Landmark Links August 25th – Game Over


Lead Story… Libor, or the London Inter Bank Offer Rate is a scandal-ridden mess and now it’s going to die.  The 50-year old global borrowing benchmark has been plagued by corruption and manipulation of late which has led to a decision to pull the plug.  From BloombergMarkets:

The U.K. Financial Conduct Authority will phase out the key interest-rate indicator by the end of 2021 after it became clear there wasn’t enough meaningful data to sustain the benchmark that underpins more than $350 trillion in securities, Andrew Bailey, the head of the regulator, said in a speech Thursday at Bloomberg’s London office.

The end of the London interbank offered rate, or Libor, is welcome on many levels for regulators. It was tied to some of the banking industry’s biggest scandals, leading to about $9 billion in fines and the conviction of several bankers for manipulating the rate. Relying on the opinions of industry insiders to set the daily estimates based on interbank lending — some in markets that saw fewer than 20 transactions annually — was unacceptable, Bailey said.

“Libor is trying to do too many things: it’s trying to be a measure of bank risk and it’s trying to substitute for interest-rate risk markets where really it would be better to use a risk-free rate,” said Bailey in an interview with Bloomberg News before the speech. “It’s had to come to a conclusion.”

On many levels, this was inevitable.  As mentioned above, the benchmark was ripe for manipulation that could result in substantial economic rewards for lenders given the incredible amount of debt that is priced off of it.  The question becomes where do we go now that the preferred index for the majority of adjustable loan products is set to exit stage left in 2021.  That problem could be a particularly perplexing one for real estate as Christina Rexrode explained in a recent Wall Street Journal article (emphasis mine):

The Libor index is going away. For U.S. consumers, its demise is most likely to be felt in adjustable-rate mortgages.

So-called ARMs—where the interest rate rises and falls with broader indexes—are often closely tied to Libor, or the London interbank offered rate. While ARMs are out of favor these days, they are still a sizable portion of the mortgage market, and once Libor disappears it is unclear to what those mortgages would be pegged.

U.K. authorities recently said Libor would be phased out over the next five years due to allegations bankers manipulated it, which could prove troublesome for borrowers, lenders and investors in mortgage securities.

“In a fairly short amount of time, no one is going to know how to compute what the next payment is going to be” for this kind of mortgage, said Lou Barnes, a capital markets analyst with Premier Mortgage Group in Boulder, Colo. ”And that’s why it’s important.”

Such mortgages were popular before the financial crisis, when lenders used their low teaser rates to get borrowers into bigger homes. They have been a tougher sell in an era of superlow interest rates, but still account for roughly $1.33 trillion of mortgages outstanding, according to Black Knight Financial Services Inc., a mortgage data and technology firm.

That is nearly 14% of the overall market, and lenders had been expecting that share to grow as the Federal Reserve continues to raise interest rates. Banks also favor ARMs for jumbo mortgages, high-dollar amount loans they view as a source of revenue growth.

 So what does all of that mean?  First off, I suspect that the percentage of adjustable rate mortgages is substantially higher in a place like CA where jumbo loans are the rule and not the exception.  In reality, pretty much every loan has a provision for index replacement should the initial pricing index become discontinued or unavailable.  The problem is that no one knows what that index is going to be which has led to uncertainty.  In the world of residential mortgages, it probably makes sense to have a universal standard set by Fannie Mae and/or Freddie Mac since so many of these loans are packaged and sold in the secondary market.  However even this approach has issues since there is a continued push in some political and financial circles to get rid of the two mortgage giants completely.
Commercial real estate loans could be a bit more difficult since it is a substantially more fragmented world.  It would be nice to know what the replacement is going to be up front since many (most) adjustable rate loans are still being underwritten today using Libor ever though it will be gone long before maturity.  However, it has not happened yet.  This is going to cause a not unsubstantial amount of uncertainty for commercial borrowers going forward not to mention a mountain of paperwork and compliance issues when the vast majority of adjustable rate loans need to change indexes en masse.  If I have one prediction to make on how the situation works out, it would be this: as a general rule, the borrower never ends up better off in this sort of situation but the lender quite often does.  Stay tuned.


Substitution Effect: How older, well paid Baby Boomers retiring is keeping a lid on wage growth in the US.  See Also: The Federal Reserve is still banking on low unemployment spurring inflation eventually but the market doesn’t think the Fed will follow through this year.

Rising Tide: There is an argument that higher minimum wages spur technological advancement that is painful at first but often pays off down the road.

