Financial Crisis

[mccw]

Just saw this in biz insider app-

""Home prices are soaring in many western U.S. markets. They're up 34% from a year ago in the Sacramento area, 33% in Las Vegas, and 31% in Oakland, according to data from the Trulia Price Monitor.""

They're calling it a "western housing bubble".

[farang000999]

Same thing in Florida. Home prices are still down a lot though even compared to pre housing crisis. it is kind of funny if you go to a gated community where the company builds the house for you, you will see the cost to build a new home in 2013 versus buy the same home built in 2006. From an appraisers perspective, I doubt there will be a difference in value upon completion.

As for buying abroad in USA and renting out - that sounds like a bad idea. The fees though would be agent charges 1st month rent to get a renter and then 10% a month to manage property. USA has a Thailand style wealth distribution these days but the underclass is different in terms of what it thinks it deserves. The process of eviction is more complicated than in Thailand!

[Naam]

We were talking at cross purposes, I was not looking at Detroit as somewhere I would personally make an investment, in that context I agree that Florida presents better opportunities. But I still believe that Detroit has a future and for big money speculators/business I think it's sound.

not to forget a sufficient long statistical life span to see positive results

[yoshiwara]

Why would you go long Detroit? Detroit is a right-to-work state now which is Spanish for No-More-New-Unions.

The population is 85% black and many areas 99% black. Good luck with the gentrification! Many of the streets have units that have been burned down and/or just left to decay. If you call the police, they come next week!

The highlight of Detroit is the beautiful weather and pretending that you are in an episode of The Walking Dead.

What jobs or industry is coming to Detroit? You might as well invest in Fukoshima farm land.

Many of the same reasons that made Detroit what it was exist today, seabound access via the Great Lakes, close proximity to and good access to Windsor, Canada, good infrastructure (roads/rail/air) and proximity to the steel manufacturing centres of Toledo and Pittsburgh - there is also an imediatley available work force and the city infrastucture remains intact, albeit unused, an added advantage today is that it's all available especially cheap.

It's not well understood that Detroit is a doughnot city that is hollow in the centre, but it's been that way increasingly since the mid 1970's. But the important part is that surrounding Detroit on three sides are some very propserous, predominently white suburbs and the professional workers who live there would love nothing more than to return to a viabrant city to work once again.

I read a report recently that said the big money speculators had moved into the centre and were buying up the business buildings very cheaply, that I think is very smart investment money and in the next ten to twenty years as Detroit reinvents itself, those investments will pay off handsomely.

It is a right-to-work state. Those old white people living in the suburbs and working at Walmart can hope all they want to return to work again but it is never going to happen and if it does it would be a for a fraction of the salary/benefits. The old union days are over. This is the new America. The growth industries are technology and energy. All sorts of things can happen in ten to twenty years.

Personally, I would rather buy in Florida. It is cheap as hell. Baby boomers are retiring. And when immigration gets more liberalized, Latin America will pour into Florida as it is so close to Central/South America.

Detroit population just keeps shrinking and I see no reason why it would stop.

That infrastructure can't be so hot the city has 1/3rd of the people it did 50 years ago... Yeah "unused" is putting it lightly.

We were talking at cross purposes, I was not looking at Detroit as somewhere I would personally make an investment, in that context I agree that Florida presents better opportunities. But I still believe that Detroit has a future and for big money speculators/business I think it's sound.

This is not a general business advice forum. The best advice for someone spending their time in Thailand but who was interested in international property opportunities would be to invest in companies doing the appropriate business. Speculating on the purchase of individual property that one has zero personal intention of ever being involved on a Cook's Tour of US cities is a complete waste of time. IMHO of course....

Edited August 9, 2013 by yoshiwara

[chiang mai]

Many of the same reasons that made Detroit what it was exist today, seabound access via the Great Lakes, close proximity to and good access to Windsor, Canada, good infrastructure (roads/rail/air) and proximity to the steel manufacturing centres of Toledo and Pittsburgh - there is also an imediatley available work force and the city infrastucture remains intact, albeit unused, an added advantage today is that it's all available especially cheap.

