Investments Have Created Too Much Inventory
A report from the Wall Street Journal. “America’s luxury-apartment craze is coming to an end. Landlords of upscale properties in cities across the U.S. are bracing for rough conditions in 2017 that will likely force them to slash rents and offer deep concessions, including as many as three months of free rent, to attract tenants. The turnaround comes after a seven-year boom during which apartment rents have risen more than 26%, far outstripping inflation and income growth. The slowdown, said Jay Parsons, vice president for MPF Research, is being driven not by a pullback in demand but rather a flood of new supply. More than 50,000 new units were rented by tenants in the fourth quarter, six times the number in the year-earlier period. But that demand was overwhelmed by the 88,000 new units that were completed in the quarter, the most since the mid-1980s, according to MPF.”
“Nationally, more than 378,000 new apartments are expected to be completed in 2017, almost 35% more than the 20-year average, according to real estate tracker Axiometrics Inc. Most of the new construction in recent years has been on the high-end. Of 189,100 multifamily rental units completed between the fourth quarter of 2015 and the third quarter of 2016 in 54 U.S. metropolitan areas, 84% were in the luxury category, according to CoStar Group Inc., a real-estate research firm. For apartment units currently under construction, renters would need to make at least $75,000 a year to afford 88% of those units.”
“Benjamin Gable, a 31-year-old advertising copywriter, recently scored a $200-a-month discount on 1.5-bedroom apartment in Brooklyn’s trendy Greenpoint neighborhood. The apartment was originally listed for $2,700 and had sat on the market for six weeks, according to Rich Cassell, Mr. Gable’s real-estate agent. The landlord had already dropped the price to $2,500 and Mr. Cassell negotiated it down again to $2,300. ‘There’s just so much that has hit the market, it is oversaturated with high-end luxury,’ Mr. Cassell said.”
The Real Deal on Florida. “Miami’s real estate market experienced the first wave of a slowdown in condo sales at the start of 2016, with some experts warning it could lead to a recession by the end of the year. Twelve months later, South Florida real estate didn’t implode, but the industry is beginning to feel the pinch of a bear market. In downtown Miami, a saturation of projects marketed to buyers looking for units as investments has created too much inventory, said Dan Kodsi, developer of Paramount Miami Worldcenter and Paramount Bay.”
“Ezra Katz, founder and CEO of Aztec Group, said he foresees construction financing slowing down dramatically next year. ‘Underwriting standards are changing and lenders are becoming more conservative,’ he said. ‘Lenders have a lot of loans on their books. I think projects that are contemplated as new construction and have not been financed will find it very challenging, particularly the Johnnies-come-lately or new kids in town.’”
From The Thrillist. “As soon as he walked through the door, Matt Semmelhack knew it was over. He’d been away from his San Francisco restaurant AQ for less than a week, but when he got back, it just felt different. It went beyond the usual concerns of the modern restaurateur. ‘I wasn’t worried the lights were properly dim, or the regulars were in the right booths,’ he says. Instead, Semmelhack was just looking at his staff — and all he could see was the money each one of them was costing him, flashing in front of him like a video-game score. ‘I knew right then,’ he says, ‘we had to shut it all down.’”
“Semmelhack is not the only restaurateur looking to duck and cover. The American restaurant business is a bubble, and that bubble is bursting. I’ve arrived at this conclusion after spending a year traveling around the country and talking to chefs, restaurant owners, and other industry folk for this series.”
“In the restaurant world, rent always sucks. In Miami, Michelle Bernstein’s Cena by Michy helped rebirth the MiMo historic district but was forced to close this year, after the landlord attempted to triple the rent. And even Danny Meyer had to close and move Union Square Cafe in New York, which, since 1985, had served as one of America’s culinary landmarks, when he couldn’t rationalize paying the huge rent hike the landlord proposed.”
“Thanks to its dubious location, AQ didn’t really have a rent issue. And in 2013, it actually increased its revenue, pulling in $3.1 million. But despite making $200K more than it had the previous year, its net profit was $50K lower, as costs continued to creep up and up. What started as $250K profit and an 8.5% margin in 2012 was down to $40K and 1.5% by 2015. Because it had to pay off $42K in Small Business Association loans each year, this meant negative net cash flow for 2015.”
“Then came 2016. In 2016, AQ’s projected revenue was $1.6 million, down a million dollars from the year before. They went from doing 240 covers (dinners served) per night at their peak to around 100 this past year. Naturally, there were a lot of factors at play. Maybe it’s because there were 3,600 restaurants in SF when it opened, and now the SF Environmental Health Department puts that number at 7,600. Maybe the physical and mental toll of running an aspirational sit-down restaurant for five years was just too much.”
“Whatever it was, with losses of around $250K and a 40% drop in revenue, AQ will serve its last meal sometime in January, 2017.”
‘with losses of around $250K and a 40% drop in revenue, AQ will serve its last meal sometime in January, 2017′
I usually don’t go into this sort of thing but it shows a few interesting things. Businesses are going under all over because of rents. To me, the ultimate cause is related to QE. You can create more claims on wealth, but it doesn’t create wealth. This places food was good, lots of customers, but they didn’t have enough wealth to support it. Meanwhile the number of competitors skyrockets (dry-cleaner effect?).
The central banks never face any heat for this sort of disruption.
Soon to become commonplace in US vernacular: Universal Basic Income.
People are broke as a joke.
people are to broke to shop at walmart. All these dollar stores are opening up.
If you want a new car or house you have to go beg the powers that be for a loan.
The higher prices go the higher probability you will have to go fill out a sh@tload of paperwork to get some credit.
People are also at William Sonoma buying $42 olive oil and $29 Moscow Mule copper mugs.
be a winner.
With borrowed money at a junk store.
/fail
/sour grapes
debt donkeys go to WalMart
And that’s where you’ll go until you swear off the debt.
“at walmart. All these dollar stores”
Perhaps the success of the dollar store is more that it isn’t 20 miles away.
Rose Bowl tickets are over $300 each and very hard to get. Broke?
lots of winners out there
Cherry pick much? By your logic I only need to find a handful of billionaires buying yachts to conclude that everything is rosy.
