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Posted by: Rubicon ( )
Date: January 08, 2019 01:58PM

From what I have read and heard the church was $33 million in debt in 1959. The main reason was the church had a strategy if they built better buildings this would attract new members. It really didn't work and the church ended up with a lot of debt. About the only good thing the church did was they bought a large cattle ranch in Florida because on of the apostles was a rancher who understood that business. He also was the same guy who encourage David O McKay to spend on things that lost money.

Apparently the big savior for the church was N Eldon Tanner. A Canadian businessman who understood real estate. Also the post war baby boom created a demand for real estate. Everything from new homes to new offices and stores was needed. Real estate has in general been a great place to make money and the church apparently has done very well.

Now many financial experts see real estate over valued and with the boomers aging and no other big boom following there is nothing to generate a demand for more real estate. Prices will start to come down especially when interest rates go up.

In 1980 when the church built the Seattle temple they required that the local members cover 33% of the cost. One regional church leader in the Seattle area even said the presiding bishop of the church got a bit annoyed when he said Seattle needed a temple. Seems like money was still tight in the late 70's.

The big spending church seemed to happen when Gordon B Hinckley came in. Ironically the prophet who often talked about the great depression and living within one's means took on very expensive real estate projects. He started the whole temple building craze and the church seems to just throw money at things like church historical sites. A pet interest of Gordon B Hinckley. The church even relocated the street the Smith farm in Palmyria and made the original street a pedestrian walk. Sure you can relocate a county road but it comes with a price and the big question is why?

So the church like any organization spends it when it has it and that trend goes on until it causes problems. If real estate is a major money generator for the church then a downturn in real estate should hurt the church. Add in a declining membership and no real solution to end that trend.

Maybe the church we see today is just the result of a 50 year old real estate boom and a increase in church membership due to a post war baby boom. Maybe the baby boom has more to do with the success of the church more than missionary work or any other factor. With the baby boom aging and ending maybe the church will age and end with it. I don't see anything that would rally the church out of it current decline down.

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Posted by: Lot's Wife ( )
Date: January 08, 2019 02:52PM

Your financial history is basically correct. Hugh B. Brown, I believe, was the "build it and they will come" moron. He was shoved aside and N. Eldon Tanner imposed financial discipline and saved the church.

Later, Hinckley literally told the Q15 that "I earned it, I'm gonna spend it" and launched the McTemples effort. The difference between him and Brown was that Hinckley actually had the money.

I'm sure the aging of the baby boom generation will cause real estate appreciation to slow dramatically and chronically. But that is true of most asset classes. What happened that interest rates peaked in about 1982 and then began a 40 year decline that pushed money into stocks, bonds, and real estate. So anyone who went long during those decades did well. The story going forward, now that rates are rising, will see a much lower rate of appreciation for most assets.

Will that kill the church? I doubt it for two reasons. First, real estate prices will still rise albeit more modesty. Second, the church has large real estate holdings but it also has dozens of other businesses and huge stock portfolios. Those assets are managed by very serious professional fund managers, managers who seek both gains and risk mitigation.

The church is not in financial trouble. It will do roughly as well as the big pension funds, which are managed similarly by similar people.

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Posted by: smirkorama ( )
Date: January 10, 2019 03:01AM

Lot's Wife Wrote:
-------------------------------------------------------

>
> Later, Hinckley literally told the Q15 that "I
> earned it, I'm gonna spend it"

and that is how Gordon BS HinckLIEy's monument to himself aka CCC mall came about .....and HinckLIEy did not give a damn if he had the approval of the 15 or not, just as he did not need of sole trustee of LDS Inc, HinckLIEy was just telling them what was going to happen

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Posted by: Elder Berry ( )
Date: January 10, 2019 01:22PM

My great grandfather wasn't the reason. This guy was.

https://en.wikipedia.org/wiki/Henry_D._Moyle

Brown got his nephew on the job.

"No less impressive than his rise within the business community of Canada was N. Eldon Tanner’s rise within the leadership of The Church of Jesus Christ of Latter-day Saints. With the completion of the Trans-Canada pipeline, the Tanners planned on enjoying a well-earned retirement on Calgary’s west side, overlooking the foothills of the rugged Rocky Mountains. They had property, horses, and grandchildren to enjoy. But after living for only eight months in the new dream home, everything changed. While attending general conference in October 1960, the Tanners dined with Eldon’s uncle Hugh B. Brown of the Quorum of the Twelve Apostles. At the end of the evening, Elder Brown said that President David O. McKay wished to see Eldon in his office at 9:00 the next morning."
https://rsc.byu.edu/archived/firm-foundation/21-n-eldon-tanner-and-church-administration

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Posted by: Brother Of Jerry ( )
Date: January 08, 2019 04:02PM

Henry D Moyle was the councilor who played fast and loose with the checkbook in the 1950s. As noted, Deseret Ranch in Florida worked out pretty well for LDS Inc

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Posted by: Lot's Wife ( )
Date: January 08, 2019 04:03PM

Absolutely right. It was Moyle.

