George Mindling Column 12-30-2005 - Real Estate Bubble

The Term Real Estate Bubble Doesn't Apply

I need a new word for "bubble"- as in "real estate bubble." A bursting bubble falls back to the surface from which it rose in the first place, but I don't think that applies to real estate values, at least not in Charlotte County. I don't think property prices here are likely to fall back to pre-2002 levels.

The surge in property values over the past several years isn't just a local phenomenon felt only in Southwest Florida. Prices from Miami to Atlanta don't seem to be faltering; instead, they continue to climb, especially along Florida's Gold Coast.

Then why are we seeing a seller's market turn into a buyer's market here in our little comer of paradise? The reasons are a matter of almost daily articles and columns by highly qualified real estate professionals. I am just a property owner and an interested observer. Maybe that's why I need a new definition of the word "bubble."

"An economic bubble occurs when speculation in a commodity causes the price to increase, thus producing more speculation," according to www.investordictionary.com. "The price of the goods then reaches absurd levels and the bubble is usually followed by a sudden drop in prices, known as' a crash."

I don't think we will see a crash in property values here, although sales prices seem to have leveled off and may even have adjusted slightly downward. After reading about the real estate boom in Georgia - thanks to large forest tracts being sold off by Weyerhauser and the soon to be completed largest Georgia land sale ever by International Paper Company - I can't help but think development companies are setting the stage for another round of price increases for residential properties throughout the south.

Middle to northern Georgia is being subdivided at an astounding rate. While the areas north of Macon all the way to the North Carolina mountains are beginning to look like the next big areas of growth, especially for "halfbacks," Southwest Florida will always be attractive to northern retirees seeking relief from the relentless northern winters. The issue will be whether or not they can afford property in Florida.

"Halfbacks," by the way, are folks who moved to Florida from up north, then decided to move halfway back home for whatever reason, ending up in the mountains of North Carolina or Georgia. These aren't the land speculators who have left here after hurricane Katrina and descended on Mississippi and Louisiana; these are mostly retirees escaping our burdensome taxes and the spiraling cost of home ownership or the threat of hurricanes.

I don't doubt real estate bubbles exist, I just don't think the term applies to property values in Southwest Florida today. But then again, if property values fall 800 percent in 2006, I could be wrong.

George Mindling © 2005

George Mindling Column 10-28-2005 - The Reason Florida Lost

The Real Reason Florida Lost Out on Technology

When Florida enacted the Unitary tax in 1983, it started an economic collapse and fiscal fallout Florida has not recovered from some 22 years later.

In the LeRoy Collins Institute report titled “Tough Choices, Shaping Florida’s Future,” released on October 4^th, researchers search for answers to questions about Florida’s position in the high tech industries that many of us who were in the business years ago take for granted. In the report, one comment expressly misses the technological industrial growth that Florida squandered.

”…Our economy missed out on periods of industrial growth because that is not what we did. For industry, we lacked raw materials, cheap energy, and a central location,” states David Denslow, University of Florida. Apparently David has never been to Boca Raton.

Florida was set to be the east coast Silicon Valley, competing with North Carolina’s bid for growing the Research Triangle Park. IBM had moved matrix printer manufacturing to Boca (all Bahia printers were made in Boca) before the Personal Computer was even announced. Of course, once the PC was brought to market, Boca was the heart of the IBM PC empire. High tech companies flocked to the area. Seagate had a huge facility just up Congress Avenue from the IBM Yamato Road plant.

IBM took out an option on 5000 acres not far from Gainesville, with the hope of building an assembly plant. Hampered by inclement weather in its traditional northern facilities, IBM wanted a facility that would be available for transportation all year round to supplement its ability to ship worldwide at any time. Florida was a place employees wanted to move to and bring their families. It was a great location for building families and satisfying future needs of the company at the same time. It was a university town, another asset IBM valued highly.

However, shortsighted and greedy Florida lawmakers decided to enact the now infamous Unitary Tax of 1983. Basically, any company doing business in Florida would have to pay taxes on total revenues worldwide, not just on sales within the state of Florida. The effect on international companies such as IBM was devastating. The CEO of IBM supposedly met with Florida’s governor to convince Florida to repeal the new tax. When no relaxation of the tax became obvious, IBM effectively closed the Boca plant and moved the whole PC operation to Austin, Texas. They then sold the 5000 acres in Gainesville and basically wrote Florida off the future expansion list. Payback can be brutal, and Florida is still trying to recover from its shortsightedness. The law was eventually repealed but not until the damage was done. When IBM left Boca, so did most of the ancillary businesses that worked with IBM. Ask anyone in Boca who was there at the time what happened.

While the LeRoy Collins paper is invaluable in its number crunching, there are telltale gaps in its ability to convey the long-term effects of bad legislation. Let’s hope the paper doesn’t generate another round of mistakes.