Sounding the Alarm: Wall Street Banks are starting to signal that the business cycle is peaking.


At What Price: Despite a thriving local economy, sky high rents that have far outpaced retail sales growth are keeping SoHo shopfronts vacant.


Back to the Burbs: Older Millennials are increasingly buying homes in the suburbs and large SUVs, both of which so-called experts said that they would never do.

No Quick Fix: The California housing affordability crisis has been decades in the making.  It will take more than quick legislative fixes to get us out of it.

Premium Product: Yes, new home sales are up but a higher percentage of those new homes are high-priced luxury units than ever before which will likely keep a lid on production. See Also: Shares of home builders look pricey and vulnerable to a correction as costs rise and affordability is strained.

Non-Conforming: Jay-Z and Beyonce took out a $52.8MM mortgage to purchase an $88MM mansion in Bel Air.  I probably shouldn’t give unsolicited advice to those far wealthier than I am but will do it anyway.  Even though LA is expensive, you can still purchase a very livable home there for the $35.2MM that you used as a down payment.  Perhaps that would have been a better idea? And for those of you who think that these type of massive loans to extremely wealthy people don’t go bad: they do.


The Hunt: Pretty much everything these days needs batteries.  Satisfying battery demand require large amounts of lithium and lithium is not easy to find or extract.

Wild West: Wall Street’s cowboy traders are finding fertile ground in crypto-currency trading as HFT becomes a tougher space in which to make money.

This Ends in Tears: A model and a rapper are heading up an initial coin offering for a company that says it is going to use blockchain technology to revolutionize the weed industry.

Unlikely Alliance: Walmart and Google are partnering up  to challenge Amazon’s eCommerce empire.

Millennial Dream Job: Meet a guy who makes a living translating emojis.

Chart of the Day

Source: Tax FoundationBureau of Economic Analysis


Groovy: Police seize 5,000 orange ecstasy tablets shaped like the head of Donald Trump because, Germany. (h/t Darren Fancher)

Staff Meeting: A man openly masturbating in a hospital led to a brawl because, Florida.

Delicious Irony: Firefighters who saved piglets get them back as ‘thank you’ sausage.

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

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Landmark Links August 25th – Game Over

Landmark Links August 22nd – Mortal Kombat


Lead Story… There is still plenty of time left but I think that it’s safe to say that Amazon is the lead business story of 2017.  Over the past few years, Apple has been the biggest business story out there as the world’s richest company continued the quest for domination through personal technology innovation.  However, the Cupertino behemoth has spent seemingly-little time on the proverbial front page this year as its Seattle tech cousin has taken center stage.  Amazon has been a massive growth story for years but it’s acquisition of Whole Foods earlier this year catapulted the online retailer to a different level.  The acquisition put the entire retail industry on notice (as if they didn’t already know) that the coming years are going to be a battle for consumer supremacy  between Amazon and Walmart.

As regular readers know, I was one vacation the past couple of weeks.  One of the realities of travelling with toddlers is that you need diapers – lots of diapers.  They don’t weigh much but take up a lot of space so they are better to pick up in your destination than take up valuable luggage space.  When we get diapers at home, it’s through Amazon Prime on a monthly subscription.  On our recently concluded east coast vacation, I found myself in a Walmart on a couple of occasions to stock up.  There isn’t a Walmart all that close to where we live in California so it’s not a store that I go to frequently.  While walking around the Walmart in Saratoga Springs, NY sans phone, I had a bit of an epiphany: Amazon will eventually win the battle with Walmart and they will win because of something that Walmart has done incredibly well: discount retailing and the legacy perception that it carries.

Perception is the important word here.  Despite it’s high tech nature, Amazon is as much of an idea as it is a retailer.  Do people consider Amazon to be a high or low end retailer?  If you asked a thousand people, you would probably get a wide range of answers.  It depends on what you are purchasing.  In other words, Amazon’s identity can shift from high to low end depending on what an individual consumer uses it for.  There is no legacy perception that can stick to Amazon as either a high end luxury store or a  discount retailer.  This is massively important since they are trying to sell everything from toilet paper to flat screen TVs to designer clothing and groceries (not to mention cloud hosting, streaming services and proprietary devices).  Walmart is the opposite.  If you were to ask one thousand people about how they perceive Walmart, I assume that the answer would pretty consistently come back as a bulk discount retailer.  This perception was enhanced by my recently visits to Walmart on vacation.  The stores are well-managed but no one is going to confuse them for a high end shopping experience.  That’s just the reality of conducting a bulk retailing business through big box stores rather than a website and Walmart has executed this business plan incredibly well which is why the Walton family is the richest in the US.

