Asset Pricing In The New Unreal World
A weekend topic starting with the Orange County Register. “Happy National Froth Day! Or, perhaps, my condolences! Twelve years ago today — June 9, 2005 — then-Federal Reserve Board chairman Alan Greenspan — the guy who was once seen as the ‘maestro’ of the economy — went to Capitol Hill and testified he saw ‘froth’ in housing but not a bubble.”
“His prepared testimony for the congressional Joint Economic Committee went like this: ‘There can be little doubt that exceptionally low-interest rates on 10-year Treasury notes, and hence on home mortgages, have been a major factor in the recent surge of homebuilding and home turnover, and especially in the steep climb in home prices. Although a ‘bubble’ in home prices for the nation as a whole does not appear likely, there do appear to be, at a minimum, signs of froth in some local markets where home prices seem to have risen to unsustainable levels.’”
“So today, we lift whatever froth you like — a coffee drink or something fizzy made with grains — as a toast to humanity’s inability to see a brewing bubble.”
From The Irish Times. “My partner and I began our house hunt fairly tentatively towards the end of last year, when talk of another property bubble was only starting. Now it’s on fire, and we’re at the centre of the blaze, competing with thousands of others searching for a property to call our own in Dublin. We knew that applying for a mortgage was going to be arduous, but we expected the delay to be at our end, as we completed the endless paperwork, not at the bank’s.”
“We’re out the door with all the applications at the moment,’ my bank’s mortgage adviser said when I went in for a chat in March. She told me it could take three or four weeks to get approval in principle, and that was after all the paperwork had been correctly submitted. ‘We can’t keep up.’ After a two-week wait our mortgage was approved, with a lower interest rate, by another provider in April, much to our relief.”
“There’s a distinct whiff of deja vu about what’s happening now. Having seen the devastating effects of the crash, we’re wary. But it’s hard not to get caught up in it when you’ve your heart set on buying a house. What’s another €10,000, you think, as the bidding climbs steadily higher.”
From Danielle DiMartino Booth. “Oh, but for the days the hawks had a hero in Sydney. Against the backdrop of a de facto currency war, the Reserve Bank of Australia stood as a steady pillar of strength. The Bank of Canada has taken a similar journey in recent years. How they’ve landed in their current predicaments is less easy to explain. Propelled by soaring home prices from Sydney to Toronto to Melbourne to Vancouver, Australia’s household debt-to-income has hit a record 190 percent, the highest among developed nations; it is trailed closely by Canada, which has a 167 percent ratio.”
“To put this in perspective, at the peak of the housing bubble, debt-to-income in the U.S. peaked at 130 percent. Then, economists took perverse pleasure in squelching the alarm these frightening figures elicited. ‘It’s not the level of debt that matters, it’s the cost to service that debt.’”
“That myopic mindset best captures the shackles that bind today’s global economy. Of course it’s acceptable to build infinitely high levels of debt — as long as rates never rise. But then there’s the inconvenient truth that when the price of the collateral backing those millions of subprime mortgages cratered, those irrelevant debt loads became relevant overnight. The same can be said of today’s delicate dynamic. Australia and Canada will be just fine so long as they don’t suffer a shock in any form to their respective economies.”
“Call it a global cultural tectonic shift. For close to a decade, the almighty Federal Reserve’s holding interest rates near the zero bound and its unconventional monetary maneuvers have bled into every nook and cranny of the global economy; it has altered the way investors of all stripes approach the very idea of debt. Asset pricing, the way it was taught in Finance 101 courses, has no place in the new unreal world.”
“Without the comforting embrace of such delusions we could hardly dismiss as hysterical hyperbole reports such as that recently released by the World Economic Forum, which said longevity and lackluster investment returns will viciously collude to create a $400 trillion retirement savings shortfall in 30 years’ time. That figure is five times global output.”
“At the very least, Australia’s Treasury Secretary John Fraser has an optimistic take on how far out the day of reckoning will be. Debt is, ‘all fine until it ain’t. When interest rates do, in the centuries to come, go up, it’s something to watch.’ Pray you aren’t the lucky soul with front-row seat tickets.”
From Harper’s Magazine. “Two years before the 2008 Wall Street crash that toppled the global economy into deep recession, Harper’s Magazine published a dark prophecy of what was to come. In ‘The New Road to Serfdom,’ economist Michael Hudson laid out how millions of Americans had taken on huge debts to buy houses on the presumption that they could later sell them at a profit. As the twenty million people who lost their homes discovered, Hudson got it entirely right.”
“Today, unemployment is at record lows, and the stock market is at record highs. Allegedly, we have recovered from the disaster. I talked to Hudson, Distinguished Professor of Economics at the University of Missouri-Kansas City and the author, most recently, of J is For Junk Economics, A Guide to Reality in an Age of Deception, about his pre-crash prediction, and what he now sees in our future.”
“At least you have the satisfaction, if that’s the word, of events proving you correct. But we’ve supposedly now recovered from that disaster. Have we?”
“No, we haven’t at all recovered. That’s why Hillary lost the election. She said, ‘Look at how much better you are since 2008. Obama has saved you.’ Trump said, ‘Wait a minute. Look at how bad you are. You’re not saved.’ Everybody thought, ‘Who are you going to believe, your eyes or Hillary?’ We haven’t recovered at all. Obama saved the banks and Wall Street, not the economy. From 2008 until today, the economy has grown by 2 percent, but the top 5 percent of the economy have got all of that growth. The economy isn’t recovering.”
“That’s why when the Department of Labor statistics gave the most recent employment figures, everybody commented, ‘It’s very interesting. Employment is up, but wages are continuing to fall.’ It’s all minimum wage work. The debt ratio for most families is rising, not falling, especially for student debt, for mortgage debt, for automobile debt. The default rate is continuing to rise.”
“So are we heading for another explosion comparable to 2008?”
“I’m not sure it’ll be an explosion. It’s more like a slow crash. It’s more like people are getting desperate. They’re having to live off their credit cards, not to buy luxuries but just simply to break even. They’re falling further and further behind, and as they fall behind the interest rate rises, the penalties rise, so people are getting more and more squeezed.”
“Is that your prediction for our future here in the United States? Greece?”
“Yes, a slow crash as more and more money is drained from the economy to pay the FIRE sector—finance, insurance, and real estate—not the goods and service producing sector.”
From the last link:
‘Have you ever heard of someone sitting on Wall Street who read Harper’s in May 2008 and acted appropriately?’
‘I don’t think they needed me. If they’re on Wall Street, they didn’t need me to tell them that the economy is going to collapse. They all knew it was going to collapse. That was in the language of “liar’s loans” and “NINJAs.” It was pretty obvious what was going on. It’s just the media didn’t talk about it because the media was giving handouts from Alan Greenspan saying that it’s not possible for there to be a real estate collapse, it’s only local. The media are cheerleaders for the stock market. Whenever it goes up they celebrate, even if it goes up because there’s a short squeeze on speculators. The media have not done a good job in educating the American public.’
‘Has that improved in the time since the crash? Did they learn anything?’
‘No. If anything, it’s gone down, because the media have all been in a financial squeeze, and they’re getting pretty inexperienced editors, reporters.’
Did they learn anything?
They learned that obama would bail them out over and over again and not ONE OF THEM would ever go to jail.
I hated Obama’s “Too Big to Fail” too! Wait.
U R always wrong.
Obama’s legacy: Democratic losses, party chaos - Washington Times
http://www.washingtontimes.com/news/…/obamas-legacy-democratic-losses-party-chaos/
Nov 14, 2016 - Obama’s legacy of losing: Democrats decimated in Congress, DNC in ….. All told, Democrats have shed 63 House seats, 10 Senate seats and 12 … majority in the early 2000s, said that worked for a few elections. …. and he’s united the Republican party, something no Republican since Reagan has done.
