Financial topics

[OLD1953]

I have always reserved my greatest annoyance for things I'm legally obligated to pay for twice. To me this dwarfs the supposed "double taxation" that results from handing taxed money to another and then declaring "that's not his income". (can he spend it? could he spend it the day before he got it? if not, it was income! it literally "came in". else you've created a "special" income class, but never call it that! people will catch on!)

Here's a simple and oft in the news example of paying twice or more, music. Every audio recording medium sold has money skimmed off the top to pay for music recording. Never mind that millions of tapes and discs were used to record business minutes or meetings or family gatherings or even (for DAT) computer backups. The music industry got that money anyhow.

http://en.wikipedia.org/wiki/Private_copying_levy

And frankly that's a very wussy article, I tend to breathe fire and brimstone about paying for things I don't use. Yet, despite a ton of free money, the recording industry is "dying". Given that it is nearly impossible to get away from people playing music on their phones and portable devices now, to the point where it's a public danger in many cases
http://thetriangle.org/news/2007/05/04/ ... shtml.html
you have to wonder what happened? The music industry likes to claim nobody is paying for music, but in fact, people are no longer paying for music they don't want.

http://www.businessinsider.com/these-ch ... try-2011-2

And that's another music industry bad practice, mix one hit with 8 songs nobody wanted, and that's an album. The digital era music "cart" has ended the forced buying of albums by music lovers.

There are quite a few similar items, but the industries involved keep very quiet about this sort of thing. Finding out you already paid for something has a dampening effect on people's willingness to buy it twice.

http://www.ers.usda.gov/topics/animal-p ... olicy.aspx

Pay attention to the words "as adjusted". Aren't they lovely? That can mean anything the adjuster wants it to mean, don't you think? What do we feed the old girl, common hay or grain or alfafa? The price differential between common hay and alfalfa is normally a good deal higher than it is now. And what do Boston prices have to do with prices in Maine or Kansas? A lot, apparently. So you pay for your milk with price supports. Admitted, that's part of food security, but the veil over such programs doesn't tend to raise confidence.

http://www.nass.usda.gov/Statistics_by_ ... prices.pdf

I used to live that stuff. Farm commodity prices are up, but not by the levels some were predicting.

http://articles.chicagotribune.com/2012 ... dman-sachs

Incidentally the USDA says that farm balance sheets are in better shape than in years, by debt to asset ratios. Can you spot the joker there?

http://www.ers.usda.gov/topics/farm-eco ... ealth.aspx

And it's pretty obvious that the joker in the deck is the price of farmland. If land prices take a big tumble, that debt to asset ratio will go up. Still, farmers are keeping more conservative balance sheets than most of the country. And that's a good thing, at least we'll all be able to keep eating, if we can afford to buy enough that the farmers keep planting.

And that's pretty much what was on my mind this evening. Woolgathering they used to call it.

[Higgenbotham]

Americans at this stage, being dependent upon collectivism (the infamous "47 percent" plus), know that their best present option is some version of collectivism. I find it interesting to look back on some predictions made by futurists near the 2009 New Year. Some said by 2012 we would have a serious third party alternative. Not even close. The sad truth is (average) Americans are so dumbed down they cannot survive under anything except some version of the collectivism they have. They are intelligent enough to know that they need the electronic disbursement from the government to go into their account so they can buy food. But they are not intelligent enough to know what to do when that money fails to hit their account or how to prepare for the day when it doesn't hit. Year ago, one obvious way to have prepared would have been to form a viable third party and try to make a smoother transition. That's what Perot tried to do in what I thought then was a timely manner. After that, my thought was that it was too late. At the time, I was in the rental business and knew about the dependency and could project the demographics going forward. This chart tells part of the story. In the state I was in, circa 1990, AFDC paid $708 per month for 4 kids, which was the best deal, plus there were the various other assistance programs, which amounted to a total benefit of about 30K per household circa 1990, which I calculated at that time. So 4 kids average was the norm. As an aside, what worked well for those on energy assistance from the government was to crank the furnace to 80 and leave the windows open in the dead of Winter. I saw this many times in multiple dwellings. The government then decided to force an energy efficiency program instead of telling people to close their windows and turn the furnace down. Then there were subsidies for that. I could write a book on those experiences but so far here I haven't.
http://www.theblaze.com/stories/the-wel ... nt-to-see/
As for the population not covered in the above paragraph (after all, there are still "only" 48 million on food stamps) the dependency is in a different form. As mentioned, I was a state government employee for 8 years, which is not too far removed from being on straight assistance, in my opinion. Those who don't fall into the above are still at least partially dependent on the collectivist support structures and secondary sources of money sloshing around; for example, the private businessman who depends solely on government contracts or spending.

