Real Estate Criteria Real Estate Criteria: Unsexy
by Kathleen Peddicord
The Rude Awakening
Wall Street, New York
February 17, 2006 Kathleen Peddicord discusses Criteria for buying real estate -- hers, and other people's.
------------------------- - The numbers are in and they don't look pretty – what
does it mean for your American dollars?
- A few things you should take into account when taking
off and,
- Putting your money to work for you in the emerging
Indian economy...this secret investment is about to
take off!
------------------------- Joel Bowman, reporting far from home... Some good news and some bad news for you today...both from
abroad. The bad news? The report from the Treasury
International Capital (TIC) is in and the numbers don't
look pretty. Last night, while sending a few emails back
home to Australia, I dropped Dan Denning a line to see what
he makes of it all. You might remember Dan's Rude musing
from Tuesday, warning us to look out for some ugly numbers
in Wednesday's report. I've included his email below so you
can take a look for yourself. The good news? If you have been thinking about foreign
investments, now is the time. Emerging markets the world
over are still (for now) hungry for American dollars and
there are plenty of opportunities to put your money to work
before demand for them dries up. From India to Panama,
there are some great investment ideas and now is just the
time to snatch them up. Our friend, and publisher of
International Living, Kathleen Peddicord lends some helpful
tips on what to look for when gazing abroad. It's a bit of an unusual Rude today and I think you'll
enjoy it. If you have an idea about where to send a hard
working American dollar to maximize returns, write to me
here at aussiejoel@the-rude-awakening.com --------------------------- Dollars Out, Dollars Out
From the desk of Dan Denning...
Joel and Eric,
The TIC data confirmed my grim expectation: foreign demand
for dollar assets continues to wane. Net foreign purchases
of long-term U.S. securities fell 38% from November to
December. But that's not the most alarming number. Poke
around in the data and you'll see that private foreign
investors purchased 75% fewer government bonds and notes in
December compared to November. In dollar terms, it was a
decline of $38 billion, from $50.8 billion in private
purchases in November to just $12.7 in December. Can we blame them? Why on earth would a private foreign
investor take on a 30-year bond from Uncle Sam, when the
interest rates on T-Bills is higher? Let's see…short-term
liability with a higher yield on the one hand, on the
other, owning the long-term liability of a government mired
in war and bankrupting itself? Even I'm smart enough to figure out that trade. Is it any
coincidence that the Treasury sold off $37 billion in
three- and six-month bills last week, nearly the exact size
of the decline in private purchases of long-term debt in
December? Well, yes, given the size of the bond market, it
probably is a coincidence. But a fortuitous one, just the
same. Foreigners are loaning money to the U.S. government for a
much shorter period of time, cashing in on the inverted
yield curve and wary of the big risks they see brewing in
an economy that continues to consume more than it produces.
They reduced their purchase of long-term liabilities by 38%
in December! Will all this result in a dollar adjustment soon? Well, the
strong housing starts data (the strongest in 33 years!) and
Bernanke's upbeat forecast of U.S. GDP growth might support
the dollar for awhile. Even so, I'd say, "Follow the
money." The foreign money is making for exits...Maybe we
should follow close behind. [Joel's Note: Alright...so, not the cheeriest email, I'll
admit. It is something that needs to be brought to
attention though, surely. If you only listen to the news
you want to hear, it's hard to be prepared for things you
don't want to happen. Dan makes no bones about telling it
straight in his Strategic Investment newsletter. Make sure
you know what's really going on behind all the puppetry the
talking heads put up for show. Stay in the know and learn
about how to make your own strategic investments right
here: The Hidden Drop – Are You Ready For This One?
http://www.agora-inc.com/reports/DRI/EDRIFB05 --- Foreign Investment Alert --- India's $200 Billion Secret is About to be Exposed! The last time an announcement like this was made anywhere
in the world was in 1992. It happened in China. The
results: - The Shanghai Stock Exchange's market value soared 44
times over
- The Hang Seng stock exchange rose as much as 314%
- Total wholesale and retail trade increased 393.3% in the
next 10 years
- The number of supermarkets increased 1,068.24%
- Retail employment nearly doubled. Now it's about to happen in India. And these four stocks
are set to make you rich: http://www.agora-inc.com/reports/SRR/ESRRG205
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Unsexy
By Kathleen Peddicord
I'm embarrassed to admit it, but logistics have become
important to me. When I think now about a good quality of
life...top priority is good infrastructure. Those who know me recognize the irony in this. I disdain
administration...have trouble keeping my driver's license
current...but, today, I'm all about the practical. How accessible is a place? How many airlines fly into its
capital city...from where...and how often? How far from the
airport to downtown? How good the roads...how reliable and
extensive the wireless access? I'm reluctant to confess it,
even to myself, but my life has evolved (you might say
devolved) to the point where these things matter more than
most others. Making the three-hour drive from the airport in Shannon to
our Ireland office in Waterford earlier this week, I was
struck by this truth. A survey published by The Economist
recently named Ireland the best place in the world to live.