Democrats lost over 1,000 seats under Obama | Fox News
http://www.foxnews.com/politics/2016/12/…/democrats-lost-over-1000-seats-under-obama.ht...
Dec 27, 2016 - @DlsTexas @Sardo77 Since 2008 Dems have lost the US House, US Senate, White … Since Obama became President on January 20, 2009, …
Barack Obama Won The White House, But Democrats Lost The …
https://fivethirtyeight.com/…/barack-obama-won-the-white-house-but-democrats-lost-...
Jan 19, 2017 - So why did the Democrats lose the 2016 presidential election? … 29 governor’s offices and now have only 16, the party’s lowest number since 1920. …. seats held after the 2006 midterms, prior to Obama’s election, with the …
The decimation of the Democratic Party, visualized - Washington Post
https://www.washingtonpost.com/…/the-decimation-of-the-democratic-party-visualized/
Nov 10, 2016 - … happened to the Democratic Party in the era of Barack Obama, I admit that I am … Since 2008, this is what the Democratic decimation has looked like. … in 2006 and 2008, winning seats in elections that would normally have leaned to … a stunning loss, the tension within the party became uncontainable.
Democrats Have Lost 1,030 Seats in Obama’s Presidency
legalinsurrection.com/…/democrats-have-lost-1030-seats-across-the-board-during-oba…
Dec 26, 2016 - Well, it turns out, the Democrats have lost 1030 seats across the board since Obama … The 2016 elections became the final nail in the coffin.
Dems hit new low in state legislatures | TheHill
thehill.com/homenews/campaign/306736-dems-hit-new-low-in-state-legislatures
Nov 18, 2016 - The Democratic Party will hit a new nadir in state legislative seats after … a net gain of 46 seats in Tuesday’s elections, while Democrats lost 46 seats, … Since Obama took office, Republicans have captured control of 27 state …
Democrats lost more than 1,030 seats during Barack Obama’s …
http://www.dailymail.co.uk/…/As-Obama-accomplished-policy-goals-party-floundered.html
Dec 24, 2016 - The Democratic Party has languished in Obama’s shadow for years and … wave that had swept the country since the dawn of the Reagan era. … To be sure, the president’s party almost always loses seats in midterm elections.
In Eight Years Barack Obama Has Obliterated the Democrat Party in …
http://www.thegatewaypundit.com/…/eight-years-barack-obama-obliterated-democrat-party...
Nov 9, 2016 - In elections last night Democrats are now down to 48 senators, … Under President Obama, Democrats have lost 900+ state legislature seats, 12 …
Have Democrats lost 900 seats in state legislatures since Obama has …
http://www.politifact.com/punditfact/…/have-democrats-lost-900-seats-state-legislatures-o/
Jan 25, 2015 - Our analysis shows Democrats have lost 910 seats since Obama took office. … Remember that before the 2010 and 2012 elections, Democrats …
And…looking ahead…
Republicans will most likely get a filibuster proof senate in 2018 (or close).
And Trump is going to win in a landslide in 2020.
+++
Pa. coal country in national spotlight as new mine gets red carpet treatment
Penn Live | June 8, 2017 | John Luciew
SOMERSET, Pa. - Coal has never been a dirty word around these parts. But even veteran miners can’t remember holding a ribbon-cutting and a lavish grand opening for what amounts to a hole in the ground.
That changes today.
In a highly unusual move, Corsa Coal of Canonsburg, Pa., will fete its new Acosta Deep Mine, located 11 miles north of Somerset, with so much pomp and circumstance that even President Donald Trump was invited.
“It’s in the spotlight all right,” says Corsa Senior Vice President Joseph Gallo, who’s overseeing the mine’s opening.
“I don’t quite understand it, but it is,” he adds. “This is the ninth or tenth mine I’ve put in, and I’ve never seen anything like it.”
“Republicans will most likely get a filibuster proof senate in 2018″
Thank you Lord.
Amen.
Have to hold the repubs’ feet to the fire and get McStain to retire or get his ticket punched, hes getting almost as pathetic as Pelosi.
Most importantly, support your convention of states. We desperately need term limits. I personally favor “1 and Done”. No more career politicians or a separate class of the political elites.
I agree.
I might go with 2 and done, however. Maybe something like two five-year terms.
One four-year or six-year term might not be enough time to institutionalize actions that promote freedom and individual liberty for all.
“Republicans will most likely get a filibuster proof senate in 2018″
They’re not going to pick up that many seats. The party that holds the White House uses loses seats.
I think 2018 could be like 1994 in favor of the Ds…IF they get serious about appealing to the middle with something more than just complaints about Trump. Memories of Clintons are too fresh for that to work. Come up with something better…call it…I don’t know…Contract With America or something like that.
Big wins in mid-term elections can be based on just annoyance at the party controlling the White House. That’s what 1994 was all about.
The media have not done a good job in educating the American public.’
Six globalist oligarch moguls own every media outlet in the USA. “Educating” the ‘Murican public is not in their financial interest. “Dumb ‘em down and profit” on the other hand will enable further looting and asset stripping of the proles. The sheeple must be herded onto the incorporated neoliberal plantation where they can be fleeced at will.
You will not get real truth or real news from the Real Journalists in the corporate media.
“If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re mis-informed.” - Mark Twain
Instead of getting frustrated or angry anymore, I’m taking Neuromance’s advice and am going to “sit back and enjoy watching the world burn,” or some such…
You mean when the EBT cards stop working?
You mean when the EBT cards stop working?
What’s funny is all the chatter about “basic guaranteed income”, even Mr Fakebook, Zuckerberg himself, jumped on the bandwagon. The consensus is that automation and AI’s are going to make millions and millions more unemployable. Where I have yet to see any consensus is how they plan to pay for this. I guess they’re planning on printing more money.
In a related news item, Amazon is going to offer its Prime service to the Free Sh!t Army at a discount.
If true (about the job losses, how do you perceive society will get around the massive unemployment? pretend that the people dying in the streets is all a media conspiracy? keep calm and carry on!
Technology has created more jobs than it has destroyed, says 140 years of data
https://www.theguardian.com/business/2015/aug/17/technology-created-more-jobs-than-destroyed-140-years-data-census
“Technology has created more jobs…”
Gangstas need not apply.
This morning I tried to read an online article from The Guardian that seemed like it was written by a high school sophomore. And the reporter described a trip he took to do research, so I’m assuming it was a staff reporter.
I only skimmed it because, while the subject matter was interesting, the article itself read like a poorly-done Wikipedia entry.
I also thought this was interesting:
‘Where I live in New York City, on all the big shopping streets there are more and more storefronts for rent. The stores are going out of business, especially the stores that are either mom and pops, or small well-known stores like art supply stores that have been there for a generation. Only the big chains are surviving, and even the chains are closing down, Sears and others. Entire shopping malls are going into default.’
‘But we keep being told that this is because people are shifting to online shopping. Is that not the case?’
‘Certainly many people are shopping online, but that’s not the real cause. The real cause is that overall retail sales are going down, because the average wage earner is only able to spend between a quarter and a third of their income on goods and services, after what’s left over from housing and taxes. The Federal Housing Authority now guarantees government mortgages up to 42 percent of your income. In New York City it’s normal to pay 40 percent of your income for rent.’
‘Assume that 40 percent of your income goes for housing. Maybe 15 percent of your income is taken right off the paycheck by the FICA [Federal Insurance Contributions Act] for Social Security and essentially pre-saving for Social Security medical care (which provides the government with enough money to cut taxes on the higher brackets.) There’s another 10 percent to 15 percent in income taxes, local income taxes, and sales taxes. In addition to paying the mortgage debt, people have to pay bank debt, auto debt, and credit card debt. That’s about 10 percent. When you add all of these up, there’s only about maybe 30 percent of the income that they can spend on goods and services.’
