A Canary Which Is Starting To Lose Oxygen
A report from the New York Real Estate Journal. “Overall capitalization rates (cap rates) are always the topic of discussion in real estate appraisal circles. We are still in the midst of some of the most historically low cap rates in modern history. The cap rates are directly related to the lowest interest rates in my 43 years as an appraiser. The effect of the low interest rates has driven one of the most active real estate market in 30 years in the northeast United States. This is especially true in New York City where real estate values are exploding. Of course some of the older buildings like One Seneca Tower had some functional obsolescence because of age and had 850,000 s/f of space which makes it a large fish in a small pond. I use this as example similar to that of a ‘canary in a coal mine’ which is starting to lose oxygen.”
“The point is; without more than low interest rates the success of smaller markets is dubious if there is not an influx of international capital, jobs and population. The Federal Reserve Bank headed by Janet Yellen is expected to increase rates before the end of the year ever so slightly which should result in continued low cap rates which will keep sales activity and prices relatively high even in the secondary markets.”
“However, the Federal Reserve has some of its own problems. Their holdings of U.S. treasuries, etc. are approximately $6 trillion. This is an increase of over 600% over the past 7 years. Some think this is a house of cards or type of Ponzi scheme; and is a policy which is not on solid financial ground. However, this strategy has kept interest rates artificially low which not only has encouraged borrowing for new projects but also boosted the stock market to record highs and real estate cap rates at all time lows.”
“One thing is for certain; real estate activity is still at near record levels in the big markets and smaller metropolitan areas in part because of low interest rates and government intervention for the foreseeable future. However, look out for the ‘canary in the coal mine’ example like Seneca Tower in your local market which may fuel a major change in Federal Reserve policy and cap rates.”
From Bloomberg. “Heightened scrutiny of U.S. commercial real estate lending is paving the way for lightly regulated investors to gain a bigger toehold in lucrative deals. Private funds are seeking a record $32 billion for commercial-property debt as buyout firms, real estate investment trusts and hedge funds expand lending. These companies, which typically charge higher interest rates, can move quickly on large loans that may be seen as too speculative for banks.”
“With banking regulators warning of a potential real estate bubble, firms such as Blackstone Group LP and Starwood Property Trust Inc. stand to become an even larger force in the market. So-called shadow banks — lenders that fall outside of the industry’s oversight — are able to take on more risk amid calls for caution in an area that melted down during the 2008 financial crisis.”
“The record capital being sought by U.S. private funds for real estate debt investment as of July was up almost 40 percent from a year earlier, according to data researcher Preqin Ltd. Banks, by contrast, are pulling back as slowing global economic growth, uncertainty over interest-rates increases and pockets of overbuilding spark concern that commercial real estate prices are due for a fall after almost doubling in six years.”
“In Manhattan, where a surge of construction has led to a glut of luxury apartments, Blackstone extended a mortgage originally made for $285 million on a condominium tower being built by Gary Barnett’s Extell Development Co. when the developer couldn’t pay off the loan on its Aug. 9 due date. Nonbank lenders ‘trust their own instincts,’ said Steven Delaney, an analyst with JMP Securities LLC. ‘Blackstone is the largest owner of real estate in the world,’ he said. ‘They don’t need regulators and the Fed to tell them what the state of the real estate market is.’”
The Philadelphia Inquirer. “With a 7 percent increase from August 2016 to September 2016, Philadelphia is third on a list that only landlords could like. According to rental agency Abodo, the hike puts Philadelphia on a list of U.S. cities where rent has increased the most, second only to Bakersfield, California and Miami, Florida. The same report indicated big dips in Seattle (down 13 percent) and San Jose, California (12 percent).”
The San Francisco Business Journal in California. “San Francisco is seeing fewer market-rate housing proposals as rents have softened and a major policy change more than doubled the affordable housing requirement, according to an analysis of city planning data. The slowdown is a sign that the city’s real estate boom may be fading even as the city pursues more concessions from developers to fund affordable housing.”
“A Socketsite analysis of the city’s development pipeline in August found that the number of units proposed, approved and under construction fell slightly by 100 to 63,300, as new applications fell relative to completed projects. Companies that track rental prices such as Apartment List and Zumper have also reported dips in the past few months in San Francisco rents.”
“‘I will say that as a result of (Prop. C), the land market for residential housing is kind of locked up right now. We’re in the market every day, and it’s very difficult to transact,’ Jesse Blout, principal of developer Strada Investment Group, said at the Business Times’ San Francisco Structures event last week. ‘Part of that is because land owners are used to a certain level of pricing.’”
“The city’s current housing production is still near a record high and outpaces previous cycles of growth, and supporters of more development say that increased supply gas helped lower rents for the high end of the market. Major landlords such as Equity Residential have offered new renter concessions such as a free month of rent as thousands of new units have been completed in the South of Market and Mission Bay neighborhoods.”
‘Banks, by contrast, are pulling back as slowing global economic growth, uncertainty over interest-rates increases and pockets of overbuilding spark concern that commercial real estate prices are due for a fall after almost doubling in six years.’
I’ve posted this information more than once. Doubling in 6 years, and it’s an all-time high, BTW.
