Letters for May 16, 2013
Bites’ arena agnosticism ‘absurd’
Re “It’s your money” by Cosmo Garvin (SN&R Bites, May 2):
I'm glad to see you are an “agnostic” on the proposed arena. I'd sure hate to think what you would say if you were opposed to it. Here's one example: “It won't create new jobs, except for saving the jobs of a few sportswriters.” Are you telling us that a major redevelopment of the downtown area, with an estimated value of $1 billion, won't bring new jobs, new businesses and new revenue for the city? That is absurd.
This isn't just about the Kings. The new facility will be open more than 300 days a year, while the Kings play 40 home games a year. Also, you somehow think it is wrong to take a highly successful project like L.A. Live and adapt it to Sacramento. That also makes no sense. Why shouldn't we copy something that works?
And let's not forget that we're talking about a $1 billion redevelopment at a cost of about $250 million. That is a return on investment of 400 percent. Even jaded Wall Street investors would drool over that kind of agreement. Do the math.
Hopefully, we may have stopped, at least temporarily, the revolving door of sports franchises, where a city and its people who have faithfully supported a team through thick and thin for nearly three decades get raped with impunity. Too bad you NIMBYs won't join in the celebration.
Re “Housing Bubble 2”by Raheem F. Hosseini (SN&R Feature Story, May 2):
Just wanted to compliment you on writing this great article for Sacramento.
It is right-on, and I have been calling this a new bubble since I found out how much investors are buying up homes and turning them into rentals. I do not believe this market will hold, because the same thing on Wall Street is happening. Blackstone Group LP, who is buying up large amounts of real estate, is borrowing money to do this. This was posted in the Financial Times recently.
Our biggest threat is corporate debt and consumer debt, which are at all-time highs. Though there are many investors with their own cash, many corporations are borrowing the money. In addition, this housing bubble has all to do with the [U.S. Federal Reserve] buying up mortgage-backed securities. The Fed is driving stock prices, real estate and every other bubble. The question is: How long can this charade last?
Companies are downsizing, but on Wall Street, they are reporting higher profits, yet there is no real manufacturing or production happening to create these profit margins.
Jobs play into the housing market, because if employees are laid off, they lose their homes.
In addition to all this mess, I read in Matt Taibbi’s Rolling Stone article last month that inventory was purposely being held down to create an illusion of rising home prices. If someone tells you that companies on Wall Street have great numbers to report, that is because companies are buying back their own stock to make it appear attractive to investors. I don’t know how much detail you focus on when it comes to the overall economy, but I would love to see some reporting on all these factors that tie into our Sacramento region. It is hard to find real journalists that actually report what is going on around us, and SN&R has once again done excellent reporting. Kudos to all of your journalists for a job very well-done.