‘Economic textbooks talk about a circular flow, where the workers will get paid wages and they buy what they produce. That’s why Henry Ford paid his workers $5.00 a day, so that they could afford to buy cars. Now they only have a little bit to buy what they produce, and the rest of their money goes to the banks and to the government to give tax cuts for the top 10 percent. You’re having a slow squeeze on the middle class and the working class in this country, and it’s stifling the domestic market.’
I’ve been wondering about this myself:
‘we keep being told that this is because people are shifting to online shopping’
Notice the calamity in retail keeps getting waved off with this line. True or not, commercial real estate can drag us into a recession or worse. And I don’t think Amazon’s stock price is going to save us.
Huh?
Let’s say $100,000 income for single in NYC (not really that much in that city)
28% Fed Tax
8.5% NYS Tax
7% NYC Tax
That is 43.5% just for income tax….
Sales Tax in NYC is 8.875%
++++
There’s another 10 percent to 15 percent in income taxes, local income taxes, and sales taxes.
but but 2 you can ride the subways and buses all month long for the incredibly low price of…..$121.00
seniors and handicapped….whoa what a deal..(Reduced-Fare MetroCard $60.50)
Those are the marginal tax rates. That doesn’t mean you pay that amount in taxes from your first dollar of earnings. “43.5% just for income taxes” is not an accurate statement.
Don’t bother people with facts — it tends to ruin the propaganda.
PS: In addition to what you said, one should also observe that only one of the taxes (state or city tax in this case) is paid on the full income, but the remainder of the taxes are paid on the remaining income after the other taxes have been paid. That also reduces the effective rate.
Where exactly is the “the calamity in retail”?
The only significant drop in US retail was 2008. Since then it has been steadily going up. There is a graph on calculatedriskblog that I think is Census data. Or go to the Census page where they break things down. Where is the calamity? Gas stations, electronics, not big numbers. Online sales also not a big impact.
I wonder if the calamity they are talking about came eight years ago when sales took one giant step down. Retail has been growing since then but at a lower trajectory. Over expansion a decade ago and not enough growth came to pay the debts? Almost a decade of cash burn and the debts just don’t go away?
You are correct.
https://fred.stlouisfed.org/series/RSXFS
‘Where I live in New York City, on all the big shopping streets there are more and more storefronts for rent. The stores are going out of business, especially the stores that are either mom and pops, or small well-known stores like art supply stores that have been there for a generation. Only the big chains are surviving, and even the chains are closing down, Sears and others. Entire shopping malls are going into default’
There’s so many things about this: can anyone deny there are lots of stores closing, restaurants too? Long established places. Many times the rents have gone up too high. Between 2014 and 2016 CRE doubled in price in NYC. Doubled! One retail CEO said it was a bubble, started a decade back or more. Some of it is overbuilding, some of it is price. How much of that retail number is going on credit cards or to money losers like Amazon? And would Amazon be able to get away with killing sector after sector while losing money if we weren’t in an extended ZIRP environment?
I go to NYC several times a year.
It’s insanity.
Empty storefronts everywhere. Empty restaurants.
Yet insane rents driving them out of business.
It makes no sense except in this ZIRP and bailout economy.
I’ve said it before, but its especially apparent now - the main mall in my county is probably half empty. Of the half remaining, most are probably deeply in the red. No way can they afford the rent, utilities and employee costs. Theres probably only 2-3 businesses with their heads above water, and I talked personally to one of those business’ owners a few weeks ago about this. (Retail)’s dead, Jim.
‘Where I live in New York City, on all the big shopping streets there are more and more storefronts for rent. The stores are going out of business, especially the stores that are either mom and pops, or small well-known stores like art supply stores that have been there for a generation. Only the big chains are surviving, and even the chains are closing down, Sears and others. Entire shopping malls are going into default’
NYC is a big city. This guy probably only sees a tenth of it. Its population is quite different from the country as a whole, with a lot of poor people and a lot of rich people and fewer in the middle.
can anyone deny there are lots of stores closing, restaurants too?
There are lots of restaurants closing all of the time, but there are also many opening. Total employment in restaurants and bars continues to increase.
“This Restaurant is Closed…” - Forbes
https://www.forbes.com/pictures/feji45eeee/this-restaurant-is-closed/
The interesting thing: 19 of those 50 chains shrank last year.Who’s closing the doors while their competitors soar? Here’s a look at the ten brands that lost the …
These 5 restaurant chains face a difficult 2017 | Clark Howard
clark.com/shopping-retail/5-restaurants-bad-2017/
Jan 4, 2017 - Total restaurant traffic is expected to remain stalled in 2017, which is … Ruby Tuesday closed nearly 100 underperforming restaurants in late …
These major retailers are closing stores in 2017 | Clark Howard
clark.com/shopping-retail/major-retailers-closing-2017/
2 days ago - Read more: Clark’s top 10 restaurant apps for free food and discounts … These 10 retailers are closing more than 1,000 stores in 2017.
Subway Shuts Hundreds of U.S. Stores - Bloomberg
https://www.bloomberg.com/…/2017…/subway-shuts-hundreds-of-u-s-stores-in-histor...
Apr 20, 2017 - Subway Restaurants closed hundreds of domestic locations last year, marking … Thu Apr 20 2017 09:25:01 GMT-0700 (PDT) Thu Apr 20 2017 …
The Great Retail Apocalypse of 2017 - The Atlantic
https://www.theatlantic.com/business/archive/2017/04/retail…of-2017/522384/
Apr 10, 2017 - A retail store with signs advertising a pre-closing clearance sale … the over-supply of malls, and the surprising effects of a restaurant …
These 8 restaurants and retailers will be closing locations this year …
http://www.bizjournals.com/…/2017/02/…/these-8-restaurants-and-retailers-will-be-closing.h...
Feb 21, 2017 - Other retailers and restaurants are on their way to multiple closures. … company will shutter 43 of its 1,500 underperforming locations in 2017.
Applebee’s restaurants are disappearing across the US - Business …
http://www.businessinsider.com/applebees-restaurants-are-disappearing-across-the-us-2017-3
Mar 3, 2017 - 3, 2017, 2:11 PM; 16,282 … “We believe that restaurant closures are an important tool to preserving the financial health of the system,” acting …
These 17 Popular Retailers Are Closing Stores In 2017 - DWYM
http://www.dontwasteyourmoney.com/these-15-popular-retailers-closing-stores-2017/
Mar 16, 2017 - Things haven’t been going so well for retailers in 2017. Here’s a list of 15 retailers that are closing stores and locations around the United States. … Outback Steakhouse, Bonefish Grill and Carraba’s Restaurants. This one isn’t …
Dozens Of Outback Steakhouse, Bonefish Grill, & Carrabba’s …
https://consumerist.com/2017/…/dozens-of-outback-steakhouse-bonefish-grill-carrabb...
Feb 21, 2017 - Dozens Of Outback Steakhouse, Bonefish Grill, & Carrabba’s Restaurants Closing. Image courtesy of Mike Mozart. Updated: February 23, 2017 …
Bloomin’ Brands closes 43 restaurants - Nation’s Restaurant News
http://www.nrn.com/casual-dining/bloomin-brands-closes-43-restaurants
Feb 17, 2017 - Bloomin’ Brands is closing 43 underperforming restaurants …
Fiesta to close 30 more Pollo Tropical restaurants Pollo Tropical
News>Fast Casual
5 reasons fast-casual sales are falling
Blog: Overdevelopment and growing competition put pressure on sales
Jonathan Maze | Jun 01, 2017
“We’ve been writing for several months that the fast-casual bubble has burst, as same-store sales at many chains decline and some concepts start closing locations. The segment has been the weakest performer so far this year, according to both Black Box Intelligence and results from publicly traded companies.”
