At first glance, it would seem that driving oil prices down and simultaneously filling the SPR would be mutually exclusive. After all, Biden drained the SPR in an effort to drive oil prices down. So, how can Trump fill the Strategic Petroleum Reserve AND still keep oil prices low?
How Can Trump Drive Oil Prices Down AND Fill the SPR? Read More »
Gold has reached all-time highs not only in nominal terms but by other measures as well. Is it overpriced now? What about Oil?
Is Gold Overpriced? Read More »
Mainstream financial news today is replete with stories about “distress” in the commercial real estate market. But what is the precise nature of this distress, and what implications does it have for those outside of the respective industry or asset class? More importantly, what set of factors contributed to the distress, and what does that say about its potential alleviation?
Broadly, “distress” in the commercial real estate context refers to the inability of a property, or portfolio of properties, to make required payments on the underlying loan (to “service debt,” in industry terms). There is also physical distress—lack of physical upkeep, accumulation of deferred maintenance, etc.—but the inability to service debt is what’s generally referred to as distress in the financial media. I’ll refer to this as financial distress and focus on it as the more relevant driver of immediate and material negative implications for owners and investors.
In the following discussion, I’ll draw on my previous experience in the hospitality and core commercial real estate industry—specifically, my involvement in restructuring, recapitalization, and various other forms of dealing with financially distressed assets in the wake of the 2008–9 crash. I’ll also use my current role as the founder of a private equity real estate company focused on apartments to expound on the current issues in that specific industry. Throughout, I will highlight connections between financial distress and economic management by government at the expense of the free market.
How Washington and the Fed Caused the Commercial Real Estate Crisis Read More »
Utility bills—for electricity, natural gas, water, and garbage—have by long-standing tradition been based on customer usage, measured in kilowatt-hours of electricity, therms or Btu of natural gas, hundred cubic feet of water, or number of garbage cans. Every residence and business has electric, gas, and water meters that measure utility usage… But what if utilities based their fixed fee on customers’ income levels rather than a flat uniform fee for every customer?
California’s Latest Hustle: Utility Bills Based on Ratepayers’ Income Read More »
Gold has shown some resiliency in 2024. Recently, John Authers at Bloomberg published the following comparison of gold vs. the S&P 500. With all the hype around the magnificent gains in the stock market you might think that it has massively outperformed gold. But currently, one ounce of gold buy the same number of shares of the S&P 500 as in 1971 when Nixon severed the link between gold and the dollar.
The Barbarous Relic Rides Again Read More »
We might think that scientific breakthroughs are necessary in order for us to have technological advancement. But as Lipton Matthews shows in this article, that isn’t necessarily the case. He says, “history has shown that science often lags technology” but “advancements in science propel technological growth.” One key concept to understanding this article is the difference between Science and Technology. The goal of Science is knowledge and understanding. But the goal of Technology is to mold the environment. Technology is the practical application of science.
Does Science Shape Economic Progress? Read More »
This article looks at the current abysmal state of the commercial real estate market and its effects on companies like Blackstone, Fifth Third Bank, and Union Bank. With commercial real estate selling as low as $9 /sf, these companies are taking a big hit to profits as they try to sell excess real estate for less than half of what they paid for it just a few years ago. Some companies like Brookfield are simply walking away from the properties in places like downtown Los Angeles.
Commercial Banks Suffer Along With Commercial Real Estate Read More »
The average square footage in new single-family houses has been declining since 2015. House sizes tend to fall just during recessionary periods. It happened from 2008 to 2009, from 2001 to 2002, and from 1990 to 1991. But even with strong economic-growth numbers well into 2019, it looks like demand for houses of historically large size may have finally peaked even before the 2020 recession and our current economic malaise. (Square footage in new multifamily construction has also increased.)
Housing Is Getting Less Affordable Read More »
Housing prices are at record highs, having more than doubled over the last decade, creating the potential for another housing crash. In the wake of the 2008 crash, there was a tremendous housing glut. People simply couldn’t afford housing after record-setting job losses. Many ended up moving in with relatives. This reduced the demand for
Are Housing Prices Set to Crash? Read More »
In the ongoing saga of Musk vs. Twitter, we first heard that the iconic billionaire founder of X.com aka. Paypal, Tesla, SpaceX, Hyperloop, etc. started acquiring significant quantities of shares of Twitter. On March 14, 2022, he had a 5% stake in the company. By April 1, he had 9.13% of the total outstanding shares, valued at the time at $2.64 billion, making him the largest shareholder in the company.
Elon Musk Ambushes Twitter Read More »