The advantage here is clearly to Amazon since they can easily move into Walmart’s discount retailer space without suffering from legacy perception bias but Walmart cannot move into the high end online sales without suffering from such bias.  What makes things worse for Walmart is that growing income inequality means that an increasing percentage of Americans’ disposable income is clustered at the high end.  Walmart understands this which is why they recently purchased, Bonobos, ModCloth and Shoebuy.  Said differently, the only way for Walmart to make in roads with the high end, younger consumer is to hide the fact that they are Walmart.  However, Amazon can make inroads with lower end consumers by being exactly who they have always been and they can do this without sacrificing there cache at the high end.  This is not a trivial issue.  In fact, the LA Times recently ran an article by Nicolas Cheng entitled Wal-Mart is buying trendy e-commerce sites. The cool kids are not having it which detailed Walmart’s struggles with new eCommerce acquisitions (emphasis mine):

But even Wal-Mart e-commerce communications Vice President Dan Toporek acknowledges that and its massive inventory of 50 million distinct products will not attract the cool kids who are — or were — shopping at places such as ModCloth.

Analysts see a trend with Wal-Mart’s recent buys.

It snapped up online footwear shop at the end of 2016, and then bought Moosejaw, an upscale online outdoor gear site for $51 million in February. After paying an estimated $50 million to $75 million for Modcloth, Wal-Mart purchased Bonobos, a New York-based site selling offbeat but slick mens wear, for a cool $310 million in June.

Investment firm RZC Investments, which is independent of Wal-Mart but is owned by late founder Sam Walton’s heirs Steuart and Tom Walton, bought premium cycling clothier Rapha for $260 million last week.

Online cosmetics retailer Birchbox is also reportedly in talks with Wal-Mart. Birchbox and Wal-Mart declined to comment.

Wal-Mart hopes to leverage the popularity of these niche, trendy sites with subsets of consumers who wouldn’t be caught dead in a Wal-Mart store. And the kids are not having it.

ModCloth and Bonobos are being cyberbullied by their fans online, who are making fun of the brands for what they see as selling out to the corporate machine.

“The thing I loved about Modcloth is that I knew the clothes I bought there couldn’t be found at Macy’s and weren’t worn by the masses,” said Connie Warner, who started a Boycott ModCloth page on Facebook. “No more. I’ve unsubscribed from their emails. I refuse to shop at a store owned by Walmart.”

That is a problem that can’t be taken lightly.  When Amazon buys Whole Foods to get into the grocery business, they do not need to hide the fact that Whole Foods is now a wholly owned subsidiary.  Walmart does not have such a luxury and they know this which is why all of the above-referenced acquisitions are effectively bending over backwards to not appear to be a part of Walmart.  Ironically, Walmart is acting like a disruptor here and Amazon is acting like an incumbent.  However, Walmart lacks both the “cool” factor and the ability to appeal to the high end that disruptors like Uber (up until recently, perhaps) or Lyft have.  Despite having a much lower market cap, Walmart actually makes a whole lot more money than Amazon does.  It’s actually not all that close with Walmart pulling in nearly 4x the annual revenue that Amazon does.  However, over time I believe that Amazon’s ability to appeal to both the low and high end simultaneously without legacy perception issues will allow it to compete on Walmart’s turf.  At the same time, Walmart’s legacy perception of being a discount retailer will make it very difficult to capture more market share at the high end.


Frugal: Young adults in the US are spending less than they did in the past.

Disruption: Self driving cars could transform jobs held by 1 in 9 US workers.  But See: Everybody Chill: Robots Wont’ Take All Our Jobs.

Root of the Problem: The real driver of regional inequality in America is that people can no longer afford to move to opportunity.


Shake Up: The resignation of commercial real estate head Dan Thomas from Bank of the Ozarks raises questions about one of the most aggressive construction and development lenders in the US.  (h/t Tom Farrell)

Crackdown: The Chinese government is moving to curb domestic companies’ investments abroad in real estate following a series of high-profile acquisitions by Chinese firms.  See Also: Asian buyers vibrant in global real estate outlay.


Vanishing Act: Why Libor going away creates a compliance trap for ARM lenders.

Heard this Story Before: Baby Boomers are dominating the Sacramento housing market and they aren’t planning on selling anytime soon.

The Construction Industry is Hiring: Why it’s been hard for coal miners to get fracking jobs.


