opihiman2

I have not kept up with the investment industry, but man, what is Paulson smoking??? "Despite healthy advances from their spring 2009 lows, banks may have more room to run, particularly if Paulson is correct in the estimate he made to investors, according to The Wall Street Journal, that housing prices will rise as much as 10 percent next year." He deserves the beat down on his holdings and mass redemptions coming his way.

Well, two data points don't make a trend. Besides, what the article forgot to cherry pick is that the Nikkei was down around 50% a few years later. I believe the S&P was right about downgrading Japan--even more so since their debt to GDP has ballooned since then and their economy is still going nowhere. Besides, the entire world is in a different place than 1993 and 1998. I see more blow ups coming down the pike in the next few years.

I now know what you meant in the other post. I caught up on some old threads and man, it does seem like there is a lot of belligerence on this forum lately. Although, now that I think of it, I contributed to that a bit in my sniping remarks when I first joined. I feel embarrassed by that.

Yep, Tim Thomas has an inspiring story. He is a brick wall of a goalie. Too bad to hear about the riots. Some of the videos I've seen were just sad. At least the Vancouver cops seem classy as heck. They were holding down the fort and doing their jobs without going overboard. Anyways, there's always a next time.

Condolences. Hope the Canucks do better next time.

I know there is at least one serious Canucks fan on here. Congrats! That was an awesome game. I hope to see Vancouver win the Stanley Cup.

That is a good point. I will have to read and think about that. Although, enlighten me: what are the full extent of the powers of a majority shareholder? They have complete control of the proxy vote? Can elect themselves on the Board of Directors to whatever position, correct? Have the power to take the corporation private? I'm not being facetious here. I would like to really know. This paper goes against the grain of common knowledge. It's cognitive dissonance to us, since it is very counter-intuitive. However, that does not make it wrong. I was pretty floored to also learn, recently, that the police force has no legal or ethical obligation to protect and serve the public--regardless of what is painted on the side of that patrol car. Anyways, I would like to really understand this. So, that's a good point. That's how corporations buy each other out. But, I feel that I'm missing part of the picture. When someone, say another corporation, buys up all the shares of another corporation, how does the ownership transfer work? Based on the papers I've read and posted (well, one of), there seems to be another part of the process of the takeover that is required for complete ownership to occur. Don't both corporations need to file regulatory paperwork for review and approval before the transfer occurs? I thought that there needs to be some sort of agreement between the board of directors on both sides of the corporations for this to occur. I mean, if I had the money to buy all of McDonalds shares, does that by default make me the legal owner of it? Or do I need to do a lot of legal work before this occurs.

There is another longer treatise on the subject in the Modern Law Review called the Company Law and the Myth of Shareholder Ownership as well as articles in the Harvard Business Review. I've just started reading the legal review paper and it's very interesting. And, no, Kraven, it's not. That is clearly in our Constitution. Bookie71, these articles and paper appear in other sources too. One, a 60+ page paper in a LEGAL review, precedes this by almost 10 years in the UK. It's not there just to impress other accounting professors.

I have been reading some material for a paper I am writing, and I have come across something that has challenged my view, and the views of folks on this board, that shareholders are part owners of a corporation. In fact, legally, we're not even entitled to the assets or income of the corporation. It also seems to change the accounting paradigm that views shareholders as owners of the assets of the corporation. There are some materials in the Harvard Business Review that explain this more fully; however, I have found this paper to be very thorough and easily accessible: http://www.profbailey.com/acct7320/Readings/Myth%20of%20shareholder%20ownership.pdf

Here's a better one: http://reason.com/archives/2011/04/29/the-truth-about-taxes-and-the

Interesting commentary from NPR: http://www.npr.org/blogs/money/2011/04/29/135813061/studies-rich-dont-flee-high-tax-states

Thanks everyone. I'm still confused as ever, and I haven't been able to find more info online. I'm still wondering if this transaction converts the non-profit in a profit venture. I guess, based on nodnub, it will. I don't know. Everything I've read so far hasn't regarding non-profit buyouts hasn't explicitly said this. I do know that its cash and short term investments are divested into charity or other non-profit foundations. However, I'm still confused where the money goes. I'm guessing it's used to pay down all creditors and liabilities. Then, whatever is left over is used as net sale proceeds for charity. I dunno.

Hello everyone, I hope this is a good place to ask this, but does anyone know what happens during a distressed buyout of a non-profit organization? I'm reviewing a case study of a recent asset sale purchase of a Ch.11 non-profit hospital in California; however, I'm very confused: who receives the money in the transaction? With publicly held companies, the equity holders are bought out and the new owners assume the assets and liabilities. In a non-profit, there is usually no equity holder. So, what happens here? Any ideas?

Here's an excellent synopsis of the current housing market from the Daily Ticker: http://finance.yahoo.com/blogs/daily-ticker/housing-market-sucks-could-years-correct-20110324-080754-787.html;_ylt=AgeY4lIF7LHno_QWiYu4KQgp2YdG;_ylu=X3oDMTBvcjdhcDRsBHBvcwM2BHNlYwNNZWRpYUJsb2dJbmRleA--;_ylg=X3oDMTFjN2RjMHJ2BGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHB0A3NlY3Rpb25zBHRlc3QD;_ylv=3#more-350 It echos my sentiments, especially in regards to the blip in housing prices a year ago and the new found optimism that followed.

