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Category: Big Mother (page 1 of 15)

February 4, 2021

What Professor Alexander Kurov Gets Wrong About Gamestop and Bubbles

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Let’s start here;  overregulation creates bubbles, not speculators.  West Virginia University Professor of Finance, Alexander Kurov, offers an op-ed which comes to the conclusion that speculation from Reddit bros could wreak havoc on capital markets:

So markets fail sometimes, and we need sensible regulation and enforcement to make such failures less likely.

Taken in isolation, the GameStop craze is unlikely to trigger a disruption to the overall stock market, especially if its price continues to fall more in line with the company’s fundamental value. Unfortunately, this was not an isolated case. Nor was GameStop the first sign of problems.

In recent days, Reddit users have also driven up the prices of silver SI00, -2.28%  and companies such as BlackBerry BB, 0.25% and movie theater giant AMC Entertainment AMC, -18.63%. Popular trading apps like Robinhood have made trading easy, fun and basically free.

The share price of Tesla TSLA, -1.16%, for example, skyrocketed 720% last year, in large part when investors bought the stock because it was already rising. This is called momentum investing, a trading strategy in which investors buy securities because they are going up — selling them only when they think the price has peaked.

If this continues, it will likely lead to more financial bubbles and crashes that could make it harder for companies to raise capital, posing a threat to the already limping U.S. economic recovery. Even if the worst doesn’t happen, large price movements and allegations of price manipulation could hurt public confidence in financial markets, which would make people more reluctant to invest in retirement and other programs.

At face value, his theory makes sense, especially in this “everyone is out of step but my Jimmy” world which government, academia, and rent-seeking businesses created (let’s call them them “the Technocracy”, just to give them a name).    I might ask the Professor to read Bastiat and Hazlitt, and look for the unseen consequences of his conclusion  You don’t have to look far to wonder why Reddit bros are trading speculative stocks like baseball cards.  I attribute this populist interest in day-trading to three things:

1- The Federal Reserve Banking System.  Artificially low interest rates encourage borrowing over thrift.

2- Cheaper Trading Platforms.  Fintech has virtually eliminated all costs for active traders.  The knee-jerk Read more

September 8, 2020

“We are easy prey” – Propositions Three and Seven by Richard Mitchell

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Suburban Phoenix Real Estate Broker

Author website

Propositions Three and Seven from The Graves of Academe by Richard Mitchell

 
In the country of the blind, the one-eyed man is, as we all know, king. And across the way, in the country of the witless, the half-wit is king. And why not? It’s only natural, and considering the circumstances, not really a bad system. We do the best we can.

But it is a system with some unhappy consequences. The one-eyed man knows that he could never be king in the land of the two-eyed, and the half-wit knows that he would be small potatoes indeed in a land where most people had all or most of their wits about them. These rulers, therefore, will be inordinately selective about their social programs, which will be designed not only to protect against the rise of the witful and the sighted, but, just as important, to ensure a never-failing supply of the witless and utterly blind. Even to the half-wit and the one-eyed man, it is clear that other half-wits and one-eyed men are potential competitors and supplanters, and they invert the ancient tale in which an anxious tyrant kept watch against a one-sandaled stranger by keeping watch against wanderers with both eyes and operating minds. Uneasy lies the head.

Unfortunately, most people are born with two eyes and even the propensity to think. If nothing is done about this, chaos, obviously, threatens the land. Even worse, unemployment threatens the one-eyed man and the half-wit. However, since they do in fact rule, those potentates have not much to fear, for they can command the construction and perpetuation of a state-supported and legally enforced system for the early detection and obliteration of antisocial traits, and thus arrange that witfulness and 20-20 vision will trouble the land as little as possible. The system is called “education.“

Such is our case. Nor should that surprise anyone. Like living creatures, institutions intend primarily to live and do whatever else they do only to that end. Unlike some living creatures, however, who do in fact occasionally decide that there is something even more to be prized than their own survival, Read more

May 7, 2013

Reason Magazine: “How established homeowners use regulations to stop new low-cost homes.”

