C I T Y L I G H T S


C I T Y L I G H T S


C I T Y L I G H T S UNDER THE RADAR


that happens, the market value of existing bonds goes down, so for a conservative investor what looks like a safe bet, the 30-year Trea- sury bond, looks risky if the investor cashes out before the bond matures. How- ever, it is safe if you don’t cash out.” Starr says the “really safe”


investment is inflation-pro- tected Treasury bonds, called TIPS. “They are also safe in the unlikely event of persis- tent deflation.” (However, others point out that TIPS can produce tax headaches in some instances, and you can lose if you sell before the bond matures.) Although he thinks inter-


est rates could go up, he says tax-free California municipal bonds can be attractive. Also, “a portfolio of junk bonds [low-quality, high-yielding bonds] could provide hand- some returns.” And what about Shilling’s strategy of buying long-term Treasury bonds? Starr thinks they are “in a bit of a bubble.” Starr says stocks com-


pared to U.S. Treasury paper are not overpriced, but com- pared with historic statisti- cal measures they are over- priced. “There is no return without risk,” says Starr. “The conventional portfolio for an investor with a long horizon is an even mix of common stocks and fixed income [bonds].” Carlsbad’s James Welsh


writes a publication, Macro Tides, as well as a weekly technical market/economic review. Today, investors “are assuming more risk than the potential reward” merits, says Welsh. “Nothing looks that good.” Interest rates in the United States can’t go down much more: “We’re getting close to the end of the road” on bonds. Stocks don’t


lo ok s o hot, either. The U.S. stock market “is the third-most expensive in the last 100 years,” he says. Sobering, that. Indeed, “In the next month or two, the market will pull back 3 to 7 per- cent,” he says. Of course, that would be what’s called a “correction.” In bear mar- kets, stocks go down 20 per- cent or more. The bear vis- its every 3.4 years, and the average decline in the last 25 bears, dating to 1929, is 35.43 percent. That means for the average investor, a dollar in stocks turns into 64.6 cents. But bull mar- kets arise out of bears, and over time, stock investments have been as good as any- thing, but you have to have a strong stomach for the roller-coaster rides. Welsh thinks valuations


for the stocks that have done best in this market, telecoms and utilities, are on the high


side. Generally, he would wait until the correction takes its bite before jump- ing back in. “It’s time for a breather,” says Welsh. He blames the nega-


James Welsh


tive interest-rate policies in Europe and Japan for much of the current prob- lems. Negative rates caused the market valua- tion of European banks to plummet. Those banks are in trouble: “There is $1 trillion of non- performing loans throughout the European bank- ing system, and one-third of that


is in Italy,” which is really in sick bay. The negative inter- est rates have not helped economies and have caused people to lose confidence in central banks. Demographics are not


positive. The fertility rate has fallen from 2.12 babies per woman in 2007 to 1.86 two years ago — below the replacement rate. His sum- mation: “Sometime in the next one to three years the wheels come off” the markets and the economy because of lousy monetary policy, excessive debt and regula- tion, poor demographics, too many retirees, poor pro- ductivity, and a host of other problems.


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Contact Don Bauder at 719-539-7831 dbauder@sandiegoreader.com


Glide control to Torrey Pines The 6.74-acre Torrey Pines Gliderport, a longtime hotspot for confrontations between videographer Bob Kuczewski and gliderport leaseholder Robin Marien over what Kuczewski has alleged are unsafe practices at the city-owned facility, is up for a change of control. “The City of San Diego is requesting proposals from qualified firms or individuals to develop, operate, lease and use City- owned property commonly known as the Torrey Pines Gliderport located at 2800 Torrey Pines Sce- nic Drive within the Torrey Pines City Park”, says an open-ended July 20 request for proposals for redevelopment of the site issued by the city, with responses due by August 30. “Proposals must include a conceptual development plan for the Property, along with the proposed changes or additions to the exist- ing facilities.” Adds the notice, “the use of the Property shall be limited to the operation and maintenance of a gliderport; use by non-powered aircraft and radio-controlled models (take-off and over-flight); sale of hang gliding, para- gliding, and sailplane parts and accessories; sale of related mer- chandise; operation of a small food retail site (café); and inci- dental purposes as may be first approved in writing by the City.” Pro- posed annual rent for the iconic locale, a major player in the city’s tourist pro- motions, is $3412 on a ten-year-or- greater lease, with the selected propri- etor to pick up all costs for operations and insurance. “The City is also issuing a Request for Infor- mation to discover opportunities for various business endeavors or fundraising opportunities, sponsorships or programs that will assist in preserving the Prop- erty including financing and development of the Property.” Adds the document, “Currently there is no on-site water, sewer or electrical service at the Property. If feasible, water, sewer and solar- powered electrical service may be installed at the Property, at the selected Proposer’s sole cost and expense.”


Have Juan, will travel A top staffer to border Democratic House member Juan Vargas has escaped the muggy summer heat of Washington DC with a summer getaway to the fresh breezes of San Francisco, courtesy of the Federal Home Loan Bank of San Francisco. “I am Rep. Vargas’ Legislative Director and staff him for his Financial Services Committee work,” wrote Scott Hinkle on his post-travel dis- closure form, dated August 18. “The trip will discuss the role of the [Federal Home Loan Bank] sys-


Torrey Pines Gliderport lease is up for grabs


tem in homeownership, which is the jurisdic- tion of the committee.” Departing Wednes-


Scott Hinkle said a second night’s stay in San Francisco was warranted because...“full program of activities”


day, August 3, and returning Friday, August 5, Hinkle and his fellow congressional staffers were treated to a Thursday-morning continental break- fast and a “lunch and discussion” entitled “The Future of U.S. Housing Finance and Housing Policy: Lessons from Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.” Following an afternoon tour of the bank’s affordable housing project, it was off to “dinner and discussion,” from 7 to 8:30 p.m. regarding “How does the mission of universal access to mortgage credit remain a core com- ponent of the future U.S. Housing Finance System.” Location was listed as “to be determined.” The lucky trav- elers were put up at the Cart- wright Hotel, Union Square, described on its website as “situated a few blocks from the theater district, it’s easy to pop around the corner and catch some of the West Coast’s finest performances or — better yet — enjoy local music and art shows outside the front door on Union Square’s central stage.” The additional night’s stay at the hotel was justified by Hinkle,


who wrote, “Given the length of travel and the full program of activities on August 4th, a second night of lodging is warranted.” The grand total picked up for Hinkle by the


home-loan bank added up to $1044 in travel costs, $533 for lodging, and meals of $74.38. Hinkle is one of the San Diego Democratic delegation’s most-traveled aides, thanks to private donors, having gone gratis to Boston in April of last year continued on page 33


San Diego Reader September 1, 2016 3


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