Landmark Links February 2nd – Head Fake

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Lead Story… Many economists believed that 2015 would be the big inflection point where first time buyers returned to the market in droves with stable job growth and lower down payments as catalysts.  They were wrong.  The first time buyer segment remained sluggish, increasing only slightly from 29% to 31% of the market.  The main culprit? Affordability.  As noted above, first time buyers are coming back.  The process is just a lot more gradual than most would like.

Economy

Less than Zero: Last week the Bank of Japan announced that they would be setting interest rates in negative territory for the first time.  They’ve tried everything else over the past 25-or-so-years and nothing has worked so why not.  For those of you keeping score at home, there are now five central banks in the world with negative interest rates, including two of the largest (Japan and the ECB) and one other major banking center (Switzerland) which adds up to about one fifth of Global GDP covered by a negative interest rate central bank.  What could ever go wrong?

Uphill Battle: Venezuela has an economy that is almost entirely reliant on oil.  In fact, fuel products make up 98 percent of all Venezuelan exports.  Venezuela’s fiscal break even point is roughly $118/barrel of oil.  Needless to say, they haven’t been faring well lately. Venezuela has been trying desperately to convince their OPEC brethren to cut production. Best of luck with that.

On the Bright Side: Housing, employment and chemical indexes are pointing towards further economic expansion.

Commercial

Re-Tooling: Retailers are betting big on re-configuring their warehouses and upgrading software in an effort to win online customers.

Tight: Los Angeles has the fewest available apartment rentals of any major US city.

Residential

Un-Attainable: Why homes in major US markets are nearly impossible to afford.  Hint: “In the past 5 years, the San Francisco are has added 480,000 jobs and only around 50,000 housing units.

Glimmer of Hope: The home ownership rate increased in the 4th Quarter, albeit slightly. See Also: Official Census reports might be low-balling household formation.

Mansion Mania: We’ve been hearing about softness at the high end of the housing market for several months.  However, super-rich enclaves (Aspen, The Hamptons, Palm Beach, Beverly Hills, etc.) are holding up just fine.  See Also: A Palm Beach mansion just listed for $195MM.

Profiles

Middle Men: Meet the retail arbitragers who buy goods at brick and mortar stores that are having going out of business sales and sell them on Amazon. The recent Walmart closing a were a bonanza for these guys.

Leading Indicator: Want to know if you should be afraid of a market meltdown?  Ask a Wall Street escort.

Doomsday Preppers: Gold Bugs are still hoarding bullion and preparing for financial Armageddon, un-deterred by the economic recovery and gold’s plunge in recent years. See Also: Lego sets have been a better investment since 2000 than gold (seriously).

Chart of the Day

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WTF

Lonely at the Top: This story might very well be remembered as the moment that we reached peak Darwin Award.  I highly doubt anyone can beat it.  Thankfully, it doesn’t sound like anyone else was hurt.  I can’t say more here.  Just click the link….trust me.

FAIL: The Super Bowl field crew screwed up and painted Broncos logos in both end zones.

Florida Crime of the Week: If the police find you in a hotel room with a dead woman and two monkeys, it’s probably time to find a good lawyer.

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

Visit us at Landmarkcapitaladvisors.com

 

Landmark Links February 2nd – Head Fake

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