Upgrade: Tech titans in San Francisco are swearing off boring golf in favor of kite foiling on San Francisco Bay.

Doomed from the Start: Why the Chargers will fail spectacularly in Los Angeles.

End of An Era: Why season tickets are becoming more difficult than ever to sell.

Chart of the Day

Battery technology is taking off.

Source: The Economist


Sometimes You Eat the Bear….  A drunk man had his arm bitten off after jumping into a cage to feed some bears because, Russia.

Landed a Big One: An intoxicated woman bit a man’s fishing line and then swam away with his rigging because, Florida.

Sign of the Times: Vegas strippers are now accepting bitcoin tips.

Damn: A woman blew a .200 on a breathalyzer after swerving on a road with her unbuckled 3-year old in the back seat because, Florida. The mug shot is epic.  (h/t Stone James)

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

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Landmark Links August 22nd – Mortal Kombat

Landmark Links August 18th – Refreshed


Back in the office after checking out for a couple of weeks…. I wasn’t sure what type of response to expect with my vacation blog post at the end of July.  However, it ended up being the most clicked-on blog post since Landmark Links started in 2015 which was a bit surprising.  As such, I figured that it’s appropriate to give a recap.

First off, the past couple of weeks were among the most relaxing of my adult life.  As previously written, I’ve found it difficult to fully unplug from the daily grind, even on vacation.  I had mentioned that my co-workers (and family members) were skeptical that I could pull off not working for 2 straight weeks.  I’m glad to say that they were proved wrong.  The first couple of days were a bit of a challenge and involved forwarding a few emails off to the office to get the piece of mind that someone was covering for me.  Other than that, it was actually a lot easier than I thought.

As we were sitting in John Wayne Airport getting ready to take off for the east coast, I made a decision that rather than just taking a break from work, I would to take a break from social media as well.  In order to put some teeth to that, I deleted all of the social media apps and most of the news apps (there are some that Apple won’t let you delete) from my iPhone.  Reading articles like this helped to convince me of just how addicting social media can be and I wanted to get rid of as many distractions as possible while on vacation.

So, what did I do for two weeks as this new, analog version of myself?

  1. Spent quality time with my kids – When at work, I frequently don’t get home until 7 pm or later.  This leaves an hour at best with Natalie and less than that with Hayden before it’s time for them to go to bed.  Yes, there are weekends but in this age of over-programming and multiple activities, those two days at the end of the week often yield less family time than one would like.  That wasn’t the case on this trip at all.  I went swimming with the girls and Mrs. Links almost every day.  My dad and I were there with Natalie when she caught her first fish and her first turtle when we took her on a “turtle hunt.”  I got to watch Hayden go from a beginner at walking to a fairly speed toddler (complete the requisite terror when she headed for something that she wasn’t supposed to get into).  I was also there to help make them breakfast every morning and just spend quality time with them for an extended period.  It was wonderful.
  2. Relaxed and read a lot – I tend to get caught up in replying to emails right away, even when not at work.  While on the trip, any time that I received an email (work or otherwise) I asked myself if it was something that required an immediate response.  If the answer was no (this was the case 95% of the time), I didn’t interrupt what I was already doing to deal with work or other issues.  Once I was fully in this mode, it was much easier to stay relaxed.  I also read a lot, but in a different way than I normally do.  Before I had kids, I used to read a book every three weeks or so.  Between little ones, a demanding job and blogging, I had read about 2 books cover to cover since mid-2014 before this trip.  However, being unplugged provided me with the opportunity to start reading again when the kids were napping and I had some downtime.  As a result, I was able to get all of the way through two books during the trip.  I find that reading a book is nothing like reading an article.  It’s far more relaxing and allows you to get into a good story over a period of time rather than moving from news item to news item.  This type of reading allowed me to unwind even further.  It’s something that I want to do more of.  By the way, if you are looking for good non-fiction, both Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice and American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road are wonderful.  I would put money on both being the basis for a movie in the near future.  In addition, I read a physical newspaper almost every morning for the first time in a long time which felt a bit like being in a time warp.
  3. We made great memories: The quality time that I spent with my family on this trip will be something that I’ll cherish forever.  There were great times: Natalie catching her first fish, Hayden basically learning to walk, Mrs. Links and I celebrating our 4th anniversary.  There were also some challenging times: namely Hayden on both flights (I’ve put her on notice that the next time that we fly together will be when I take her to visit colleges when she’s 18 after she puked all over on the way home – although I suspect that this will become funny with time) and saying goodbye to our family members after two incredible weeks.  These life events – both big and small are impossible to fully when glued to a computer screen or a phone and I’m grateful that I was able to experience them.

