Landmark Links August 28th – Culling the Herd

Darwin1

Lead Story…. Silicon Valley startups have been on an epic run for quite a while. However,  good times can eventually lead to complacency and many of the top performing startups like Google and Facebook actually came about when things were lean.  Downturns are painful but necessary to get rid of the dead wood and force financial discipline on often profligate startups.  Some veteran VCs are beginning to advise founders to raise capital to put aside for the next downturn.

Economics

Everything Has A Price: The most affordable place to raise a family in the US is Morristown, Tennessee.  Most likely because no one actually wants to live there.

Growing Drumbeat: There are some awfully influential folks now saying that the Fed should not raise rates in September.  Contra: Recent market chaos is the very reason why the Fed should hike rates in September.

Black Box: One big problem with China: for as large as it is, the Chinese system is about as transparent as a brick wall.  In other words, no one knows WTF is actually going on over there.  See Also: Don’t be surprised to see some very prominent folks shipped off to labor camps as the Chinese blame game intensifies.  Angry investors already captured the head of one metals exchange.  Video: If you want a good primer on what is going on in China, this is a good place to start. (h/t Winn Galloway)

Quantifying the Fallout: What affect will the market chaos have on the US economy?

Drought

Red Tape: Last year, Californians voted for Proposition 1, a large portion of which is earmarked for water storage.  For the uninitiated, most of California’s water infrastructure was built to deliver water from the mountains to the Pacific Ocean when it rains in order to avoid major flooding in densely populated urban areas.  As the drought persists, many have concluded that we need to store rain water when we get it rather than flushing it into the ocean.  Makes sense so far.  This winter is supposed to bring what NASA is calling a Godzilla El Nino which could dump a lot of rain on our parched state.  Seems like the perfect opportunity to collect some rain water using the billions of dollars of funding from Proposition 1, right?  Wrong.  The new law is wrapped in a ton of red tape and the approval process will take 5 years or more to get anything built, even though the measure passed nearly a year ago.  I, for one am stunned (end sarcasm here).

Commercial

Video of the Day: This time-lapse of the Wilshire Grand getting built is amazing.

Is There a Doctor in the Building? Medical office sales and development are hot right now with doctors forming larger physician groups as a result of the ACA.

Residential

Not Quite There Yet: Despite recent gains in new home sales we are still just above previous cycle lows and far behind cyclical highs.  In other words we are still dealing with the hangover from over-building during the housing bubble Whether or not the tepid recovery will continue is largely dependent on the economy as a whole……and the Federal Reserve.

Time is Money: Housing Market Forecast US has a great piece today on why it will take up to 90 years for real housing prices to reach their prior peak (absent another housing bubble, of course). (h/t Tom Reimers).  However: The Mortgage Banker’s Association is forecasting a massive boom in household formation over the next decade.  See Also: Here come the Millennials.

Greasing the Skids: Fannie Mae is trying to make it easier to get mortgages.

Collateral Damage: If stock volatility continues, it could begin to negatively impact housing demand, which has been rising all year.

Profiles

Just in Time for Football Season: Amazon announced that it will  add 1 hour booze delivery to it’s Prime Now service meaning that I’ll have one less reason to get off the couch on weekends this fall.

Shocking Revelation of the Day: People ignore ads on social media sites and apps.  Also, orange juice tastes just like oranges.

It’s About Time: Like pretty much everything else associated with college, text book prices are out of control.  Students and some creative services are fighting back.

Who Does Number Two Work For? With big events like the Super Bowl on the horizon, San Francisco is looking for ways to solve it’s homeless perplexing pooping problem.

Fake it ‘Til You Make It: China already had a fake Apple Store and a fake Ikea.  Now it has a fake Goldman Sachs as well.

Chart of the Day

Better is a relative term when it comes to new home sales

new home sales

WTF

Not All Heroes Wear Capes: A woman in China was asked to discard a $200 bottle of cognac while going through airport security. She chugged the entire thing instead, earning the admiration of frat boys everywhere. In related news, USC Athletic Director Pat Hayden has reached out to her to see if she’d be interested in mentoring head football coach Steve Sarkisian on how to hold his booze.

But First, Let Me Take A Selfie: A man in Lake Elsinore attempted to win a Darwin Award by taking a selfie with a rattlesnake.  He failed miserably but might lose his hand anyway.

Your Daily FAIL: Connecticut woman keys boyfriends car after she catches him cheating.  Misspells “whore” but manages to join the “Hot Mug Shot” club.

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

Visit us at Landmarkcapitaladvisors.com

Landmark Links August 28th – Culling the Herd

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