‘Blackstone is the largest owner of real estate in the world,’ he said. ‘They don’t need regulators and the Fed to tell them what the state of the real estate market is’
You go girls, couldn’t happen to a more deserving bunch.
has yellen rewritten the rules of the credit cycle?
It seems like we keep having the boom and busts because credit is extended like crazy . when the bills come due folks default .
Isn’t Blackstone systemically important / too big to fail / bailout worthy?
That’s BlackROCK
“The record capital being sought by U.S. private funds for real estate debt investment as of July was up almost 40 percent from a year earlier, according to data researcher Preqin Ltd.”
Time to sucker punch the rubes?
“In 2013, Bloomberg uncovered how the Blackstone Group was self-dealing after its affiliate GSO Capital Partners purchased debt and credit default swaps in Codere SA, a Spanish betting, online gambling and gaming company.[147] “In the first half of 2013, Blackstone GSO and another firm later purchased a €100 million bank loan (via secondary markets) that Codere already had on the books, and then convinced Codere to delay repayment on the debt related to the aforementioned credit default swaps. That delay triggered the CDS, resulting in upwards of $18.7 million in profit for GSO.“[148] The GSO director defended the move with “Codere (working with us…) had to trigger the credit default swaps, as it was the only way to compel certain bondholders to negotiate.” and blamed credit default swap investors for their loss: “Unlike Blackstone, who invested directly into Codere, these financial investors [of hedge funds using credit default swaps] were not aligned with the interests of Codere, but instead through their use of credit default swaps, were betting on when the Company would default[...]having no interest in the outcome of the game.”
https://en.wikipedia.org/wiki/The_Blackstone_Group
‘The same report indicated big dips in Seattle (down 13 percent) and San Jose, California (12 percent).’
Check out that biggest fall list: LA, Boston, Charlotte NC, Long Beach CA, San Francisco, Chicago, Baltimore and Lexington KY.
‘The record capital being sought by U.S. private funds for real estate debt investment as of July was up almost 40 percent from a year earlier’
But they won’t overbuild.
Isn’t San Diego overdue for rent decreases?
– Breaking News: Senator Elizabeth Warren tells Wells Fargo CEO: “You should resign…You should be criminally investigated.” http://cnnmon.ie/bkgnews
But, but…he said he was sowy!!!
“You should be criminally investigated.”
Why isn’t he being investigated?
Speaking of bloomberg, I feel for those hosts, its really become an Obama/Hillary shill fest as of late - they were forced to cite this morning the “inclusive economic policies of Obama - and not just for the 1%” as the reason the economy is doing so well - right before they cut to announcing a string of bad economic news. Cognitive Dissonance FTW!
Also heard Former Prez and CIA head George H Dubya “We need a new world order” and “I cant remember where I was when JFK got shot” Bush has endorsed Hiliary.
Kiss. Of. Death. Not that Hillary needed that, given her health, LOL!
Yep, Mike and Rio voting with the Bush family.
What’s happening is political magnetic poles are re-aligning. Like after the Vietnam war. Like when the south went Republican after 150 years of being Democrat. All sorts of issues will define it; empire, globalism, immigration.
Also heard Former Prez and CIA head George H Dubya “We need a new world order” and “I cant remember where I was when JFK got shot” Bush has endorsed Hiliary.
I’d never heard or read anything about Bush Senior and the JFK assassination, so I Googled it and the first result was something from WND.COM. So it must be some wacky conspiracy deal.
Kiss. Of. Death. Not that Hillary needed that, given her health, LOL!
It seems extremely unlikely that this announcement would be bad for HRC. Those soccer moms in the suburbs of Philadelphia and Tampa are not going to choose to vote for Trump because a former GOP president has decided to vote against him.
Your measure of truth is whatever the first link that google comes up with? That would explain a lot about you MM
As for the bush endorsement, not sure what rock you’ve been under, but I seem to recall a little tension betwixt the clinton supporters and the bushes. Maybe thats not talked about in the first link google comes up with on the subject?
You’re making it to easy to tee off on you, you might want to find another sandbox, this is getting sad. Low energy Mike, you’re STILL not making any sense!
Your measure of truth is whatever the first link that google comes up with?
Relying on what Google returns does have a lot of drawbacks, but we’re not talking about truth here. It’s about who’s concerned about the issue.
As for the bush endorsement, not sure what rock you’ve been under, but I seem to recall a little tension betwixt the clinton supporters and the bushes.
I’m not sure what you’re getting at here. If you think that people who have been strong supporters of Hillary are going to decide to vote against her because Bush Senior has decided to vote for her, that doesn’t make any sense. Trust me. It’s only going to confirm what they already think, which is that Trump is such an extreme, unbalanced clown that even lifelong Republicans are announcing their opposition to him.
I forget who it was who said H.W. had argyle socks underneath his cowboy boots. If the pantywaist had continued to Baghdad Saddam Hussein wouldn’t have been able to attack us on 9/11.
??? What does Saddam and 9/11 have to do with each other? The Saudis funded and supplied the manpower for the 9/11 attack.
NAHB: Hottest Housing Market In 11 Years
Builders Say Strong Market Will Stay On Course
Home builders feel terrific about the future U.S. housing.