Hard hitting journalism from CBS News: http://www.zerohedge.com/article/thanks-60-minutes-report-fraudclosure-us-gdp-about-soar-50-billion The stream is on the page. It's a must watch, I think. Zero hedge also cites a report from a JPM analyst that shows the benefits of squatters rents on GDP and rental income. This report is quite interesting as it highlights some important implications on the economy going forward. As more people walk away from their mortgages and squat (that's not hard to see in my neck of the woods), there should be a bigger boost to GDP and rental income. Of course, the problem with this thinking is there will be a day of reckoning. The banks will take a hit as they foreclose and mark those assets to market, or people will be forced out of squatting and into paying real rents. The net loss will be to the GDP. The mortgage fraud, though, is probably the most interesting part.

My wife and I were looking at houses in Trail, BC. It was ridiculous. The houses in a small town of maybe 30,000 people were going for the cost of homes in coastal California. I also think Canada is in a housing bubble. Another thing I'm seeing is people talk about buying vs. renting. When I was talking about housing being fairly valued, I was looking at a buy vs rent calculation over 30 years. Buying a house or condo comes out a little bit better than renting over a 30 year period. Although, there are big assumptions with that such as the rate of inflation and rent increases. I don't see it as much of a value proposition. It's definitely not a lifestyle one if you plan on moving around.

Oh wow. What a small world! That's cool. Yep, I live in Monterey and have noticed exactly what you're talking about. Houses in that range have not moved at all. And have you seen the amount of inventory out here? I just don't know who is moving out here to buy these properties. Just a drive through Carmel, and it's mind boggling to see all the houses for sale. By the way, when you say northern end, are you talking about Marina?

That sounds like crappy inland prices. Where exactly do you live? If it's one of the most desirable coastal communities in CA, I'd like to buy a house there! Monterey.

I rarely post, but I have to pitch in on this one. My wife and I have been holding off on buying a house for 2 years now. We have a really good grasp on real estate prices here in California. A year ago, I remember there was some optimism about the housing market from not only the financial wires, but from some of the posters on here too. I noticed it in the local housing markets as well. Prices seemed to blip, even on the Case Schiller index, realtors were starting to be more snobbish again and less desperate, and the supposed outstanding inventory of homes was dropping to between the level of the high and median monthly levels. Everyone was saying then that it was the TIME to buy. SHYEAH! I had to stick to my guns on that one, and it was tough, but I'm glad I did. Fast forward today and those houses and condos are now selling for 30% less. I was thinking, "Who is still gonna be able to afford a 700k house around here?" Those 700k houses in the upper class subdivisions are now selling for under 500k. Condos and apartments? $240k down to $170k and below. This isn't in a crappy inland community. It's in probably one of the most desirable coastal communities in California. Just next door, I live next to a house that has been vacant and foreclosed for almost 3 years now (longer than I've been here). Just up the street is another vacant foreclosed house that has been sitting there for over 2 years. I've seen another house that has been for sell for over a year down the street. There are SO much for sale signs around, I don't see how it's possible for that much buyers to exist. So, do I think housing prices are ready to recover? No. I think whenever asset bubbles pop, they take forever to recover. Nasdaq back to 2000 levels? How long did it take gold to reach the 80s highs? Oil, when adjusted for inflation, is STILL below its peak during the 70s oil crisis. Japan? etc... And I've personally seen what happens in a regional housing bust. It takes FOREVER (and even a major housing bubble) for prices to reach their previous highs. I'm talking 15-20 years. There is just way too much headwinds for housing prices to recover. Interest rates are starting to go up. When QE2 is over, who knows how high interest rates will hit. I believe that will kill the housing "recovery". There is also still way too much inventory out there. Even by normal estimates, I think there is 2 months of excess inventory. That's not including the shadow inventory--like what I see around my neighborhood. Job market? Who has the income to soak up all this excess inventory? Although the job market is improving, I doubt these newly employed feel confident enough to buy a home. And most importantly, prices. Although prices are much more reasonable now, definitely compared to rents, I think there is still enough pressure to push prices further. At the very least, I think prices will meander in most markets for several years. Housing in the bigger cities like San Francisco and New York will probably do better.

Thanks for the responses! Just wondering, is there a formula that determines the expense ratio from the fund size? That is, if the asset base doubles in the fund, how much lower will the expense ratio go? I'm in Shane's camp: trying to find a good, ethical active money manager.

I was wondering if someone could help me understand. So, the expense ratio is 5.22%? Does that mean the annual returns are handicapped at 5.22%? I am just wondering because that seems really high for a mutual fund.

This was a great documentary. I'm happy it won an Academy Award.

Anyone see the 30 yr rates? Man, they have jumped in the past month. It's the first time I've seen the 30 yr rates hit over 5% in a while. Historically, we're just reverting to the mean. However, mean reversion requires an overshoot to the average. So, will we see 8.5% 30 yr rates? Will the Fed be able to monetize debt? I think anything above 6.5% and the housing market will get creamed.

^^ Actually, looks like the fight is still on. The CRTC simply just delayed it by another two months. I bet the CRTC is doing this intentionally a day before the protests to curb the movement, so they can sneak it in a few months from now. Also, it's odd that the Supreme Court of Canada pipes up and reverses the government's decision to reverse another CRTC decision. Depending on your perspective, hope you guys don't get screwed.

That's an interesting take on it. Too bad they haven't implemented this with airline tickets: the more you weigh, the more you pay. They are sort of doing that now with obese passengers that obviously require two seats. However, why shouldn't the skinnier people benefit? It would give an incentive to people to lose weight. There is one problem, however, that I see with bandwidth restrictions and pay for use. You have to be on top of your bandwidth usage, and perhaps the ISP can provide a free, software based bandwidth meter to monitor your network connections, but if you have some Trojan horse (illegitimate or not) constantly sending updates, etc from the web...there goes your bill! Well, anyhow, I guess this post is shot down. It looks like Harper said they will challenge the CRTC.