George Mindling

George Mindling Column 9-30-2005 - Free Credit Report is Free

Making Sure Your Free Credit Report is Free

If you don't cancel your membership within the 30-day trial period, you will be billed $12.95 for each month that you continue your membership. That’s the fine print contained in the Web Page of http://www.freecreditreport.com/. That web page is advertised on television and offers consumers credit services that are often needed. However, it is not to be confused with the free credit reports everyone is entitled to under the current credit card laws. The Federal Trade Commission web page at http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm explains the only authorized web site for the federally mandated reports.

Everyone is entitled to an annual free credit report from each of the three major credit-reporting firms, Equifax, TransUnion, and Experian. The three companies jointly sponsor a web site for you to easily get your free annual credit report on line. The free annual credit report web site is https://www.annualcreditreport.com/, and can now be accessed by everyone as the last region went on-line September 1^st.

Each of the three companies must be accessed individually for their report. The beauty of the joint page is each of the firms can be accessed, one after the other if you choose to do so, from the one page. Each firm asks a different series of questions using secure web links to validate who you are. The questions and formats differ between companies, and even the information reported by the firms differs somewhat. The “Credit Score” is not part of the free report, but can be added for a nominal one-time charge by each of the companies.

To keep a running check on your credit status, request one report every four months from one company, wait four months then get another report from the second company. Finally, ask for your last report four months later from the third company.

The first thing I noticed about my reports was an incorrect address someone had accidentally entered for my former address in Miami. The correct address was listed prior to 1997, but an extraneous digit had been added in 1998 effectively changing my residence to some 20 miles out in the Everglades. Other than that, I could see no other discrepancies in my report. Each firm has a web page explaining how to dispute the information if I decide to correct the address error. You must follow several steps to initiate an investigation into your complaint, and of course you can do it by mail if you choose to do so.

Each of the three firms offers more detailed credit reporting services for different fees, much as Freecreditreport .com from their respective web sites. In fact, it is difficult to find your free credit report on any of their individual home pages pages. The joint credit report page is fast and easy to use. By the way, the “s” in the https part of the Internet address means it is a secure site.

It is a good idea to keep track of the companies that are keeping track of you.

George Mindling

George Mindling Column 9-23-2005 - Paper tiger (Unpublished) My Last Column

George Mindling Column 9-23-2005 - Paper Tiger -  For Immediate Release

(The Charlotte Sun-Herald elected NOT to print this column.  This is its first publication) 

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“The Capitalists will sell us the rope we use to hang them.” While Lenin’s exact words were far more verbose, they apparently did not fall on deaf Chinese ears.

According to a recent published report, the Communist Chinese government holds 790 billion dollars of U.S. currency and bonds! Chinese General Zhu Chenghu told the world the very same week of the report they WILL attack the United States with nuclear weapons if we try to defend Taiwan, the Republic of China, from Communist takeover. We are paying for the two largest military buildups in recent years: Ours and the very forces we may have to go to war with, the Communist Chinese.

Why do American companies, especially those that purport to be Christian based, do business with the godless dictatorship that is Communist China? Which is the real answer: money or morals? Are we so busy trying to create a democratic utopia that selling our energy and technology assets to a security threat to our country in the name of “Growing Democracy,” is naively ignored? What will we sacrifice chasing the 490 billion dollar market China appears to offer to American retailers in 2006? Chinese leaders have had the inscrutable patience to let the Americans “dig their own graves” with their unbridled greed.

Last February, Secretary of Defense Rumsfeld testified at a Congressional hearing on the Chinese buildup and the Chinese policy paper challenging the U.S. military presence in the Pacific. U.S. intelligence had believed China to have a fleet of only “60 to 70 operational submarines, most of which are ageing, and only a handful of which are nuclear powered.”

However, the June 9^th Washington Times reported a U.S. security document found that American intelligence has missed the Chinese naval buildup for TEN years! Among the items missed were China's development of a new long-range cruise missile, deployment of a new attack submarine known as the Yuan class that was missed by U.S. intelligence until photos of the submarine appeared on the Internet, (http://www.jeffhead.com/redseadragon/planbuildup.htm) and development of surface-to-surface missiles for targeting U.S. aircraft carrier battle groups. According to CNN, The Chinese Navy will soon be the largest in the world. This from a country from which we borrow 2 billions dollars daily! If we default, how will they foreclose?

Secretary of State Condoleeza Rice warned on August 18^th that China must make significant structural changes in its economic policies, lest it remain "a problem for the international economy."

"The overwhelming sense I got was that they do not want a conflict with the United States," said Robert B. Zoellick, the deputy secretary of state. But he said that he, too, "tried to get them to see how their actions are perceived by the other side," particularly "if they were not transparent, they would create uncertainties, and uncertainties lead people to hedge."