It's not well understood that Detroit is a doughnot city that is hollow in the centre, but it's been that way increasingly since the mid 1970's. But the important part is that surrounding Detroit on three sides are some very propserous, predominently white suburbs and the professional workers who live there would love nothing more than to return to a viabrant city to work once again.

I read a report recently that said the big money speculators had moved into the centre and were buying up the business buildings very cheaply, that I think is very smart investment money and in the next ten to twenty years as Detroit reinvents itself, those investments will pay off handsomely.

It is a right-to-work state. Those old white people living in the suburbs and working at Walmart can hope all they want to return to work again but it is never going to happen and if it does it would be a for a fraction of the salary/benefits. The old union days are over. This is the new America. The growth industries are technology and energy. All sorts of things can happen in ten to twenty years.

Personally, I would rather buy in Florida. It is cheap as hell. Baby boomers are retiring. And when immigration gets more liberalized, Latin America will pour into Florida as it is so close to Central/South America.

Detroit population just keeps shrinking and I see no reason why it would stop.

That infrastructure can't be so hot the city has 1/3rd of the people it did 50 years ago... Yeah "unused" is putting it lightly.

We were talking at cross purposes, I was not looking at Detroit as somewhere I would personally make an investment, in that context I agree that Florida presents better opportunities. But I still believe that Detroit has a future and for big money speculators/business I think it's sound.

This is not a general business advice forum.

If you say so moderator Yosh, if you say so!

[chiang mai]

Many of the same reasons that made Detroit what it was exist today, seabound access via the Great Lakes, close proximity to and good access to Windsor, Canada, good infrastructure (roads/rail/air) and proximity to the steel manufacturing centres of Toledo and Pittsburgh - there is also an imediatley available work force and the city infrastucture remains intact, albeit unused, an added advantage today is that it's all available especially cheap.

It's not well understood that Detroit is a doughnot city that is hollow in the centre, but it's been that way increasingly since the mid 1970's. But the important part is that surrounding Detroit on three sides are some very propserous, predominently white suburbs and the professional workers who live there would love nothing more than to return to a viabrant city to work once again.

I read a report recently that said the big money speculators had moved into the centre and were buying up the business buildings very cheaply, that I think is very smart investment money and in the next ten to twenty years as Detroit reinvents itself, those investments will pay off handsomely.

It is a right-to-work state. Those old white people living in the suburbs and working at Walmart can hope all they want to return to work again but it is never going to happen and if it does it would be a for a fraction of the salary/benefits. The old union days are over. This is the new America. The growth industries are technology and energy. All sorts of things can happen in ten to twenty years.

Personally, I would rather buy in Florida. It is cheap as hell. Baby boomers are retiring. And when immigration gets more liberalized, Latin America will pour into Florida as it is so close to Central/South America.

Detroit population just keeps shrinking and I see no reason why it would stop.

That infrastructure can't be so hot the city has 1/3rd of the people it did 50 years ago... Yeah "unused" is putting it lightly.

We were talking at cross purposes, I was not looking at Detroit as somewhere I would personally make an investment, in that context I agree that Florida presents better opportunities. But I still believe that Detroit has a future and for big money speculators/business I think it's sound.

How about LA?

I see seen several multi family / apartment buildings going for around $800,000 to 1,200,000 at a around 7-8% net yield/ after running costs but before taxes. Not bad if can fix a 30year loan at 4or 5%?. 20% money down?

Second biggest economic zone in the country after NY I read. One of the biggest in the world. Plenty of jobs and renters. I've never been though.

Direct flight from bkk I think.

How does one get to Florida if one needs to?

Something like this can be trusting agents / managers to take care of properly and as investor/ owner just see the money come in? Or you think safer to buy just a couple nice apartments do you think? My feeling generally where ever the country its nice to actually own land and building on it rather than just a piece of sky + then liable for others charges fees and nieghbours out of control/ I like to be able to deal with any problem rather than be reliant on petitioning others to do something.

It would depend on which part of LA, LA is huge and you'd need to be very careful about neighbourhoods/districts.

Florida from here is to Miami either via NY or LA, go east or go west via London/Europe, it's a long way which ever way you go.

