September 18, 2017

Becoming Collector Items

A report from the Boulder Daily Camera in Colorado. “More than 1,000 apartments and rooms for rent are sitting empty in Boulder right now, either too expensive or too old or just too inconveniently located for someone to claim. Renters have never had more choices, as reflected in the 7.9 percent vacancy rate — a 10-year high watermark. ‘We cringe every time we see a new complex approved,’ said Gary Epperson, of Longmont’s PMP Realty, which manages hundreds of for-rent rooms and homes in Longmont. He admitted there is always a chance of oversupply as financial backers of such projects, reacting to a stated need, overindulge on the promise of a healthy return.”

“The picture is much the same across the region. From 2011-2016, 56 percent of all new housing units in Boulder County were multi-family, the projects more likely to be rented than owned. And active development in the two biggest cities, Boulder and Longmont, is even more skewed: For every single-family unit under construction or in the permitting process, there are three planned multi-family dwellings.”

“The demand for houses to buy is strong as well, as indicated by double-digit price growth. But other barriers stand in the way of single-family building: the scarcity and high cost of land limit what can be built affordably enough to guarantee that someone can buy it. ‘Unless the zoning laws are changed, there’s just not that many more single family homes that can be built in the county,’ said Jay Kalinski, of Re/Max of Boulder. ‘Single-family homes are becoming like collector items.’”

From NBC Bay Area in California. “High housing costs are nothing new to the Bay Area, but one recent sale has even the locals scratching their heads. A home in Sunnyvale recently went for nearly $800,000 over the asking price of $1.7 million. True story. Listing agent Dave Clark said it’s certainly a desirable location, and that’s why he priced it aggressively.”

“‘We did not overpay for it; we paid market value,’ said Mini Kalkat of the Troyer Group, the agent for the buyers. ‘These are smart, sophisticated buyers buying in a very cosmopolitan area that’s now competing against London and Manhattan and all the places we never thought we’d compete against.’”

“Some neighbors see the surging prices and want to sell. Others are looking to double down on the neighborhood. ‘When our son graduates from high school, we’re thinking of renting our house because we don’t want to give up or sell the property,’ homeowner Rosemary Brooks said. ‘It’s just too valuable.’”

From News Hub in New Zealand. “Real estate agents insist a fall in profits in this year’s finale of The Block NZ is proof the Auckland housing bubble has burst. Winners Andy and Nate claimed the highest profit of $31,000 in last night’s dramatic episode, as well as $100,000 in prize money. That’s just a fraction of the profits made in previous years last year’s winners made $380,000, not including the $100,000 bonus.”

“‘We’re feeling pretty sorry for the other teams,’ says Andy. ‘Everyone is trying to celebrate and then you’ve got teams who are walking away with $1000, teams that thought they won two minutes before and then [have it] stolen away. It was a real double-edged sword.’”

“‘It feels great that we’ve gotten the money, but ripped off at the same time, because you can’t really celebrate,’ adds Nate.”

“Jeremy O’Hanlon from Homes.co.nz says what viewers saw last night is also happening in auction rooms across the city. ‘It shows that there’s a bit of a slowdown in the market. It’s harder to get buyers into the room at the moment.’ Real estate agents told Newshub they were impressed The Block NZ homes managed to sell at all, as buyers are taking a wait-and-see approach.”

From Pramit Bhattacharya. “Ten years ago, in August 2007, the French investment bank BNP Paribas SA told those investors that it was suspending redemptions because the bank’s fund managers were no longer sure what those mortgages were worth. Ripples of panic spread across financial markets, and the resulting financial contagion led to a global credit freeze. The global financial crisis has also morphed into a social and political crisis, producing mass discontent, and challenging the global neoliberal consensus forged after the collapse of the Soviet system between 1989 and 1991.”