The Wealth Report
Flip That Yacht
Rich Buyers Sell Unfinished Boats, Reaping Millions in Profits
By Robert Frank
Updated May 25, 2007 12:01 a.m. ET
Terry Taylor, a Florida car dealer, has purchased five yachts since 2001. But don’t expect to see him anchoring off the coast of Cannes this week. Mr. Taylor is boatless, having sold all of his yachts to other buyers for huge profits.
…
I am sensing mucho satire…
Only billionaires got to football games? Ever see the Raiders crowd?
Lots of people did very well the last 8 yrs, or at least their 401k did!
“the Raiders crowd?”
$60 and dinner off the tailgate is doing “very well”?
That’s all a debtor can afford and that is OK
Raider = not very well. get it?
“Businesses are going under all over because of rents.”
Case in point: La Jolla restaurants I used to frequent have recently shuttered their operations because the rent is too high to cover out of food sale revenues.
I guess they will have to turn the spaces into luxury condos?
The Shutter
After 17 Years in La Jolla, Roppongi Restaurant & Sushi Bar Shutters
It may be resurrected elsewhere.
by Candice Woo
Nov 3, 2015, 4:07pm PST
Several tipsters alerted us to the shutter of Roppongi Restaurant & Sushi Bar, which announced its closure rather suddenly last night. Owned by Sami Ladeki, the eatery, which is part of the Ladeki Restaurant Group (Sammy’s Woodfired Pizza), had been in operation in downtown La Jolla since 1998.
Ladeki tells Eater that he had been contemplating a top-to-bottom refresh of the restaurant but with his lease coming up, made the difficult decision to pull the plug; he acknowledged that business had been dwindling in recent months, and cited the shutter of several other eateries on Prospect Street, from Amici to Bijou, as evidence of the neighborhood’s changing restaurant climate.
…
Yet another victim of the Fed’s eCONomic terrorism.
Was in La Jolla one evening this past October. Was surprised at how quiet Prospect St. was, and there were more than a few empty store fronts. We bought chocolate in a candy shop. We were the only people in the store.
The cove was overrun with Sea Lions. I had never seen so many there, 100+. The stairs down to the cove were closed.
“The cove was overrun with Sea Lions. I had never seen so many there, 100+.”
They poop fish remains and stink up the surrounding high rent district considerably!
Heh, I wuz gonna say. They have the same problem on Cape Cod with all the seals. Cute lil’ buggers until you get downwind of ‘em.
Not great company when you have a large tuna at the end of a fishing line, either.
Was in La Jolla one evening this past October. Was surprised at how quiet Prospect St. was, and there were more than a few empty store fronts.
The crazy house prices often turn towns like that into senior citizen communities.
Exactly. There was a time maybe fifty years ago when a middle class income could enable a household to locate in La Jolla. Those who did so are sitting on massive recent Bubble equity gains. Unless they are exceptionally wealthy, the younger generation is priced out, leaving behind older folks who can’t afford to sell and give up their Proposition 13 tax rate.
California Props 60 and 90 can help “older folks” keep their existing tax rate, assuming they can downsize in the counties that allow it.
And it’s happening everywhere in CA.
In NYC the number of people working in the Food Services and Drinking Places industry soared from about 200,000 in 2008 to more than 300,000 now. Why?
Cheap money with nowhere to go. And cheap labor — all these young people with nowhere to go, willing to work any job while awaiting their real job. America’s young adults were ripped off in the labor market, and in the real estate market, where they are paying half their income to live more than one person per room.
Now they are starting to leave, and the Baby Boomers are retiring. Restaurants are raising prices, but if they do their customers, who are broke, disappear.
This whole “recovery” was a snapback, credit-driven boom in the auto industry, an desperate capital bubble in the new media/IT industry, the oil and gas bubble, and lots of people going to Applebees on the credit card.
In NYC the number of people working in the Food Services and Drinking Places industry soared from about 200,000 in 2008 to more than 300,000 now. Why?
That number has probably been increasing pretty steadily for 40 years or more. Also, 2008 was when the recession began. The population of NYC has also grown in past 8 years.
Why, yes it has, by enough to support a 50% gain in restaurant employment in that time frame. Of course that’s the answer!
‘America’s luxury-apartment craze is coming to an end. Landlords of upscale properties in cities across the U.S. are bracing for rough conditions in 2017 that will likely force them to slash rents and offer deep concessions’
Well you’re 2 years behind me WSJ. Everything turned out to not be so awesome after all. And I said this was going to happen when it was boom to the moon.
Why is it that this country and its media has turned into something resembling a bad North Korean propaganda machine?
You need to read today’s legacy media the way the average Soviet read Pravda in the times of the USSR.
Look for what they don’t say.
When they deny something it is probably true.
When they contradict themselves, believe neither story.
Etc.
I dunno, maybe it’s always been this way.
What changed is the number of idiot voices added to the din. Stupidity has been amplified by the internet.
I think they are going to regret this fake news thing. Right after they started it, the Washington Post completely makes up a story about Russians hacking the Vermont power grid. People are going to be ever more skeptical.
I made a couple phone calls. Rumor is it’s bogus.
The only thing noteworthy about many of these “news” stories is the agenda.
“The turnaround comes after a seven-year boom during which apartment rents have risen more than 26%, far outstripping inflation and income growth. The slowdown, said Jay Parsons, vice president for MPF Research, is being driven not by a pullback in demand but rather a flood of new supply.”
How is that not good news? Isn’t that the way it’s supposed to work?
We’ll soon see if they built the right kind of housing in the right locations. In that case rents will drop, perhaps significantly, but the units will fill.
There are still people living in houses where they have not paid the mortgage for almost 10 years. There are still vacant houses rotting away with no attempts at foreclosure.
The time to foreclose and sell these houses at auction was the past few years. After all, that is money just sitting there, and one has to scratch their head to ponder why some institution would forego the financial win.
My guess is that the houses are actually sitting on the Fed’s balance sheet. What other explanation could there be? I think the Fed bought tons and tons of these MBSs, making the banks whole in the process, then just withheld them from the market to help drive the current bubble pricing.