“It’s a bit of a surprise, given that the fast-casual segment is supposed to be disrupting the entire restaurant industry, leading to a major shift in the way consumers eat and taking business away from casual-dining concepts and quick-service chains.”
“Why is this happening? We discussed one potential issue last week when we wrote about competition from the quick-service chains and casual-dining concepts that are adapting to the segment’s presence. And much of the problem is simply that the market is tough and fast-casual chains are not immune to that.”
“5. Pricing: Restaurants have continued to raise menu prices over the past 18 months, even as commodity costs fell, amid fears about higher labor costs. Fast-casual chains have been among the most aggressive. And while consumers may be willing to pay higher prices for quality, they remain price conscious in today’s market.”
http://www.nrn.com/fast-casual/5-reasons-fast-casual-sales-are-falling
Retail woes hit Cracker Barrel
Sales fall as customers grow accustomed to markdowns
Jonathan Maze | May 23, 2017
“Not even the rocking chairs and knickknacks at Cracker Barrel Old Country Store Inc. are immune to the disease spreading through the retail sector.”
“The Lebanon, Tenn.-based chain of roadside family-dining restaurants, which includes retail areas, said on Tuesday that same-store retail sales fell 4.7 percent in the third quarter ended April 28.”
“That was considerably worse than Cracker Barrel’s restaurant sales. Same-store restaurant sales fell 0.4 percent in the quarter, with traffic declining 2.1 percent.”
“Speaking on the company’s earnings call Tuesday morning, Cracker Barrel executives suggested that some of the same problems afflicting casual dining — notably heavy discounting — are far worse in the retail world.”
“As much as we believe that discounting in the restaurant business is significant, it’s even more so in the retail industry right now,” Cracker Barrel CEO Sandra Cochran said. “I would characterize the environment as even more highly competitive.”
“Cochran said on Cracker Barrel’s earnings call that customers have grown accustomed to the markdowns they see at mall-based retailers, and Cracker Barrel hasn’t done a good enough job of showing off its lower cost items.”
“Still, for all the retail woes, Cracker Barrel is still a restaurant chain. The chain’s same-store sales decline reflects similar problems at other family-dining chains, such as IHOP and Denny’s. The results were “below our internal projections,” Cochran said.’
http://www.nrn.com/finance/retail-woes-hit-cracker-barrel
Sure, food/retail biz is up, right Mike?
“Still, for all the retail woes, Cracker Barrel is still a restaurant chain. The chain’s same-store sales decline reflects similar problems at other family-dining chains, such as IHOP and Denny’s. The results were “below our internal projections,” Cochran said.’
But what % of their profits come from the retail side vs. what % comes from the food? I always thought a lot of this type of restaurant made a pretty hefty percentage of their profits from sales of knick-knacks, t-shirts, etc.
“Applebee’s restaurants are disappearing across the US”
Oh, thank GOD! That place is nasty…
“As the WSJ writes, the seeds of the industry’s current turmoil date back nearly three decades, when retailers, in the throes of a consumer-buying spree and flush with easy money, rushed to open new stores. The land grab wasn’t unlike the housing boom that was also under way at that time.
“Thousands of new doors opened and rents soared,” Richard Hayne, chief executive of Urban Outfitters Inc., told analysts last month. “This created a bubble, and like housing, that bubble has now burst.”
“The excess retail space means that North America has a glut of retail outlets, as well as far too many shopping malls, something which is becoming apparent as sales per capita decline.
http://www.zerohedge.com/news/2017-04-22/retail-bubble-has-now-burst-record-8640-stores-are-closing-2017
Like the housing bubble, started several decades ago.
I remember we were discussing here a decade ago that Starbucks was only showing a profit because the value of their real estate kept going up.
The former Radio Shack here has been turned into a psychic’s studio.
Total employment at Food Services and Drinking Places has been rising continually for over 7 years.
https://fred.stlouisfed.org/series/CES7072200001
It’s possible those increases come from more workers hired for fewer hours to skirt the aca insurance requirement for employers.
The fast food industry hires it’s labor in a perfectly competitive market, they can get as many workers ad they need at minimum wage, so why not hire more at fewer hours and churn the losers.
Employment is up, but wages are down across the economy. That speaks to the fact that the created jobs are all low wage, and most likely part time.
What’s interesting is when you break out the numbers in the FRED data, E commerce now accounts for 8% of total retail sales up from 3.6% before the crash in ‘08.
Even though the total is moving up, brick and mortar businesses are seeing a smaller share of the pie. At the same time they have had massive increases in operating costs from both labor and rent.
“E commerce now accounts for 8% of total retail sales up from 3.6% before the crash in ‘08″
With total retail up 30% in the same time, online sales isn’t a good explanation.
Were there really massive increase in labor costs?
“In addition to paying the mortgage debt, people have to pay bank debt, auto debt, and credit card debt. That’s about 10 percent.”
10% my ass! You’ve got millenials on zero down, $1,000 month truck payments care of subprime loans. They’re not earning more than $100k per year.
“‘Economic textbooks talk about a circular flow, where the workers will get paid wages and they buy what they produce. That’s why Henry Ford paid his workers $5.00 a day, so that they could afford to buy cars. Now they only have a little bit to buy what they produce, and the rest of their money goes to the banks and to the government to give tax cuts for the top 10 percent. You’re having a slow squeeze on the middle class and the working class in this country, and it’s stifling the domestic market.’”
It all boils down to greed. It’s not limited to the oligarchy, either. I peruse the Craigslist “gigs” listings for entertainment from time to time. Everybody is looking for something on the cheap, at the expense of somebody else’s labor.
The effects of unchecked immigration and cheap, illegal labor flooding the labor pool cannot be understated. It’s been devastating for the country.
I’ve been wondering about this myself:
‘we keep being told that this is because people are shifting to online shopping’
Notice the calamity in retail keeps getting waved off with this line. True or not, commercial real estate can drag us into a recession or worse. And I don’t think Amazon’s stock price is going to save us.
E-commerce and Brick & Mortar: A Symbiotic Relationship
Stores are not closing because of online sales.
E-commerce and Brick & Mortar: A Symbiotic Relationship
Hmmm…there was supposed to be a link in there:
https://www.sellerlabs.com/blog/ecommerce-brick-and-mortar-symbiotic-relationship/
OK, but I have given up on most of my local stores because I waste 1.5 hours going to 2 or 3 of them trying to find what I am looking for, without success.
Heck, even at a local Walmart, I was looking for a very popular lithium coin cell CR202x - I found three different places in the store where they used to be, all with empty hooks. Finally found a Ray-o-Vac version.
With this kind of in-store experience, it’s so much easier to go to Amazon and click on what I want, and pick it up at my private mailbox store a day or two later.
So it’s not that I want to shop online, but am being forced to.
Wal-Greens is a good source for coin cell type batteries, ie. for a remote key fob. I still prefer to buy local if at all possible.
Sure, but you’ll pay through the nose. Walgreen’s prices are outrageous.
“Amazon’s stock price is going to save us.”
Amazon can’t save itself from its own demise.
Amazon, the River of No Returns, could ever crash to a realistic valuation? Inconceivable!
Where I live in New York City, on all the big shopping streets there are more and more storefronts for rent. The stores are going out of business, especially the stores that are either mom and pops, or small well-known stores like art supply stores that have been there for a generation. Only the big chains are surviving, and even the chains are closing down, Sears and others.
