Landmark Links September 18th – Everybody Has a Plan Until They Get Punched in the Mouth

tyson ear

Lead Story…. Back when Iron Mike Tyson was at the peak of his boxing career,  he was asked by a reporter how he would handle an opponent’s game plan in an upcoming fight.  His response: “everyone has a plan until they get punched in the mouth.”  In other words, it’s one thing to have a strategy, it’s completely another to execute said strategy when adversity rears it’s ugly head.  The Federal Reserve has had a plan for months now to raise interest rates.  However, every time they get close, the world economy takes some sort of hit (Greece, China, rising dollar, oil price declines, etc) that keeps them from executing it.  The Fed declined to raise rates again yesterday after indicating that they would earlier in the summer.  When will they judge the economy healthy enough to sustain a small bump at the short end of the yield curve? Your guess is as good as mine.


Circular Logic: “….we’re in a funny kind of circular logic world, where, since the Fed acknowledged a strong dollar could become a variable, that meant the odds of the Fed increasing interest rates declined. One of the reasons the dollar stopped strengthening is the consequence of the Fed mentioning its strength has been problematic, meaning there’s less likelihood of them tightening. But the reason the dollar was getting so strong was that the Fed was talking about tightening.  You see the circular logic: The dollar is strong, so they can’t tighten. So the dollar weakens, so they can tighten. So the dollar strengthens, so they can’t tighten, so the dollar weakens, so they can tighten. And around we go. That’s where we are right now.” – QOTD by Bond King Jeff Gundlach of DoubleLine explaining why the Fed has been unable to raise rates

Day of Reckoning: Oil patch operators have limped through the past several months as prices plunged, largely reliant on available credit from lenders.  Lenders are now re-evaluating the value of the oil properties on which they have lent.  Some experts predict that borrowing bases could be reduced by as much as 15%.  The ensuing blood bath as credit lines are reduced and small companies sell off assets could have a profound  impact on both oil supply and the economy as a whole.

Low Expectations: Inflation expectations have now fallen to multi-year lows and CPI actually decreased in August.


The Surge: Renters are responsible for the vast majority of household formation growth (which has been picking up lately) since the recession hit.  Their ranks are still growing, especially in the single family for rent space.

Smallest Violin: $100MM+ homes aren’t selling. The build in 9-figure inventory is indicating a top in the very top of the market.

Steady and Slow: The August housing starts report (far overshadowed by the Fed announcement) was pretty meh but still indicative of an ongoing slow, steady recovery.


What Happens in Vegas: The gaming mecca is on pace for a record number of visitors in 2015.  In addition, the inventory build in Vegas is slowing and non-distressed sales are way up.

No Sleep ‘Till…Brooklyn has been a white hot market for years but a ton of new housing inventory could be signalling a coming glut.


All in the Family: Big time hedge fund managers have been setting up private family offices to manage their wealth separate from the funds that they manage.  A lot of investors are less than thrilled.

Sharks vs. Fish: If you’ve been within shouting distance of a TV the past few weeks, you’ve probably been inundated with gambling….. I mean weekly Fantasy Football league commercials touting million dollar payouts.  They have a dirty secret though that you won’t hear about on TV: the leagues are dominated by sophisticated players with huge bankrolls who feast upon the unsophisticated and make a huge percentage of the profit.  91% of daily league profits are made by just 1.3% of players and 36% of losses are borne by 5% of players.

Chart of the Day


Hero Who Doesn’t Wear a Cape: Meet the hipster who runs around South Africa cutting off other hipsters man buns.

How NOT to Drink on an Airplane: Don’t ever, ever be this guy.

How NOT to Pledge a Sorority: Don’t ever, ever be this girl.

That’ll Leave a Mark: Watch a 40-ton humpback whale breach on top of a kayak nearly crushing two not-very-bright British tourists.

‘Murica: A court ruled that you can write “go F%$k yourself” on a speeding ticket under the 1st Amendment.

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

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Landmark Links September 18th – Everybody Has a Plan Until They Get Punched in the Mouth

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