Not if you're in any hurry, I'd have to argue. What's most important to you? Real Estate Criteria: Cost, Taxes, and Schools For Lief, it's the cost of living...and taxes. And for both
of us, in addition, it's the quality of the local schools. We're considering where else we might spend an extended
time, and Panama is at the top of the list of choices...for
it meets all criteria on both our lists. The cost of living
is low...the tax situation can be favorable...good English-
language schools exist, both for primary- and secondary-
level education...and, critically, the airport is but a
half-hour from downtown...and you travel from one to the
other along a well-paved road. You can fly into Panama's
Tocumen International Airport any day of the week from
Miami or Houston, direct. And, once in the country, you
have no trouble getting around (again, on those nicely
asphalted highways)...and you never want for Internet
service--broadband or wireless...in most parts of Panama
City, you can take your pick. Talk about stripping the romance out of it. Money, taxes,
and transportation. Very unsexy ideas that, these days, for
Lief and me, seem to rule our lives. What, then, you may wonder, are we doing spending so much
time in Ireland and Paris? Ah...here's where it gets tricky. For these kinds of
decisions...where to spend your time, your money, your
energy...are not made entirely with the head. The heart has
a voice, as well. Ireland used to be affordable...even cheap. And it used to
be tax-friendly. Neither no more. Today's Ireland suffers
from bubble pricing, for real estate, mostly, but when it
comes to the overall cost of living, too. And, this year,
Irish tax laws are changing so non-Irish residents will no
longer be taxed on a remittance basis (that is, based on
what money they bring into the country)...but on the basis
of worldwide income. Ouch. We came to Ireland to avail of government tax incentives
for the business...and to establish an EU base of operation
for International Living. Reasonable reasons. Paris, though? Harder to rationalize that move. Paris is
not cheap...and it boasts one of the most onerous tax
regimes in the world. It's only when we remember our
hearts' agendas...and balance them against the
practical...that we can begin to make sense of our Paris
experience. Paris may be expensive...its bureaucracy and
ways of doing business stifling...but, well, it's Paris.
Beautiful, romantic, historic, captivating... And this is my point. One that lately I struggle to
remember myself. Real Estate Criteria: Infrastructure Lief maintains one can (even should) organize his life's
affairs according to the relevant tax liabilities and
legislation. And recently I'm tempted to think similarly, putting
infrastructure at the top of my What's Most Important
list...especially when bouncing over the neck-, back-, and
kidney-battering roadways of southern Ireland, trying to
get to the office on time. But, in the end, I believe (and, at weak moments, even Lief
agrees) convenience and a cheap lunch don't Paradise make. Where, then, is the best place in the world to live? Listen
not only to your head, but to your heart, as well, when
trying to come up with an answer to this question. And
don't be afraid to make a move that may not seem entirely
sensible on paper. You can try to spreadsheet your
future...but, in the end, it's the feel of a place that
makes it a fit. Do your research, make your notes, draw your
conclusions...then get on a plane. Sometimes, within a few
hours of arriving in a place, you'll know if it's
right...or not. [Joel's Note: It all seems so glamorous doesn't it? Jetting
all over the world I search of prime real estate
investments. I thought so too, but it is actually far less
expensive, and a lot less hassle than you might imagine.
Check out the report below and find out just how close your
international vacation playground really is: International Living Report:
http://www.isecureonline.com/Reports/IL/EILVG264/ --- Advertisement --- Learn about the world's six best places to live or retire. Live like royalty on $17 a day. Own an exotic beachfront getaway for $35,000. Or a romantic
pied-a-terre for under $60,000. Enjoy fine restaurant dining for $7 per person. Employ a
maid or gardener for $6 a day. Buy comprehensive health insurance for $20 per month. Get the details in your FREE report now.
http://www.isecureonline.com/Reports/IL/EILVG264/ ------------------------- [Joel's Note: While on the topic of travel and
international investments, there are some worthwhile
resources available to you for free that you may not be
taking advantage of. The team over at the Daily Reckoning
has been busy setting up camp all around the world. Dan
Denning, for example, is currently residing in Melbourne,
lending a hand to the burgeoning Australian version. In
addition to the Aussie charge, there are editions flowing
forth from Germany, South Africa, France and England. You
can have a gander at any or all of these editions on there
www.dailyreckoning.com website, or simply have them
delivered, free, to your inbox everyday. When I want to check out what's going on back home I head
to http://www.dailyreckoning.com/Australia.html I know these resources will prove valuable to you, so check
them out if you get a chance. We'll be back with the Rude
weekend edition tomorrow. Cheers, Joel
And the Markets...
| Thursday | Wednesday | This week | Year-to-Date | DOW | 11,121 | 11,059 | 201 | 3.8% | S&P | 1,289 | 1,280 | 22 | 3.3% | NASDAQ | 2,295 | 2,276 | 33 | 4.0% | 10-year Treasury | 4.59 | 4.60 | 0.00 | 19.00 | 30-year Treasury | 4.57 | 4.58 | 2.00 | 3.00 | Russell 2000 | 732 | 725 | 15 | 8.7% | Gold | $547.75 | $540.45 | -$3.05 | 5.9% | Silver | $9.43 | $9.21 | $0.06 | 6.9% | CRB | 322.60 | 320.75 | -9.00 | -2.8% | WTI NYMEX CRUDE | $58.90 | $57.97 | -$2.94 | -3.5% | Yen (YEN/USD) | JPY 117.69 | JPY 117.87 | 0.23 | 0.2% | Dollar (USD/EUR) | $1.1891 | $1.1888 | 10 | -0.4% | Dollar (USD/GBP) | $1.7382 | $1.7407 | 59 | -1.0% |
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