Some anecdotal observations on this:
Last year I was in San Diego and went down to Prospect St in La Jolla early one evening. When I lived there Prospect was a bustling place in the evening, full of people browsing the shops or having a moderately priced meal at a restaurant.
Fast forward to last year: It was ghost town. Empty retail space and shuttered restaurants. Those remaining were all super high end, as in places where you’d buy $1000 shoes or purses or have a $100+ per person dinner. Small wonder San Diegans don’t go there any more.
In London, where I was a couple of weeks ago, corporate chains seemed to rule. If you walked down a major street you would repeatedly see the same places: Costa Coffee, Cafe Nero, Pret A Manger, Starbucks, McDonalds, Boots (their Walgreens), etc. Mom and Pop shops were few and far between, and were mostly on the side streets. Most Pubs, while still having their historic names, are also now owned by chains or breweries. And here is the kicker: almost everyone who works retail or in food service in central London is eastern European.
If you bumped into an Englishman in central London, chances are he’s a “suit”.
Totally with you on Prospect but this is not a new development. I lived in San Diego mid 70s to very early 80s and loved that area. Lots of mom and pop retail that was unique and invigorating to be around. Went there to shop for Xmas presents while on vacation back in 2007 and I was shocked to find only chain stores. I’m sure it’s gotten worse - as has the quality of the pristine coves and beaches in La Jolla.
La Jolla
How many yoga pants store can it handle? I have never seen so many in one small city.
“Fast forward to last year: It was ghost town. Empty retail space and shuttered restaurants. Those remaining were all super high end, as in places where you’d buy $1000 shoes or purses or have a $100+ per person dinner. Small wonder San Diegans don’t go there any more.”
I got the same impression from Scottsdale, AZ a couple of years ago, Barnes and Noble store closing… everything 60% off, few mom-n-pop stores… all franchises, street people loitering in the malls for the air conditioning, and just a polarized feeling… either rich or struggling.
‘When interest rates do, in the centuries to come, go up’
This is another thing I think the media/PTB have got entirely wrong. Greenspan popped the bubble. Does anyone think things would have been better if he hadn’t? And why should we take solace that the current central banks see no reason to take away the punch bowl? QE is like a swimming pool compared to a punch bowl.
Then there’s this: remember what US treasuries were yield last summer?
http://www.cnbc.com/quotes/?symbol=US30Y
And from this past week:
“One hundred days and counting into the new presidency, the market is showing some signs of wear, which could be a continuation of the November hold pattern or simply market dynamics—the waters are that murky. ‘Certainly in the first part of the year acquisitions were down and taking longer to be consummated,’ says Daniel Cunningham, SVP and East Coast manager of the multifamily division at PNC Real Estate. ‘Part of it is due of course to the elephant in the room, but it’s also slowdowns in the market, some absolute rental rate declines, and people trying to figure out what will happen with cap rates and interest rates.’”
“Not surprisingly, the same cautionary atmosphere exists on the construction side. William R. Lynch III, SVP of PNC Real Estate, who works in the Washington, DC, market, agrees that market conditions—whatever the source—are getting tighter. ‘While there’s still capital available for multifamily construction, it’s not as prevalent for a number of reasons and if it is available, it’s likely on terms and conditions not quite as favorable as a few years ago,’ he says.”
http://thehousingbubbleblog.com/?p=10109
Interest rates are up, and the Fed hasn’t done squat. Lenders are nervous about overbuilding and declining rents, etc, and Yellen can’t eliminate market risk. They even say, “we just clean up afterward”!
And the democrats still don’t get why they lost…
Look - Russia!
+++++
“No, we haven’t at all recovered. That’s why Hillary lost the election. She said, ‘Look at how much better you are since 2008. Obama has saved you.’ Trump said, ‘Wait a minute. Look at how bad you are. You’re not saved.’ Everybody thought, ‘Who are you going to believe, your eyes or Hillary?’ We haven’t recovered at all. Obama saved the banks and Wall Street, not the economy. From 2008 until today, the economy has grown by 2 percent, but the top 5 percent of the economy have got all of that growth. The economy isn’t recovering.”
Obama saved the banks and Wall Street, not the economy.
What did the sheeple expect when they voted for a Soros- and Goldman Sachs-bankrolled snake oil salesman pitching “hope n’ change.”
Stupidity has consequences. You reap what you vote.
I guess Mnuchin, Cohn, Ross, the Kochs and Bannon only sell feel good oil?
You are new here. Are you interested in the subject of this blog? I don’t mind some off topic, but of your comments I have deleted so far, it all looks like political trolling.
I read, have never commented. The housing commentary and articles are tremendous (especially foreign RE) The hypocrisy has gotten too much lately and I had to comment. Funny that political comments are made in just about every thread, but you seem to have a problem when I challenge their one-sided rhetoric?
“I read, have never commented”
Sure you have.
And the democrats still don’t get why they lost… ??
You won 2fruit…Get over it…
fruity won, the planet lost.
See, you really don’t get it. “Oh the planet!” This Paris deal was voluntary. It front loaded job losses in the US and put back cuts in China and India until 2030! You know, the places where people can’t breath or drink the water? You are always going on about China, well here you go: fix China’s pollution while you are in Paris and maybe we’ll talk. Until then, stop taxing me and cutting jobs so you can pose as doing something about “the planet”. This is exactly the fudged up attitude about the big picture and jobs the guy in Harper’s was talking about.
And the democrats still don’t get why they lost…
The $2.5 trillion obama giveaway “agreement” is in the trash bin of history.
And all they can do is stamp their feet.
China and India are still the #1 and #2 polluters of the planet.
They can start reducing pollution all by themselves…maybe you could protest in front of their embassies.
or stop buying their stuff. Just sayin.
“…or stop buying their stuff. Just sayin.”
I’ve tried, but it’s impossible. I cannot fix my truck if I don’t buy a Chinese part now. Should I stop driving?
“See, you really don’t get it. “Oh the planet!” This Paris deal was voluntary. It front loaded job losses in the US and put back cuts in China and India until 2030! You know, the places where people can’t breath or drink the water? You are always going on about China, well here you go: fix China’s pollution while you are in Paris and maybe we’ll talk. Until then, stop taxing me and cutting jobs so you can pose as doing something about “the planet”. This is exactly the fudged up attitude about the big picture and jobs the guy in Harper’s was talking about.”
+1 I understand why the Antifa, SJW, and common sheeple have that attitude. But how the heck can people read this blog daily and still stay so blind? What’s the point of learning here if one still just regurgitates the baseless globalist narrative?
I cannot fix my truck if I don’t buy a Chinese part now. Should I stop driving?
I haven’t had a problem buying finding US made parts. They cost more and you might not find them at those discount auto parts retailers. Just like you won’t find American made tools at Harbor Freight. In both cases you get what you paid for.
“or stop buying their stuff. Just sayin.”
On more than one occasion I have put merchandise back on the shelf after seeing where it was made. But sometimes (say with mobile phones) there is no choice, unfortunately.
And the democrats still don’t get why they lost… ??
Trump said that the reason was Hillary didn’t devote enough time to the Rust Belt states.
That Harper’s article is great.
I read the Harpers article a couple of days ago..The Harpers article is one of the better articles I have read in quite some time…I have read it twice…Will likely read it again…
I think I’m turning Japanese, I think I’m turning Japanese, I really think so…
++++
So are we heading for another explosion comparable to 2008?
I’m not sure it’ll be an explosion. It’s more like a slow crash. It’s more like people are getting desperate. They’re having to live off their credit cards, not to buy luxuries but just simply to break even. They’re falling further and further behind, and as they fall behind the interest rate rises, the penalties rise, so people are getting more and more squeezed.