With today’s mortgage rates ultra-low and U.S. rents rising, home builders are planning for another strong finish to the year for housing, and a fantastic start to 2017.
Market confidence among the nation’s builders is at decade-best levels.
As measured by the National Association of Home Builders’ Housing Market Index (HMI), home builder sentiment reads 65 out of 100, which is a “confident” figure.
It’s the strongest reading in nearly a year, and certain components of the index exceed confidence levels of 11 years ago.
Builders are excited about the 2017 housing market — and for good reason…..
http://themortgagereports.com/22134/nahb-housing-market-index-september-2016
Don’t wet yer pants there builder boy!
On the commercial side, a couple of observations from the first two articles:
” price of $6.28 billion or approximately $2,285 per s/f. Ironically, a former trophy property in Buffalo, New York which is now known as One Seneca Tower, originally constructed by Marine Midland Bank 43 years ago, reportedly is under contract for $12 million or $14.11 per s/f by a Washington D.C. developer. This 38-story building is one of the largest and tallest office buildings in Upstate New York. To be fair and balanced, this building is almost 100% vacant.”
And from the Bloomberg article,
““These guys aren’t scared of an empty building,” said Steven Delaney, an analyst with JMP Securities LLC. “These are the loans banks don’t want. There is a tremendous opportunity and a need for commercial-property owners for more types of financing than the commercial banking industry as a whole is willing to provide.””
People like to speak about “commercial real estate” as though it’s one market. It isn’t. Certainly the price of a leased Class A office in NYC is correlated to the price of a leased office building in Boise, ID, but that correlation weakens as the difference between the assets increase (deferred maintenance, vacancy, market strength/vacancy, building age, etc.).
Today, if you have a fully leased commercial property with no deferred maintenance in a “gateway city” (SF, LA, NYC, etc.), the prices are VERY high. The prices in these kinds of markets are never really “cheap”, but are stretched even higher due to the availability and cost of debt.
However, what if you have a 50% leased property in a non-gateway city where it needs a new roof, the facade is old and tired (needing a “facelift”), and an owner needs to set aside a lot of capital for tenant improvements and leasing commissions to lease the rest of the building?
Much different story.
First off, there is less debt available, and it is more expensive. You might pay 7-8%, instead of 4%, and instead of borrowing 75% of cost, you might only borrow 65%, but a large portion of the 65% is “good news money”–for tenant improvements and commissions that only are needed if you find a tenant. You might be at 50% leverage until you find that tenant.
Secondly, in addition to losing the demand from foreign buyers or pension funds who want to buy “trophy assets” for their cash flow (because the assets neither are trophy, nor have cash flow), you also lose the local investors who don’t want to deal with the renovation/rehab, or leasing of the building. So, if you are selling a 50% leased building, the audience of buyers is significantly reduced.
While certainly what is happening with commercial real estate in Manhattan is correlated to all real estate, that correlation in many cases can be very weak–and weaker still if the common thread of cheap and available debt from traditional lenders isn’t there.
‘are stretched even higher’
And higher, year after year, which we’ve never seen before. It would have been entirely different if the central banks had merely lowered rates to zero, given the economy a boost and then raised them. It also would have been entirely different if QE didn’t happen, or was just a temporary shot in the arm. One could have argued a limited juicing of the markets was appropriate (I would disagree). But this perpetual, petal to the metal (as Mel Watt said) approach can only end in calamity. Eventually greed insures the market will provide too much and not suited to actual needs.
They should have pulled this thing in years ago. It’s too late now.
“However, the Federal Reserve has some of its own problems. Their holdings of U.S. treasuries, etc. are approximately $6 trillion. This is an increase of over 600% over the past 7 years. Some think this is a house of cards or type of Ponzi scheme; and is a policy which is not on solid financial ground. However, this strategy has kept interest rates artificially low which not only has encouraged borrowing for new projects but also boosted the stock market to record highs and real estate cap rates at all time lows.”
What constrains them from adding trillions more to the balance sheet?
What constrains them from adding trillions more to the balance sheet?
I suppose that as long as inflation stays in check …nothing.
It does bring up the question Ben has asked. If they can do this, then why have any taxes at all? In a ZIRP/NIRP environment governments can borrow up to the moon and beyond. As long as they can roll over the debt (and why wouldn’t central banks allow them to do that?) they never have to pay it back.
As far as I can tell, the only thing that can bring this house of cards crashing down is some good old fashioned inflation.
Repatriation of US dollars
As long as those dollars don’t find their way to consumer’s pocket books, it’s all good.
Article for all the Big Government lovers who take campaign contributions from the pharmaceutical industry pimping oxycontin and fentanyl:
“The Public Policy Polling survey, commissioned by the pro-legalization Marijuana Policy Project, suggests that that’s how many Colorado residents see it, too. About 61 percent of voters there say legalization has had a positive impact on the economy, and 58 percent say the tax revenue generated by legal marijuana sales has been good for the state.