I’ve thought about driving around and collecting addresses to try to trace ownership through the county recorder websites. This stuff is so crooked you couldn’t dream it up.
I will bet a steak dinner that all the property taxes were paid for those folks who haven’t paid a mortgage in 10 years…
Why is that?
People respond to ther rule of law.
When enforced.
When ignored it fertilizes corruption.
They said it straight out. Foam the runway for the banks. HARP/HAMP was never about “saving” FB’s.
Yep. But HAMP and HARP were both set to expire on Dec 31, 2016.
Will anything change with the non-foreclosed 10yr no-pays now that that is the case?
My guess is no—the moldering inventory will continue to rot until it meets the wrecking ball.
Another gawd bless DJT moment.
The death of HAMP and HARP.
I’m pretty sure they were done with it already, and wouldn’t have extended it regardless; in other words, nothing to do with DJT.
All government programs, past and present, are like vampires.
They can rise from the dead anytime.
DJT is the stake through the heart.
Get a room…
“I will bet a steak dinner that all the property taxes were paid for those folks who haven’t paid a mortgage in 10 years…”
School teachers count on property taxes for their salaries.
Teachers can retire here at age 55 w 75% pay
Can you?
Why don’t you quell your envy by becoming a teacher?
It sounds like envy. That’s what the rich say is behind efforts to raise their taxes.
envy my ass.
go get some more stucco.
then get bent.
you & your ivory tower grifters.
(but but how DARE I criticize?
after all, it’s “for the children!”)
He has a fair point, though: if it’s such a sweet gig with such amazing retirement benefits, why aren’t people flocking to this profession?
>>My guess is that the houses are actually sitting on the Fed’s balance sheet. What other explanation could there be? I think the Fed bought tons and tons of these MBSs, making the banks whole in the process, then just withheld them from the market to help drive the current bubble pricing.
That’s what I have been thinking, too. But when these mortgages eventually start maturing, SOMEONE is going to have to start recognizing the losses. I’m sure the Fed is not going to be happy to do so. Banks neither. How to foist it upon the taxpayer this time?
Hope and change.
And another obama mess left for DJT
Foaming the runway?
4.7% unemployment and DOW 20k handed to DT.
now we crash….
“4.7% unemployment”
Thanks
I needed a good laugh
“4.7% unemployment”
Drinking so early in the day?
Plenty of jobs in CA. Just look at Indeed. Sorry, coal mining and oil is down. But lower prices are great!
Since when does Obama control the Fed?
Since he appointed everyone on it?
I guess it gets down to a question of whether the Fed’s vaunted independence is a ruse. At any rate, if Trump has other ideas about how the Fed should operate, he will have plenty of opportunity to appoint board members who reflect his views.
Dec 22, 2016 @ 09:11 PM
The Little Black Book of Billionaire Secrets
Trump Could Get Seven Appointments To The Fed
John Mauldin, Contributor
The current Federal Open Market Committee (FOMC) may have some new voters by March. There are two vacant seats Trump can fill as soon as he takes office and gets the Senate to confirm them.
However, there could be four or five more in the next two years.
…
I was always waiting for the fed to somehow sell those houses to the Chinese instead of them dumping their billions in Vancouver.
sell them to hedge funds or commercial RE companies then the Chinese buys the hedge funds. or the public companies its only real estate not some hi tech security company
https://finance.yahoo.com/quote/AMH
How to foist it upon the taxpayer this time?
You have missed a critical point: the Fed’s financial roll up into the Treasury’s financials. In other words, all of the gains at the Fed (before they pay dividends to the banks, and compensate themselves whatever they want) already flow to the Treasury/taxpayers.
The corollary is that any losses that the Fed recognizes in the future from their past “rescue”/market-manipulation actions are ALREADY foisted upon the taxpayers—it’s just that no one knows it yet.
They don’t have to take any actions; it’s already baked in the cake.
I think you mean AFTER not BEFORE but yeah, the thought crossed my mind that, for example, that FRB might be increasing interest rates to increase their profits on USG debt and thereby be able to offset some losses from the MBS holdings.
I also do not know whether FRB is allowed to roll over losses to another year, and thereby avoid or postpone paying profits to UST.
Fed = toxic mortgage asset burial grounds
They had to buy 4 trillion dollars worth of bonds to start to clean up that last bubble.
There is only about 17 trillion in cash in circulation.
There is a huge incentive to keep prices high so that doesnt happen again.
Some of the P/E ratios on stocks are just stupid.
I cant believe it has lasted this long. It seems it wont go down until retail is suckered in at the top .
It is very hard to time this stuff.
You don’t “time” anything. That’s for suckers. You buy on price. If it takes 10 months or 10 years, you wait for your price. That goes for stocks, houses and anything else financial.
dont u think there is a pretty good correlation between crashes and a good price?
There isnt much value out there now thats for sure. suckers markets.
You have to admit that it is taking an awfully long time for the residential real estate mania to subside. Although there definitely are some promising recent developments!
Vancouver’s Housing Market Has Seen 42% Of Its Money Vanish
The Huffington Post Canada | By Daniel Tencer
Posted: 11/15/2016 1:29 pm
EST Updated: 11/15/2016 7:53 pm EST
Six months ago, Toronto and Vancouver were Canada’s twin hot housing markets.
Now, they couldn’t look more different.
As Toronto and surrounding regions hit new heights, Greater Vancouver’s market is crumbling. After peaking earlier this year, the amount of money flowing through it shrank by 42.1 per cent this October from the same month last year.
…
—————————————————————————
Industry News
Residential Real Estate
Reversing annual trends, San Francisco rents down nearly 5 percent citywide
Dec 21, 2016, 12:51pm PST
Updated Dec 21, 2016, 4:08pm PST
Kevin Truong
San Francisco Business Times
San Francisco’s red hot rental market has received a splash of cold water in the past year, with median 1-bedroom rents falling by 4.9 percent, according to data from real estate site Zumper.
That reverses the pattern from 2015, which saw rents rise 4.5 percent and 2014, where rents surged up an eye-popping 13.5 percent. Check at our map below for which neighborhoods are hottest.
