The reasons advanced for this are many, but mainly, it is to spread the cost of defective products on those who can bear the cost -- the manufacturers with lots of money -- rather than on those who cannot bear the cost -- the general populace. In general, you like strict liability theories for products liability.
Actually, believe it or not, I don't like assigning liability based on envy.
Okay, but why would you want to put up with such crappy lighting that makes a buzz? (I know, I know, "you can't hear it". Probably from torturing your ears with loud bass music all your life, but some of us have more sensitive hearing.)
Well, I probably shouldn't respond, because an AC isn't going to be around to even read it, but since others might, I should list how much you got wrong:
1) How much start-up capital you have wouldn't affect the calculation, since for a fair comparison you'd have the capital on both options. 2) At no point do you "pick stocks" -- I mentioned picking indexes. 3) The stock market has lower risks because a) if forced to sell you don't have to pay transaction costs, b) you can diversify to account for the many risks that can hit your investment, while with a house you are locked into one kind of asset in one region. 4) The value of your investments can be enough to buy a house at the end of the 30 (or whatever) years, meaning you're better off than if you had bought the asset. 5) You could just as easily say that if real estate underperforms (likely in an era of declining population growth) you have far less in assets to trade for income.
And the home you could get with that mortgage payment would be worse. For it to be a fair comparison, you would have to set the living arrangements in both options equal, not the dollar cost equal. Remember, you can always say "well buying a home is better than renting a room in the Four Seasons for the rest of your life", or that "renting the basement of Farmer John's outhouse is cheaper than a mortgage on a home in suburbia". Neither would prove much. That was why the example added the expenses you don't have on one side (commute/greater insurance costs on renting) to the other side. The point was that for living in the same kind of property, you can be better off renting.
Are you content to be only a tenant in a system where someone else retains ultimate control?
Actually, yes. A lot of people don't realize you can become financially a lot better off by renting a place instead of buying. Before you rip me a new one, I'll admit there are a number of variables that affect the calculation, and non-monetary considerations, so I agree that claim doesnt hold for everyone. However, too many people assume that if you can afford the mortgage payments and can get someone to lend to you, buying is a no-brainer. They act like renting is "throwing away money". But when you buy, you also throw money away -- it's just called "interest" and "property taxes" instead of "rent". This site has a sample calculation for San Francisco:
Renting: Rent: $1,800 Monthly Loss: $1,800
Buying: Property Tax: $486 ($729 per month at 1.25% before deduction, $486 lost after deduction.) Interest: $2,333 ($3500 per month at 6% before deduction, $2333 lost after deduction.) Other Costs: $450 (Insurance, maintenance, long commute, etc.) Principal loss: $1,667 (Modest 3% yearly loss on $700,000. Reality will be much worse.) Monthly Loss: $4,936
Even if you strike the principle loss, that's still worse. And of course, the monthly expense doesn't cover the mortgage payment going to principle, which, while nominally "coming right back to you" is locked up in a highly illiquid asset that can only be draw on at sale or by borrowing against it at interest. (Or transaction costs.) If you rent and invest the savings in a well-diversified portfolio (e.g. covering large caps, small caps, foreign, and bonds in proportions appropriate for your age), taking advantage of the various tax-advantaged vehicles (Roth, 401k), you can be much better off financially. (Again, *can*. I'm not saying this is right for everyone, just pointing out the considerations.)
I know, this has absolutely nothing to do with Windows. I just wanted to dispel the notion of renters as being necessarily exploited.
-It's well known that sugar has high tariffs in America. -It's well known that corn is highly subsidized in America. -It's well known that HFCS is used as a sweetener in many products, and that this is due to its low price compared to sugar.
The controversial part was that it leads to diabetes. But that is at worst, a "crank medical theory" not a conspiracy theory. That's a completely different category.
it probably would have been easier to just quit tariffing sugar and subsidizing corn so that they stop using the bane we know as "high fructose corn syrup".
That sounds remarkably similar to the indifference vote that Paul Birch likes to promote. You bid for your preferred option until the money you allocated toward it would make you indifferent, and if you don't get your way, you are paid that much (instead of paying that much). If you do get your way, you pay your bid. I makes you, in essence, indifferent to the outcome. His example:
Let's try a simple example.... You and your friends want to go to a restaurant. But which one? The Peking Duck or the Spaghetti Italiano? Charles prefers Chinese, but you're a bit strapped for cash and Italian's cheaper. You bid 50p. Charles goes 60p. The girls join in. Amy is on a diet and bids 50p for the Duck, but Beth is always hungry and bids 70p for the Spaghetti; the score is now £1.20 for Italian, £1.10 for Chinese. Amy looks at Charles, who goes up 11p to 71p. You decide to bid another 2p. Charles shakes his head. Amy reluctantly adds another 2p for Chinese herself. The final bids are £1.22 for Italian, £1.23 for Chinese. So off you all trot to the Peking Duck. Amy and Charles fork out 52p and 71p respectively; Beth gets 70p and you get 52p. Amy and Charles get the fancier but less fattening fare they wanted; you get enough money to cover the higher prices, and Beth gets enough for a larger helping. The waitress gets the penny left over.
