Landmark Links September 17th – Dumb and Dumber

dumb and dumber

Must Read: In a rare moment of lucidity, the California electorate soundly rejected a proposition that would have opened the door to statewide rent control last year.  In the months since then, state legislators have failed miserably in passing any bill that would meaningfully impact our epic housing affordability crisis, despite some good proposals.  So, with apparently no remaining good ideas after the rejection of SB 50 a few months ago, the legislature passed (and Governor Newsom signed into law)…….a state-wide rent control bill.  This despite the fact that rent control has been derided by economists across the ideological spectrum and ineffective and counter productive in bringing housing costs down for the majority of residents.  There was never a doubt in my mind that California would manage to make the housing crisis worse.  However, I figured that it would mostly be due to inaction.  I didn’t think that they’d be so aggressively stupid in getting there.


Tea Leaves: Duke finance professor Campbell Harvey, who is widely credited with discovering the correlation between an inverted yield curve and recessions says that his indicators point toward a downturn.

Exodus: All three of the largest metros in the United States – Los Angeles, New York and Chicago – now have shrinking populations.

Just What We Needed: With the global economy slowing and potentially headed towards recession, Iran (allegedly)  launched a drone strike on a major Saudi Arabian oil refinery, sending oil prices soaring and opening up the possibility of another military conflict in the middle east.


Biting the Hand That Feeds: WeWork is apparently charging forward with its IPO despite being urged to postpone by it’s largest investor/sugar daddy SoftBank.  In an effort to sweeten the pot, WeWork is also mulling changes to its bizarre governance structure that gives CEO Adam Neumann nearly all control as a way to drum up some more investment appetite.

Little to Gain? At some point we will have another recession.  However, the lack of excessive leverage in the market coupled with cash on the sidelines waiting to buy the proverbial dip mean that it may not result in an abundance of opportunities.

Going Up: Amazon (and others) are building multi-story warehouses in densely populated areas with high land prices in an effort to speed up deliveries.


Point and Click: Millennials who are priced out of homes where they live are increasingly going online to buy investment properties with the push of a button.

Falling Behind: Here are the cities where job growth is outpacing new home construction.


Black Box: Prolific use of backleverage has made private equity returns denominated in IRR nearly meaningless.  (h/t Steve Sims)

Feeding Frenzy: Universities are joining the century bond boom as rates have fallen worldwide.

Chart of the Day

Not really a chart but this John Burns Real Estate Consulting Development Dash game board is too good not to share.

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Source: John Burns Real Estate Consulting 


Gettin’ Busy: A man and a woman arrested for public drunkenness started having sex in the back of a police car because Florida.

Oops: A white couple gave birth to an Asian daughter after a fertility clinic mishap.

There’s A Lot Going On Here: A headline out of Baltimore last week read: Loud sex, mistaken for fight, ends with gunshots and 2nd-degree attempted murder charge.  Whats even more shocking is that this was the fifth time this exact scenario happened in Baltimore in 2019. (h/t Tad Springer)

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Landmark Links September 17th – Dumb and Dumber

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