However even with the decline this year, the city sits firmly in the top spot when it comes to the most expensive rental market in the country, with its $3,300 median 1-bedroom rents beating out New York City by $300.
Falling rents were seen in previous high-flying neighborhoods in the city’s Northeast like Nob Hill, which was down 6 percent. The biggest drop in rental prices was seen in the NoPa neighborhood, which is down 9 percent since last year and Noe Valley which dropped 8 percent. Other neighborhoods seeing major median rent price declines include Ashbury Heights, Civic Center and Nob Hill.
“Overall, the priciest neighborhoods seem to have hit a price ceiling that renters are willing to pay,” the Zumper report said.
…
—————————————————————————
Markets Heard on the Street
Chinese House Speculators Curb Their Enthusiasm
By Nathaniel Taplin
Dec. 19, 2016 1:11 a.m. ET
With investors’ ears still ringing from the resounding “pop” sound emanating from China’s bond market, data released Monday contained another piece of unwelcome news: The housing market is clearly now at or quite near its peak.
…
—————————————————————————
Runaway Australian Property Market Shows First Signs of Cooling
by Emily Cadman and Kimberley Painter
December 20, 2016, 10:00 AM PST
Offshore hedge fund managers and priced-out young Australians have long argued the pace of house price growth in the nation’s biggest cities is unsustainable. They may finally be right.
After two years of double-digit growth, the Sydney house price index gained just 3.2 percent in the year to September, the weakest increase since 2012, according to the latest government data. Melbourne’s rise of 6.9 percent was the slowest in more than a year.
The dip comes amid increased warnings from the central bank of a looming oversupply of inner-city apartments, with Morgan Stanley analysts saying there could be a surplus of 100,000 units by 2018. Fitch Ratings this month cut its outlook for the Australian banking sector, citing “key risks” around the housing market, while a measure of consumer confidence in property is the lowest in a year.
…
—————————————————————————
Eurostat: Greece Housing Market Prices Decline April-June Quarter
By Kerry Kolasa-Sikiaridi -
Oct 13, 2016
On Wednesday Eurostat presented data gathered by the Bank of Greece (BoG) showing that the Greek housing market has experienced a decline in prices for the April-June quarter.
According to the data, Greece came in second from the bottom in performance among all the EU member states showing a 2.9 percent annual decline in prices.
However, Greece was not alone in experiencing a decline in prices in the housing market. Two other countries, Cyprus and Italy both saw declines as well with 9 percent and 1.4 percent, respectively.
…
—————————————————————————
Real Time Economics Housing
Why It Isn’t Yet Time to Worry as Global House Prices Rise
The dynamics are somewhat different this time around, IMF economists say
Construction workers build a new apartment complex in Beijing. Rapid construction and widespread overinvestment in Chinese property created what many economists say is a dangerous real-estate bubble.
Photo: Kevin Frayer/Getty Images
By Ian Talley
Dec 30, 2016 10:40 am ET
Global house prices have reached precrisis levels, but that shouldn’t be cause for automatic alarm.
“This is a time for vigilance, but not panic,” says Prakash Loungani, a top economist in the International Monetary Fund’s research department.
In contrast to the 2008-09 financial crisis, the dynamics causing resurgent house prices this time around aren’t signaling another bout of global turmoil, Mr. Loungani and colleague Hites Ahir argue in a new IMF blog post.
…
It’s different this time around.
“a dangerous real-estate bubble”
By that they mean a bubble in dangerous rela-estate.
(”Rapid construction and…)
The IMF has a blog?
‘It is very hard to time this stuff.’
More energy today. I like it.
Any guess what the mbs portion of fed pool is worth
$1.75 trillion
Seems like alot!
Looking at the recent dip in this chart makes me wonder if the Echo Bubble peak is past.
Conservatively roughing out an estimated average $300K per federally-guaranteed U.S. home mortgage, the $1.75 trillion in Fed-owned MBS would be sufficient to finance the purchase of 5,833,333 homes, which doesn’t seem like a particularly large fraction of all U.S. owner-occupied homes.
“I think the Fed bought tons and tons of these MBSs, making the banks whole in the process, then just withheld them from the market to help drive the current bubble pricing.”
If Uncle Sam offers a specially favored class of Americans federally-guaranteed subprime loans to buy houses they can’t afford, which are securitized by the GSEs, then sold to the Fed, who loses if many of the loans eventually go into default? Remember that the Fed gets to create money out of thin air, so its operations are not a drain on the U.S. taxpayer, right?
Also, I don’t see any reason the Fed needs to ever offload toxic MBS or recognize the losses, as a private firm would. If I am missing something, please elaborate.
that the Fed gets to create money out of thin air, so its operations are not a drain on the U.S. taxpayer, right?
When they print money, they’re increasing the representations of wealth (”claims” which is a pretty good term). They distribute those representations/claims to their favored population/sectors, thus facilitating the redistribution of wealth.
Inflation is often considered a stealth, unvoted-upon tax. This redistributive mechanism is even more subtle than inflation, but IMO just as real.
Giving people mortgages which they can barely afford (the GSEs buy 3%/de facto 0% down mortgages) is not an effective wealth building strategy, but again, follow the money. That policy leaves a lot of carnage in its wake.
“This redistributive mechanism is even more subtle than inflation, but IMO just as real.”
One can view the action of the printing press as a dilution of the currency, as one cannot create real wealth out of thin air.
so its operations are not a drain on the U.S. taxpayer, right?
False. The Fed’s profit-loss statement flows through to the Treasury’s, so the taxpayers are directly eating any losses.
What could go wrong buying a condo here?
A property isn’t just a place to live. It’s a nice, big, fat juicy asset that can’t be moved…
—–
Illinois ends 2016 with an $11 billion in unpaid bills
Illinois Policy | December 26, 2016 | Brendan Bakala
Illinois state government has left the people of the Prairie State quite the stocking stuffer this holiday season: an $11 billion bill backlog that is expected to hit $14 billion by summer 2017. However, with money from a June stopgap funding agreement set to run out by the new year, nonprofit service providers and students receiving state grants may view it more as a lump of coal.