I asked a question one time, here, about why you see so many/.ers refer to their xbox, despite this being a hostile environment to MS, and the xbox being the very definition of an unnecessary MS purchase. You might want to check it out. There were some interesting responses.
Sorry, typo, meant "deflation". Why don't you try to keep up by reading in context so you can spot what's a typo?
I noticed the error when it posted, and I would have corrected it, except I assumed... well, whatever I assumed, it certainly wasn't justified in your case.
Oh well, hey, if Wikipedia says inflation is bad, I guess that pretty much settles it.
*ahem*
Alright guys, remember, when prices go down, that's BAD. The history of computers is pretty much a silent Holocaust. Remember to keep your money in an account that pays the inflation rate. I mean, you'll still have to pay taxes so... hell, why not just spend all your money?
LOL, small misunderstanding. I wasn't saying that "companies should offer pensions but not tell you what the value is". I mean, the whole idea of a company promising a fixed annuity based on pay an years of service is stupid. They can never know how much to fund, so they're either
a) eventually underfunded b) rely on new suckers, I mean employees to join them, making them effectively a Ponzi scheme c) not under your control, so someone can raid it and leave you with no recourse (because they can't pay damages)
or some combination.
It makes much more sense to have a defined *contribution* plan, where they say how much they'll *give you* (or how much you can divert) and then you can choose how to save it, and have full ownership rights (vestiture) over the account, so that, if you want, you can "put it in a savings account".
They use a more rigorous standard than that: how many people make how much noise about whether it counts as a disease.
For example, homosexuality was scientifically proven to be a disease before the 70's. Then because of enough protests, it became scientifically disproven. Likewise, fetishism is currently scientifically proven to be a disease, but if enough people raise a stink, that will count as scientific disproof.
It works the other way too. Formerly it was scientfically proven that alcoholism isn't a disease; people just get drunk a lot. Then because of enough protests from people who didn't want to accept that their spouse is a lousy human being who values physical pleasure over their family, it became scientifically proven that it is a disease.
Thanks for reminding me of something that doesn't contradict any assumption of my post, which was quite specfically worded in terms of "what is required for logical consistency" rather than "what the Supreme Court currently believes" (they can be different, believe it or not).
I really don't know how I'd get through the day if not for showoffs.
Please. If you really believe in free speech, you shouldn't distinguish "Clinton is a moron" from "Buying my products is a good idea." Whenever a "business" says something, it requires a person to say it. You can't deny the right to the "business" while claiming to respect the rights of the person who voiced it.
If it's a fraudulent claim, sure, that should be illegal, but it shouldn't matter if it's a person or a "business".
Actually, now that you mention it, I should add that my company matches 401k contributions, but requires you to buy company stock with the match (though not with your own contribution). You then have to hold it for ~2 years. I didn't like that. So for a while, I was seriously considering ways I could monetaize that holding so I could diversify it. One way would be to sell the shares now, with a time lag of the required holding period. Another way would be to sell the option to buy at some price at the end of the period, so I get money now. So I would want a service like that.
Luckily, next month, they're eliminating that policy, so I can sell the shares without waiting. They still automatically buy company stock with your match, you're just allowed to resell it immediately.
I agree with you there. And that all levels of government should explicitly represent future entitlement obligation. My point was just that the issue is more complicated than the GGG(G?)P was making it out to be.
I don't know of too many financial experts (who are really disinterested) who can make a credible claim that binomial option modeling is massively incorrect on the value of the options granted
I wasn't saying that there's dispute on the market value of the options, but rather, whether the option's value should be put as an expense on the balance sheet before it's ever realized (and given that it might never be realized). There are reasonable people who don't think it should be.
As for options vs stock the valuation is slightly more complicated, but still well documented and understood.
"Stuck on a desert island? Assume a survival kit!"
The options vs stock is the very heart of the matter, and it is most certainly not well-documented and understood. The difficulty is that, even though the option, if sold on the market, had positive value, but the stock may fall in price, meaning the option is never redeemed for cash. So, it's an expense... you never paid. Now, I agree that nevertheless it should be regarded as an expense, but it's far from a simple matter! Intelligent financial experts have long disagreed about this.
Also, as I 've said before, the real scandal is not stock options, which at worst, is overcompensation of employees and overstatement of tax liability, but rather the whole pension-accounting system that has allowed defined-benefit plans to underfund their obligations, and screw retirees and potentially taxpayers if this breaks the PBGC (Pension Benefit Guarantee Corporation). I mean, defined benefit plans are ridiculous in the first place, but the accounting problems there could actually screw retirees and significantly revise the net book value of several large old companies, like GM, which would have negative net book value if it actually treated these obligations like bonds.