[gerald]

Higgenbothem ---

Regarding rental apartments and tenants, I know what you are saying. I am sure we all have those kind of stories. -- Such as a tenant in a tenant heated apartment who turned the heat up in the nighttime, and then turned the air- conditioning on in the daytime. And then complained to me that his utility costs were too high, and it was my fault.

As far as the price of the farmland joker, it may not be such a big joker. Apparently, according to farmland managers, the larger more sophisticated and highly mechanized farmers have been expanding operations and reducing costs by leasing land from cash investors. Quality farmland in adequately sized tracts is difficult to find, and if on the open market, is generally sold at auctions. Under these circumstances, aggressive bidding wars have developed between cash investors, driving up prices to unheard of levels.

Considering that less then a year ago one could purchase adequately sized, well configured and high CSR land for under $10,000 per tillable acre, prices have definitely gone up --- to over $21,000 per acre ( a special case ) http://news.yahoo.com/iowa-farmland-sal ... 42666.html Investors appear to be using quality productive land as a kind of hedge like gold, of course with gold you generally pay to store it, where as with land it pays you. And yes, both have intrinsic risks as well as market and government risks.

A final thought--

It has been said, that if presented properly, most people would sell themselves into slavery.

[Higgenbotham]

To switch gears, it would be interesting to know about who is not dependent on the existing "system" in some form or another. The Amish might be a good example but I've never been close to the Amish.

In the rental business, I was close to the gangs and saw how they operated. I had brief discussions with some (two) top level gang members out of Chicago when evicting one of their drug dealers. I found it interesting that they were controlling operations 100 miles from their home base. At the time, they operated in a very efficient and proficient manner, and I had great respect for them; they were more efficent and proficient than most managers in large corporations. They were true to their word and respectful whereas most top level white managers in large corporations are not, based also on brief discussions with them. I can say this by direct experience whereas few can. Which I suppose might explain in part why they have been able to take over some urban areas in zones where law and order has broken down. The insurance companies identified those areas and would not insure in them. They couldn't flat out say that but would make a lame excuse. I owned some rentals one block away from an area where insurance could not be obtained through my regular insurance companies. Insurance could be obtained through an expensive state fund as I recall, but the cost was prohibitive unless I then went to above market subsidized Section 8. That was the only viable business model in the areas where law and order had broken down. There was a house one block up that needed renovations but materials would be left out overnight at your own risk, as well as the empty house itelf of course. That describes part of the mechanism by which a city like Detroit can collapse block by block. When large swaths of the cities collapse and the transfer payments stop, then I'm really unsure how things will work as far as rentals go. I can imagine a situation where the gangs will take properties and the existing rule of law will basically be revoked, along with recordkeeping and taxation. Once cities (like San Bernadino) are bankrupt and dissolved this is what I think can happen, over time, as the Baby Boomers die off. When city officials say load your guns and lock your doors (as recenty did happen in San Bernadino) because we are broke, the gangs have a void to step into.

In 1995, I travelled West and looked at some 10-20 acre wooded parcels. One I looked at in the mountains near Butte, Montana was interesting as on the property there was a makeshift shelter made out of tarps. From the tarps emerged a mountain man! He was about 35 and lived off his land. He told me he was still dependent on the "system" to some extent to pay his taxes and buy some food and his funds were depleting. His plan was to sell his land and buy half as much land in Northern Minnesota. A person can be entirely self sufficient through barter but taxation is still a drain until government disconnects. I think by now he is probably dead.

[Higgenbotham]

Regarding rental apartments and tenants, I know what you are saying. I am sure we all have those kind of stories. -- Such as a tenant in a tenant heated apartment who turned the heat up in the nighttime, and then turned the air- conditioning on in the daytime. And then complained to me that his utility costs were too high, and it was my fault.