The whole economy at the end of the road is going to look like Greece or Spain or Portugal or Italy. All of these economies are shrinking by what’s called debt deflation. In other words, people have to pay either so much debt or they have to have forced saving, like pension fund saving, that the economy is shrunk for financial reasons, for putting more and more of its money out of the real economy of goods and services into the financial sector.
Is that your prediction for our future here in the United States? Greece?
Yes, a slow crash as more and more money is drained from the economy to pay the FIRE sector—finance, insurance, and real estate—not the goods and service producing sector.
If you declare your ‘hood a “micro-hood,” your special listing can command 3X its normal asking price.
Suzanne researched this. Buy now or be priced out forever!
http://www.businessinsider.com/photos-of-bushrod-oakland-what-its-like-2017-6/#bushrod-oakland-is-one-of-a-shrinking-number-of-bay-area-neighborhoods-where-you-can-buy-a-home-for-under-1-million-that-might-not-be-true-for-long-1
https://www.google.com/?gws_rd=ssl#q=site:craigslist.org+3+months+free
69,000 results for free rent from Houston to LA, San Francisco, Seattle, Manhattan, Miami and Denver.
Do not peddle the fiction…
I just got an email about this listing:
13210 Haney Pl, Los Angeles, CA 90049
5 beds 9 baths 6,863 sqft
For Sale
$6,499,999
Price cut: -$500,000 (6/3)
Zestimate®: $6,641,224
https://www.zillow.com/homedetails/13210-Haney-Pl-Los-Angeles-CA-90049/20538637_zpid/
06/03/17 Price change $6,499,999-7.1%
05/23/17 Back on market $6,999,999
05/10/17 Pending sale $6,999,999
03/18/17 Price change $6,999,999-5.4%
03/07/17 Listed for sale $7,399,000+12.1%
05/13/16 Sold $6,600,000-3.8%
04/18/16 Pending sale $6,859,000
03/16/16 Listed for sale $6,859,000+123%
08/04/15 Sold $3,079,000-2.5%
06/02/15 Pending sale $3,159,000
05/07/15 Price change $3,159,000-8.4%
03/19/15 Listed for sale $3,450,000+1.5%
07/30/13 Sold $3,400,000+61,383%
09/10/02 Sold $5,530
The email says,
“Price Reduced $500k!”
“Seller Bought Another”
So they are down 100k since May 2016. Plus transaction fees. Well, it was cheaper than renting, enjoy the open house this weekend!
“Open House Saturday & Sunday 2-5pm”
“HOUSE IS NOW FULLY STAGED”
Only $37,000 in property taxes!
The alligator WILL be fed.
Democrat patronage and graft networks are not going to fund themselves, you know.
Forward, Soviet!
Our problem. My wife and were married in 2014 and I found myself with a blended family and 2 houses, one of which we don’t need. My home that I’ve owned since 2004 which is the larger of the two became our main home. Post divorce, my wife bought a home not far from UC Irvine. For two years we’ve been timely on the mortgage payment, no tenant and now the insurance company told us our homeowners policy will end in July because it is empty. We’ve had it on the market most of those two years and although there is much interest the offers don’t come close to covering all the expenses she (and we) have incurred. In retrospect we should have just bargained with the very interested buyer we had at the time. We’ve paid out $3700 every month since then. The going rate for rents don’t come close to that number and we’ve approached the bank about sharing the difference between what it could sell for and what we owe and we were flat out rejected. Not paying out anymore is a serious topic of conversation right now.
Greed was why you didn’t want to sell, yes?
If you were reading this blog for the past two years you could have cut your losses, considering the amount that you have paid in PITI till now.
You can get a different kind of insurance policy for an unoccupied house. I did for a couple of years while doing a renovation.
Bringing massive debt into a marriage sure can put a strain on.
“05/13/16 Sold $6,600,000-3.8%
04/18/16 Pending sale $6,859,000
03/16/16 Listed for sale $6,859,000+123%
08/04/15 Sold $3,079,000-2.5%”
Yeah, no fraud there…
But, but…new granite countertops
What in tarnation are you talkin bout, Goober?
Fraud? No! Market demand.
The Market says the house was worth $3.5 million more in
May 2016 than it nine months earlier in August 2015. And so it is!
You’re just jealous.
“13210 Haney Pl, Los Angeles, CA 90049
5 beds 9 baths 6,863 sqft
For Sale
$6,499,999
Price cut: -$500,000 (6/3)
Zestimate®: $6,641,224″
Seeing that it sold for $3.5 million less 9 months earlier should have been the current owners first clue. That’s gonna leave a mark.
Bubble be crazy…
From the Harper’s article …
“It was very clear that more and more of everybody’s income had to go to buying a house. Housing prices were soaring, and the reason wasn’t because of population growth. And it wasn’t because people were getting richer. It’s because a house is worth whatever a bank is going to lend against it …”
If this makes sense to you then that means you are an idiot.
“… and banks were lending more and more money against houses and pushing people …”
“pushing people”, banks were pushing people …
“… further and further into debt so that basically they had to spend almost their entire working life to pay off the price of getting a home.”
These people were totally dumbed-down idiots.
“People thought they were getting richer as house prices were going up, but while the sellers were getting richer, the people who had to buy the house had to pay a larger and larger proportion of their income.”
To the banks, people had to pay larger and larger proportions of their incomes to the banks - each and every month paid to the banks, each and every month paid to the banks for … for decades.
Bahahahahahahahaha … a nation of dummys.
How many of you pukes on this message board believe that banks have the ability of pushing people into buying homes. Anyone?
Or, rather, pushing people into more and more debt.
Banks don’t push people into debt, people willingly do this for themselves. Set out a few sheets of paper filled with lots of interesting words and some dotted lines and … stand back because here they will come.
Don’t forget about Suzanne…
She said it was ok…
Suzanne got a one-time hit from the unfortunate schmuck, I get a continuous hit - a hit each and every month.
Plus …
Suzanne (and unfortunate schmuck’s wife) did all the work in beating down into submission the unfortunate schmuck. After this necessary preparation work was completed the unfortunate and beaten down schmuck was brought to me for the finishing touch of signing the dotted line.
Others do the working, Mr. Banker does the reaping.
God’s Plan.
I looked for the YouTube video of that commercial….
Alas, no reliving of those good times.
Here …
https://www.youtube.com/watch?v=20n-cD8ERgs
HA!
I didn’t search for “The Nastiest Wife on Television”
“Without the comforting embrace of such delusions we could hardly dismiss as hysterical hyperbole reports such as that recently released by the World Economic Forum, which said longevity and lackluster investment returns will viciously collude to create a $400 trillion retirement savings shortfall in 30 years’ time. That figure is five times global output.”
But there’s no downside to pinning interest rates to the floor for over a decade. These pension funds and life insurance companies have simply piled into commercial real estate, chasing yield. As long as nothing goes wrong in retail, office and multi-family, it’s all good!
I agree Ben…
And yet you support a party with these policies. Head check.
And yet you support a party ??
I don’t support any party dude…I am a independent…I don’t vote the party I vote the person or in Trumps case I voted against the person…
“I don’t support any party”
Aw, man, that’s just wrong. Nothin’ like a good party! Gotta fight for your right to party!
https://www.youtube.com/watch?v=eBShN8qT4lk
So one party supports low interest rates and the other wants higher rates? I doubt that there’s much evidence of that.
Hey Ben, do you have any money in stocks? Just curious on your investment choices.