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Suburban Phoenix Real Estate Broker

Author website

It’s not mentioned in the Reason article, but the real curse of zoning is the prohibition of innovation. By forbidding all projects, land-use tyrants exclude not just the dreck but also the sheer genius. Some builder coud have come up with the modern equivalent of Wright’s Five-Thousand Dollar Home, but that guy works in software instead, where innovation is celebrated and rewarded.

Meanwhile, the hard consequences of coercive land-use regulations:

When a news crew showed up to film a public meeting in tony Darien, Connecticut, in 2005, some of the residents were less than thrilled. “Why don’t you fucking shoot something else?” one demanded. Hundreds crammed into the hearing, sneering and jeering during the presentation.

The fresh hell residents showed up to protest? A proposal to replace a nondescript single-family home on a one-acre lot with 20 condos for senior citizens.

In Snob Zones, journalist Lisa Prevost describes the heights of entitlement to which property owners ascend when faced with the prospect of new development, especially multi-family dwellings in neighborhoods dominated by single-family homes. Prevost tours New England and finds an aging, declining populace bent on excluding outsiders. In town after town, affluent and working-class alike, residents line up to shout down new development no matter how modest.

In Darien, the need for the proposed project was clear; the town’s senior housing center had a long wait list, as did the last condo development built in the area (in 1994). Still, many townsfolk, expecting the project to open the floodgates to more high-density projects in the resolutely low-density burgh, were incensed.

Incumbent homeowners have a powerful weapon for vetoing change: zoning. In Darien and other exclusive zip codes, mandated minimum lot sizes kneecap developers who want to build something other than super-sized homes. In the process, they put entire towns out of reach for all but the wealthy. In hardscrabble Ossippee, New Hampshire, where it’s not uncommon for the working poor to live in tents during the summer months to save on rent, the zoning code flatly prohibits new apartment buildings.

Though Prevost, who covers the real estate beat for The New York Times, has no problem with Read more

May 1, 2013

Joel Kotkin on the triumph of suburbia.

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Suburban Phoenix Real Estate Broker

Author website

New Geography:

The “silver lining” in our five-years-and-running Great Recession, we’re told, is that Americans have finally taken heed of their betters and are finally rejecting the empty allure of suburban space and returning to the urban core.

“We’ve reached the limits of suburban development,” HUD Secretary Shaun Donovan declared in 2010. “People are beginning to vote with their feet and come back to the central cities.” Ed Glaeser’s Triumph of the City and Alan Ehrenhalt’s The Great Inversion—widely praised and accepted by the highest echelons of academia, press, business, and government—have advanced much the same claim, and just last week a report on jobs during the downturn garnered headlines like “City Centers in U.S. Gain Share of Jobs as Suburbs Lose.”

There’s just one problem with this narrative: none of it is true. A funny thing happened on the way to the long-trumpeted triumph of the city: the suburbs not only survived but have begun to regain their allure as Americans have continued aspiring to single-family homes.

More:

While they’ve weaved a compelling narrative, the numbers make it clear that the retro-urbanists only chance of prevailing is a disaster, say if the dynamics associated with the Great Recession—a rise in renting, declining home ownership and plunging birthrates—become our new, ongoing normal. Left to their own devices, Americans will continue to make the “wrong” choices about how to live.

And in the end, it boils down to where people choose to live. Despite the dystopian portrays of suburbs, suburbanites seem to win the argument over place and geography, with far higher percentages rating their communities as “excellent” compared to urban core dwellers.

Today’s suburban families, it should be stressed, are hardly replicas of 1950s normality; as Stephanie Coontz has noted, that period was itself an anomaly. But however they are constituted—as blended families, ones headed up by single parents or gay couples—they still tend to congregate in these kinds of dispersed cities, or in the suburban hinterlands of traditional cities. Ultimately life style, affordability and preference seem to trump social views when people decide where they would like to live.