“Given the pivotal role of economists in forging that consensus, the cracks in the consensus have created a crisis for the discipline of economics itself. The problem with economists is not that they make assumptions. After all, any theory or model will have to rely on simplifying assumptions. But when critical assumptions are made just to circumvent well-identified complexities in the quest to build elegant theories, such theories will simply end up being elegant fantasies.”

“Just before the collapse of Lehman in 2008, former International Monetary Fund (IMF) chief Olivier Blanchard wrote a paper extolling the virtues of the neoliberal consensus, claiming that the convergence of views and methodologies in the discipline showed that the ‘state of macro-economics is good’. It is only several years after the crisis that a senior economist from the Fund dared to wonder out aloud if neoliberalism had been oversold.”

“One way in which economists could have compensated for the lack of engagement with other social sciences is by studying economic history. But economic history has been relegated to the margins over the past several years, and many graduate students remain unacquainted with the subject still.”




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62 Comments »

Comment by Ben Jones
2017-09-18 08:42:45

The ‘Seven Sins Of Economists’ in the last link is worth reading in full.

‘One way in which economists could have compensated for the lack of engagement with other social sciences is by studying economic history. But economic history has been relegated to the margins over the past several years’

You know, I have mentioned that shack prices didn’t go up and down like this for - hundreds of years. And you know what? There wasn’t even ONE TV show about flipping them. Not one! What did people do for money all those decades?

Comment by oxide
2017-09-18 11:41:11

Damn Ben, now you got me visualizing some YouTube parody of historic housing flipping.

Condo right next to the Colosseum; enjoy the gladiator fights while sipping your favorite wine from the balcony.
2-bed 0-bath Virgin Tudor black-and-white in downtown London… high Walk Score, vibrant theatre community (iambic pentameter FTW), craft mead joint on the way back.
Unique large home just upriver from the Delta. Close to the well yet out of the ag flood zone. Save money with the 95 Sun Number(TM). Camel stables, Lapis and Gold iconic decor, hand-painted walls, cozy stone bed. Eternity guarantee on construction. Disposable in-house handyman staff included with property.

Comment by Rental Watch
2017-09-18 13:46:46

Get Mel Brooks involved in the style of History of the World, Part 1, and you have a big winner.

 
 
 
Comment by Ben Jones
2017-09-18 08:46:01

‘When our son graduates from high school, we’re thinking of renting our house because we don’t want to give up or sell the property,’ homeowner Rosemary Brooks said. ‘It’s just too valuable.’

Here’s your inventory. Rosemary is a speculator. When she gets spooked, like they have in Toronto (where prices used to be just as high or higher), the inventory will flood in looking for an exit.

I don’t want to be rude, but you just have to put up with all these people who go on about how “it’s always been expensive”. Because it hasn’t. They are ignoring history too.

 
Comment by Ben Jones
2017-09-18 09:01:36

‘Just before the collapse of Lehman in 2008, former International Monetary Fund (IMF) chief Olivier Blanchard wrote a paper extolling the virtues of the neoliberal consensus, claiming that the convergence of views and methodologies in the discipline showed that the ‘state of macro-economics is good’. It is only several years after the crisis that a senior economist from the Fund dared to wonder out aloud if neoliberalism had been oversold’

For new readers, neoliberalism is code for globalism. You may remember this “consensus” amounted to being lectured about how inevitable and irreversible was.

 
Comment by Ben Jones
2017-09-18 09:04:23

‘We did not overpay for it; we paid market value,’ said Mini Kalkat of the Troyer Group, the agent for the buyers. ‘These are smart, sophisticated buyers buying in a very cosmopolitan area that’s now competing against London and Manhattan and all the places we never thought we’d compete against.’

Uh, Mini, London and Manhattan are getting their ass kicked.

Comment by BlueSkye
2017-09-18 09:46:56

sophisticated buyers…

That must be the new label for a suitcase full of money and a box full of stupid.

Comment by Mafia Blocks
2017-09-18 09:52:05

It’s HousingHenSpeak for dumb.borrowed.money. aka DebtDonkeys.