I got no complaints from the tenants because it was all paid by the taxpayer. The utility company didn't complain because they only investigate when they are metering less gas than expected, not more. Seems like the bean counters in government looked at what they were paying and invented new programs to justify based on the numbers on the spreadsheet. The houses had 87% efficent furnaces and 9 inches of insulation in the attic, etc. I have no idea what the government was paying but based on observation it had to be enormous and the regulation didn't solve that problem.

Seems I read you rent mostly to students - this might interest you. It's a chart of the government's biggest asset on the balance sheet - student loans.
http://www.financialsense.com/contribut ... dent-loans

[aedens]

https://www.youtube.com/watch?v=g3JRsTHI9sg

dont bend for any one, detroit will find a way
https://www.youtube.com/watch?v=f4ElcyEI7os
They laugh at life since they have pity. I would say they are not going to Hell
and when they say yes that is what it means.
https://www.youtube.com/watch?v=W_9k5WCuda0 They think mainstream are is insane as they
butcher anything in there way on the planet thats brown. Usually noted is assholes are a beat down.
Are some problems, yep. Are some officials problems, yep.
Michigan and you cannot hurt us any more. https://www.youtube.com/watch?v=sDncRIq64Lo

[Higgenbotham]

They laugh at life since they have pity. I would say they are not going to Hell
and yea when they say yes that is what it means.

The notice had been served by the sheriff. I went over there and there were 4 guys on the porch. The 2 I hadn't seen before were from Chicago and they said let's go behind the house and talk. First thing they said is they understood my position and had no argument with the eviction (it had already taken place). Next they said the tenant had nowhere to go and they needed to find a house in the immediate area, did I understand that. I said I understood. They said we will find a place and have her moved in 1 week. I said I will schedule the movers to come in a week. In 1 week their local men had it done.

[aedens]

street ethics
https://www.youtube.com/watch?v=zEdJifWe4Ag
Journalist noted the kids are polite in the City.
People have choices. The three torches in the area was drug houses.
The kids are torching the drug houses. Nobody has clue.

Residents are fed up.
"There are problems all over this city," east side resident Charles Rattee said. "The bad economy is partly to blame for all the crime, but I also think it's the people in charge. There's a lot of mishandling, and a bunch of ignorant smart people running things."
http://www.detroitnews.com/article/2012 ... z2EVgRp4oa

meanwhile
http://www.ethicalmarkets.com/2012/11/2 ... scuppered/

people know who the thugs are

[gerald]

Regarding rental apartments and tenants, I know what you are saying. I am sure we all have those kind of stories. -- Such as a tenant in a tenant heated apartment who turned the heat up in the nighttime, and then turned the air- conditioning on in the daytime. And then complained to me that his utility costs were too high, and it was my fault.

I got no complaints from the tenants because it was all paid by the taxpayer. The utility company didn't complain because they only investigate when they are metering less gas than expected, not more. Seems like the bean counters in government looked at what they were paying and invented new programs to justify based on the numbers on the spreadsheet. The houses had 87% efficent furnaces and 9 inches of insulation in the attic, etc. I have no idea what the government was paying but based on observation it had to be enormous and the regulation didn't solve that problem.

Seems I read you rent mostly to students - this might interest you. It's a chart of the government's biggest asset on the balance sheet - student loans.
http://www.financialsense.com/contribut ... dent-loans

Thanks but --

I am out of the student rental business, after 30 plus years, and into farm land, don't miss it, renting has gotten "interesting ". A number of years ago while renting to foreign students, over the years, at least 25% were, I had the "unfortunate" I guess, experience regarding a potential foreign student tenant from an "important country" which lead to a meeting with a "man in the suits", as in the movie "Wag the Dog" it is a little disconcerting meeting a guy who knows more about you, then you do, and then gives you a slip of paper and suggests you what you should do -- or ---

I think corn is quite acceptable.

[gerald]

“In the end, more than freedom, they wanted security. They wanted a comfortable life, and they lost it all – security, comfort, and freedom. When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for most was freedom from responsibility, then Athens ceased to be free and was never free again.”

- Gibbon