We already see these preferences establishing themselves, again, among Read more

April 30, 2013

Zero Hedge: “Presenting: The Housing Bubble 2.0”

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Suburban Phoenix Real Estate Broker

Author website

Tyler Durden:

It was just seven short years ago that the prices at the epicenter of the housing bubble, Los Angeles, CA rose by 50% every six months as the nation experienced its first parabolic move higher in home prices courtesy of Alan Greenspan’s disastrous policies: a time when everyone knew intuitively the housing market was in an epic bubble, yet which nobody wanted to pop because there was just too much fun to be had chasing the bouncing ball, not to mention money. Well, courtesy of the real-time real estate pricing trackers at Altos Research, we now know that the very worst of the housing bubble is not only back, but it is at levels not seen since the days when a house in the Inland Empire was only a faint glimmer of the prototype for BitCoin.

Urf.

A lot of the people I talk to in Phoenix are trying to time their exit. It wasn’t this way in 2005-2006; I had people still eager to buy ten months after the market had turned.

April 9, 2013

Kotkin: “Why the next great American cities aren’t what you think.”

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Suburban Phoenix Real Estate Broker

Author website

Joel Kotkin at The Daily Beast:

Once considered backwaters, these Sunbelt cities are quietly achieving a critical mass of well-educated residents. They are also becoming major magnets for immigrants. Over the past decade, the largest percentage growth in foreign-born population has occurred in sunbelt cities, led by Nashville, which has doubled its number of immigrants, as have Charlotte and Raleigh. During the first decade of the 21st century, Houston attracted the second-most new, foreign-born residents, some 400,000, of any American city—behind only much larger New York and slightly ahead of Dallas-Ft. Worth, but more than three times as many as Los Angeles. According to one recent Rice University study, Census data now shows that Houston has now surpassed New York as the country’s most racially and ethnically diverse metropolis.

Why are these people flocking to the aspirational cities, that lack the hip amenities, tourist draws, and cultural landmarks of the biggest American cities? People are still far more likely to buy a million dollar pied à terre in Manhattan than to do so in Oklahoma City. Like early-20th-century Polish peasants who came to work in Chicago’s factories or Russian immigrants, like my grandparents, who came to New York to labor in the rag trade, the appeal of today’s smaller cities is largely economic. The foreign born, along with generally younger educated workers, are canaries in the coal mine—singing loudest and most frequently in places that offer both employment and opportunities for upward mobility and a better life.

Over the decade, for example, Austin’s job base grew 28 percent, Raleigh’s by 21 percent, Houston by 20 percent, while Nashville, Atlanta, San Antonio, and Dallas-Ft. Worth saw job growth in the 14 percent range or better. In contrast, among all the legacy cities, only Seattle and Washington D.C.—the great economic parasite—have created jobs faster than the national average of roughly 5 percent. Most did far worse, with New York and Boston 20 percent below the norm; big urban regions including Philadelphia, Los Angeles, and, despite the current tech bubble, San Francisco have created essentially zero new jobs over the decade.

[….]

The reality is that most urban growth in Read more

April 3, 2013

Apparently, insanity is buying the same house over and over again, even though you never qualify.

by

Suburban Phoenix Real Estate Broker

Author website

You just can’t make this shit up: Obama administration pushes banks to make home loans to people with weaker credit. Why not? It worked out so well the last time.

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

Housing officials are urging the Justice Department to provide assurances to banks, which have become increasingly cautious, that they will not face legal or financial recriminations if they make loans to riskier borrowers who meet government standards but later default.

Officials are also encouraging lenders to use more subjective judgment in determining whether to offer a loan and are seeking to make it easier for people who owe more than their properties are worth to refinance at today’s low interest rates, among other steps.

Obama pledged in his State of the Union address to do more to make sure more Americans can enjoy the benefits of the housing recovery, but critics say encouraging banks to lend as broadly as the administration hopes will sow the seeds of another housing disaster and endanger taxpayer dollars.