 
 
Comment by jimo
2017-09-18 13:17:03

no one does this unless they need to … that’s a big red flag … hmmmm … i bet someone’s getting interested in these ‘buyers’ …

Comment by oxide
2017-09-18 14:26:25

They were probably overjoyed to overpay by $800K in this single transaction. That’s $800K they won’t have to launder in some other additional transaction.

Comment by BlueSkye
2017-09-18 14:33:18

Much more likely that is money they will attempt to pay back with interest over the rest of their precious working years. They will also pay real estate taxes on that for eternity. Priceless.

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Comment by Mafia Blocks
2017-09-18 14:39:03

The poor donks. The poor poor donks.

 
 
Comment by Professor 🐻
2017-09-19 09:18:23

It’s important to spend Bitcoin-denominated wealth quickly, before its value collapses.

Footnote: My Lyft cab driver yesterday explained to me why he invests in Litecoin instead of Bitcoin. I didn’t have the heart to let him know that all cryptocurrencies are headed down the toilet.

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Comment by Rental Watch
2017-09-19 09:27:41

My Lyft cab driver yesterday explained to me why he invests in Litecoin instead of Bitcoin. I didn’t have the heart to let him know that all cryptocurrencies are headed down the toilet.

Shoeshine boy moment?

 
Comment by Rental Watch
2017-09-19 09:29:21

BTW, I don’t know enough about BTC, but my understanding is that the blockchain is the interesting part, not the coin, with blockchain applications including things like property title, etc.

Will be interesting to see how that develops as a mechanism to track in a public ledger.

 
 
 
Comment by junior_kai
2017-09-18 15:07:04

I was thinking they got cash back at closing and are already out of the country. That was a big thing back in bubble 1.0. Maybe someone can look at who the lender is and if they “specialize” in this sort of thing.

 
 
Comment by MarkinSF
2017-09-18 14:38:37

Sunnyvale is the new Manhattan? OMG it really is the theater of the absurd.

 
Comment by dwkunkel
2017-09-18 14:45:26

Sunnyvale Ca is a cosmopolitan area? You’ve got to be kidding me!

Comment by Mafia Blocks
2017-09-18 14:54:37

A strange notion given we’re talking about the poorest state in the nation.

“California Poverty Rate Remains Nation’s Highest”

http://www.sacbee.com/news/politics-government/capitol-alert/article172973181.html

 
 
Comment by Karen
2017-09-18 23:12:46

‘These are smart, sophisticated buyers buying in a very cosmopolitan area that’s now competing against London and Manhattan and all the places we never thought we’d compete against.’

Are London and Manhattan streets covered in shit as well?

 
Comment by Get Stucco
2017-09-19 09:12:33

‘These are smart, sophisticated buyers buying in a very cosmopolitan area that’s now competing against London and Manhattan and all the places we never thought we’d compete against.’

Soon to become the latest bagholders to get stucco at the point of bubble collapse…

 
 
Comment by Ben Jones
2017-09-18 10:00:02

‘More than 1,000 apartments and rooms for rent are sitting empty in Boulder right now…He admitted there is always a chance of oversupply as financial backers of such projects, reacting to a stated need, overindulge on the promise of a healthy return’

Yet more proof that the multifamily bubble has nothing to do with the made up stories about rich renters, etc. This is simply too many Yellen bucks chasing yield and going to money heaven in the process.

Comment by Apartment 401
2017-09-18 10:24:47

We call our friend in Boulder “bubble boy” LOLZ.

 
 
Comment by Ben Jones
2017-09-18 10:03:28

‘Boulder and Longmont…For every single-family unit under construction or in the permitting process, there are three planned multi-family dwellings’

Why is this? From yesterdays post:

‘Flash forward to the current hyper-apartment building cycle we remain in. Developers have approached a number of these older complexes because of their low density, which result in larger, buildable lots. Taking down 30 condos on an acre or two makes economic sense when you replace it with 200 apartments. Current owners take the windfall of likely double the condos’ market value and run.’