I can remember when the stock market was where companies raised capital. And you bought a stock because a company made money and paid the stockholders out of that profit. Years ago congress started taxing corporate earnings twice, once when they showed a domestic profit, again when dividends were paid. The result? Companies largely stopped paying dividends. Making profits fell out of favor as increasing stock prices became the rage. Enter merger and acquisition, which leans toward consolidating and job cuts, and off-shoring which came around the same time. Then the companies that do make a profit were allowed to put a HQ in for example, Ireland and book profits in lower tax countries. Now we have corporations issuing junk bonds to buy back stocks, which increase stock prices but add nothing to profitability, nor the ability to hire. Actually the interest incurred reduces profitability.
Long story short, conventional financial thinking is: buy this stock because some other guy will pay you more for it later. Not a big fan of greater fool investing.
Damn. Well said.
Yes but it’s different this time. I have that on good authority.
“I can remember when the stock market was where companies raised capital. And you bought a stock because a company made money and paid the stockholders out of that profit.”
Then the entire population got dumbed down.
I call this … progress.
Everybody’s a stock genius right now because of the latest bubble. They talk about “investing” in stocks when they’re nothing but sheep benefiting from irresponsible monetary policy.
According to bloomberg’s chart, Venezuela’s stock market is up 511% the past year. Heh.
https://www.bloomberg.com/quote/IBVC:IND
“Years ago congress started taxing corporate earnings twice, once when they showed a domestic profit, again when dividends were paid.”
Are you saying that corporations were taxed 2x on dividend expense? I don’t get it. Corporations are taxed on their earnings; individuals are taxed on dividends they receive so I’m not sure how that computes to double taxation.
Whatever. Can we just get on with it and have a big, bursting bubble crash of some sort?
Here’s something from that Fake News news site, Zero Hedge …
Why markets are overdue of a gigantic bust.
http://www.zerohedge.com/news/2017-06-10/why-markets-are-overdue-gigantic-bust
so if we are going bust wouldn’t a 3x bear ETF fund be a good place to park some money?
I have three such ETFs. I’ve had them for 4 years. Put $300 in each. Lost money in all three to date. Not a surprise.
Placeholders and all ready to go.
Who was that guy who shorted the housing market back in 2007 and made tens of millions or more? Anyone out there remember?
“Who was that guy who shorted the housing market back in 2007 and made tens of millions or more? Anyone out there remember?”
Hedge fund manager John Paulson. Made personally 4 billion in 2007.
https://www.forbes.com/sites/robertlenzner/2011/01/29/heres-how-john-paulson-made-5-billion-last-year/#3599f1263476
Thank you.
http://wolfstreet.com/2017/06/10/liberbank-spanish-bank-about-to-bite-the-dust/#comments
For the first time since the Global Financial Crisis, shareholders and subordinate bondholders of a failing Spanish bank were not bailed out by taxpayers; they took risks in order to make a buck, and they bore the consequences. That’s how it should be. But bank investors don’t like not getting bailed out.
Now they’re worrying it could happen again.
Tame Impala — Nothing That Has Happened So Far Has Been Anything We Could Control:
https://m.youtube.com/watch?v=VIVa7WEjXro
I’m going to see George Clinton and Parliament Funkadelic a week from tomorrow at the Ogden. And the Descendents on 7/22 at the Fillmore. There is no music in the lives of people with mortgages, only sadness, regret, and empty wallets
Tame Impala — Keep On Lying (Lying Lying Realtors 12″ Dance Single):
https://m.youtube.com/watch?v=zZY5bfBVyzk
Kevin Parker is from Perth, Australia, and a one man show, production and performance mastermind, like Frank Zappa, Todd Rundgren, or Prince.
I liked his earlier work with the Dee Dee Dums.
I wonder what happens if the price-support + inventory-limiting policies of the PTB become too successful. An interesting scenario to ponder. The obvious solution is to unleash the credit taps again. But the resulting wealth transfers from the stimulus and bailouts are not consequence-free.
I was talking about the “War on consumer surplus” yesterday. The easiest way to extract maximum consumer surplus is to engineer that the items will be paid for with debt-obtained largesse.
Real estate CEO: Record-low housing inventory is ‘freaking us out’
• Housing inventory continues to drop amid tight credit and a growing tendency toward becoming a landlord.
• Homes in April sold the fastest since Redfin began tracking the market in 2010.
by: Diana Olick
CNBC
Thursday, 18 May 2017
The number of homes for sale in America has been falling steadily for the past year, but the situation is apparently getting much worse as spring demand heats up.
“The inventory is reaching historic lows. It’s never declined faster than it did last month. It’s freaking us out — it’s affecting our business; it’s limiting our sales,” said Glenn Kelman, CEO of Seattle-based Redfin, a real estate firm. “We’re going to be fine in terms of market share, but I think the overall industry for the first time is seeing sales volume really limited by the inventory crunch.”
Kelman considers Redfin more as a technology company and touts his ability to track closely the more than 80 metropolitan markets it covers. He blames the lack of inventory on a new dynamic in housing.
http://www.cnbc.com/2017/05/17/real-estate-ceo-record-low-housing-inventory-is-freaking-us-out.html
“Freaking us out…”
LMAO.
There is no record low inventory. There is plenty of inventory.
The problem? A record high number of dumbasses. Oops ….
I mean “investors”.
This inability to understand “the lack of inventory” despite record high prices and decreasing wages is astonishing. What the hell do people think Keynesian economics and printing presses bring? A properly functioning supply and demand marketplace?
There are tens of thousands of individual “investors” and corporate “investors” buying up property left and right.
“Investors” selling properties to each another is NOT market demand!
Investors buying up properties and taking them out of production - deliberately withholding them from end-use consumers - does NOT constitute a true supply and demand marketplace. In fact, it’s maleficent, in much the same way that buying a productive factory only to immediately furlough it is maleficent.
We need a return to Austrian economics. Badly.
100 years ago, it was considered a crime against humanity (and the state) to hoard the essentials of life in hopes of a speculative profit.
“NAVY MAN INDICTED FOR FOOD HOARDING”
http://query.nytimes.com/gst/abstract.html?res=940CEEDD1238EE32A25753C3A9639C946996D6CF&legacy=true
Fascinating, that. Thanks.
Can you imagine indicting “investors” for house hoarding?
It’d be quite satisfying watching “hedge fund” managers, government-sponsored investment “companies” leaders, and Casey Serin type individuals wearing black and white striped clothing.
Two reasons to borrow long to buy a house:
1) Even with interest and additional risk, buying a house is drastically cheaper than renting.
2) No matter what you pay for a house, the house will make you rich through astronomical price increases year after year without end.
Now is not a very good time to buy or sell. That’s why sales are down. People won’t just give it away, or like the poster above, they can’t because they’re underwater. When the capitulation phase of the bubble sets in, there will be lots and lots of “inventory”.
Kelman considers Redfin more as a technology company
LOL, that’s what Amazon calls itself, too. But they can’t even manage to get rid of fraudulent listing by Chinese who’ve hacked their site, take orders for products, but never ship them (or ship them counterfeit merchandise.)
It’s been going on for quite some time now.
Here’s one article on one aspect of this:
https://www.forbes.com/sites/wadeshepard/2017/02/14/how-amazons-wooing-of-chinese-sellers-is-hurting-american-innovation/#75378be81df2
Thanks, Karen. Great article and it illustrates the problem perfectly. I have an ongoing debate with a buddy whose ambition is to sell his very own brand of crap on Amazon. I thought about emailing him the article, but he’d only tell me I was being a downer. He’s been listening to all those happy talk videos on youtube on how to make a million on Amazon with your own fabulous brand of crap! There were people who succeeded at this early on, but that ship has sailed due to the China Syndrome.
I think I’ll just let him carry on, maybe mention it later and ask what his plans are to protect himself from the situation.
It really is a problem.
Amazon is a catalog company.
Remember the old Montgomery Wards and Sears catalogs?