Slashdot Mirror
The reasons advanced for this are many, but mainly, it is to spread the cost of defective products on those who can bear the cost -- the manufacturers with lots of money -- rather than on those who cannot bear the cost -- the general populace. In general, you like strict liability theories for products liability.
Actually, believe it or not, I don't like assigning liability based on envy.
Some of us used to mix soundboards and value our well-tuned hearing. You're not the only one who has "sensitive" hearing.
Please explain proper term I should have used instead of "sensitive".
Oh, right, you were just being a dick.
Okay, but why would you want to put up with such crappy lighting that makes a buzz? (I know, I know, "you can't hear it". Probably from torturing your ears with loud bass music all your life, but some of us have more sensitive hearing.)
Please, cut it with the fads. Just call it by its normal name -- an Internet French Disk.
So, you like Time's writing style?
Thanks for helping dumb down modern discourse.
Yes, this is worth getting modded down for.
Well, I probably shouldn't respond, because an AC isn't going to be around to even read it, but since others might, I should list how much you got wrong:
1) How much start-up capital you have wouldn't affect the calculation, since for a fair comparison you'd have the capital on both options.
2) At no point do you "pick stocks" -- I mentioned picking indexes.
3) The stock market has lower risks because a) if forced to sell you don't have to pay transaction costs, b) you can diversify to account for the many risks that can hit your investment, while with a house you are locked into one kind of asset in one region.
4) The value of your investments can be enough to buy a house at the end of the 30 (or whatever) years, meaning you're better off than if you had bought the asset.
5) You could just as easily say that if real estate underperforms (likely in an era of declining population growth) you have far less in assets to trade for income.
And the home you could get with that mortgage payment would be worse. For it to be a fair comparison, you would have to set the living arrangements in both options equal, not the dollar cost equal. Remember, you can always say "well buying a home is better than renting a room in the Four Seasons for the rest of your life", or that "renting the basement of Farmer John's outhouse is cheaper than a mortgage on a home in suburbia". Neither would prove much. That was why the example added the expenses you don't have on one side (commute/greater insurance costs on renting) to the other side. The point was that for living in the same kind of property, you can be better off renting.
Are you content to be only a tenant in a system where someone else retains ultimate control?
Actually, yes. A lot of people don't realize you can become financially a lot better off by renting a place instead of buying. Before you rip me a new one, I'll admit there are a number of variables that affect the calculation, and non-monetary considerations, so I agree that claim doesnt hold for everyone. However, too many people assume that if you can afford the mortgage payments and can get someone to lend to you, buying is a no-brainer. They act like renting is "throwing away money". But when you buy, you also throw money away -- it's just called "interest" and "property taxes" instead of "rent". This site has a sample calculation for San Francisco:
Renting:
Rent: $1,800
Monthly Loss: $1,800
Buying:
Property Tax: $486 ($729 per month at 1.25% before deduction, $486 lost after deduction.)
Interest: $2,333 ($3500 per month at 6% before deduction, $2333 lost after deduction.)
Other Costs: $450 (Insurance, maintenance, long commute, etc.)
Principal loss: $1,667 (Modest 3% yearly loss on $700,000. Reality will be much worse.)
Monthly Loss: $4,936
Even if you strike the principle loss, that's still worse. And of course, the monthly expense doesn't cover the mortgage payment going to principle, which, while nominally "coming right back to you" is locked up in a highly illiquid asset that can only be draw on at sale or by borrowing against it at interest. (Or transaction costs.) If you rent and invest the savings in a well-diversified portfolio (e.g. covering large caps, small caps, foreign, and bonds in proportions appropriate for your age), taking advantage of the various tax-advantaged vehicles (Roth, 401k), you can be much better off financially. (Again, *can*. I'm not saying this is right for everyone, just pointing out the considerations.)
I know, this has absolutely nothing to do with Windows. I just wanted to dispel the notion of renters as being necessarily exploited.
What bullshit conspiracy theory was I spouting?
-It's well known that sugar has high tariffs in America.
-It's well known that corn is highly subsidized in America.
-It's well known that HFCS is used as a sweetener in many products, and that this is due to its low price compared to sugar.
The controversial part was that it leads to diabetes. But that is at worst, a "crank medical theory" not a conspiracy theory. That's a completely different category.
it probably would have been easier to just quit tariffing sugar and subsidizing corn so that they stop using the bane we know as "high fructose corn syrup".
I'm just sayin...
I asked a question one time, here, about why you see so many /.ers refer to their xbox, despite this being a hostile environment to MS, and the xbox being the very definition of an unnecessary MS purchase. You might want to check it out. There were some interesting responses.
