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Tiger Woods?

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Everything posted by Tiger Woods?

  1. You say this in jest, but you might be onto something...
  2. Oops. That doesn't sound good does it now? Having said that, if they didn't pay reasonable compensation by capping compensation at 1.84 billion a year upfront after bailing out the banks for huge sums, I suspect the spikes on Tower Bridge might come back into use. Thinking about it, it'd be worth every lost penny to see.
  3. Hopping in the South Australian waters dressed like a seal has always struck me as inviting 5 seconds of sheer terror before being bitten into two or more pieces.
  4. +1 There is some corruption, to be sure...but it is basically a whole heap of individual decisions that are inevitable given the circumstances. No council is going to let private individuals profit handsomely when they hold planning permission.
  5. Well, he has a daughter near the end of high school iirc, so I suspect over 40.
  6. I agree that at some stage the demographic that supports pensions and our current growth model of money will breakdown and that the effects on the monetary system will be profound. I also agree that the second and third world population growth are what will determine world population in the medium term. I don't believe that birth rates will lower as much as the low ball predictions suggest, ceteris paribus. I'm sceptical of the reasoning behind standard models of demographic transition for reasons that I don't have time to go into atm (i.e. I must do some work!) However, I suspect that the low world population projectiosn for 2100 will turn out to be true or an overestimate. I expect serious, serious famines and massive habitat destruction, making the 20th century seem completely benign, within the next few decades.
  7. Yep. This is correct. The councils are taking huge, and I do mean huge, cuts of any development. For instance, my parents wanted to cut our half acre block into two to build a house for me and my family. Our local council wanted $190,000 for the privilege. For this, we will get absolutely nothing as all ammenties have already been run up to the land (at our expense years ago.) In fact, proceeding with this division would lower the combined value of the two blocks of land to below that of the single block. Some councils will not talk to you unless you hand over $10,000 - that is before they will even say "no, there is no chance." My cousin, who is a land developer, has said that charges are now so high that the only profit he will make on a parcel of land he has had for 10 years is, basically, the difference between its undeveloped value in 2000 and now. All the profit of being developed is being taken by his local council.
  8. The UN's current mid range prediciton for 2050 is 9.2 billion, with a high case of 10.5 billion. The high case projection to 2100 is 15.8 billion. For example, see link. As I said, you only ever hear about the low case, as the high cases are pretty scary.
  9. Yes. Income tax and VAT cause serious inefficiencies in the system as they hamper exchange due to screwing up the working of comparative advantage. Without income tax/VAT I would hire someone to do a job even if they were 5% more efficient than I am. Whilst, in a VAT/Income tax regieme where the transaction will, at the margin, be taxed at close to 60% they need to be 150% more efficient than I am for me to hire them. So, as a simple illustrative example, assume we have a plumber and a painter who can do their own job in 1 hour, but takes two hours to do the other person's job. In a no (or low) income tax/vat world the plumber will do the plumbing in the painter's house and vice versa, taking a total of 2 hours. In our current world, the painter will do the plumbing in his house and the plumber will do the painting in his house and the total time taken is 4 hours, because it would cost the 2.5 hours of their wages to pay the other. Throw in high costs of using commercial land due to prices pumped by bankers and parasitic councils and it is a wonder that any business gets done at all. Obviously in a real economy things are a little more subtle, but income tax and VAT (at high levels) are completely destructive with respect to quality of life and real wealth.
  10. That is the UN rose coloured spectacle low case. Funny how everyone wants to quote that one. What is often not reported are the other scenarios where world population goes to 12 or 15 billion. (For instance, birth rates come down to when children substantially subtract from your wealth, and it may be that in a low energy world you want to have more children.)
  11. I disagree. This may be actuarial science 101, but it isn't part of actuarial science 301, the advanced course. You are forgetting that there is information asymmetry. For example, if you double the amount you are insured for, you more than double the cost of the insurance due to the information conveyed by wanting to insure for 2x rather than x. To price insurance you need to know the risk that the insured is taking. Banks have been very good at hiding that from their shareholders and their accountants (e.g. the big kerfuffle about repos just before reporting) because they have more knowledge/information than the observers have (or the insurers would have). Because of this, a rational insurer would charge very high premiums.
  12. What is most disturbing is that many of our politicians think that this is unreasonably low. Jesus wept.
  13. Do you mind if I ask where exactly? On a related note, I know a certain section of Noosa properties that would have been 3 million are now priced at 2.
  14. Impossible. No one loses on property in Melbourne. Okay, Schadenfreude done with. I'll be good now. Can't say he wasn't warned though. Oops. Here it comes again (At least he has the intelligence to know when to bail though. Lesser people get wedded to their positions and lose a lot of money.)