Most interesting, from a public health standpoint, is the finding that nearly one in four Colorado voters say they know someone who is drinking less alcohol now that marijuana is legal. Research has generally shown that marijuana consumption is associated with fewer health risks — both to consumers and society as a whole — than alcohol consumption. If Coloradans are substituting marijuana for alcohol, the state could see some subtle gains in public health as a result of that shift.”
https://www.washingtonpost.com/news/wonk/wp/2016/09/20/most-colorado-voters-say-legal-weed-has-been-good-for-the-economy/
The following is a narrative, reprinted from the Washington Post, which is owned by globalist Jeff Bezos:
“Just 3 percent of American adults own half of the nation’s firearms, according to the results of a Harvard-Northeastern survey of 4,000 gun owners.
The survey’s findings support other research showing that as overall rates of gun ownership has declined, the number of firearms in circulation has skyrocketed. The implication is that there are more guns in fewer hands than ever before. The top 3 percent of American adults own, on average, 17 guns apiece, according to the survey’s estimates.
The survey is particularly useful to researchers because it asked respondents not just whether they own guns, but how many and what types of guns they own. This makes for one of the clearest pictures yet of American gun ownership, showing the concentration of most guns in the hands of a small fraction of American adults.”
http://www.denverpost.com/2016/09/19/just-3-percent-of-adults-own-half-of-americas-guns/
Note that at the bottom of the article is the tag: Gun Control.
Globalists gonna globe. And the way this narrative ends is people getting put on trains, sent to the east, locked in chambers where the Zyklon B sprays out of the ceiling, and their corpses piled into ovens.
History does not lie.
4000 people is a pretty small sample size
They must have gone by my Uncle’s house.
Hell, he had no idea how many guns he owned. A thousand? As near as I could tell, he had a thousand long guns. No telling how many handguns.
Another of the “cold dead fingers”/”guns are good investments” type. This investment only works as long as the NRA keeps the wretched refuse stirred up. The AR-15 market is pretty soft around here. Everyone who ever wanted, or thought about getting one, has one (or two).
That, and I love how the gun industry suckered everyone into buying AR-s, then jacked the price of the ammo. I can still buy 30.06 cheaper than 5.56mm. LOL
(There’s a good discussion……..what’s the better investment? A legal sub-machine gun/assault rifle, or $5K worth of cheap handguns?)
“In a land of handguns, the machine gun owner is KING!”
Paid Minion, 2016
U can’t buy an assault gun
Semi auto only
The same recycled narrative, here provided by the UK Guardian:
“These super-owners include collectors with elaborately curated selections of historical firearms, serious hunters, firearms instructors, gunsmiths, people who love tinkering with and customizing their firearms, and Americans worried about feeding or defending their families in the wake of a disaster scenario. But you don’t have to be prepping for the breakdown of civilization to end up with 17 guns. In fact, gun enthusiasts say, it’s surprisingly easy to get to 17 – especially because many Americans inherit multiple guns from their parents and grandparents.
“I’m from Texas, and I just have an assload of guns,” said John Risenhoover, a retired agent from the Bureau of Alcohol, Tobacco and Firearms who now lives in Colorado.
Risenhoover said he owns about thirty guns, including firearms given to him by his father-in-law and grandfather, his self-defense Glocks, a shotgun for hunting ducks, a larger rifle for hunting elk, and a few .22 handguns, “little plinker guns” he used to teach his children how to shoot. (His daughter is more enthusiastic than his son, he noted.)
“The fact that you’d open the closet and have a stack full of guns in this country is really not a big deal,” he said. “I know it sounds weird.”
Yet somehow this slipped into the narrative:
“Fred, a 39-year-old truck driver from Ocala, Florida, has about 40 guns – roughly 24 pistols and 14 long guns. He said his firearms collection began to grow after he became a father. He had a “catastrophic knee injury” that he worried would make it hard for him to protect his wife and child, and when he researched his neighborhood, he saw crime was going up.
It’s not just a home intruder that worries him, but a broader societal breakdown. He spent five years as a civilian truck driver during the Iraq war making deliveries between military bases in southern Iraq. Today, he sees the fragility of America’s food supply network. If the interstate highways aren’t drivable, or if the electrical grid fails and diesel stations can’t pump their fuel, many local stores would quickly run out of food, he said.
“All of our morals or ethics would be out the window in the fear of the inability to survive as soon we got just a little bit hungry.”
https://www.theguardian.com/us-news/2016/sep/20/gun-ownership-america-firearms-super-owners
“It’s not just a home intruder that worries him, but a broader societal breakdown.”
A co-worker is convinced the zombies are coming. Hehe, poor guy.
“This makes for one of the clearest pictures yet of American gun ownership, showing the concentration of most guns in the hands of a small fraction of American adults.”
Heck I’d bet 20% of the people is AZ have a gun….. in their car.
75% if its a truck…
Likud Party sponsored narrative:
“Billionaire casino owner Sheldon Adelson and his wife, Miriam, are planning to spend $45 million to boost Republicans in the next two months, including at least $5 million to help Mr. Trump, according to a person familiar with the plans.
Mr. Adelson’s planned donations—first reported by CNN—would make him easily the largest donor of the election cycle. Yet they fall far short of the $100 million the casino owner had earlier this year pledged to spend on Mr. Trump’s behalf. While Mr. Adelson endorsed Mr. Trump shortly after the primary concluded, he didn’t donate any money to Mr. Trump’s campaign or to pro-Trump super PACs through July, according to the latest Federal Election Commission disclosures.”
http://www.wsj.com/articles/billionaires-sheldon-adelson-joe-ricketts-plan-donations-to-donald-trumps-campaign-1474340684
Got Realm?