[yoshiwara]

If you say so moderator Yosh, if you say so!

What a lot of this boils down to is what should one do with say up to $200,000 to invest if one needs income to support one's time in Thailand.

Edited August 9, 2013 by yoshiwara

[mccw]

If you say so moderator Yosh, if you say so!

What a lot of this boils down to is what should one do with say up to $200,000 to invest if one needs income to support one's time in Thailand.

In a way yes. Its how to invest in this financial crises effected environment.

If say one has $200,000 then the appealing thing I see about the US is this 200 can borrow another 800. The 800 could be bringing in 2 to 4% profit over the fixed interest payment. While the 200 is making you 7-8% also. So your 200 in can be returning around 60-90k or roughly 20 to 35% actual return from the cash in + potential inflationary gains. Fixed rate for 30years is really sounding very nice to me. Its hard to imagine that these dollars won't be worth a fraction of what they are today.

Invest in companies doing this - so you own a share and they pay you some measly dividend of a couple % while they take your money and make 20-40% ? Doesn't sound like the one for me. They might over levage , collapse and you loose everything ; so plenty of risk for penuts. Or can own the actual asset and make enough profits to cover the occasional hiccups of evictions and repairs. If the company can make it work why not an individual if the have the recourses to back it up (I'm not talking an all eggs in one basket investment here; but part of a portfolio)

[farang000999]

If you are going to be abroad you are going to have a lot of expenses:

maintenance

home insurance

property taxes

management

income taxes on rental income

and then capital gains taxes if you ever sell

The reality is that real estate in the USA (maybe everywhere) is a pretty shitty investment if you are not living in it. This is just IMHO. There will always be exceptions, like if you are one of those people on the tv shows that transform the house and make a killing - but just buying and renting- I don't see why you would not rather own equities.

Ive honestly never met a single person who owned homes and did not say what a pain in the ass that it is. Renters DO NOT maintain your home for you. I can literally drive down a street and tell exactly who is a renter without fail - the property looks like crap. and there is still the chance that they totally destroy your property.

Here is rental property i have the misfortune of owning.

rent $1000/month

lawn maintenance $100/month

property tax $110/month

insurance $130/month

now if i were paying someone to manage it $100/month

that leaves $560/month before expenses related to maintaining the property.

A roof costs about $10,000 and lasts maybe 15 years on average. A/C lasts 15 years and costs $5,000. Plumbing. Water heater. Pool equipment. Termites spraying. The list never ends.

A home is a depreciating asset and it is a headache.

That is just imho.

Edited August 9, 2013 by farang000999

[mccw]

I'm looking at www.loopnet.com

Others may find it interesting.

They break properties down as investments rather than just headline prices / info.

[mccw]

If you are going to be abroad you are going to have a lot of expenses:

maintenance

home insurance

property taxes

management

income taxes on rental income

and then capital gains taxes if you ever sell

The reality is that real estate in the USA (maybe everywhere) is a pretty shitty investment if you are not living in it. This is just IMHO. There will always be exceptions, like if you are one of those people on the tv shows that transform the house and make a killing - but just buying and renting- I don't see why you would not rather own equities.

Ive honestly never met a single person who owned homes and did not say what a pain in the ass that it is. Renters DO NOT maintain your home for you. I can literally drive down a street and tell exactly who is a renter without fail - the property looks like crap. and there is still the chance that they totally destroy your property.

Here is rental property i have the misfortune of owning.

rent $1000/month

lawn maintenance $100/month

property tax $110/month

insurance $130/month

now if i were paying someone to manage it $100/month

that leaves $560/month before expenses related to maintaining the property.

A roof costs about $10,000 and lasts maybe 15 years on average. A/C lasts 15 years and costs $5,000. Plumbing. Water heater. Pool equipment. Termites spraying. The list never ends.

A home is a depreciating asset and it is a headache.

That is just imho.

All depends on what the property is obviously. Like a wood built home (i would never by a wood house- being from uk where houses are made out of brick it really seems a ridiculas method, especially in such enviroments as US has) then maintenance going to be much higher % costs to income than a concrete and steel built apartment building.

