Just in Case it Matters to You
- A GENUINELY FUNNY RECAP OF 2016: https://www.washingtonpost.com/lifestyle/magazine/dave-barrys-year-in-review-trump-and-the-hideous-monstrosity-that-was-2016/2016/12/29/17c84a14-b7d6-11e6-b8df-600bd9d38a02_story.html?utm_term=.74fe5ec308c4&wpisrc=nl_headlines&wpmm=1
- NEW 2017 CALIFORNIA LAWS TO BE AWARE OF: (1) Immigration Protections: Employers are subject to a $10,000 penalty for requesting more documents than the federal I-9 forms demands, failure to honor documents that appear to be genuine, or re-investigating a current employee’s work authorization. (2) Minimum Wage: increases to $10.50 if more than 25 employees. (3) Overtime Exempt status: Minimum annual salary must exceed $43,680; Federal minimum was raised by exec order to $47,476 but effective date is deferred pending court appeals process. (4) Restrooms: All ‘single-user’ toilet facilities in a business establishment or place of public accommodation must now be identified as “all gender.” (5) Marijuana Use: While recreational use is now legal over age 21, employer policies are not required to accommodate use, and may stipulate a ‘drug free workplace.’
- THE MAJOR REASON THAT SOCIAL SECURITY FUNDS ARE IN TROUBLE is that Congress has usurped ‘Old Age Survivor’ funds to provide Disability Benefits to anyone earning below $1,130 a month. Disability criteria began with medically-diagnostic injury, sickness, chronic pain or mental disorder, but were amended to allow subjective determination “whether applicants are able to perform work that is available – effectively becoming a social contract” about jobs available in the community where ones chooses to reside. Accordingly, “workers who might have endured pain for a physical job now apply for disability when jobs disappear” (with nearly 40% claiming ‘musculoskeletal connective tissue’ problems and 20% claiming mental disorders). Then, since recipients “often hesitate to look for full-time employment and risk losing the financial cushion with access to health care that disability insurance also provides… a proposed Congressional Bill would now allow recipients to keep some of the subsidy even after they’re employed.” What a system… [BLOOMBERG BUSINESSWEEK – Dec 19, 16]
- CONVENTIONAL MANAGEMENT THEORY CONTENDS THAT GLOBALIZATION IS “BOTH INEVITABLE AND IRREVERSIBLE – the product of technological forces that mere human decisions cannot reverse.” But that theory is glaringly naïve about politics, and evidence (particularly Brexit and Trump’s election) now suggests we’re headed for an “increasingly nationalistic future. Modern management orthodoxies were forged in the era from 1980 to 2008, when liberalism was in the ascendant and middle-of-the-road politicians were willing to sign up to global rules. But today’s world is very different: (1) Productivity growth is dismal so companies are fusing at a furious rate – averaging 30,000 mergers or acquisitions a year worth 3% of GDP); and (2) Entrepreneurialism is stuttering as the rate of business creation has declined since the late 1970s and more companies died than were born.” Reality is that “management theory is becoming a compendium of dead ideas… and Populism is on the rise.” [THE ECONOMIST – Dec 17, 16]
- BE CAUTIOUS RELYING ON STATISTICS: Wall Street forecasts are uniformly positive for 2017 but, according to Bloomberg surveys, the average crystal ball strategists have failed to predict a coming market drop since 2000, while shares actually fell one year out of three. // Of the ten million new jobs created between 2005-2015, 94% were either temporary or contract-based, versus 9 to 5 employment positions, according to a study by Princeton & Harvard economists. [THE WEEK – DEC 23, 16]
- LIKELY RISING INTEREST RATES WILL IMPACT 2017 INCOME PROPERTY VALUES which are typically measured in relation to annual ‘net operating income’ (NOI) and presented as a CAP RATE (Capitalization) – derived from the NOI divided by PRICE). From a seller’s position, a low cap rate is desirable; from an investor buyer’s position, a high cap rate is pursued. [Example: If NOI is $100K and pricing is $500K, cap rate is 20; if pricing is $1M, cap rate is 10; if pricing is $1.2M, cap rate is 8.3] NOI represents excess of rental revenue over operating expenses, but excludes Interest or Depreciation – because these are a result of buyer’s arbitrary decisions about financing alternatives and/or income tax benefits, versus property attributes per se. If/when involved in investment property transactions, DCG have decades of expertise to assist in obtaining your objectives.
- THOUGHTS FOR THE WEEK: Visitors at the New York Guggenheim museum wait in line for up to two hours to use a bathroom which offers a fully functioning 18-karat gold toilet. The Italian designer noted that “it has a dramatic leveling affect: whatever you eat – a $200 lunch or a $2 hot dog – the results are the same, toiletwise.”
An oddly-related story: If planning on travel to India, good to know that the country’s Court has just ordered their aviation industry to stop “dumping human waste during flights” after injuries to New Delhi residents. If waste tanks are found empty on landing, airlines will now be charged 50,000 rupees – equivalent to $735.