I have been reading some things that run counter to prevailing consensus. For instance, the neocons are really hating on Putin. But Netanyahu has been to Russia 3 times in the last year to meet with him. And the neocons haven’t said boo about it. A reader posted this a while back:
‘The Ultimate Long Game: Autarky and Resilience’
‘Ironically, autarky and these cultural dynamics arise from decentralization and the free flow of information, not one-world centralization.’
‘In my recent essay Could the Deep State Be Sabotaging Hillary? I wrote: “An increasingly powerful sector of the Deep State views the neo-con agenda as a disaster for American interests, and is far more focused on the Long Game of energy, food security, economic and military innovation and a productive response to climate change.”
‘This runs counter to the conventional view that the U.S. Deep State is rabidly attached to the neoconservative liberal hegemony model of geopolitical hard power. If you want some evidence for this shift, please read this essay from the journal of the Deep State, Foreign Affairs; if you read this carefully, you will find a devastating critique of the neo-con strategy and an alternative strategy based on autarky, a topic we’ll discuss in a moment.’
‘The Case for Offshore Balancing: A Superior U.S. Grand Strategy (registration required)’
‘ While many understandably view the Deep State as being wedded to globalization and centralized one-world power structures, I see the Emergent Deep State in the U.S. pursuing a much different Long Game: autarky (self-sufficiency), and the geopolitical influence that flows from an abundance of the FEW resources, my term for the essential resources of food, energy and water.’
‘(These are related, of course; with no energy and no water, you won’t have any food, either.)’
‘In addition to the FEW resources, autarky requires a culture of innovation, flexible social structures and multiple ladders of social mobility. In effect, globalization guarantees insecurity, and so further attempts to consolidate one-world power are doomed to fail, regardless of the resources thrown at the effort.’
‘In effect, when you can’t feed your people, everything else goes by the wayside: fancy political theories, one-world schemes of domination, hegemony, you name it–all go in the trash bin of history.’
‘Ironically, autarky and these cultural dynamics arise from decentralization and the free flow of information, not one-world centralization. Anyone pursuing that path is doomed to instability and collapse.’
If this is true, what we could be witnessing is a power struggle within the establishment/deep state/PTB, what have you.
Related to the long-term availability of food, here is an excellent article on rapidly-declining underground water sources in Eastern Oregon, from the Portland Oregonian. Everybody who lives anywhere in the Western US should read this article.
Having a reliable source of water is key - if your 500′ deep well goes dry, sure, you can spend 5-figures to go deeper, but there is no guarantee that you will get water, or water fit to drink.
http://www.oregonlive.com/environment/index.ssf/page/draining_oregon_day_1.html
Yep, a big issue here in California too….remember reading years ago how a deep well pumping lots of water can cause a “cone of depression” in the aquifer and make nearby wells even miles away go dry. Currently in many areas if you can even afford to have a deeper well dug at great expense the waiting list for a well driller can be a year or two. From what I’ve heard some big water users with deep pockets (like vineyards, etc.) are buying drilling rigs out of state…
https://en.wikipedia.org/wiki/Cone_of_depression
The American would reject autarky if they were asked about it. We’re too addicted to coffee.
“Got Realm?”
Remember to bend thy knee when the chariot passes.
http://picpaste.com/sheldon_of_the_empire.jpg
Globalist narrative linked from Drudge:
“Billionaire investor George Soros pledged on Tuesday to invest up to $500 million in programs and companies benefiting migrants and refugees fleeing life-threatening situations.
Announced against the backdrop of an ongoing United Nations (U.N.) summit in New York, Soros explained that he wished to harness the power of the private sector for public good.
The Open Society Foundations (OSF), a non-profit organization owned by Soros, will be in charge of the funds, the statement said. Any profits from the investments would go to the OSF’s migrant and refugee-related programs, which include community centers in Greece and initiatives to provide Syrian refugees with legal advice.”
http://www.cnbc.com/2016/09/20/george-soros-to-invest-500-million-in-help-for-refugees-through-his-open-society-foundations.html
Got Rotherham?
2 years without a job: Calgary in the downturn
Severance is gone, EI has run out, and still no job on the horizon
http://www.cbc.ca/news/canada/calgary/calgary-unemployed-more-than-a-year-1.3769195
Yeah, I posted an article yesterday with a city counsel guy saying they’ve lost 27,000 jobs in downtown Calgary alone.
From the article:
‘Now, two years into the slowdown, Calgary’s unemployment rate sits at nine per cent, and there are 42,000 more people out of work than there were the day that Williams lost his job. The number of Calgarians receiving unemployment benefits peaked in June 2016, in part because those benefits have started to run out, even for those who qualified for extended benefits. And there are few signs of improvement.’
‘Bucher said that companies are planning more layoffs through the end of the year, although fewer than in 2015. “There are some major oil and gas companies that have 900 fewer people on their team than a year ago. The question becomes how many more people can they let go and remain an entity. But what is happening in the commodity market to cause oil prices to go up? I think the answer is nothing. So this is going to continue until some mystical point in the future when things turn around.”