I have brick built rental houses in UK. They are nicely profitable. I started with them at the low after crash and have healthy capital gains but the point is rent. With mortgage leverage its very nice. Borrowing at 4-5% and on property yielding 9-13% (total price) means an actual yield on cash in of 20-30%. Maintenance is a minor compared to the income. I have a few in same area so save by existing tenants recommending friend so hardly need agents and I have a maintance guy who takes care of things for a discount on his rent. I don't expect it this sweet in US but from my experience in UK I don't see why I couldn't apply the same principles over there but calculate allowances for agent fees and more expensive maintenance call outs.

Why not equities? Because a diversified share of value a million $ with dividends of 3-5% only gets you around 40 thousand dollars a year. But just 200,000 dollars could get you more than this alone if using mortgage levage. So that 1 million could = yearly income of $200,000 instead of the equities 40. Which is better seems obvious to me.

Equities can't be leveraged like this can they? Because no loans cheaper than the dividends. No?

[mccw]

I thinking along lines something like these:

http://www.loopnet.com/Listing/18266109/4525-Rosewood-Avenue-Los-Angeles-CA/

http://www.loopnet.com/Listing/18299570/1420-W-39th-St-Los-Angeles-CA/

http://www.loopnet.com/Listing/18297713/455-S-Alexandria-Avenue-Los-Angeles-CA/

[mccw]

http://www.loopnet.com/Listing/18193329/4801-2nd-Avenue-Los-Angeles-CA/

So everybody think this kinda business is bonkers then?

Physical assets that need maintaining are worse way to steer through a financial crises than bonds which don't have that cost but do pay very low interest or carry quite a very high risk of capital loss? Or shares I'd class in a similar boat.

Only time I would by shares is at a contrarian time; not now when at record highs. Only maybe if a PE jumps out at me. Like BP at 5.1 to earnings with a dividend over 5% looks alright for a buy? Plenty of negative stories taking share price down; but they are huge company and will come through it in a couple of year and be making billions upon billions.

[mccw]

""""

Sants Joins Inner Sanctum Of Bank Lobby Group

Last Updated 18:38 09/08/2013

Mark Kleinman, City Editor

Sir Hector Sants, the former chief executive of the City regulator, has cemented his gamekeeper-turned-poacher status by joining the board of the banking industry's main lobbying group.

Sky News understands that Sir Hector, who joined Barclays earlier this year as its head of compliance and government and regulatory relations, will attend his first board meeting of the British Bankers' Association (BBA) in the autumn.

The appointment underscores how Sir Hector's career has come full circle after leaving the investment banking arena to join the Financial Services Authority (FSA) in 2004. He landed the top job at the regulator three years later, and endured a torrid time at the helm as Britain's banking system faced arguably its biggest-ever crisis.

Sir Hector replaces Matt Hammerstein, who has moved to a new role in Barclays' retail operations, as the bank's BBA board representative.

Each of the main UK high street banks nominates a director of the BBA, which does not routinely publish the names of those representatives. A number of international banks with a major presence in the UK, such as BNP Paribas, also have BBA directors.

Sir Hector's arrival on the board comes as the lobbying group prepares to redefine its strategy following the loss of its role in setting the interbank borrowing rate, Libor.

According to people close to the BBA, it is expected to thrash out a number of changes to its activities in the autumn. In recent months the industry has faced criticism for the extent of its efforts to water down new rules forcing banks to hold more capital, and Barclays in particular was censured for threatening to shrink its lending as a result.

Barclays was the first bank to be fined for its role in the rate-rigging scandal when it landed a £291m penalty from regulators including the FSA last year.

The BBA and Barclays declined to comment.

"""""

-sky news app

[yoshiwara]

Good for Hector.

[midas]

Wash rinse, repeat

German opposition parties accused Chancellor Angela Merkel on Sunday of lying before elections next month about the risks of a new bailout for Greece,

http://www.reuters.com/article/2013/08/11/us-greece-aid-bundesbank-idUSBRE97A09O20130811

[chiang mai]

The Sunday papers in the UK report that all is well, employment, consumer spending, house prices, the view on Europe and everything else that can be, are all up.Hallelieua, it's a mirracle, we've all been saved!