Look through the pages, pick up the phone, order the product you want.
Amazon: type in what you seek, scan the offerings, order the product you want.
Did Montgomery Wards and Sears ever have a P/E of 900+?
Amazon is a catalog company. No matter the stock price.
Little of what comes out of Silicon Valley and the bay area is what I would call “rocket science”.
Much of “high tech” is mundane these days. Indeed, some of it literally is counterproductive. Oooohhhh…lookit our latest gizmo or app!!!!! Who gives a sh*t? Not I.
I’m not so easily amused.
I don’t even give a sh*t about driverless cars. Did I just say that? Yes, I did.
Wanna really change the world Silicon Valley? Solve the nuclear fission / fusion question that was all the rage 15 years ago.
tech is just new ways of doing old things, when you think about it.
I can understand the attraction of Amazon for shoppers. I forget if it was rms or redmond, but one of the posters on this blog wrote about how great it is to order something from Amazon instead of having to waste the better part of a Saturday going from store to store hunting for an item, when you can be doing work around the house or enjoying some family time. That makes a lot of sense and that is a major benefit of shopping on line. Ebay is great for older, hard to find stuff, although I just bought a bunch of specialty consumables for close to half the price of what I would pay retail, with free shipping.
Bing and Google are great for research. But here’s where the counter-productive situations come in: it used to be really easy to pop in a few key words describing something I’d found at a yard or estate sale and the information and images would come up immediately. However, Google’s favoritism toward Pinterest has screwed up that function royally. Now their search is bloated with a lot of irrelevant crap that you can’t even browse through.
And don’t get me started on how Ebay screwed up their own search function. I remember the CEO fatuously making some statement on how they can pinpoint and predict exactly what someone is looking for on the site. Of course, he didn’t know that for a fact. He just listened to on of his underlings who was laughing up his sleeve and telling the boss what he wanted to hear.
It’s harder now to find what you want there than it used to be. You have to wade through pages of the same dang lousy thing being sold by Chinese sellers to get to the item you are really looking for. Even using the “US only” filter doesn’t help, as they use drop shippers in the US now. As the article points out, the Chinese have gamed the system, to the detriment of US citizen sellers.
“I forget if it was rms or redmond, but one of the posters on this blog wrote about how great it is to order something from Amazon instead of having to waste the better part of a Saturday going from store to store hunting for an item, when you can be doing work around the house or enjoying some family time.”
Precisely what a catalog is for.
Wards and Sears catalogs performed the same function. Pick up the phone, have the product shipped to your door.
Today’s youngsters don’t understand that Amazon represents nothing new. All that’s new is that catalog orders now are done electronically rather than over the phone. Big whup.
And E-Bay is nothing more than a flea market.
At the lowest price with free 2 day shipping and easy free returns. I use Amazon twice a week. Saves gas and time. Everything from an electric bike to Visine.
Amazon is a catalog company.
Remember the old Montgomery Wards and Sears catalogs?
Look through the pages, pick up the phone, order the product you want.
Amazon: type in what you seek, scan the offerings, order the product you want.
Except the point of my post was that you often don’t get the product advertised, you get a counterfeit version.
OR, you wait and wait and wait, and get nothing at all: https://www.forbes.com/sites/wadeshepard/2017/01/02/amazon-scams-on-the-rise-in-2017-as-fraudulent-sellers-run-amok-and-profit-big/#2cdf7ad63ea6
Amazon’s site has been hacked by Chinese scammers, and so far they haven’t been able to fix it.
“Amazon is a catalog company.”
One needs only Google, eBay and Amazon.
and the 99 cent stores to buy thing you need now and not get them delivered in in 3-4 days
Has the Menckenstein monster survived the Comey aftermath so far?
So far.
http://grrrgraphics.com/uploads/7/4/7/3/74734153/deep-state-swamp-ben-garrison_1_orig.jpg
One good cartoon deserves another.
https://www.reddit.com/r/conspiracy/comments/4nxe9b/yellen_the_felon/
“He’s a leaker.”
Housing my good friend housing!
Redmond, WA Housing Prices Crater 9% YOY
http://www.movoto.com/redmond-wa/market-trends/
Should be good for Sleepless
Dumb@ss suckers getting your arses handed to you?
CNN Money
A new bubble bursting? Tech stocks plunge
By Paul R. La Monica
June 9, 2017: 4:10 PM ET
Tech stocks took a hit after a Goldman Sachs analyst questioned this year’s run-up in the industry’s five biggest names — Apple, Microsoft, Amazon, Facebook and Alphabet — the parent company of Google.
The Nasdaq, which hit an all-time high Friday morning, fell nearly 2% by the end of the day. The tech wreck put a dent in the performance of the Dow, which includes Microsoft (MSFT, Tech30) and Apple (AAPL, Tech30), and the S&P 500.
The Dow and S&P had also hit records earlier as investors shrugged off worries about the British election and about fired FBI director James Comey’s testimony on President Trump and Russia.
…
Yes. The Sky Is Falling!
More daily histrionic papp from yet another “news source” that lacks the intellectual and ethical capacity to offer anything different.
A 2% one-day drop represents nothing. It indicates nothing.
J is For Junk Economics, A Guide to Reality in an Age of Deception
On the must-read list…
A scathing criticism by Paul Romer:
1) The emperor’s new paunch (The Economist)
2) The Trouble With Macroeconomics (yale.edu) (PDF)
Your link sucks: Here’s a better one.
http://michael-hudson.com/2017/02/j-is-for-junk-economics-a-guide-to-reality-in-an-age-of-deception/
“If you’re a human being living in 2017 and you’re not anxious,” she said on the telephone, “there’s something wrong with you.”
Prozac Nation Is Now the United States of Xanax
By ALEX WILLIAMSJUNE 10, 2017
https://www.nytimes.com/2017/06/10/style/anxiety-is-the-new-depression-xanax.html
LMAO. I love this kinda stuff!
Between a Keynesian economy and the election of Trump, one can only imagine the haul shrinks are making on both coasts. Make hay while the sun shines, boys and girls!
I wonder if Mr Banker invests in psychiatric clinics and hospitals. Ought to. Seems like a no brainer. Soak ‘em while encouraging their mental disorder, soak ‘em as you help them dispel it.
Or replace the disorder with something else…like maybe a Lexus!!!!
The article strongly projects what a disaster social media is to your personal sense of well being.
I recommend that people ditch their social media.
The human mind and psyche is not equipped to handle 24/7 communications and social commentary. Recognize it and do something about it.
To everyone reading this post, I suggest making a $50 donation to the HBB. I just saved you a trip to the shrink, who will pro-offer considerably less cogent advice less for considerably more money.
“I wonder if Mr Banker invests in psychiatric clinics and hospitals.”
I don’t want the problem fixed, I want it attended to. I want it managed.
These neurotic pukes make great customers in that they try to fill their f*cked-up and empty lives by purchasing items they do not need with money they do not have. I do not and I can not supply the items they do not have but I can and do supply the money that they do not have, and in return these neurotic pukes willingly sell their souls to me one dotted line at a time.
Invest in psychiatric clinics and hospitals? Shirley, you jest.
I didn’t see the NYT mention that Xanax is a benzodiazepine and is considered a Schedule IV controlled substance (considered to have a low potential for abuse). Actually, it has a high potential for abuse and many people have to go to rehab to get off of it. It’s classification probably has nothing to do with the tens of millions of scripts being sold every year. Here are some facts:
(source: http://www.cbsnews.com/news/how-the-fda-is-sleeping-through-the-xanax-epidemic/)
Xanax is responsible for:
199 overdoses
156 losses of consciousness
110 intentional overdoses
98 completed suicides
83 comas
76 deaths