It’s important to remember this is blow-back from the “once in a lifetime bubble” that was China. What caused that? China does 20 trillion plus in QE, pours a hundred years of concrete in three, and set off a commodity boom that echoed around the world.
My waitress on Sunday was from Calgary. Pretty gal, about 25. After two years of getting poor tips, she was happy to make the move east.
There must be a psychological term for what Deutsche bank is trying to pull…
https://www.bloomberg.com/gadfly/articles/2016-09-20/deutsche-bank-finds-crisis-era-fix-for-crisis-regulation
Strange times!
“Federal Reserve … holdings of U.S. treasuries, etc. are approximately $6 trillion. This is an increase of over 600% over the past 7 years.”
They have to destroy the country in order to save it.
This past weekend I posted a paper by the FRBSF where they said “first do no harm”, comparing themselves to doctors. It reminded me of what an accounting professor who had a doctorate was asked in class, “what kind of doctor are you?” He replied, “the kind that can’t do anything for you.” Do no harm? Ask the pension funds you herded into these real estate projects about that.
Nobody is putting a gun to the pension investment managers’ heads and forcing them to buy real estate funds, are they?
They are simply chasing the highest return, like most funds managers are these days.
‘ Major landlords such as Equity Residential have offered new renter concessions such as a free month of rent as thousands of new units have been completed in the South of Market and Mission Bay neighborhoods. ‘
Yep I know those neighborhoods wells as I stayed out there for work projects in a corporate apt. Many new complexes and luxury condos being built while I was there in 2012-2013. Right by ATT Ballpark. Back then the rent was going for $3500-$5000/month.
These concessions are often not counted in the rent decreases either. In Denver when they recently were, rent declines went from 6% to an adjusted 14%.
America’s Armed Forces can’t kick ISIS’s ass with one hand tied behind their back:
http://dailycaller.com/2016/09/07/trump-outlines-plan-to-make-americas-military-great-again/
Trump cited several statistics regarding the military’s current lack of readiness, noting that “President Obama and Hillary Clinton have also overseen deep cuts in our military, which only invite more aggression from our adversaries.”
The Navy has gone from 285 ships to 276 since Obama took office, Trump claimed. Meanwhile, the Army is shrinking from 553,000 personnel to 479,000 under the current administration, while the Air Force is at its smallest since its inception in 1947.
To alleviate the nation’s military problems, Trump said he will rebuild the military at every level. His ten-point plan includes maintaining an active Army force of 540,000 personnel, as the Army chief of staff has requested. A future Trump administration will also increase the size of the Marine Corps, from 23 to 36 battalions. Trump said he will drastically increase the number of Navy surface ships and submarines to 350. He also plans to give the Air Force a modest boost, from 1,113 to 1,200 aircraft
One thing not discussed is the wear and tear on our carrier fleets. The non stop combat deployments for our carrier strike groups has caused them miss routine maintenance and required overhauls. That along with budget sequester and shortfalls has been a recipe for disaster for combat readiness.
Since he’s against foreign deployments, who does Trump plan to use the military against?
Capitol Hill!
Oceana naval station looks like a junkyard
Cherry point marine f18 are even worse
Maybe we should ditch osprey and f35
Like it or not, the F-35 is here to stay. Over 200 have been built. Starting on a new design will take 10 years, and would probably be a marginal improvement (at best) over the F-35.
Nobody cares that the F-35 can’t “dogfight”. The whole point of the airplane is to stay out of dogfights. Getting involved in a “furball” takes away any technological superiority you have.
The F-35 is designed to detect and attack air-air targets a long time before the opponent “sees” them. Doesn’t matter that an SU-35 can fly rings around it in a dogfight. It’s a (electronically) big, non-stealthy target. A radar powerful enough to get a whiff of an F-35 will make the airplane carrying it an even more (electronically) visible target.
All of the “problems” you are hearing about now is the kind of stuff you run into when you start handing the airplane off to the squadrons/operators/general public, instead of just having the guys in the experimental shop fix/build it.
I was indirectly involved in the flight testing and certification of an all new bizjet back in the 90s. Three years of flight testing on three airplanes, reliability and durability testing, demonstration flight, etc.
You would think that all of the issues would be found. Anyone who spends any time in the business knows that new airplanes generate new issues that never come up in flight test. You can plan on working these issues on the first 30-50 customer deliveries.
What separates the men from the boys (and the successful airplanes from the ones that aren’t) are how quickly issues are communicated from the customer to your engineering staff, and how quickly you can identify the cause, design a “fix”, and get it to your customers.
(In our case, this meant a team of dedicated Field Service guys, one of which was the single point of contact for the operator, a bunch of the engineering staff ready to drop everything else at a moments notice, and in the case of companies buying multiple aircraft, an experienced FSE/mechanic “on site” as the airplanes were being delivered and went into service)
Events over the past 15 years have shown that there are only a limited number of companies in the world that can design a commercial jet/business airplane from scratch, and get it built and certificated in a reasonable timeframe (3-4 years).
Their names? Textron (Cessna), Gulfstream, Boeing, Airbus, Dassault Falcon, Embraer.
-Raytheon is toast, their last three programs were FUBAR, and now the worthwhile wreckage is owned by Textron.