[midas]

The Sunday papers in the UK report that all is well, employment, consumer spending, house prices, the view on Europe and everything else that can be, are all up.Hallelieua, it's a mirracle, we've all been saved!

UK wages decline among worst in Europe

http://www.bbc.co.uk/news/business-23655605

Edited August 12, 2013 by midas

[chiang mai]

The Sunday papers in the UK report that all is well, employment, consumer spending, house prices, the view on Europe and everything else that can be, are all up.Hallelieua, it's a mirracle, we've all been saved!

UK wages decline among worst in Europe

http://www.bbc.co.uk/news/business-23655605

...and Mrs Jones at number 23 has got an ingrown toenail.

Hardly catstrophic news given the collective wealth of the UK population, or are they really approaching somchai's income level!

[midas]

The Sunday papers in the UK report that all is well, employment, consumer spending, house prices, the view on Europe and everything else that can be, are all up.Hallelieua, it's a mirracle, we've all been saved!

UK wages decline among worst in Europe

http://www.bbc.co.uk/news/business-23655605

...and Mrs Jones at number 23 has got an ingrown toenail.

Hardly catstrophic news given the collective wealth of the UK population, or are they really approaching somchai's income level!

It's very easy to brush it off when enjoying a comfortable life in Thailand while in Britain the poor buggers are seeing more and more of their public money gradually siphoned off into private pockets

Edited August 12, 2013 by midas

[chiang mai]

The Sunday papers in the UK report that all is well, employment, consumer spending, house prices, the view on Europe and everything else that can be, are all up.Hallelieua, it's a mirracle, we've all been saved!

UK wages decline among worst in Europe

http://www.bbc.co.uk/news/business-23655605

...and Mrs Jones at number 23 has got an ingrown toenail.

Hardly catstrophic news given the collective wealth of the UK population, or are they really approaching somchai's income level!

It's very easy to brush it off when enjoying a comfortable life in Thailand while in Britain the poor buggers are seeing more and more of their public money gradually siphoned off into private pockets

If there's one thing I've learned from living in Asia it's that wealth is a relative thing that needs to be compared on a global basis, rather than against the person next door..

[midas]

...and Mrs Jones at number 23 has got an ingrown toenail.

Hardly catstrophic news given the collective wealth of the UK population, or are they really approaching somchai's income level!

http://www.nationaldebtclock.co.uk/

[chiang mai]

...and Mrs Jones at number 23 has got an ingrown toenail.

Hardly catstrophic news given the collective wealth of the UK population, or are they really approaching somchai's income level!

http://www.nationaldebtclock.co.uk/

Fair enough I suppose, but it still makes me pause, reflect and get marginally annoyed every time I compare relative worth, assets, standards of living and available facilities of the Somchai's and the Smith's. Granted the wealth of the collective Smiths is largely imaginary although it is real if any one of them choses to realise it, Somchai's poverty is real and no ammount of imagination can make it otherwise, I hope this doesn't make me a socialist.

[Naam]

£ 34.408 debt per UK taxpayer

that should scare the living beejesus out

of the Brits who live in Nakhon Nowhere!

[NeverSure]

...and Mrs Jones at number 23 has got an ingrown toenail. alt=giggle.gif width=20 height=25>

Hardly catstrophic news given the collective wealth of the UK population, or are they really approaching somchai's income level!

width=20 alt=giggle.gif>

http://www.nationaldebtclock.co.uk/

£ 34.408 debt per UK taxpayer

that should scare the living beejesus out

of the Brits who live in Nakhon Nowhere!

alt=w00t.gif width=18 height=20>

"The truth however is much worse, factoring in all liabilities including state and public sector pensions, the real national debt is closer to £4.8 trillion, some £78,000 for every person in the UK."

Same link as above - debt clock.

[mccw]

A snippet of an RT story for Midas-

"""Mandatory minimum sentences for non-violent drug offenses have played a huge role in the explosion of the U.S. prison population, Durbin said in a news release. Once seen as a strong deterrent, these mandatory sentences have too often been unfair, fiscally irresponsible and a threat to public safety. Given tight budgets and overcrowded prison cells, judges should be given the authority to conduct an individualized review in sentencing certain drug offenders and not be bound to outdated laws that have proven not to work and cost taxpayers billions.""""

