Landmark Links July 23rd – The Big Short, Part II?

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Lead Story…. Prolonged low yields have led investors to seek out risky structured alternative investments like liquid alternative ETFs that invest in junk bonds and bank loans in search of yield (sound familiar?). Hedge funds have been buying up default protection (again, sound familiar?) in expectation of a potential epic crash when the Federal Reserve finally raises rates and unsophisticated investors rush for the exit.  Could this be “The Big Short” part II?

Economics

Shanghai Shit Show Redux: China’s stock market debacle is looking like a cross between the 1929 US stock market crash and 1989 Japan.

Federal Reserve Update: The Federal Reserve seems determined to raise rates in the near future.  However, it’s in uncharted territory and, actually doing so without causing major market issues is far easier said than done.

Where are the Jobs At? Here’s a cool map of employment in America (h/t Dave Kidder)

Commercial

America’s New Ghost Town: Suburban office parks, especially in the northeast corridor are struggling to lease up space.  However, non-CBD office showed some serious signs of life last quarter, especially in VC fueled regions like Silicon Valley.

Inflating Inflows: Outbound investment from China into the global commercial real estate market reached new highs as the Chinese equity market continues to implode.

Boosted Billings: Increasing architectural billings are a positive sign for the commercial real estate development industry.

Drought

Cashing In: Landscapers are cashing in on the drought and making big $ by painting brown yards green.

Residential

Party Like it’s 2005: Interest only loans are baaaaaaack!!  (albeit much more tightly regulated than they were during the boom).

Condo Conundrum: Higher-end single family homes and multi-family developments have rebounded but condos, hampered by difficult financing restrictions, have not (save for some very expensive markets like Manhattan and Miami).  Condo projects often offer the best affordable options for entry level buyers.  It’s not difficult to see the connection between the moribund condo-construction market and the lack of new affordable housing.

Flying off the Shelves: At least on a relative basis.  Existing home sales are now at an 8-year high.

Markets

West Side Story: Want to see what a red hot apartment market looks like?  Look no further than the West Side of LA where a developer recently paid over $1MM per door for an apartment building in Brentwood.  It’s the highest price ever paid in LA for a building not adjacent to the beach.

The OC: Orange County’s economy is currently firing on all cylinders.

Going Up: Watch what happened to the price of land over the past 40 years – especially in California – in this animated map.  Spoiler alert: land to build an “average” home only cost $4,500 in 1975.  Also, the most fascinating part to watch is the Great Recession.

(Depressing) Chart of the Day 

WTF

You’re Fired: We typically avoid politics at Landmark Links.  However, the Donald Trump Insult Generator is too awesome not to share regardless of your political persuasion.

Taking a Name Literally: 50 Cent is broke after losing a $5 million dollar judgement for releasing an unauthorized sex tape.  He claims that the diamonds, cars, etc are all for show and all rented or borrowed.  Apparently, he’s not the only one: here’s a hilarious chart of rapper’s net worth’s versus their lyrics (it’s a bit out of date on Dr. Dre after the sale of Beats to Apple though).

Only 153 Shopping Days Left Until Christmas: Do you have someone on your list who is impossible to buy for? There are now a line of jeans that promise to eliminate fart odors.  You’re welcome.

Landmark Links – A candid look at the economy, real estate, and other things sometimes related.

Visit us at Landmarkcapitaladvisors.com

Landmark Links July 23rd – The Big Short, Part II?

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