You can’t put 9 houses on a shack lot. This is where the money is, or has been.

Comment by In Colorado
2017-09-18 12:19:02

The Colorado bubble makes no sense. Longmont is a very ordinary town surrounded by zillions of acres of open space, and while it is technically in Boulder County it’s an armpit that’s overrun with illegals. It’s not even that close to Denver. People who work in Boulder or Broomfield would choose to live there to spend less on housing, but that isn’t the case anymore.

As I have mentioned, I’m shopping around for a new job, and what I’m finding is that the pickings on the Broomfield/Boulder corridor aren’t as good as they used to be, and I’m finding more opportunities in other parts of metro Denver, especially in the downtown area, where you have to pay $200 a month to park.

Comment by Apartment 401
2017-09-18 13:04:39

Take the bus.

Comment by nolookpass13
2017-09-18 13:13:31

Or the RTD.

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Comment by In Colorado
2017-09-19 08:23:16

From where I live … that should take 2+ hours each way. I could look into riding on a Van Go shuttle, though.

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Comment by Mafia Blocks
2017-09-19 08:33:44

I doubt the shuttle accepts CraterTaters for payment.

 
 
 
Comment by Carl Morris
2017-09-18 14:27:55

Longmont is a very ordinary town surrounded by zillions of acres of open space, and while it is technically in Boulder County it’s an armpit that’s overrun with illegals.

I liked Longmont back in the 90s. To a Wyoming guy it seemed like the big city. It even had a mall :-). If you were a car guy the cruising/street racing scene there was epic. Perfect small town main street with a drive in on one end and 4 lanes into the dark on every end of town. But they finally managed to crush all that.

 
Comment by OneAgainstMany
2017-09-18 16:54:50

Bloomberg Business Week

Suburbanites to Clog Cities With Their Cars

A new report documents the counterproductive effects of the commuter parking tax benefit.

By Peter Coy
September 15, 2017, 7:00 AM MDT

Not a new problem, but an annoying one: The federal tax code encourages companies to provide free parking to their employees by exempting the fringe benefit from taxation. That means the government is subsidizing commuters to drive themselves to work instead of carpooling or taking mass transit or walking or biking or working from home.

The tax break promotes traffic congestion and eats up parking spaces. It’s worth the most to the people in the highest tax brackets. And it’s worth the most in places where parking is the costliest—that is, the places where congestion is the biggest problem.

Plus, of course, the tax break is money that the government doesn’t collect that could have been used to reduce other taxes or fund other programs.

A new report from TransitCenter, a foundation that says it “works to improve urban mobility,” calculates that the parking benefit is worth up to $1,000 a year for commuters who are in high tax brackets and work in big cities. Collectively, it calculates, the break costs $7.3 billion a year in lost tax revenue.

True, there’s also a tax benefit for mass-transit commuters that costs the government about $1.3 billion a year. TransitCenter says that while it’s good as far as it goes, “it is overshadowed by the parking tax benefit’s much larger adverse impact.”

If you work in a place where there’s lots of free parking in lots or on the street you don’t benefit from the tax break. That’s because in such places the employee parking lot isn’t an economically valuable fringe benefit; you could have parked for free even if it didn’t exist. The break is only valuable for people who work in crowded areas. So two-thirds of American workers are in effect transferring money to the other one-third.

One obvious option is simply to eliminate the tax break. “Nations such as Australia, Ireland, Austria, and Sweden have established systems for taxing the value of employer-provided parking that could serve as a model for the United States,” says the TransitCenter report.

But the organization seems to recognize that outright elimination of the break is a political long shot. The last time it was seriously attempted was the 1970s, and there was “serious pushback,” the report says, referring readers to this 2014 study for the gory details. (They’re in Appendix B.)

So it lays out a variety of other options, which are important but unfortunately wonky. They include such things as expanding benefits for other ways to get to work. It’s all in the report, “Who Pays for Parking?”