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Posted by: Gheco ( )
Date: January 08, 2019 07:42PM

Any crash or recession will affect their income via fewer tithing dollars.

I would imagine property values of LDS real estate might not be that big a factor as they would probably just hold on to stagnant property until market conditions improve.

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Posted by: Heartless ( )
Date: January 08, 2019 07:43PM

The for profit arm of the church is not adverse to cutting its losses.

ZCMI, Zion's Bank and Beneficial Life are a few examples.

Real estate is a lot less liquid. I'd wager most of it is under the non profit arm and hence shielded from taxes so holding it may not be as expensive as we'd think.

The real damage will come when the church cannot funnel tax free money into it's for profit businesses by having them build, rebuild or renovate churches and temples. That will hurt the royal families that control these businesses right in the pocket book.

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Posted by: anono this week ( )
Date: January 10, 2019 08:49AM

In Mormon Hierarchy Wealth and Corporate Power it talkes about the churches specualtions during the 1st half of the 20th century. Despite the platitudes in general conference about being wise with money, The Bretheren were always into penny stocks and worthless gold mining stocks. They were constantly buying risky things on the market because there was always some story running around Wall-Street that someone made big on this or that mine of gold or something. But it never panned out consistently.

From what I understand what really turned mormondom around was that starting in about 1950s some wealthy southern California widows (non mormons btw) decided to deed their estates to the church. Think of that a 100 acre farm in Santa Barbara, Malibu, or San Diego. What's would that be worth in 70 years? And you add up 100 such farms deeded in the 1950's. And it's worth billions today.

California real estate is the gold mine that shaped the mormon empire. But as for a crash in the price of real estate? I don't see it happening anytime soon. Look at Japan they have a steady or declining population yet it's still the most expensive place in Asia, and they are sitting at the top of the heap.

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Posted by: Lot's Wife ( )
Date: January 10, 2019 01:54PM

anono this week Wrote:
-------------------------------------------------------

> From what I understand what really turned
> mormondom around was that starting in about 1950s
> some wealthy southern California widows (non
> mormons btw) decided to deed their estates to the
> church. Think of that a 100 acre farm in Santa
> Barbara, Malibu, or San Diego. What's would that
> be worth in 70 years? And you add up 100 such
> farms deeded in the 1950's. And it's worth
> billions today.

Those things may have happened but they did not have an immediate impact. The church almost went bankrupt at the end of the 1950s. It was Tanner, and his rigorous cost control, that avoided the crisis.


-----------------
> But as for a crash in
> the price of real estate? I don't see it happening
> anytime soon.

No one ever does. That is why it is a "crash" rather than a gradual decline. The overall market didn't have a clue in 2006-2007: the subprime crisis looked small and containable, but of course it was not.

Then there is Japan. . .


-------------------
> Look at Japan they have a steady or
> declining population yet it's still the most
> expensive place in Asia, and they are sitting at
> the top of the heap.

I'm not sure what this means. Japan is a great example of how real estate crises occur unexpectedly and horrifically. Just look at a chart of Japanese real estate prices from 1989 to the present. After 30 years, prices are still down about 60+ percent.

As for Japan's "sitting at the top of the heap," what does that mean? Japan is in serious decline. China is economically bigger, militarily stronger, and politically driving what happens in East Asia and increasingly the world. In part because of its economic failures and market crashes, Japan is a shadow of what it once was.

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Posted by: ificouldhietokolob ( )
Date: January 10, 2019 03:20PM

There you go again, letting facts ruin a good story...:)

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Posted by: messygoop ( )
Date: January 10, 2019 04:34PM

I was a clerk during that weird time when the church was in flux between early modem talkin' computers and their fancy Brother business style electric typewriters. Even though a program had been developed to print church ordinance certificates, I was still expected to use a typewriter with a worn-out ribbon. Sure, very nice stationary that looked like crap because the ribbon was worn out. The stake had some auditor that verified that each ribbon was fully run through 4-5 times before a new ribbon was authorized.

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