Funding for service providers hasn’t been a priority for the General Assembly for quite some time. Service providers wait, on average, nearly a year to be paid. Illinois politicians have been delaying payment to service providers since 2002, valuing increases in government-worker salaries and pensions more than compensating those who aid the most vulnerable Illinoisans. Spending on state-employee pension benefits increased 586 percent from 2000 to 2015, yet funding for human services only increased by10 percent during that time.
…
The state’s total pension debt has swelled to $130 billion, up 17 percent since 2015.
…
Illinois’ tax revenues have increased 70% more than inflation over last 3 decades
Tax on Million Dollar Homes
This free article from Economy.com suggests a wealth tax on Million dollars homes might be a food way to raise revenue. You can move them to a tax haven!
If the link does not work go to Economy.com and it is right there.
https://www.economy.com/dismal/analysis/datapoints/292072/A-Tax-on-Luxury-Homes/
The votes of the free sh*t army don’t come cheap.
And as for only ultra rich people owning these houses…
You should see how little $1M buys you in SF, NYC or close to DC….
—–
To consider just one possible use, revenues of this size would pay for half of a significant proposed increase in the Earned Income Tax Credit that was recently analyzed by the Center on Budget and Policy Priorities.
“Instead, Semmelhack was just looking at his staff — and all he could see was the money each one of them was costing him, flashing in front of him like a video-game score. ‘I knew right then,’ he says, ‘we had to shut it all down.’””
What a description. Like a video game score. Many people are losing their jobs and will continue to lose their jobs in 2017 and beyond.
Hard to feel sorry for him.
He lives in Marxist SF.
Massive regulations and taxes.
Who did he think was going to follow those rules and pay those taxes? Jose and his taco stand?
And all those snowflakes are going to loose pretty decent jobs.
But they will keep voting in progressives never making the connection.
Yeah, and they won’t be able to find new jobs (if they exist at all) unless they spend a lot of money on facial reconstruction surgery for their mangled ears and noses.
mangled ears and noses… and don’t forget skin.
I went to a Renaissance Faire on one of those hot fall days, and it was wall-to-wall ink and gauges, which the rest of us have to look at this for DECADES.
There pack-muling for extra cash to pay the mortgage?
packmuling…. that sent me to urbandictionary. Good gosh people are gross
You went right to the gutter on that one Donk.
“Good gosh people are gross”
You should date an ER nurse sometime. Great stories.
What’s the best way to buy physical gold (avoiding as much of the dealer ripoff as possible)? Thanks and Happy New Year.
Do your homework.
Research.
Talk to people.
Find a local dealer you trust.
Ampex seems to have a good following.
Start small.
Troll ebay for plain gold jewelry sold by a desperate seller in the US. Pretty easy to get your money back if someone pulls a fastie.
I’ve done a lot of that. LOL
txchick, can you explain your thinking on physical? I assume it must look like a buy to you at current levels; but if you thought it was a short-term buy, paper would be far simpler and liquid with lower transaction costs. Are you looking at physical for SHTF potential, long-term hold, or other?
I watched this
https://www.youtube.com/watch?v=h8GGm0WOGms
I don’t think most people could tell the difference between real gold and fake sh@t like painted lead.
There are a lot of shysters selling bogus gold.
U need to learn the troy oz system.
Get yourself a scale. Grains and pennyweights should come quick.
If a magnet sticks to it run as fast as u can !
When I was a kid a made some awesome nuggets with mercury and nitric acid.
Mercury is silver colored dude.
Even more amusing, the guy thinks he’s gonna give txchick advice. Jeebus.
most of you numnuts have never had any gold in your hands.you full of a lot of monday morning qb bs.
“most of you numnuts have never had any gold in your hands.you full of a lot of monday morning qb bs”
*hands mirror*
I watched this
One of the very first things that he said made me think that he’s a blithering idiot:
“Who is going to bail out the central banks?”
Are you freaking kidding me??!? These are the only folks in existence who have no budget constraint and no liquidity constraint. And any losses that they suffer already flow through to the taxpayers _without_ needing any bailout!
How could they possibly need a bailout?
Ok, I’ll try to reserve judgement while I watch the rest, primarily because I have a lot of respect for you, txchick…
Some serious apologism for LTCM from 7:30 to 8:30—touting their dividend, and long-term record (for anyone who bought in early), while totally glossing over the fact that anyone who bought in too late took a nearly 100% loss, making it sound like the fund managers bore most of the loss… I call BS.
He sounds pretty sane and sensible about the risks involved in derivatives from 13:30 onward…
His LTCM failure description and the resultant unbalanced hedges at 20:00+ is pretty interesting…
His description at 32:00+ of his 5yrs after the LTCM shutdown sounds like an academic doing a round of therapy to cope wiht failure… Study more! Try to make sense of it!!
34:00 re: 286x normal volume of American Airlines puts in the last couple of days before 9/11: Holy Moly!!!!
how about coin shows? http://www.coinshows.com/texas.html
usually cash only unless tx has laws about collecting taxes or providing ID at events…..
I bought a bunch of physical back in 2001 from these guys, and had a good experience. It came in the mail via insured US Postal Service. I had to pick it up in person at the local post office. They list the closing gold price alongside their prices for coins and bars here:
http://www.usagold.com/gold/price.html
I’m a buyer under $500, not a dollar sooner.
If you buy physical gold and at some point in the future decide to sell some of it, that is also when you should be very careful. The first time I sold some of my gold, it was at a reputable jewelry/pawn type of store, and they gave me a good price right off the bat, but that place was far away from me and a hassle to get to. The second time I sold some physical gold was trying one of those “We Buy Gold” places that sprung up in my town. It was pretty shady. It was a completely empty store except for a desk and a lady and a video camera where “the boss” was watching from some remote location. Initially, they tried to give me a terrible price, but I haggled them down. The really shady part was when they tried to pay me (it was well in excess of $10,000), and they wanted to print me multiple checks, each for $9,999 instead of one single check for the whole amount. That set off red flags to me because I knew about the $10K check limit for IRS reporting and law enforcement agencies. And I knew that they look for people trying to subvert it by getting multiple checks just under the limit. Bank people aren’t stupid either when you go to deposit a bunch of checks for $9999. So I forced them to give me a single check and they gave me a 1099 form. All legal and proper.