One last thought: Treating free parking like any other taxable fringe benefit could even, oddly, benefit some commuters by getting them out from behind the wheel. Says TransitCenter: “A growing body of evidence suggests that, compared to drive-alone commuting, workers who walk, bike, carpool, or ride transit to work arrive energized and refreshed, and experience lower rates of mental health issues.”

Comment by nhtransplant
2017-09-19 06:42:06

Nobody wants to take public transportation with the smelly people.

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Comment by In Colorado
2017-09-19 08:20:36

Not to mention that riding the bus takes forever if you have any serious distance to cover.

I’ve done the carpool thing, highly overrated if you ask me.

 
 
Comment by BlueSkye
2017-09-19 07:35:03

LOL. The government is causing mental health issues by allowing people to park at work without taxation.

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Comment by Ben Jones
2017-09-18 10:37:09

Also from the last link:

‘The basis of the post-1989 neoliberal consensus rested on what economists call the rational expectations revolution of the 1970s and 1980s. The rational expectations revolution provided the intellectual basis for ‘light touch’ regulation by positing that markets will auto-correct left to themselves, and that state or regulatory interventions can only be counter-productive.’

‘The edifice built atop the rational expectations model also came crashing down then, and the policy response to the crisis reverted back to old-fashioned Keynesian demand-management policies (read fiscal stimulus packages), which the ‘superior’ and ‘rigorous’ rational expectation model had supposedly supplanted three decades back.’

Let me get this straight: so Greenspan was wrong, let’s go back to the failed Keynesian model!

Alas, so much revisionism, so little time. Greenspan wasn’t into “stimulus”? What happened after the Asian meltdown? The Russian bond implosion? The dotcom fiasco? September 11th, 2001? That’s probably missing a few.

https://www.federalreserve.gov/boarddocs/speeches/2002/20021121/

Remarks by Governor Ben S. Bernanke
Before the National Economists Club, Washington, D.C.
November 21, 2002

Deflation: Making Sure “It” Doesn’t Happen Here

“With inflation rates now quite low in the United States, however, some have expressed concern that we may soon face a new problem–the danger of deflation, or falling prices. That this concern is not purely hypothetical is brought home to us whenever we read newspaper reports about Japan, where what seems to be a relatively moderate deflation–a decline in consumer prices of about 1 percent per year–has been associated with years of painfully slow growth, rising joblessness, and apparently intractable financial problems in the banking and corporate sectors. While it is difficult to sort out cause from effect, the consensus view is that deflation has been an important negative factor in the Japanese slump.”

“U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

“One important concern in practice is that calibrating the economic effects of nonstandard means of injecting money may be difficult, given our relative lack of experience with such policies. Thus, as I have stressed already, prevention of deflation remains preferable to having to cure it. If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation.”

Comment by Ben Jones
2017-09-18 10:43:55

Does this sound like a light touch?

‘the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost’

‘The basis of the post-1989 neoliberal consensus rested on what economists call the rational expectations revolution of the 1970s and 1980s. The rational expectations revolution provided the intellectual basis for ‘light touch’ regulation by positing that markets will auto-correct left to themselves, and that state or regulatory interventions can only be counter-productive’

Comment by Neuromance
2017-09-18 16:21:33

Bernanke went to Citadel and Pimco. Quite the revolving door.

These folks have every interest in increasing the wealth and power of the FIRE sector. Having intellectual cover to do so is icing on the cake.

Comment by Patrick
2017-09-18 18:23:51

I cannot believe someone in charge of so much money would write such drivel.

“increase cash and you cause inflation” to drive away deflation.

Nonsense. He fails to say that the “use” of that cash is the determinant, and a guy at that pay grade should know this.

Using 80% of that excess cash for share buybacks does nothing.

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Comment by Professor 🐻
2017-09-19 09:21:13

“Having intellectual cover to do so is icing on the cake.”