The patient Chinese are not stupid. They measure time by generations, not fiscal years. By then, we will be the Paper Tiger.

George Mindling © 2005

George Mindling Column – 8-26-2005 - Online Banks Competing

 For Savings Dollars

The competition for your savings dollar is getting fierce. There is a new banking game in town. It is called direct savings and it is an on line, or Internet, method of bypassing the costs of “Brick and Mortar” banking institutions. Actually, the game isn’t in town at all, but available everywhere to anyone on the Internet. Without the cost of doing business in a traditional neighborhood establishment, cost savings are passed on to the consumer. Or, in this case, the banking customer looking for a place to put cash with the highest return. The current big players are ING with their “Orange” accounts, and Emigrant Savings Bank with their American Dream Accounts, and Presidential Savings with its Premier Savings Account.

ING Orange accounts currently pay 3.30% APY. ING at http://home.ingdirect.com/ has a quick and easy sign up procedure and has a deposit confirmation procedure to validate your new account. It takes 10 days before you can draw against the account, but only takes a couple of days for the account to be active.

Emigrant at http://www.emigrant-direct.com/ was made famous by Suze Orman’s recent endorsement. The Emigrant American Dream Account currently pays 3.50% APY with no fees and no minimum.

Also competing is Presidential at http://www.presidential.com/ . Presidential currently pays 3.87% APY and is also relying on the PC and Internet to do direct transactions.

The name of the game is the highest return available anywhere on your savings deposits. Only on line transactions, or telephone activity, is handled as there is no person-to-person interface available.

Opening an account is simple. Only two or three screens of information, including an active checking account and you have a new savings account. The checking account is required for the on-line transfer of funds between the new savings account and your current bank. Your checking account is a DDA, a Demand Deposit Account. A DDA account gives you the right to demand immediate payment of funds. Savings accounts, however, usually have a restriction of requiring you to provide the bank with 60-90 days notice of your intention to withdraw funds. While Emigrant has this warning in their on-line agreement, ING does not. According to Internet sources, the time period is rarely enforced and most transactions appear as completed within 48 hours. My personal experience with our direct account is that transactions are completed in a matter of hours.

How the traditional banks handle the new on-line competition remains to be seen. For example, Bank of America http://www.bankofamerica.com has its current rate buried at the bottom of the fourth web page about the benefits of their savings accounts. The difference, of course is that is all full service banks have a local, neighborhood presence, and offer far, far more than just a savings account. Like a real person to see and talk to, face to face. Traditional banking services will have to compete with cost, and the consumer will win either way.

George Mindling

George Mindling Column 8-12-2005 - Web Service Change Has Big Consequences

Web Service Change Has Big Consequences

Backing up PC or electronic data is a subject I have written about many times. I thought I had covered just about every contingency requiring an up-to-date copy of your computer data. Surprise! This column is being written because the original column planned has been rendered useless due to the people who administer my web site.

All they did was change one little character in the name of my web site. Not just mine, but every web site they host. The result? Not only can I not find my site, no search engine in the world can find my site.

Why would the hosting service change the URL, or Universal Resource Locator, the alphabetic name assigned to a series of numbers that point to my web site? A change in server software, from Unix to Microsoft, dictates the URL not contain the tilde character, the”~”. The ~ is used in Unix systems with User Names, but not MS systems.

The problem is the web hosting service thought so little of their customers they didn’t bother to tell their customers the change was coming. We found out when we tried to visit our web site and got the famous “404” error, site not found.

To make matters worse, the web hosting service doesn’t care if I’m out the cost of business cards or advertising, or in my case, a column about web sites! They offered no apologies, or assistance to resolve the issues.

I have a feeling the legal eagles will descend on the comatose propeller heads with a vengeance. In my case, the web site I maintain is about my old Air Force unit and is used as a community site by a group of people with a common interest. No financial loss, just a regal loss of time and effort. As soon as I have a new URL, I’ll upload the corrected backup data. Of course neither Google nor any other search engine will be able to find my site for quite a while, so I have to rely on word of mouth and e-mail. One thing bothers me, though. What is to prevent any other web hosting service from such an insensitive change? I had moved my wife’s business site off of this web hosting service several years ago, but I can’t help but wonder about the small businesses that are suffering without recourse.

I’m shopping for a new web hosting service and that is where I use a full backup of my web site. The old service won’t restore the old name, so since I have to start over I certainly won’t use the same service. Hopefully, my next web hosting service will be customer oriented instead of totally unconscious when dealing with its customers. Technology changes that destroy customer loyalty are not going to keep any company in business.

I’ll keep a backup of the web site handy, just in case.

George Mindling