Sorry, I meant, “haggled them up”. Heh.
Why didn’t you just get cash…?
Pretty trusting selling your gold to what you describe as a shady establishment and walking out with a random check…
I didn’t ask for cash, it would have been a lot. The place wasn’t “shady” in the sense of being in a bad neighborhood with gangs and violence — it was located in a very nice mall in a well-to-do town. The fact it was empty inside and when they tried to pull that multiple-check thing was why I called it shady. But yes — I was worried about their check clearing. I went straight to the bank to deposit it, and fortunately it cleared. But, if I ever do that again, I probably would not go to one of those places. I guess maybe selling on ebay or something would be better, but I didn’t try that back then.
As an aside, you know the TV show Pawn Stars. Something I never understood — whenever they are buying big-ticket items, they proudly try to win over the seller by saying, for example, “I offer you $50,000, cash money! $100 bills!”.
It’s like… really? You want to walk out of there with a backpack full of $100 bills? First, the $100 bill is the most counterfeited bill we have, and these days, if you walked into your local bank branch and pulled out $50,000 in $100 bills to deposit, you’d probably get arrested. Hehe.
Of course, you could just pay cash for a house, no questions asked!
It’s all part of their (Fed, etc.) planned attack on cash. Make it hard for people to get, deposit, etc.
There is definitely the perception out there, that if you are in possession of a large amount of cash, you must be doing something bad / illegal.
A few months ago I sold my old car at a pawn shop for about $7K, in $100 bills. When I deposited the cash at the bank, even that smallish-amount of cash triggered red flags. The manager had to come over and check it all out. Then they had to do a little conversation among themselves off to the side where I could not hear them. I’m a clean-cut looking guy, I don’t think I look like a criminal or anything, but they were definitely suspicious.
I got the same treatment when I took about $8K out of my account some years back, thinking I was going to buy a car… I should have told them that it was for hookers and blow—free country, and my own money, right??!? WTF business is it of theirs??
There are many reputable coin dealers out there. They all want their cut. I believe the best deal you can get on a Krug is 20 dollars above spot.
for some reason I think the stock market bubble will implode under trump.
Is there any chance the Fed will try to repay him for slamming them on the campaign trail? For instance, they could shock markets by replacing their recent head fake policy on rate hikes by actual follow-through on forward guidance.
What led Fed to bump up rate-hike forecast?
Paul Davidson , USA
TODAY 6:03 a.m. EST January 2, 2017
The Federal Reserve tossed some cold water on the recent market rally a few weeks ago when it not only raised interest rates as expected but forecast three rate hikes in 2017 instead of the two moves anticipated. Fed meeting minutes out this week are likely to shine more light on what Fed policymakers were thinking.
…
seems like when the market goes down they start back peddling.
They talked all year about a rate hike and finally delivered a 1/4 point on the feds fund rate, BFD.
Isnt there a sh@tload of excess reserves still out there?
Feds fund rate is rate between banks to meet reserve requirements. They already have more than they want.
I’m hoping for many accidental benefits from the Chauncey Gardener presidency.
“Chauncey Gardener presidency.”
Lolly-lol, you learned exactly zip from his campaign. But that’s fine. He loves being mis-underestimated. Speaking of which, we already had Chauncey Gardener. GWB.
Hey, pop quiz. When did Trump decide to go for it? And no, it wasn’t when he had that interview with Oprah that everyone posted ad nauseum throughout his run.
Trump likes to watch.
When did Trump decide to go for it?
Who cares? It’s gonna be Party in the USA for the 1% and BOHICA for everyone else.
well, rates are going up and debts are high.
China will get it all started.
And you think Trump’s all worried about it? Not at all. He’s probably got a new system for the US all set and ready to go. He would LOVE to be the guy to take out the FED and implement a new monetary system.
b-b-but Goldman Sachs cabinet!, you say.
They’re just for show. Except maybe for Bannon.
“He would LOVE to be the guy to take out the FED and implement a new monetary system.”
I’m going to maintain cautious optimism to match your exuberance on this.
palmetto
I went back and reread something from earlier in the week and there was a question from you that I missed. Firstly, you don’t have to worry about “poor taste” when you are talking to me.
Second, the answer to your question is yes.
I will let you know how it shakes out when it shakes out.
Happy New Year to you and yours
jeff
“Firstly, you don’t have to worry about “poor taste” when you are talking to me.”
My heart to you and yours.
“Second, the answer to your question is yes.”
Awesome. If I recall correctly, it’s in the R’side/Old G’wich sweet spot, too. Good for you. That’s where the action is right now.
It will, but it will also be entirely unrelated to him.
What about his superpowers?
Here is a puzzler which I hope some on this board may be able to help me understand.
The U.S. has laws prohibiting housing discrimination:
And yet U.S. federal housing policy explicitly embodies discrimination in favor of minorities.
Something ain’t right here.
Trying to explain the plain meaning of the words in the US Constitution to Democrats and Progressives is an exercise in frustration…
The right to bear arms?
Equality under the law?
The 10th amendment?
Etc…
The free shit army votes don’t come cheap.
Correct me if I am wrong, but isn’t George W. Bush a Republican?
“Supplemental Nutrition Assistance Program (SNAP)”
https://www.fns.usda.gov/pd/supplemental-nutrition-assistance-program-snap
This would be another one. Fewer than half of the population receives SNAP, so only a minority benefit.
This sort of thing bothers you?
HUD also awarded:
◦ More than $604 million in housing assistance for the nation’s low-income elderly.
◦ $150 million in housing assistance for persons with disabilities.
You could say that much of what the government does benefits minorities. Education is directed at children, who are less than half of the population.
“You could say that much of what the government does benefits minorities.”
I guess there is nothing wrong with that, provided the benefits are not provided on the basis of illegal discrimination.
The young are called minors for a reason.
For HA, enjoy some retail therapy: http://slo.craigslist.org/grd/5924842495.html
That Alex Jones and his conspiracy theories.