I left in late July exhausted and somewhat frustrated with work and arrived back after a few weeks feeling well rested and excited for the rest of the year.  After our flight landed, I added my news apps back on the iPhone as well as Instagram but am going to try to go without Twitter and Facebook on there.  I’m keeping both accounts and will still check in on my computer but have found them to be a bit too distracting, addicting and generally unnecessary to be tuned in to 24/7.  In closing, if you are feeling worn down or frustrated, I’d highly encourage you to take off for a couple of weeks with your family to unplug.  It’s good for the soul and everything will (probably) still be there when you get back.


The Price is Wrong: Yes, low inflation helps enable people to buy more.  However, this isn’t 2005 and spending growth will remain weak until income gains become stronger.

Limbo: Just how low can the ever-falling unemployment rate go?

Out of Context: Why the popular meme about high household debt is wrong – income has grown more.

The Big Unwind: Most Fed officials support a move towards unwinding the $4.5 trillion balance sheet soon but are divided over further rate hikes this year in the face of slowing inflation and productivity.


Star Performer: Rental housing has substantially outperformed stocks since the 1950s mainly because rental income has been better than dividend income – not due to capital gains.

Looming Threat: How Blockchain technology could have a profound and disruptive impact on real estate transactions and data. (h/t Tom Reimers)

Trailing Off: Multi-family starts are way down after a 5-year boom.


Standoff: The continuing battle over Brisbane’s Baylands development is emblematic of why California has an affordability crisis…….. and why it will likely require some form of state-level intervention to fix it.

Gridlock: Baby Boomers who don’t want to sell are dominating the housing market and not enough is getting built to change that.


Big Brother: The SEC has put crypto currency issuers who do initial coin offerings on notice that they fall under their jurisdiction.  (h/t Tom Reimers)

Behemoth: Amazon can now borrow money more cheaply than many sovereign countries.

Charts of the Day


But Did it Work?  Residents who set fire to a Costa Mesa duplex said that they did it to ward off evil spirits.

I Thought That it Would Be Higher, TBH: Half of Detroit’s 8 mayoral candidates are felons.

Gotta Hear Both Sides: A woman was caught snorting cocaine off of her iPhone in a middle school parent pick up line because, Florida.

Sausage Party: AirDropping dick pics is the latest horrifying subway trend in NYC.  See Also: Dick Pic Locator is every perv’s worst nightmare.

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

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Landmark Links August 18th – Refreshed

Landmark Links July 28th – Gone Fishing


Lead Story… Today, I want to get away from talking about real estate and spend a bit of time writing about something that I haven’t done a great job of lately – work / life balance.    To start with, I’ve always been a bit of a workaholic and have a tough time getting away from work even when I’m not in the office.  2017 has been particularly challenging.  Projects seem to be moving at a slower pace than ever and  I often compensate for this by feeling the need to reply to emails or return phone calls instantly.  While this is likely good from a customer service standpoint, it probably isn’t the best thing for my sanity, especially in a year where everything seems to move at a snails pace.  In addition to my day job, I write this blog a couple of times a week which means that I’m constantly prospecting for interesting and thought provoking stories online.  I can’t tell you how many times I get asked about the sources of some of the links in the blog or how I find the time to write regularly between having two young children and a demanding job.  As much as I’d like to think that it’s a result of my tremendous efficiency and skill as a writer, it really has a lot more to do with a largely unhealthy iPhone addiction.

That brings me to the point of today’s article.  Every now and then I come across an article that makes me reconsider on some aspect of life.  I recently came across a blog post from Venture Capitalist Mark Suster entitled I Only Have 7 Trips Left. On Managing Work / Life Balance, Love & Family that caused me to revisit the way that I look at family vacations.  Since founding Landmark, we’ve joked internally that the best part about this job is the ability take off and travel whenever we want but the worst part is that we never actually get to take a vacation from work.  This is part of our reality in a transaction-based business but I’ll admit that I probably take it to the extreme.  Fully getting away from work has always been an issue for me when I’m on vacation: I have a hard time unplugging and tend to work too much when I should be out relaxing with my family.