That pretty much sums up why the Fed is so heavily populated with refugees from academic economics departments.

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Comment by sod
2017-09-18 18:49:32

“In order to have a truly stable economic and monetary system, the money supply must grow in proportion to the population. Since human beings are themselves the “gold”, or the “wealth” of a nation, as the population multiplies, so too must the amount of money in order to keep the buying power of that money stable.

The smoothest way to accomplish this is via the fractional reserve banking system, with
A.) significant, strictly enforced reserve requirements,
B.) “One Dollar of Capital” daily marking-to-the market of bank assets with full dollar-for-dollar backing of any shortfall or of any unsecured loans by bank owners and investors
C.) the total, complete elimination of branch banking and bank holding companies (Yay!)

The alternative method of controlling money supply would be a central bank, and I think we can all agree that that little experiment has been tried, failed miserably, and proven that Central Banks are nothing more than a cesspool of scoundrels and aspiring tyrants.”

- Ann Barnhardt

 
Comment by Mike
2017-09-18 20:28:30

On Bernanke:
As Abraham Maslow said in 1966, “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.”

The great depression “scholar” believes that printing money can stave off deflation/depression. I would argue that it just delays it. Simply because printed money cannot be directed. It tends to go into highly unproductive uses including: 1) ballooning reserve assets 2) used by zombie corps (that should rightfully close shop) to float junk bonds 3) used by corrupt CEO’s/board to “financialize” their business (e.g., selling bonds to buy back shares, thereby goosing EPS) 4) make monthly payments on mortgages lower, thereby goosing housing prices.

Doug Noland, an analyst who has sound analysis (but makes rather inaccurate predictions), noted that they could have printed the $5B and staved off the great depression (soon to be known as GDI) but what then?
When that goose to the money supply had run its course, what are the options? Well, we have seen that there is only one. Print some more.

That is the trap that “the courage to act” hero has left us in.

Comment by Mafia Blocks
2017-09-18 20:48:57

In the case housing, the failed efforts of the fed simply resulted in collapsing demand.

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Comment by Lurker
2017-09-18 19:17:37

“The rational expectations revolution provided the intellectual basis for ‘light touch’ regulation by positing that markets will auto-correct left to themselves”

The author is conflating a mess of related but separate ideas here, especially regulation vs. monetary policy, and “efficient markets” vs. “rational expectations.” Light touch government regulation (like say repealing Glass Stegall) is very different than central banks refusing to intervene to pop bubbles, which very different than central banks eager to intervene to soften recessions.

Rational expectations theory is not about regulation; it’s about monetary policy and the inability of government stimulus to affect long-term growth and unemployment. Of course it’s easy to say it “failed,” because at the first sign of a downturn in 1987 politicians and Greenspan got itchy and couldn’t help themselves from intervening. So the only time the theory was ever implemented was on the way up, yet the only time it’s actually good for something is on the way down.

Of course in the end, what good is any theory when it is selectively applied, with policymakers cherry-picking the most convenient aspects in order to justify what they were planning to do anyway? But it’s so much easier to blame a theory than to hold decision-makers accountable.

Comment by BlueSkye
2017-09-18 20:30:21

Overanalysis. The central bank is a parasite. Everything that they do is designed to drain off the life blood of the populace. Lending at interest to increase prices is a tax and we are encouraged to lean into it.

 
 
Comment by Karen
2017-09-18 23:46:31

Every word in this speech is a lie.

 
 
Comment by Senior Housing Analyst
2017-09-18 12:58:46

Englewood, CO Housing Prices Crater 8% YOY

http://www.movoto.com/englewood-co/market-trends/

 
Comment by jeff
2017-09-18 15:49:00

Happy National Cheeseburger Day

Comment by Apartment 401
2017-09-18 16:06:26

SmashBurger. Cherry Cricket if you want table service.

