignorant public who the republicans are really fighting for. What did republicans get out of the deal ? Financial benefits for the rich ( oh yes, that supposedly trickle down).

Tenouncetrout says

You Libs could give a Rats ass about the American people

Right wing commentator Charles Krauthammer (in the W. post)

Obama is no fool. While getting Republicans to boost his own reelection chances, he gets them to make a mockery of their newfound, second-chance, post-Bush, Tea-Party, this-time-we're-serious persona of debt-averse fiscal responsibility.

Under these circumstances it's clear to me which party cares less about the people. As a purely hypothetical (and I know you could argue the premise), if saving this country and our long term economy truly came down to whether or not we will have much more progressive taxation of high incomes, which would the republicans choose ?

That's right. The liberals are the new conservatives (at least if you can understand how radical big tax breaks for the rich really are).

TechGromit says

Hey your right. And cutting the defense budget isn’t going to solve our deficit crisis, so why bother? Cutting the federal employees raises isn’t going to solve it and raising the retirement age isn’t either, so let not even bother to do those things. Do you know where we end up? Right were we are now, do nothing, stall, until I get re-elected again. Then who cares for another 2 years. Then blame the other party, it’s all there fault I tried to fix things, but they are crazy, but if you re-elect me I’ll make everything better.

This situation isn’t going to be solved with one stroke of the pen, it’s going to take a lot of little sacrifices, and this government isn’t willing to sacrifice anything. I seriously fear for the future, Hyperinflation is the only way out of this mess. Congress shows a compete lack of willpower to change. Tea party or not, its the same animal, just different colors.

Well said, I agree completely. And every time we kick the can down the road, the sacrifices we will have later just get bigger. I believe that it is possible to stall things too long, with an end result as you say of hyper inflation, or even worse the end of democracy as we know it (knew it).

I don't know the answer, but I believe some kind of very real campaign finance reform would be a start.

shrekgrinch says

The average we get in income tax revenues is 19.5%, with the lows and highs I just mentioned and you acknowledge.

What part of the word average don't you understand? It means more was collected some years and less in others. Not that 19.5% was collected every single year. Your argument just doesn't make any sense other than to say the average collections is less than the current expenditures. So what's your point? This not any great leap in the fund of human knowledge.

You guys are just being ridiculous anyway. Taxes must go up, spending must go down, the excesses of the past must be paid for somehow. Any not too bright 7 year old can do the math on this one. Will it happen before a major economy destroying crisis. Not likely.