“If that were to come to pass, that would open the floodgates to highly excessive risk and would send us right back on the same path we were just trying to recover from,” said Ed Pinto, a resident fellow at the American Enterprise Institute and former top executive at mortgage giant Fannie Mae.

March 25, 2013

We are all ‘greater fools’ now: How can you sell your house to a big family when big families don’t exist any longer?

by

Suburban Phoenix Real Estate Broker

Author website

Markets go up. Markets go down. But the whole house of cards is built on the idea that population will grow. What happens when it doesn’t?

matt-king-most-depressing-slide

From Business Insider:

It’s what I like to call “the most depressing slide I’ve ever created.” In almost every country you look at, the peak in real estate prices has coincided – give or take literally a couple of years – with the peak in the inverse dependency ratio (the proportion of population of working age relative to old and young).

In the past, we all levered up, bought a big house, enjoyed capital gains tax-free, lived in the thing, and then, when the kids grew up and left home, we sold it to someone in our children’s generation. Unfortunately, that doesn’t work so well when there start to be more pensioners than workers.

The entire welfare state is built on the idea that young people can be milked of their wealth because they’re too busy being young to notice.

Alas, the welfare state also awards adults either for not reproducing or for reproducing in only the most wealth-destructive ways. The consequence (entirely foreseeable) is that the number of dependents-by-choice goes up while the number of de facto slaves declines — by people either opting out of producing wealth or opting in to the welfare state’s “free” benefits or, as here, by not being born in the first place.

This will not end happily…

March 21, 2013

Has your town pissed away a fortune on the so-called ‘creative class’? Bad news from Richard Florida: “On close inspection, talent clustering provides little in the way of trickle-down benefits.”

by

Suburban Phoenix Real Estate Broker

Author website

Joel Kotkin:

Among the most pervasive, and arguably pernicious, notions of the past decade has been that the “creative class” of the skilled, educated and hip would remake and revive American cities. The idea, packaged and peddled by consultant Richard Florida, had been that unlike spending public money to court Wall Street fat cats, corporate executives or other traditional elites, paying to appeal to the creative would truly trickle down, generating a widespread urban revival.

Urbanists, journalists, and academics—not to mention big-city developers— were easily persuaded that shelling out to court “the hip and cool” would benefit everyone else, too. And Florida himself has prospered through books, articles, lectures, and university positions that have helped promote his ideas and brand and grow his Creative Class Group’s impressive client list, which in addition to big corporations and developers has included cities as diverse as Detroit and El Paso, Cleveland and Seattle.

Well, oops.

Florida himself, in his role as an editor at The Atlantic, admitted last month what his critics, including myself, have said for a decade: that the benefits of appealing to the creative class accrue largely to its members—and do little to make anyone else any better off. The rewards of the “creative class” strategy, he notes, “flow disproportionately to more highly-skilled knowledge, professional and creative workers,” since the wage increases that blue-collar and lower-skilled workers see “disappear when their higher housing costs are taken into account.” His reasonable and fairly brave, if belated, takeaway: “On close inspection, talent clustering provides little in the way of trickle-down benefits.”

Rotarian Socialism doesn’t work? Not even when you geyser those subsidies at really hip, pomo Rotarians? Who knew…?

November 6, 2012

Embracing your inner anarchist — because there is no alternative.

by

Suburban Phoenix Real Estate Broker

Author website

Here’s my quick take on the presidential election, from a video made one day prior to the event: Mitt Romney is going to win an Electoral College landslide. My state-by-state prediction is shown below, but it’s not based on any sort of arcane science. I’m just betting that married people with kids and jobs will vote to fire Barack Obama for gross incompetence.

Note that this is not an expression of racism, as you will surely hear from the perpetually-sore-losers of the chattering classes. I’m just betting that the people with the biggest stake in the game of human life will vote against the most perniciously anti-life candidate ever to seek the office of the presidency.

But at the same time, Romney’s win will not be any sort of repudiation of Marxism, contrary to Michael Walsh’s claim at National Review Online. It’s just the correction of a bad hiring decision.

