Landmark Links February 12th -Going in Reverse?

Reverse

Lead Story…. We’ve been hearing about the inevitability of rising interest rates since the beginning of the financial crisis.  However, the yield on the US 10-Year Treasury has dropped like a rock since the Fed hiked short term rates at it’s December meeting.  It is currently down nearly 27% since the announcement.  In other encouraging news, the yield curve– the most reliable indicator of future recessions – is the flattest that it’s been since 1998.  So, there’s that.  At this week’s Congressional hearing Fed Chair Janet Yellen was peppered with questions about not only reversing course and cutting rates but actually instituting NIRP or a negative interest rate policy as several European countries and Japan recently have and she didn’t dismiss the suggestion.  There you have it, we have now come full circle from the inevitability of rates going up to questioning whether or not they should go below zero.

Economy

QOTD: “We know you can’t hold back production to get higher prices later if you have debt to service. Only equity financed production has that luxury.”Mark Dow on the benefits of low (or no) leverage on an investment.

Going Negative con’t: The world now has $7 trillion of outstanding debt that has a negative interest rate after the Japanese 10-year traded into negative territory this week. This has become such a mainstream story that Jose Canseco took to twitter to deride the Bank of Japan it’s foray into negative interest rates.  Yes, THAT Jose Canseco.

Running out of Space: One of the last things keeping the oil market from crumbling into a smoldering heap is that there has been storage space for the millions of unneeded barrels currently being pumped.  However, storage is a finite resource and we are quickly running out of it.  When/if we run out of storage space and don’t slow the pump to a sustainable level, things could get ugly.

Commercial 

New Heights: Freddie Mac sees multifamily remaining strong into 2016 after stress tests.

Residential

Welcome to the Agrihood:  As golf withers away as a viable operating business, some communities are trying a new use for their open space: operating farms.

Bounce: Mortgage rates have been plunging well into the 3’s in recent weeks and wealthy borrowers are one again pouncing on the ability to refinance into a cheaper loan sending applications higher.

Why Can’t Afford a Home: Chapman’s Joel Kotkin on why buying a home in desirable areas has become nearly impossible (hint: it has a lot to do with restrictive zoning) and what we can do about it.  See Also: Is a home on it’s way to becoming the ultimate luxury item in the US?

Profiles

Shark Take: Mark Cuban on why unicorn tech companies circumventing the IPO process is bad for the economy.

Bloodbath: Last fall, The Links was telling you that daily fantasy leagues were a scam before it became cool to.  Now state governments are cracking down, causing investments in sites like Draft Kings and Fan Duel to be written down by 60% or more.  Oops.  Don’t say we didn’t tell ya so.

Gettin’ Busy: It’s good to be American Pharoah.  Not only was he the first Triple Crown winner since 1978, he now has an even more lucrative (and and probably fulfilling) career: the world’s highest-paid gigolo.  That’s right, filly owners are paying $200k for their gals to spend one night with him in the hopes of producing the great race horse. When it’s all said and done, American Pharoah could make more money as a stud horse than he ever did on the track….and you thought that you couldn’t be jealous of a horse.

Numbered Days: Anyone unfortunate enough to venture inside a Sears knows the sad truth: the place sucks so bad it’s depressing.  But things are getting even worse for America’s retailer of last resort.  The department store has traditionally attracted female shoppers 55 and older.  However, a recent study shows that Sears’ is losing ground with this demographic and that shoppers would now rather go to Goodwill, a second hand story than Sears.

Chart of the Day

WTF

See You Later, Alligator: If aliens landed on earth and asked me to explain the State of Florida, I would direct them to this story about a hillbilly throwing a gator through a drive through window.

Unconventional: Pro athletes are a different breed.  When most people sprain an ankle, they use the RICE method (rest, ice, compression and elevation) to help it heal.  Not Chad Johnson (I still refuse to call him Ochocinco).  had a different method: I would collect warm urine from my teammates, heat it up and put my ankle in it for 30 minutes.”  I haven’t a clue how that helps an ankle sprain and frankly I don’t want to know. (h/t Winn Galloway)

If This House is Rocking, Don’t Come a-Knocking: Pimps and hookers in Sweden are increasingly using AirBnb rentals to ply their trade as hotels crack down.

Bigfoot Sighting Video of the Day: A tourist at Spanish ski resort took a video of something that sort of looks like a yeti.  Predictably, the internet went apeshit with conspiracy theories.

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

Visit us at Landmarkcapitaladvisors.com

Landmark Links February 12th -Going in Reverse?

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