  15. $335k (2005) $267k (2012) It is in Torquay, so one of the more desirable suburbs (along with Urangen), has a huge block of land, in a quiet street and is a short walk from sports centre, school, shops etc. The negative is that the house needs some internal rennovation. (1980s build, 4 bedroom, but a bit strange.) House+unit sales in Torquay were 369 in 2007 and had run at similar levels for the preceding decade. In 2011 there were 72 sales, which is about the stock of a single agency, and there are dozen at least. If you decide to buy there, go in hard and make embarrassingly low offers. Someone will bite. Unit price growth has been negative in Hervey Bay every year since 2007. House prices since 2009. The selling agent told me, and RP data seems to support him here, that anything much over $300k isn't selling, and he thinks that there is a fair bit more pain to come. It is a completely secondary/tertiary market and prices there are determined by spillover from people retiring from the big cities, overseas, and speculators. There is nothing in the area other than an excellent microclimate, and not so long ago houses here were dirt cheap. I suspect that is where they are going again. The demographics of Torquay (and most of the rest of Hervey bay, again RP Data) are 31% single mums!!!, 30% childless couples (mainly retirees), couples with children (19%), group households (13%), and lone households (7% mainly retirees I suspect). Median household income is less than 35k and a third of households are on less than 25k, so even at these prices, houses are over priced at 8+ times local earnings. On the plus side, this means that a lot of things are cheaper there than, say the Sunshine Coast. Interesting fact: Did you know Hervey Bay had the worlds largest mobility scooter parade in the world? Oh yes indeed, it's not just for the proximity to Fraser Island that HB is famous!
  16. ...but not to being hit by a cruise missle.
  17. My stepfather has just sold a house in Hervey Bay. (Well, the contract is signed at least - fingers crossed). Price was 21% down on the price paid in 2005. This was a good property, 1980s house on a 1400sqm block, with huge 4 bay shed etc, in a good location, and we priced it to sell. We had 30 sets of people through, but only one offer. Once you throw transaction costs in, he is about 25% down on the deal. We are lucky. We are happy to sell at this price, as it is clear the market has much, much further to go. Volumes have plummetted (less than half relative of recent years) and "normal" places on normal blocks aren't even getting viewings. The crash has already hit the secondary markets. I've seen similar drops on the Sunshine Coast, and believe the Gold Coast is similar if not worse. High end properties have been hit hardest from what I can see. There are, of course, lots of deluded wannabe sellers. Houses priced at peak in my local just sit on the market - some have been for sale for well over 18 months.
  18. Of course you wouldn't, given these figures. My example was trying to highlight the theoretical advantage of tax free imputed rent versus other forms of income on capital, which are taxed. As I mentioned in a recent post, the best thing to do is the sort of calculation you have done. Tying oneself in knots over the concept of imputed rent doesn't help with working out how you will be best off.
  19. This is case 2. You cannot earn rent and interest on the capital. You must also live somewhere. Case 2 is the opportunity cost of case 1.
  20. The issue of imputed rent arises in all cases, it pertains to any equity you have in a property (mortgage interest is just rent.) So if you had 100k equity and 200k mortgage, then the same sort of calculation pertains, but on 100k rather than 300k. Of course, imputed rent is a red herring - making something more complex than it has to be. What you need to do is calculate your net profit/loss in the owning versus renting scenarios, including capital appreciation/depreciation etc. etc.
  21. If you read what I wrote, you will see that I included bank interest in the calculation.
  22. Suppose you have a house worth 300,000 and, to keep things simple, assume that it would cost 15,000 per year to rent and that interest rates were 5%. Moreover assume your marginal tax and NI rate on an increased earnings is 40% CASE 1: YOU OWN THE HOUSE YOU LIVE IN To live in the house costs you nothing (forget maintenance etc. keeping this simple to make the point). It may seem a little strange, but you can think of this as you paying yourself £15,000 rent per annum. i.e. earned rent from asset = £15,000 p.a. (you pay no tax on this, as this imputed rent transaction never happens) paid rent = -£15,000 p.a. net change in wealth = £0 p.a. CASE 2: YOU SELL YOUR HOUSE, PUT THE CAPITAL IN A BANK AND RENT AN EQUIVALENT HOUSE interest after tax = £15,000 * 60% (assuming you pay 40% tax + NI) = £9000 p.a. paid rent = £-15,000 p.a. net change in wealth = -£6000 p.a. This example assumes that you aren't mortgaged and that rents are similar to the nominal pretax opportunity cost of the capital tied up in the house.
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