CIA HEAD: WE WILL SPY ON AMERICANS THROUGH ELECTRICAL APPLIANCES
Steve Watson
Infowars.com
March 16, 2012
Speaking at a summit for In-Q-Tel, the CIA’s technology investment operation, Petraeus made the comments when discussing new technologies which aim to add processors and web connections to previously ‘dumb’ home appliances such as fridges, ovens and lighting systems.
“Items of interest will be located, identified, monitored, and remotely controlled through technologies such as radio-frequency identification, sensor networks, tiny embedded servers, and energy harvesters — all connected to the next-generation internet using abundant, low-cost, and high-power computing,” Petraeus said.
http://www.infowars.com/cia-head-we-will-spy-on-americans-through-electrical-appliances/
Fridges and washing machines could be vital witnesses in murder plots
Sarah Knapton, science editor
2 JANUARY 2017 • 9:04AM
High-tech washing machines and fridges will soon be used by detectives gathering evidence from crime scenes, experts have forecast.
The advent of ‘the internet of things’ in which more devices are connected together in a world of ‘smart working’ could in future provide important clues for the police.
Detectives are currently being trained to look for gadgets and white goods which could provide a ‘digital footprint’ of victims or criminals.
http://www.telegraph.co.uk/science/2017/01/02/fridges-washing-machines-could-vital-witnesses-murder-plots/
I saw a Samsung smart fridge the other day. Five grand.
with your huge salary u can afford it.
I’m sure Ben could afford it. But he’s too smart to waste his money on one, which is precisely why he could afford it.
I have a strong desire NOT to have my refrigerator connected to the internet.
What could possibly go wrong?
This is my biggest turnoff with new cars. Unless you buy a bare bones model it will be packed with all sorts of gadgets that are almost guaranteed to break after the warranty has expired, and they won’t be cheap to fix.
Who needs a hot spot in their car? Do they really want someone to be able to hack into it while they’re driving?
from now on, I lease and drive a new car every 3 yr. Like a cell phone bill, just part of the game these days. Super safe, 31 mpg, quiet, great stereo, back up cameras….. all the whistles…
I keep one old car for fun, but drive it less and less…
who wants a 4 yr old BMW out of warranty?
“who wants a 4 yr old BMW out of warranty?”
This reminds me of wall-e.
“WALL∙E spends a normal day at work”
https://www.youtube.com/watch?v=QHH3iSeDBLo
who wants a 4 yr old BMW out of warranty?
True of any German car. They break a lot and are very expensive to fix.
Of course, if you don’t drive an overpriced German car it will last 10+ years with any major problems. And best of all, it will be payment free for the majority of its trouble free life.
But yeah, the only way the typical wage slave can “afford” a luxury car is to lease it.
As for the bells and whistles, most of them are useless fluff.
not everyone is a tightwad. life is good, spend some $$
dont be typical
not everyone is a tightwad.
quite true, and most free spenders live paycheck to paycheck, have no savings and don’t have a pot to piss in.
SBA loans-wonder what the failure rate is?
if you have the right skin tone or u r from out of town u r in.
tumpf better get the default rate below 2% just like the real world
I knew a Hispanic woman who borrowed over $1M to open an independent dollar store. I haven’t seen her in years, but I do know that her store closed. I wonder how much of that loan the taxpayers wound up eating.
The first thing I thought when I visited her store was that there was no way she would be able to compete with the chain stores. She also sold some weird stuff there, like off brand breakfast cereals imported from Egypt.
As for the bells and whistles, most of them are useless fluff.
I wonder how much of that loan the taxpayers wound up eating.
Sorry, misfire—tried to copy/paste, somehow posted…
Meant to say:
I wonder how much of that loan the taxpayers wound up eating.
They’re borrowing public monies, and the taxpayer is on the hoook for the losses—doesn’t it seem like the public should have access to information about who failed and how much they owed? After all, we are the lender…
ooooh-WHEE, Paul Krugman, PUh-LEEZE do the country a favor and strangle on your facial hair. Jeebus.
Swamp Donkeys?
Paul Joseph Watson vs Liberals (Best Moments)
Published on Dec 27, 2016
2:50
https://www.youtube.com/watch?v=FlmrU6NHTbg
3:50
Did the white chick ever figure it out?
Don’t be a swamp donkey or a debt donkey.
I think that he’s the one who fooled a lot of right wingers with story about Trump housing a homeless person in Trump Tower.
Mercury Amalgamation:
http://mine-engineer.com/mining/minproc/MercAmal.htm
thats how its done boys!
The Chinese use tungsten.
If you played around with this, it explains alot.
2016 wasn’t bad for everyone:
http://mashable.com/2016/12/15/chewbacca-mom-candace-payne-tlc-digital-shows/#IHqcoOstMkqt
Mexicans are stamping their little feet over 20% hikes in gas and diesel fuel.
http://wolfstreet.com/2017/01/02/shrinking-oil-giant-pemex-starts-2017-on-wrong-foot/
Gas prices in Mexico are set by the government/Pemex and are fixed. They don’t experience the daily price variations we do and IIRC the price hasn’t changed in years.
The current price there is now about $4 USD a gallon.
Seems to me that the Mexican FedGov needs more revenue (they basically take all of Pemex’s profits), hence the well above market prices. An on top of that, if you drive in Mexico City, your car can’t circulate one day a week from Mon-Fri (and it’s two days when the smog gets really bad)
Oil is equally rigged in the US. It just happens they lose control from time to time and the market takes over.
Agreed. The method of determining oil prices is laughable. After the price is “set” a barrel of oil is traded eight times a day.
“Oil is equally rigged in the US.”
True.
“Perhaps 60% Of Today’s Oil Price Is Pure Speculation”
http://www.engdahl.oilgeopolitics.net/Financial_Tsunami/Oil_Speculation/oil_speculation.htm
Flint elector says Trump will help blacks. This is a deviation from The Narrative.
http://www.eastvillagemagazine.org/2017/01/02/local-presidential-elector-with-deep-flint-roots-says-trump-will-help-blacks/
It’s also a deviation from common sense.
http://www.cnbc.com/2016/11/11/why-hillary-clinton-couldnt-rally-the-black-vote-commentary.html
Paul Krugman belatedly decides he’s against epic corruption, despite turning a blind eye to the systemic corruption, graft, and influence-peddling of the Democrats.
http://www.zerohedge.com/news/2017-01-02/new-year-same-sht-krugman-loses-it-fears-era-epic-corruption-ahead-trumpistan
2 January 2017 • 7:48pm
China launched its first freight train to London on Sunday, according to the China Railway Corporation.