Every year since Mrs. Links and I have been together (minus those where we either got married or had a baby during the summer) we have done a 2+ week lake trip to the east coast.  My parents have a house on Lake Hopatcong in New Jersey that has been in my dad’s family for years.  Her grandmother has a house on Lake George.  It’s a great opportunity to bring our kids to a place that is very different than where we live and also spend time with relatives (my entire family and Mrs Links’ entire extended family all live on the east coast) who live 3,000 miles away and we don’t get to see as frequently as we would like.  There is nothing like a lake in the early weeks of August.  It’s a trip that is incredibly special to us since we get to watch our kids do the same things that we did when we were their age.  Natalie is turning three next week and Hayden just turned one.  This means that Natalie is now old enough to get excited about swimming, fishing, sailing, rowing, etc and I have the opportunity to experience these moments with her just like my dad did with me at the same age.  My dad, aka PopPop will be right there with us which makes it all the more special.

Here’s the thing that Mark Suster’s blog post got me thinking about: when you really take a step back and think about it there are a lot fewer of these annual trips left than one would like to think.  This makes it all the more important to enjoy them as a family while we can.  Best case scenario, we have 16 more summer lake trips before Natalie heads off to college.  That assumes that youth sports and other activities don’t get in the way at some point.  It also doesn’t take into account that age and health.  My parents are right around 70s and in excellent health.  My wife’s grandmother is in her early 90s and also in excellent health, but 90 is still 90.  My point is that there’s no way of knowing how many more times we will be able to take two weeks a year to relive our youth through our children’s eyes.  I have zero desire to become one of those cautionary tales about a parent looking back when they take their kids to college and thinking that I only wish I had spent more time with them when they are young.  Time goes by too quickly and you simply don’t get these days back.

That brings me to the work part of things.  The last couple of “vacations” that I took, work ended up taking up too much time.  When my parents came in to town for a couple of weeks right after Hayden was born, I was in the office pretty much every day.  Same thing at Christmas save for a few days.  We stayed at a friend’s beach house for a week after 4th of July this year and I was in front of my computer more than half of the time.  You get the idea.  So, I am taking Mark Suster’s advice to heart as I write this:

I love my wife and I love my children. I think some of our fondest memories will be the goofy time we spent during our travels as opposed to the planned itineraries. We’ll remember all of the games of Hearts. We’ll remember when Andy fell down the hill into the bushes (but was ok). We’ll remember throwing the football on the beach with Troy Aikman (the nicest pro football player you’ll ever meet who even with no cameras around and even once he found out we were Eagles fans was still so gracious to my boys). We’ll remember Daddy accidentally shoving an entire Serrano chili pepper into his mouth because it was dark outside and he thought it was a carrot. And we’ll remember how much time Mom spent meticulously planning with love so that our entire family could enjoy every moment.

If you’re caught on the hamster wheel, recognizing it and trying to take some actions is the first step. Having just gotten back from my first proper 2-week vacation (as opposed to extended family gathering) since 2009 I can tell you it was truly life fulfilling. I’m now ready to come back to work feeling really refreshed.

I haven’t been on an actual vacation for more than a few days since 2015.  Needless to say, I’m looking forward to the next couple of weeks as a chance to spend some quality time with my family and recharge my batteries.  This means no blogging until mid August.  I’m also going to try to unplug from the daily financial news cycle for the first time in forever.  My game plan is to go get a couple of books that I’ve been meaning to read and enjoy them in my downtime or when the kids go to bed rather than reading countless articles about economics and real estate markets.  I don’t think that this will be particularly easy for to do but I guess that’s part of the point.

So, why am I posting this rather than just checking out for a while? Two reasons:

  1. This is difficult for me to do.  I figure that writing it down where regular blog readers can seen it will help to make me a bit more accountable.  In addition, I’ve already told my co-workers that I’m going to unplug for a while starting the end of this week.  They seem to be skeptical that I can actually pull it off and I want to prove them wrong.
  2. I’m hoping that it helps someone.  I was planning on just looking at this trip as “business as usual” until I read Mark Suster’s post last week and it helped me to re-consider the bigger picture.  Perhaps that this article will do the same for someone else.

I hope that you enjoy the next couple of weeks of your summer and I’ll see you again mid-August.

The end.

P.S. This is where you can find me




Counter-Intuitive: Financial conditions are easing even as the Fed continues to increase rates.  This makes it more likely that the Fed will continue to stay on track with their planned hikes.

Clustering: The best $100k + tech jobs are increasingly concentrated in just 8 cities.

Decline: An alarming number of Americans are worse off than their parents were.


En Fuego: America’s hottest properties for investors may be data centers and cell towers as landlords anticipate more tenant demand thanks to e-commerce.