Sorry, typo, meant "deflation". Why don't you try to keep up by reading in context so you can spot what's a typo?
... well, whatever I assumed, it certainly wasn't justified in your case.
I noticed the error when it posted, and I would have corrected it, except I assumed
Try again.
Oh well, hey, if Wikipedia says inflation is bad, I guess that pretty much settles it.
... hell, why not just spend all your money?
*ahem*
Alright guys, remember, when prices go down, that's BAD. The history of computers is pretty much a silent Holocaust. Remember to keep your money in an account that pays the inflation rate. I mean, you'll still have to pay taxes so
I know you're not following your posts, but I really want to hear about the over-glorification of the 401k.
Since they only penalty is a fine, can you pay the fine out of the money you made selling the metal from the melted down coins?
Irony meter broken?
LOL, small misunderstanding. I wasn't saying that "companies should offer pensions but not tell you what the value is". I mean, the whole idea of a company promising a fixed annuity based on pay an years of service is stupid. They can never know how much to fund, so they're either
a) eventually underfunded
b) rely on new suckers, I mean employees to join them, making them effectively a Ponzi scheme
c) not under your control, so someone can raid it and leave you with no recourse (because they can't pay damages)
or some combination.
It makes much more sense to have a defined *contribution* plan, where they say how much they'll *give you* (or how much you can divert) and then you can choose how to save it, and have full ownership rights (vestiture) over the account, so that, if you want, you can "put it in a savings account".
They use a more rigorous standard than that: how many people make how much noise about whether it counts as a disease.
For example, homosexuality was scientifically proven to be a disease before the 70's. Then because of enough protests, it became scientifically disproven. Likewise, fetishism is currently scientifically proven to be a disease, but if enough people raise a stink, that will count as scientific disproof.
It works the other way too. Formerly it was scientfically proven that alcoholism isn't a disease; people just get drunk a lot. Then because of enough protests from people who didn't want to accept that their spouse is a lousy human being who values physical pleasure over their family, it became scientifically proven that it is a disease.
Give 'em some credit.
Thanks for reminding me of something that doesn't contradict any assumption of my post, which was quite specfically worded in terms of "what is required for logical consistency" rather than "what the Supreme Court currently believes" (they can be different, believe it or not).
I really don't know how I'd get through the day if not for showoffs.
Please. If you really believe in free speech, you shouldn't distinguish "Clinton is a moron" from "Buying my products is a good idea." Whenever a "business" says something, it requires a person to say it. You can't deny the right to the "business" while claiming to respect the rights of the person who voiced it.
If it's a fraudulent claim, sure, that should be illegal, but it shouldn't matter if it's a person or a "business".
Actually, now that you mention it, I should add that my company matches 401k contributions, but requires you to buy company stock with the match (though not with your own contribution). You then have to hold it for ~2 years. I didn't like that. So for a while, I was seriously considering ways I could monetaize that holding so I could diversify it. One way would be to sell the shares now, with a time lag of the required holding period. Another way would be to sell the option to buy at some price at the end of the period, so I get money now. So I would want a service like that.
Luckily, next month, they're eliminating that policy, so I can sell the shares without waiting. They still automatically buy company stock with your match, you're just allowed to resell it immediately.
I agree with you there. And that all levels of government should explicitly represent future entitlement obligation. My point was just that the issue is more complicated than the GGG(G?)P was making it out to be.
I don't know of too many financial experts (who are really disinterested) who can make a credible claim that binomial option modeling is massively incorrect on the value of the options granted
I wasn't saying that there's dispute on the market value of the options, but rather, whether the option's value should be put as an expense on the balance sheet before it's ever realized (and given that it might never be realized). There are reasonable people who don't think it should be.
As for options vs stock the valuation is slightly more complicated, but still well documented and understood.
... you never paid. Now, I agree that nevertheless it should be regarded as an expense, but it's far from a simple matter! Intelligent financial experts have long disagreed about this.
"Stuck on a desert island? Assume a survival kit!"
The options vs stock is the very heart of the matter, and it is most certainly not well-documented and understood. The difficulty is that, even though the option, if sold on the market, had positive value, but the stock may fall in price, meaning the option is never redeemed for cash. So, it's an expense
Also, as I 've said before, the real scandal is not stock options, which at worst, is overcompensation of employees and overstatement of tax liability, but rather the whole pension-accounting system that has allowed defined-benefit plans to underfund their obligations, and screw retirees and potentially taxpayers if this breaks the PBGC (Pension Benefit Guarantee Corporation). I mean, defined benefit plans are ridiculous in the first place, but the accounting problems there could actually screw retirees and significantly revise the net book value of several large old companies, like GM, which would have negative net book value if it actually treated these obligations like bonds.