Comment by Rental Watch
2017-09-19 00:37:28

Make your own…my wife won’t eat burgers out anymore…my kids usually finish theirs before I sit down to eat.

 
Comment by Young Deezy
2017-09-19 07:51:49

Smashburger is waaaaaayyyyyy too salty. Find a local joint that serves quality food and forget about chain burgers.

 
 
 
Comment by azdude
2017-09-18 17:00:28

have u all figured out the FED cycle yet?

 
Comment by Taxpayers
2017-09-18 17:58:35

Silver
Sil. Or paas ?
Deep thoughts

 
Comment by Neuromance
2017-09-18 18:43:05

History doesn’t exactly repeat but it echoes. The Vietnam War, a Ken Burns documentary, is currently playing on PBS. Highly recommended. Two episodes of five complete so far (yesterday and this evening), and 3 episodes left. With a full rebroadcast on the same schedule next week.

Thought provoking.

The importance of a full belly, then of pride, cannot be overstated. If the belly is full, pride provides the next level of an addictive dopamine hit, and people will put up with a lot of physical discomfort to get that hit.

 
Comment by Neuromance
2017-09-19 04:54:46

Incredible. Toys R Us, a profitable company but saddled with massive debt by private equity investors, goes under. An iconic, well regarded brand to many of us. I don’t solely blame Bain, et. al. for the destruction - the fact that this is legal is a problem.

Not the first iconic US company to be destroyed by private equity debt. Colt (firearms manufacturer) went bankrupt during the Obama years, the golden age of firearms sales.

Comment by Sean
2017-09-19 05:56:40

Retailers still haven’t figured out that Gen Xers and Millenial parents are basically minimalists. Only the Boomers thought buying a cart full of plastic Chinese toys was a good idea. I’m an Xer with 3 young kids, and we always go low with toys. I’d rather they have 10 toys that they love to play with than 100 toys that sit in the corner.

Last month I went to Toys R Us with my kids and the place was deserted. No customers, skeleton work crew, half the stuff was on sale. Walked out without buying anything and thought “Well, here’s another store that won’t survive”.

Comment by ibbots
2017-09-19 06:18:55

They’re Doing A reorg, So Not Going Under Just yet.

We have a 2 year old. Their babies-r-us store near us always has traffic the few times we go there. We pick up toys wherever, garage sales, etc. I bought a xylophone for my daughter for 7$.

 
 
Comment by rms
2017-09-19 06:58:57

“Incredible. Toys R Us…”

Consumers are tapped-out, IMHO. They are spending too much on upper education, transportation and housing.

Comment by taxpayer
2017-09-20 08:37:28

you forgot free-er meds
that’s the big 4 for 4 of big gov “making affordable”
housing
meds
trans
college

w 10 + gov programs they have become totally unaffordable

in the 1950’s they were affordable- add big gov and
voila

 
 
Comment by In Colorado
2017-09-19 08:17:40

I seem to recall reading that WalMart was killing them. It didn’t have the variety they had, but WalMart picked what would sell and undercut them on price.

 
Comment by Rental Watch
2017-09-19 08:51:05

We shop at a few local independent toy stores. “Main Street” feel, good variety, helpful staff, wrap birthday presents within about 5-10 minutes.

Toys R Us is large and sterile.

 
 
Comment by Rental Watch
2017-09-19 15:12:11

https://newrepublic.com/article/144528/gone-baby-gone-wake-housing-crisis-new-breed-real-estate-investor-destroying-america-cities

I like how the article makes the investors to be the evil participants in the process, and not the circumstances that led to their being neighborhoods where no one wants to live/pay their taxes.

Sounds to me like the cities were already destroyed, and the tax auction process favors groups like the outside vulture investors (who are seeking out blight), rather than the local neighbors, who know the blight is there, but aren’t aware of when/if the property can be purchased for the delinquent taxes.

Comment by Mafia Blocks
2017-09-19 16:09:34

There are investors and then there are degenerate gamblers.

Right? ;)

 
 
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