Help Wanted: Amazon’s warehouses may be highly automated by conventional standards but they still need human employees and finding them can be a challenge in an increasingly tight logistics labor market.  But See: The next leap for robots is picking out and boxing your online order.


How It’s Supposed to Work: A look at 1950s rental ads shows how yesterday’s luxury housing became today’s affordable housing.  Keep this in mind the next time some NIMBY starts shrieking about luxury development.

Incoming: Canadian home buyers are beginning to flock to America as their domestic market starts to rollover and the dollar continues to weaken.

Fixer Upper Nation: American’s are pouring record sums into home improvements as tight inventory continues to keep a lid on people moving. In other words, t’s a good time to be Home Depot.

Seems Reasonable: According to a recent survey by SunTrust Mortgage, 33% of Millennials were influenced more by dogs than marriage or children when purchasing their first home. The desire for more space and opportunity to build equity were the only two factors that topped having room for a dog.

New Game in Town: Expedia and Priceline are both making moves to move in on AirBnb’s turf.


Changing Tastes: Millennials don’t seem to like beer all that much, causing headaches for the brewing industry which is losing alcoholic beverage market share.

And So It Begins: Treasury Secretary Steve Mnuchin has questioned Amazon’s tax collection practices .

Played: The pedestrian buttons at crosswalks don’t actually do a damn thing.

Chart of the Day

From the Daily Shot

Turning to housing, home prices continue to rise at nearly 6% per year.


In fact, the FHFA measure shows national housing inflation at almost 7%. Note that a weaker dollar will provide further tailwinds for US property markets by making homes more affordable for foreigners.


Here is an updated chart comparing home prices and wages over the past couple of decades.


Home prices in some areas are rising rapidly. Here is Seattle’s housing market gaining 13% a year.


Gotta Hear Both Sides: A creepy one-armed clown with a machete was arrested in Maine.

Hide Yo Kids: ‘Stoned’ sheep go on ‘psychotic rampage‘ after eating cannabis plants dumped in Welsh village.

Clowning Around: The Clown Motel in Nevada, once described as the scariest motel in America can be yours for a mere $900k (h/t David Landes).

Brilliant Disguise: A Los Angeles man was arrested for smuggling three live king cobras hidden in Pringles canisters.

Millennial Link of the Day: Six tips to making Snapchat work on your cat.

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

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Landmark Links July 28th – Gone Fishing

Landmark Links July 25th – Full Speed Ahead

Full Speed Ahead

Lead Story… It’s not much of a challenge to trace the genesis of much of California’s affordability crisis back to Prop 13.  Whether you love or hate the iconic ballot measure that resulted from a 1970s tax revolt, there is little doubt that it created a disincentive for residents to move which pushes a higher burden on new construction for entry level housing.  At the same time, it acts to drive up impact fees since cities and counties have almost no ability to re-assess property taxes to cover funding needs, pushing all of the burden on to new development.

The tendency for California home owners to stay put is undoubtedly contributing to the current housing affordability crisis.  After all, why move if it will cause your tax basis to go up substantially – even in cases when you downsize? Better to stay put an renovate. The California Association of Realtors has proposed an initiative which aims for a spot on the November 2018 statewide ballot that would attempt to make moving a bit less painful.  From the LA Times (emphasis mine):

Under a ballot measure filed Thursday, California’s landmark Proposition 13 property tax breaks would be extended to young homeowners who sell their residence and buy a new one.
The proposal, which aims for a spot on the November 2018 statewide ballot, would allow homeowners of any age to carry a portion of their existing property tax rate across county lines when they purchase a new house. Homeowners often are reluctant to switch houses, given that Proposition 13’s cap on annual property taxes ends once they sell and move somewhere else.

A more limited version of this has actually existed for a while.  Homeowners older than 55 in some California counties can transfer their existing basis to a new home of equal or lesser value than their current home sells for.  The idea was to get rid of a negative financial impact to those who wished to downsize.  However, this proposal would go much, much further.  Again, from the LA Times (emphasis mine):

“A lot of people kind of feel locked into their properties,” said Alex Creel, a lobbyist for the California Assn. of Realtors, who filed the proposed initiative. “This will free up those folks.”
The new tax rate, Creel said, would be based on a “blended” value of the old and new properties, and could be considerably lower than the market rate property tax otherwise assessed once a new home is bought.
Creel filed three different versions of the proposal, all of which would create tax incentives for selling one house and buying another.


Unlike current law, the proposal would allow homeowners to take advantage of the tax break as many times as they want.

