See the report here: http://bit.ly/xm8uUG
Connecting with the Fluid Consumer in 2012, good Critical Mass Slideshare on Barry Ritholtz’s blog
Fluid Consumers:
- Ebb and Flow At Their Leisure
- Seek Their Own Level
- Follow The Path Of Least Resistance
- Erode The Best Marketing Intentions
- Collectively, Are A Force Of Nature
- They Live In The Here And Now
- They Seek Answers
- They Are Plugged In
- …
Check it out here: http://bit.ly/x2QkrR
NY AG Schneiderman and OWS finally convince Obama to go after banksters. Via TBP Blog
Elected attorney general in November 2010, Schneiderman discovered upon taking office that the Obama administration was avidly promoting a proposed settlement among five mega-lenders… In return.. the feds and the state AGs would grant the banks immunity for not just any further robo-signing misdeeds but for all illegal conduct that had led to the 2008 collapse… the banks would be free and clear of any state or federal prosecution for these offenses. Indeed, with no agency of government able to bring legal action, there would be no serious investigation of whether and how the banks broke the law.
“We have to get accountability,” Schneiderman told me this week. “We have to get substantial relief for homeowners and investors. And we have to get the story told clearly and factually, so the history doesn’t get rewritten. If you listen to the presidential debates, you hear the same supply-side and deregulatory nonsense that got us into this crisis. If we don’t uncover the facts and put them out there, it will happen again.”
See the whole article here: The man who shaped Obama’s drive to hold banks accountable
Zero Bound Interest Rates, The Zirp Dimension, Stagflation and #Multifamily
Zero interest rates and apartment building investment.
First my condolences to Bill Gross on the loss of his brother-in-law. Reading his piece in PIMCO’s latest Investment Outlook it is clear that the world’s biggest bond manager is running out of places to generate returns for their investors and by extension this applies to all income investors, especially retired people trying to live on interest income. For those would like to retire soon you may have to delay that decision for “an extended period’ as Edward Harrison over at Credit Writedowns put it in Permanent Zero and Personal Interest Income.
Gross’ points out that the Fed’s zero interest rate policy (ZIRP) which they have just announced to maintain through 2014 and their defacto though opaque continuation of quantitative easing (QE2.5 as he tweeted it) threaten to take us into another dimension where their policies have the opposite effect of their intentions.
“Much like the laws of physics change from the world of Newtonian large objects to the world of quantum Einsteinian dynamics, so too might low interest rates at the zero-bound reorient previously held models that justified the stimulative effects of lower and lower yields on asset prices and the real economy.” – Bill Gross
His bullet points:
- Recent central bank behavior, including that of the U.S. Fed, provides assurances that short and intermediate yields will not change, and therefore bond prices are not likely threatened on the downside.
- Most short to intermediate Treasury yields are dangerously close to the zero-bound which imply limited potential room, if any, for price appreciation.
- We can’t put $100 trillion of credit in a system-wide mattress, but we can move in that direction by delevering and refusing to extend maturities and duration.
For more views on this and Europe too see also Entering the Debt Dimension from Phil’s Picks on the Phil’s Stock World Blog.
What does this mean for Multifamily?
The Zirp Dimension leads to Stagflation where economic growth remains anemic yet prices on essential Continue reading Zero Bound Interest Rates, The Zirp Dimension, Stagflation and #Multifamily
MF Global Customer Funds ‘Vaporized’? Can you trust YOUR brokerage company? Not if you have a margin account.
Jesse’s Café Américain Blog had a post Monday (sorry, just catching up) on MF Global and how the government is not done anything but protect the perps so far. This has left the tax paying citizen/customers dangling in the wind and now facing potential tax bills on money they may never see- how great is that? This is on top of the supposed regulator doing nothing to protect customer accounts while the TBTE banks hide the MF Global cash they hold from everyone. Here’s what got me from the post:
“Remember that the customers were not speculators who lost money on their bets, as the bailed out banks had been, but in many cases were depositors who had cash and valid title to precious metals and treasuries held on account in a firm that was one of the Fed’s primary dealers and a major player at the CME. And the money was taken twice. First by MF Global, and then by the financial institutions that seized the money and then manipulated the courts and the press to hide it and to keep it.
The theft of customer funds was bad enough, but the manner in which the exchange, the regulators, the court, the Congress and the Obama Administration have dealt with the aftermath of this is truly despicable. Throughout the financial crisis the character of the public’s dealings with the financial sector has been dominated by of opacity, obfuscation, misuse of influence, abuse of power, and fear.”