Eric Holder is suggesting the change. Do it appears that the result of financial crises maybe the eventual decriminalising of drugs (as seen with ganja in many states) and lower prison populations. I'll believe it when I see it; but the rate of change on the weed front has astounded me. This hopefully will send waves of more sensible policy reverberating around the world.

[midas]

A snippet of an RT story for Midas-

"""Mandatory minimum sentences for non-violent drug offenses have played a huge role in the explosion of the U.S. prison population, Durbin said in a news release. Once seen as a strong deterrent, these mandatory sentences have too often been unfair, fiscally irresponsible and a threat to public safety. Given tight budgets and overcrowded prison cells, judges should be given the authority to conduct an individualized review in sentencing certain drug offenders and not be bound to outdated laws that have proven not to work and cost taxpayers billions.""""

Eric Holder is suggesting the change. Do it appears that the result of financial crises maybe the eventual decriminalising of drugs (as seen with ganja in many states) and lower prison populations. I'll believe it when I see it; but the rate of change on the weed front has astounded me. This hopefully will send waves of more sensible policy reverberating around the world.

You are right to be sceptical until you see the outcome of any probable lobbying and further campaign contributions ( , the three largest private prison companies—CCA, GEO and Cornell Companies —have

contributed $835,514 to federal candidates, including senators and members of the House of Representatives and giving to state level politicians $6,092,331.)

I mean heaven forbid that there should be any reduction to their revenue stream

" The demand for our facilities and services could be adversely affected by the

relaxation of enforcement efforts, leniency in conviction or parole standards and

sentencing practices or through the decriminalization of certain activities that are

currently proscribed by our criminal laws. For instance, any changes with respect

to drugs and controlled substances or illegal immigration could affect the number

of persons arrested, convicted, and sentenced, thereby potentially reducing

demand for correctional facilities to house them . Legislation has been proposed in

numerous jurisdictions that could lower minimum sentences for some non-violent

crimes and make more inmates eligible for early release based on good behavior.

Also, sentencing alternatives under consideration could put some offenders on

probation with electronic monitoring who would otherwise be incarcerated.

Similarly, reductions in crime rates or resources dedicated to prevent and enforce

crime could lead to reductions in arrests, convictions and sentences requiring

incarceration at correctional facilities."

~ CORRECTIONS CORPORATION OF AMERICA 2010 ANNUAL REPORT

Edited August 13, 2013 by midas

[cheeryble]

that should scare the living beejesus out

of the Brits who live in Nakhon Nowhere!

ha-ha-ha barf barf!!

"£ 34.408 debt per UK taxpayer"

.......

"The truth however is much worse, factoring in all liabilities including state and public sector pensions, the real national debt is closer to £4.8 trillion, some £78,000 for every person in the UK."

Neversure .....

You are counting the sum owed BY the British population, but omitting the small fact that it's also owed TO the British population.

Edited August 13, 2013 by cheeryble

[NeverSure]

that should scare the living beejesus out

of the Brits who live in Nakhon Nowhere!

ha-ha-ha barf barf!!

"£ 34.408 debt per UK taxpayer"

.......

"The truth however is much worse, factoring in all liabilities including state and public sector pensions, the real national debt is closer to £4.8 trillion, some £78,000 for every person in the UK."

Neversure .....

You are counting the sum owed BY the British population, but omitting the small fact that it's also owed TO the British population.

Sorry, it doesn't work that way. That figure is money owed by the government to the people in the way of pensions.

You must separate the private sector from the public (government) sector. The private sector creates wealth while the public sector is a consumer of wealth produced by the private sector. The government must figure out a way to pay these pensions, etc., to the people who have received the promises.

So while yes, the government is the people, it has to tax the people to pay its bills and they are £4.8 trillion, some £78,000 for every person in the UK.

[cheeryble]

You saying I don't know a net zero-sum when I see one?

Edited August 14, 2013 by cheeryble