CDC Commercial Inc

July 2015 Monthly Letter

On the 4th of July 1826, former Presidents Thomas Jefferson and John Adams, who were once fellow Patriots and then adversaries both died within five hours of each other. Jefferson and Adams were the last surviving members of the original American Revolutionaries who stood up to the British Empire and forged a new political system in the former colonies. However, while they both believed in democracy and life, liberty and the pursuit of happiness, their opinions on how to achieve these ideals diverged over time… My how some things never change!

As we gather around our barbecues this weekend and watch Greece melt down (note I said Greece and not grease). I think it is important to realize that our Founding Fathers fought for our Freedom not Freedumb – which is a society that thinks everything should be free – that is just dumb. I heard earlier this week that there are more people working for the Greek railways then ride on them!

Well I am happy to report that Capitalism it is alive and well… in India. What was even more humorous to me was that during the TV special about India’s economy I saw a TV commercial for Emirates Air (the largest airline in the Middle East) with the slogan; “Choice, it’s a wonderful thing”. It just seemed ironic to me given the current battles in the Middle East with ISIS.

Closer to home and our economy, we prepare for “lift off”. At no time in history has an economy raised rates off of zero. I read that for every one point down in rates there was a 12% increase in house prices. However, don’t forget that blade cuts both ways as we prepare for potential rate hikes. May’s unemployment report was good with 280,000 jobs added Nationally. The unemployment rate climbed from 5.4% to 5.5% percent but that is actually good as it is a sign of more people beginning to look for work. I think the big thing that is perplexing the Fed is wage growth versus wage inflation. A sudden jump in hourly wages suggest inflation-hence the need to pull the trigger on rates (wage inflation) and probably the start of a recession. Wage increases accompanied by productivity gains means a growing economy and sustainable increase in rates.

Speaking of sustainable growth, CONNECT reported that 446 ” innovative company” (read “tech”) startups were formed in San Diego in 2014. The report said 147,900 people were employed in an innovative economy company at an average of $109,600 – more than twice the average San Diego wage. That’s what I call wage growth!

I like to watch where the job growth is because that points to where the real estate occupancy will occur. For May 2014 to May 2015 we saw 42,400 jobs added. Here is the breakdown of the largest gains.

Agriculture – 700
Professional & Business – 11,000 (scientific + Tech – 8500)
Admin & Support – 1900
Leisure & Hospitality – 8500
Education & Heath Services – 6800
Construction – 4500
Trade, Transport, Utilities – 4100

As a side note, I was at a roundtable with some lenders and across the board their volume of making loans was up 10% plus over last year.

We live in a time of blurring lines. Are we worried about inflation or deflation? Where do I put my money to keep it safe and or provide a reasonable rate of return? Should Bruce Jenner be on a Wheaties box or on the cover of the Vanity Fair as Kaitlin? Wage growth? Wage inflation? Dreams or fears? Jefferson or Adams? One thing that is constant is cash flow. Keep your eye on the prize. Well located real estate with sustainable rent .

In any given group or industry, the highest paid and most highly recognized people are those that consistently outperform their peers. To those victors go the lion’s share of the reward. This phenomenon is known as the Law of the Vital Few or the Pareto principal. But what really makes these vital few so successful while the rest of the group can barely achieve mediocrity? The thing that truly separates these people from the crowd is an unwavering dedication to achieve the maximum results for the amount of time and effort invested into their endeavors. This is recognized as a commitment to excellence. This is the principal our great nation was founded upon and what those of us that CDC Commercial strives for every day. Happy 4th of July… Hope you enjoy the story…

Thomas Jefferson was a very remarkable man who started learning very early in life and never stopped.

  • At 5, began studying under his cousin’s tutor.
  • At 9, studied Latin, Greek and French.
  • At 14, studied classical literature and additional languages.
  • At 16, entered the College of William and Mary.
  • At 19, studied Law for 5 years starting under George Wythe.
  • At 23, started his own law practice.
  • At 25, was elected to the Virginia House of Burgesses.
  • At 31, wrote the widely circulated “Summary View of the Rights of British America ” and retired from his law practice.
  • At 32, was a Delegate to the Second Continental Congress.
  • At 33, wrote the Declaration of Independence .
  • At 33, took three years to revise Virginia’s legal code and wrote a Public Education bill and a statute for Religious Freedom.
  • At 36, was elected the second Governor of Virginia succeeding Patrick Henry.
  • At 40, served in Congress for two years.
  • At 41, was the American minister to France and negotiated commercial treaties with European nations along with Ben Franklin and John Adams.
  • At 46, served as the first Secretary of State under George Washington.
  • At 53, served as Vice President and was elected president of the American Philosophical Society.
  • At 55, drafted the Kentucky Resolutions and became the active head of Republican Party.
  • At 57, was elected the third president of the United States.
  • At 60, obtained the Louisiana Purchase doubling the nation’s size.
  • At 61, was elected to a second term as President.
  • At 65, retired to Monticello.
  • At 80, helped President Monroe shape the Monroe Doctrine.
  • At 81, almost single-handedly created the University of Virginia and served as its first president.
  • At 83, died on the 50th anniversary of the Signing of the Declaration of Independence along with John Adams

John F. Kennedy held a dinner in the White House for a group of the brightest minds in the nation at that time. He made this statement: “This is perhaps the assembly of the most intelligence ever to gather at one time in the White House with the exception of when Thomas Jefferson dined alone.”

When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.” — Thomas Jefferson

The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.” — Thomas Jefferson

It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.” — Thomas Jefferson

I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” — Thomas Jefferson

My reading of history convinces me that most bad government results from too much government.” — Thomas Jefferson

No free man shall ever be debarred the use of arms.” — Thomas Jefferson

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.” — Thomas Jefferson

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.” — Thomas Jefferson

To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.” — Thomas Jefferson

Thomas Jefferson said in 1802:

I believe that banking institutions are more dangerous to our liberties than standing armies.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property – until their children wake-up homeless on the continent their fathers conquered.

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