-Bombardier is toast, the Lear 85 is (now was) a $1.5 billion dollar smoking hole, the C-series airliner is semi-FUBAR, and 40% of the company is now owned by the Government of Quebec to keep the company afloat.
-Eclipse Jet? ROTFLMAO Look up “Cl##sterF##k” in the dictionary, and a picture of an Eclipse 500 will stare back at you
-Honda took ten-plus years to develop the HondaJet, by which time the airplane has become irrelevant to everyone except the “Honda kool aid drinkers”.
Don’t forget Mitsubishi! My old company signed an order for the “MJ”, and while I haven’t kept up on it I don’t think it’s even left the drawing board.
XGSF I presume? Interesting to see how much similarity between how your field service/new product introduction works and how mine does. Also interesting take on Honda, I’ve been curious how that was going for them.
What about the Sukhoi “SuperJet”?
dandroidz
Lol, Raytheon is far from toast my friend. They have a missile defense monopoly, trust me I see their contracts everyday. The patriot missile system is a multi billion $$ gem that all NATO countries keep ordering. Their radar systems get juicy sustainment money to constantly upgrade S/W and H/W.
Raytheon are experts in buying their competitors and disappearing their superior tech in favor of derptarded solutions that cost Uncle Sam (actually you, the taxpayer) beaucoup bucks.
Another problem with the “rather fight them over there than over here” plan.
You spend enormous amounts of money, and wear and tear on the equipment and personnel, getting from here to “over there”.
A corresponding saying was “I’ll fight them now, so my son doesn’t have to”.
Which might have been okay, if we had limited our plan to bringing back OBL’s head on the end of a stick.
Instead, the neo-cons were given a green light for nation-building/regime change. And now, we can’t tell they players without a program (updated weekly)
By doing so, you have guaranteed that your son will have to.
The Secretary of State doesn’t generally get involved with planning the DoD’s budget. There was an article a couple of weeks ago estimating that this plan would cost 90 billion dollars annually.
http://www.nytimes.com/2016/09/08/us/politics/donald-trump-speech.html?_r=0
We win and they lose. What do you think of that?
You must work for a defense contractor.
pay your inflation taxes! 2% / year is all they ask.
I looked into some dental work and these folks are just grossly overpriced.
No wonder a lot of folks are toothless.
I looked into some dental work and these folks are just grossly overpriced.
There are chains like Comfort Dental that are about half the price. If you have insurance you will find that it covers about 90% of the cost of a crown vs. say 40% at Dr. Pricey’s Luxury Clinic.
The chains run a tight ship. No flat panels on the ceiling so you can watch TV while they work on you and no fancy waiting rooms with giant fish tanks and espresso machines. They are very low frills (the way the dentist’s office was say 30+ years ago), but if you find a dentist there that you like (and who will stay around) you can save quite a bit.
So far I have been seeing the same dentist at my local Comfort Dental and have been satisfied with his work. YMMV, of course.
Yup. And their evening appointments are a super time saver.
I ended up doing that in Colorado, too. No idea if I have a similar option in California that would work out as well.
Every dentist I’ve been too is usually no frills , and the one who I saw for 14 yrs was constantly upgrading equipment to the latest techniques and such. They also accepted most major insurance companies…
Steve Martin, sadistic dentist.
https://www.youtube.com/watch?v=bOtMizMQ6oM
Don’t a lot of people here on the west coast go to Los Algodones in Mexico? Don’t know anybody who’s done it, or done it myself; just looked this up, says can be 70% less.
Dental Departures
Dentists of Algodones
George H.W. Bush is a loooooooser. Remember he raised taxes to 31%. And he got his fighter plane shot down and had to be rescued. Just like John McCain.
Don’t forget he papered over the S&L losses with that big tax raise. Bail outs started decades ago.
Yeah but that was TIGHT when he called out that east coast elitist prep school spoiled brat Pete Dupont by his real French name “Pierre.” Hard core OG.
Remember he raised taxes to 31%
Yeah, it wasn’t enough. Clinton came along and raised taxes further and then we got some nice economic growth.
Clinton came along and raised taxes further and then we got a nice dot-com bubble.
At least he served his country, unlike Trump.
Wrong again!
https://www.washingtonpost.com/politics/decades-later-disagreement-over-young-trumps-military-academy-post/2016/01/09/907a67b2-b3e0-11e5-a842-0feb51d1d124_story.html
Attending military school then skipping military service doesn’t count.
“However, the Federal Reserve has some of its own problems. Their holdings of U.S. treasuries, etc. are approximately $6 trillion. This is an increase of over 600% over the past 7 years.”
I wonder if the “King of Debt” would take care of that by just netting out the money owed by one part of the federal government to another, and making it go away?
I saw a rather disturbing article (which I didn’t read) that neither of the main party candidates has fiscal responsibility as a main part of their platform.
What’s a few trillion of additional debt…no problem!
Given demographic realities and Medicare bills soon to pile up over our heads, we are going to drive the debt train straight into the wall at 100 mph without even tapping the brakes.
I sure wish the American public could do math.
One candidate did suggest the debt might be renegotiated. It’s the bond buyers that can’t do math, or they would have known the debt was never going to be repaid 10 years ago. Firing Yellen would be a good start. When was the last time one of these losers got fired?