The train will travel from Yiwu West Railway Station in Zhejiang Province, Eastern China to Barking, London, taking 18 days to travel over 7,400 miles.
The route runs through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France, before arriving in London. The UK is the eighth country to be added to the China-Europe service, and London is the 15th city.
The railway is a major strategic development to assist Xi Jinping’s multi-billion dollar ‘One Belt, One Road’ strategy, according to the China-Europe Freight Rail Development Plan released in October.
The strategy was launched in 2013 and is an infrastructure and trade network connecting Asia with Africa and Europe along old Silk Road trading routes.
There are currently 39 routes linking 16 Chinese cities to 12 European cities.
Until June 2016, 1881 services had run from China to Europe and 502 had returned.
The returning journeys transported items such as German meat products, Russian woods and French wines.
The China Railway Corporation said the train to London will strengthen the connection between China and Western Europe and improve China-Britain trade ties.
China’s exports totaled $2.27 trillion in 2015, slowing down from $2.34 trillion in 2014.Its economic growth slipped to 6.9 percent in 2015 from 7.3 percent in 2014, marking the slowest growth in 25 years. The ‘One Belt, One Road’ strategy is part of an effort to boost trade and economic growth.
http://www.telegraph.co.uk/news/2017/01/02/china-launches-freight-train-britain/
The route runs through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France, before arriving in London. The UK is the eighth country to be added to the China-Europe service, and London is the 15th city.
That sure sounds like a lot of points of failure to me, especially Russia, Belarus and Kazahkstan.
Plus I don’t really see how this would be cheaper than using container ships, of which there is a global glut.
Ships probably take longer than 18 days.
I would suppose so. But I would think that most low value stuff doesn’t need to arrive that quickly.
Does it go over or under the English Channel?
Under is the better option.
The ‘big’ picture is the Chinese have always been wary about the U.S. Navy cutting off the sea routes, choking off China’s trade. More pertinent now then ever with Trump coming trade war with China, eh. Land routes circumvent this, as well as providing a means that the United States military cannot interfere with easily. Its a game of chess and strategy here; more to things than easily meets the eye.
“US stocks riding a bull market in corruption” - whoa, never thought I’d see this kind of truthy headline on a corporate financial news site.
http://www.marketwatch.com/story/us-stocks-riding-a-bull-market-in-corruption-2017-01-02?link=MW_latest_news
there is no risk for some people.
North Salt Lake, UT Housing Prices Crater 8% YoY
http://www.zillow.com/north-salt-lake-ut/home-values/
Oh yeah, get ready to work those asses off, coal miners.
“New Cheerleader-In-Chief Can’t Change Coal’s Fall, Rise In Gas, Renewables”
http://www.theenergycollective.com/djwamsted/2395564/new-cheerleader-in-chief-cant-change-coals-fall-rise-in-gas-renewables-2
Go to the home page and they have even more Liberal Lunacy
For China, Climate Change Is No Hoax – It’s a Business and Political Opportunity
January 2, 2017 by DeSmog Leave a Comment
Yes, the Arctic’s Freakishly Warm Winter is Due to Humans’ Climate Influence
December 29, 2016 by DeSmog 3 Comments
2016: A Year in Photos, From Climate Change Devastation to the Power of Protests
December 26, 2016 by DeSmog Leave a Comment
Fears of a ‘massive’ global property price fall amid ‘dangerous’ conditions and market slow-down
By Szu Ping Chan and Isabelle Fraser
2 JANUARY 2017 • 3:23PM
Property prices have climbed to dangerous levels in several advanced economies, raising the risk of massive price falls if markets overheat, according to the Organisation for Economic Co-operation and Development (OECD).
http://www.telegraph.co.uk/business/2017/01/02/fears-massive-global-property-price-crash-amid-dangerous-conditions/
The exodus from California continues. Here is a story from today about a garment business moving to Las Vegas because of the new minimum wage law that went into effect in California.
http://www.latimes.com/opinion/op-ed/la-oe-salem-minimum-wage-20170102-story.html
“We need more stable, blue-collar jobs in places like the San Fernando Valley — the kind I thought I was helping create. California, however, has put up a giant “Go Away” sign. If President-elect Donald Trump is interested in learning more about the hurdles to adding manufacturing jobs in America, looking at the Golden State’s steep pay requirements would be a good place to start.”
…
And California wants to become their own country?
Is it like a video game?
Yes. Donkey Kong.
We need more stable, blue-collar jobs in places like the San Fernando Valley
That would stable, blue-collar jobs that pay less than $10.50/hour.
“NO significant economic reforms have happened since the start of the Great Recession. There has been no significant improvement in corporate earnings, just a lot of expanded debt to buy back shares in order to improve Price-Earning ratios, which still look terrible. The entire market is but a poof of speculative hot air.”
Don’t most fast food places already pay more that $10.50/hr? They do in my little burg, even though our local minimum wage was ~$8/hr
I don’t know about fast food, but one of the things mentioned in the article is that it’s not just the $10.50 that started this Jan 1st. It’s going to keep rising to $15/hr over the next 5-6 yrs. I’d imagine that many business owners are planning for their future cost increases and deciding if they can continue being in California as the cost keeps going up.
It seems like, whenever governments get into the business of setting prices of things, whether it is goods, services, or wages — everything always gets screwed up eventually.
“California passed 900 new laws in 2016. More does not always equal better”
http://www.latimes.com/opinion/editorials/la-ed-new-state-laws-20160102-story.html
More does not always equal better
Thanks, Captain Obvious
Falling housing prices MeltdownMike…. Falling housing prices.
you need to just suck it up and overpay !
“When all the experts and forecasts agree – something else is going to happen.”
2016 wasn’t bad for everyone:
http://finance.yahoo.com/news/mugshot-model-and-his-family-mug-it-up-in-their-luxury-mansion-over-the-holidays-210311547.html