If you can stand to read the whole post at: MF Global: A Despicable State of Affairs
Can your broker’s company, its regulator or the exchanges they trade on be trusted? That is a big question. If you doubt that read up on re-hypothecation and then study very carefully the fine print in your brokerage agreement. For more see:
MF Global and the lie about safe accounts and MF Global and the great Wall St re-hypothecation scandal and this MF Global and Rehypothecation Now you understand why your brokerage was so hot for you to sign up for a margin account, even though you never trade on margin!
BTW JCA is a great place to get a non-corporate view of finance, the markets, government and politics.
Whodunit? Great books on the causes and solutions to the Financial Collapse
A year ago for Christmas I received a Kindle eReader (thank you Tammy!) and it has greatly accelerated my consumption of books. One of the subjects that I dove (continued to dive) into was the causes of the financial collapse. The conditions that contributed to our undoing, how we get out of our ongoing mess and the steps that should be taken to prevent a repeat are vitally important to our future as well as to our children and their children.
I have written about this myself since 2008 (see here and here for instance) and have read a number of books on the subject (see my Whodunit list down to the right on this page under Learning From History) that I thought covered fairly well the breadth of the subject and helped me refine my understanding. However I was humbled last night by a blog post on The Baseline Scenario that linked to Reading About the Financial Crisis: A 21-Book Review by Andrew Lo, a truly epic undertaking that is well worth reading on its own.
The causes are Continue reading Whodunit? Great books on the causes and solutions to the Financial Collapse
Supply Shortage Continues in Multifamily. Apartment vacacny lowest in 11 years.
From WSJ Developments-
Little new apartment construction and surging demand has created a shortfall of 2.5 million units, the largest the nation has seen in more than a half-century, according to research from Nareit, a trade group for real-estate investment trusts.
As we’ve reported, apartment landlords are seeing vacancy rates decline as more Americans rent by choice or necessity. In the fourth quarter, apartment vacancy fell to the lowest rate since late 2001, with the national rate dropping to 5.2% from 6.6% a year earlier, according to Reis Inc. The vacancy rate had risen as high as 8% in 2009.
Pent-up demand could pull that rate even lower. According to Nareit, the normal rate of household formation is about 1.2% annually. But, with the sour economy in the last four years, the rate plunged to about 0.5%, as people delayed moving out and opted to live with roommates and parents longer. This has created an unmet demand of about 2 million households, “about three times what it has been in previous business cycles,”… See the whole article here
The #Multifamily Asset Twilight Zone: In default but payments still being made. Opportunity or? Via @rshall03
A common theme adopted by the industry is that lenders continue to delay action on distressed assets for as long as possible.
The fact is that this scenario is borrower-specific. If a borrower is acting in good faith, the lender may allow the asset to continue operating, resulting in a commercial property “Twilight Zone.”
The Twilight Zone is made up of properties on which loans have defaulted or in which default is likely imminent, but the borrower is still willing to provide all available cash flow to the lender, even if it is not enough to cover the payments. The lender agrees to accept net rents and, in turn, keeps the building operational, albeit in a limbo period.
When the lender does finally pull the plug value opportunities can Continue reading The #Multifamily Asset Twilight Zone: In default but payments still being made. Opportunity or? Via @rshall03
Is Gen Y your target demographic for Multifamily? Here’s why
Gen Y—those between the ages of 16 to 33—represents about 25 percent of the population in the country and is now larger than the baby boomer generation, which is shrinking
The Gen Y group keeps getting larger for a number of reasons, including the fact that immigrants to the United States typically come as young adults—and rent. This group is expected to continue to expand over the next 15 years.
Through 2017, she adds, there are going to be more than 4.3 million people turning 22 each year (though analysts used to use 18 as the age people left home, young people have delayed forming new households). This number is expected to remain above 4 million until 2025. And, of course, fewer people looking to purchase a home also bodes well for the multi-housing industry.
See the whole article at: Gen Y for Multifamily on MHN Online
Find the freight trains in your life and get on them instead of in front of them.- Barry Sternlicht Video via @Michael_MBA
Great advice from Barry Sternlicht plus much, much more on real estate, investment, capital, leadership, opportunity, Europe, China while speaking at the Schack real estate conference. He is one very smart guy while being personable and humble, a rare but valuable combination. Reminds me a bit of my virtual mentor Tom Barrack, and not just because of the haircut! Barry even mentions wanting to learn how to surf, something Tom could definitely help with.
Here’s the link to the video: Barry Sternlicht at Schack RE Conference For more great video from the conference Continue reading Find the freight trains in your life and get on them instead of in front of them.- Barry Sternlicht Video via @Michael_MBA