Perhaps they are counting of selling their Treasuries to the FedRes down the road.
Yeah his name was Ron Paul. He was the only one ever with the balls to call out the banker masters, their inflation game, and our $60+ trillion in liabilities. Most people just say “our debt is crazy”, but to actually cite the real number, or approx, is the real game changer.
Testify. Ron Paul got the ardent support of the intelligent, thinking 5%. The vegetables voted for the Establishment status quo.
Reagan proved that deficits don’t matter.
#MCLM
Money Changers Lives Matter *raise fist
Forgive me, but I constantly contrast the real estate market with the business jet market.
Prior to 2008, the were both propelled by favorable treatment by the government money printers, banksters and policy deciders.
Post 2008, you can compare the businesses to see what happens when one corner of the economy is deemed “too big to fail”, and another is thrown under the bus.
Use business aviation (and a bunch of other businesses) as a guide to what real estate might look like if (or when) it is no longer deemed “too big to fail”
Among other things, the “bubble” of 2000-2008 camoflaged the fact that millions of middle class jobs were disappearing, or put on a slow boat going to Mexico and the Far East. One wonders if this was an accident/unintended outcome, or part of the plan.
“Finding a place to sleep at night in San Francisco has been a lifelong chess match for Dexter Green, who said he was born at a bus stop to homeless parents and grew up on the city’s gritty streets.
After decades of drifting from place to place, getting bounced by police or avoiding sketchy people on the street, the 36-year-old finally found decent enough digs at one of the city’s most entrenched homeless encampments on the north bank of Islais Creek Channel in eastern San Francisco.
But that all ended Monday when city crews made good on a promise to dismantle the sprawling urban tent city, where mountains of trash and human waste had accumulated along the promenade near Cesar Chavez Street, just south of the Dogpatch neighborhood.
“I guess I’ll have to go the same place I always go — nowhere,” Green said Monday morning as police, city homeless-outreach workers, and crews from the city Department of Public Works put the kibosh on the growing encampment.”
http://www.sfgate.com/bayarea/article/SF-homeless-uprooted-from-sprawling-creekside-9191417.php
Dogpatch district was/is a cesspool. I worked in the Shipyard right there temporarily. Funny thing was that’s where major gentrification was occurring and building/renovating multi-million $$ condos/apartments. At the time (2012) I just didn’t understand what the heck everyone was doing to afford such digs in such slums.
Another heroin article?
“People who are concerned about what officials call a “heroin and opioid epidemic” in South Florida are invited to attend a public town hall meeting at Lynn University on Thursday afternoon.
The meeting will feature federal, state and local law enforcement from Broward and Palm Beach counties, as well as experts on addiction and emergency medical treatment. Panel discussions will focus on trends in drug use, law enforcement’s efforts to clamp down on dealers, and how to get help for people struggling with addiction.
The event, hosted by U.S. Attorney Wifredo Ferrer, is part of National Heroin and Opioid Awareness Week. Authorities say there has been a rise in overdose deaths and abuse of heroin, fentanyl and other opioid drugs in recent months.”
http://www.sun-sentinel.com/local/broward/fl-heroin-opioid-town-hall-brief-20160920-story.html#nt=oft12aH-1gp5
If I lived in south Floriduh I’d be on opioids too.
I had always wondered what the saying, “Charity begins at home,” meant. Now I finally get it.
The New York Post
Trump spent charity’s money on his legal bills: report
By Marisa Schultz
Published: Sept 20, 2016 4:35 p.m. ET
Donald Trump spent $258,000 from his charity to settle business fines and lawsuits, according to a report Tuesday.
Not only did the GOP nominee fail to donate to his own charity since 2009, he used other people’s charitable donations to solve legal troubles at his for-profit businesses, the Washington Post reported.
…
Through skillful and persistent deception, a master propagandist is able to transform perceived weaknesses into strength.
…
Mrs. Clinton’s Achilles heel is well known: A majority of Americans neither like nor trust her. If Mr. Trump is Teflon, Mrs. Clinton must be Velcro: Every transgression, real or perceived, from her decades-long career in politics stubbornly sticks to her.
When it comes to Mr. Trump, though, his enduring popularity is a mystery.
Mr. Trump was among the first to note his ability to defy the laws of political gravity. “I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn’t lose voters,” he said in January.
What’s remarkable now is how, after months of withering scrutiny — including accusations of graft, malfeasance and racism — he remains apparently immune to the effects of negative news.
…
‘his enduring popularity is a mystery’
No it isn’t. People want change. And not the usual promises of change from insiders. It isn’t about Trump, that’s what the press and pundits don’t get. The Democrats could have nominated someone just like him and we’d all be hearing the same thing. But they got the embodiment of the establishment. The system is still stacked in the establishments favor. We’ll see who prevails.
“It isn’t about Trump, that’s what the press and pundits don’t get.”
Lyin’ Ted’s campaign was all about change, but it got Trumped. I subscribe to the theory that some politicians are more talented in politics than others. For example, Bill Clinton, Barack Obama and Donald Trump all have much more political charisma than does Hillary Clinton.
“The Democrats could have nominated someone just like him and we’d all be hearing the same thing.”
Like, say, Bernie Sanders?