In this week’s video, I argue that the self-loving thing for you to do is to accept that fact that each human being is sovereign and indomitable, and that, therefore, self-control is all the control that can ever exist among human beings. In the course of that argument, I cite an essay of mine, Meet the Third Thing. I also recite an old poem, which I will transcribe here for what may be the first time it has ever appeared in print:

What if I’ve been wrong?
What if I’ve been wrong all along?
What if everything I’ve said,
everything I’ve done,
everything I’ve thought about is wrong?
What if I’ve been wrong all along?

Here is this week’s video:

For an audio-only version of this video, take yourself to the SelfAdoration.com podcast on iTunes.

June 6, 2012

Ray Bradbury: “In sum, do not insult me with the beheadings, finger-choppings or the lung-defiations you plan for my works. I need my head to shake or nod, my hand to wave or make into a fist, my lungs to shout or whis­per with. I will not go gently onto a shelf, degutted, to become a non-book.”

by

Rust Belt Realtor

Author website

Lately I’ve been pondering where the spice in our culture has gone? Perhaps, as a woman of a certain age, I’m unable to see it, but I don’t think so. My deviant detector is fairly well-tuned and I’m drawn to the outsiders of the world because, well, I am one, but it’s very milquetoast out there these days. We wouldn’t want to offend anyone or their delicate sensibilities.

Somehow I missed reading Ray Bradbury. Well, no, not somehow. That was pretty much a planned avoidance of the sci-fi genre in general because it tends to spawn cult-like followers. True story. And I’m not much into cults however clever they are. But today David Boaz at the CATO Institute posted the Coda to the 1979 Del Rey edition of Fahrenheit 451, written by Ray Bradbury. And while I’ve been pondering our collective love of the plain vanilla, I’ve concluded that it seems to have begun around the year this Coda was written. Either it was the death of disco or the election of Ronald Reagan but something went terribly wrong around that time. I never read Bradbury, but this is quite lovely and also funny and has enough biting social commentary to make me appreciate the man’s sensibilities and shared appreciation of digressions. There are indeed many ways to burn a book.

About two years ago, a letter arrived from a solemn young Vassar lady telling me how much she enjoyed reading my experiment in space mythology, The Martian Chronicles.

But, she added, wouldn’t it be a good idea, this late in time, to rewrite the book inserting more women’s characters and roles?

A few years before that I got a certain amount of mail concerning the same Martian book complaining that the blacks in the book were Uncle Toms and why didn’t I “do them over”?

Along about then came a note from a Southern white suggesting that I was prejudiced in favor of the blacks and the entire story should be dropped.

Two weeks ago my mountain of mail delivered forth a pipsqueak mouse of a letter from a well-known publishing house that wanted to reprint my story “The Fog Read more

March 24, 2012

I Hate Bill Maher

by

Realtor, Renaissance Man

Author website

I hate Bill Maher…mostly. Hate most of the stances he takes, and over the years the manner in which he has taken them. “Never make a point when you can take a shot…Maher.” But in this short video he has me laughing, at myself and even with him. Good on ya….as Greg would say.

 

Am I getting soft, going kookoo, or simply exposing that mostly I like to laugh rather than look at gestalt or grouse? Ah well, Maher will do himself in with me in a week or month, but for today I’m leaving work with a smile on my face. Be happy my fellow hounds….

January 9, 2012

CNBC: “In the name of supporting home prices, the Obama administration will likely put in place a system under which investors make private profits while the taxpayers subsidize the risk.”

by

Suburban Phoenix Real Estate Broker

Author website

Is housing the next Solyndra? Looks like it. The Obama administration is getting ready to transfer billions of dollars worth of foreclosed homes to campaign donors. If you think still more Rotarian Socialism sucks, wait until the house up the block from yours goes Section 8. Looters never tire of loot, so rent money they don’t have to earn will turn out to be the perfect garnish for real property they won’t have to pay for.

We are living in Part Three of Atlas Shrugged…

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