This would be a major win for current homeowners since they could maintain a low basis forever – especially because of that last sentence about being able to take advantage of the transfer an unlimited number of times.  It would mean that you carry your assessed basis from the first home you buy throughout your lifetime which seems insanely lucrative.  Someone who owns a $300k condo, wins the lottery and buys a $20MM beach front mansion would still carry the tax basis from the $400k condo, blended in with the basis of the new home. The statewide revenue impact would be devastating.

To be clear, I’m a California homeowner and would benefit from this financially.  I still think that it’s a bad idea though.  The proposal may very well entice people to move but it will put even more pressure on impact fees in doing so.  As we’ve seen since the passage of Prop 13, when municipalities can’t raise property tax revenues they look to one of the few places left where they can without facing voter backlash – impact fees.  New construction is already shouldering a higher burden that is sustainable thanks to astronomical fees – it’s far more palatable for politicians to raise taxes and fees on new residents then it is on current constituents.  If this were to pass, expect that burden to worsen as revenue from property taxes inevitably shrinks.  In a sane world this thing would never get to a vote.  However, never underestimate the willingness of California homeowners to vote themselves into a new entitlement that will ultimately be financed on the backs of newcomers – and the CA Ballot Proposition system gives them the vehicle that they need to do just that.


Still Thriving: Bank profits are near pre-crisis levels despite all of the new rules and red tape.

Sliding: The dollar has been falling since January.  That’s good news for exporters and a mixed bag for consumers.

It’s a Start: The cost of higher education is now growing roughly in-line with overall inflation after out-pacing it for decades.  Perhaps trees don’t grow to the sky after all.


Conversion: In order to stave off decline, Australian malls are becoming more like village centers, offering medical facilities more restaurants and even amusement parks.


Bombshell: Breaking story from the New York times sure seems to imply that the government changed the terms of the Fannie & Freddie bailout in 2012 in order to make more money at the expense of shareholders.

Loosening: More than 70% of non-cash, first-time home buyers — and 54% of all buyers — made down payments of less than 20% over at least the past five years.  See Also: Millennials want to buy houses but not save for them.

Level Playing Field: Any proposed Fannie-Freddie reform in the coming months will hinge on keeping small lenders happy.

Rise of the Machines: Real estate appraiser could be the next job where robots displace humans.


The Heist: More than 20% ($750mm) of the Democratic Republic of Congo’s mining revenue is being lost due to corruption and mismanagement. Remember this when you hear about mysterious shell buyers purchasing high priced real estate in the US. (h/t Darren Fancher)

Trust Bust? Scott Galloway on how Amazon will be the world’s first trillion dollar company but will eventually be undone by a DA with larger political aspirations looking for an anti-trust fight.

Get Off My Lawn: Sure Millennials ruin everything but then again, that’s what every generation says about the ones that come after it.

Simpler Times: Why some pot growers in California are already longing for the more paranoid but profitable days before legalization.

Chart of the Day

From the Daily Shot

Yields on commercial properties are at pre-recession lows (suggesting that the market may be overvalued).

Source: Credit Suisse

Residential construction pay for skilled workers is rising faster than the national average.

Source: John Burns Real Estate Consulting

The reason for better pay in construction is labor shortages.

Source: John Burns Real Estate Consulting

The number of existing homes for sale in the US is at the lowest level since the mid-1990s.

This is why I believe that the next recession is unlikely to hit housing all that hard: we aren’t building much and there just aren’t many existing homes for sale.  This is one time when the raw numbers of available homes may turn out to be more relevant than the favored months-of-supply metric.

Source: Capital Economics


Seems Reasonable: Airport bosses in Russia sparked controversy after creating ‘women only’ car parking spaces since:

This is because women apparently need more space to get in and out, as well as extra space for loading and unloading…

The spaces are also marked with a giant pink high heel which is going over as you would expect.

Probably a Smart Bet: A company is betting that people with pay $30 to sit in a club and watch cat videos because, Millennials.

Jealous: China banned Justin Bieber from playing concerts there due to “poor behavior” since they are apparently smarter than we are.

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

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Landmark Links July 25th – Full Speed Ahead

Landmark Links July 21st – Where is Everyone?

major league

Lead Story… I was talking with a client earlier this week about how long projects seem to be taking in the development world lately.  Across the board, we have found things moving a lot slower than they were just a couple of short years ago.  Lenders and capital partners are generally less aggressive than they use to be which means that the process of getting a commitment – let alone closing, takes a substantially longer time.  There are plenty of culprits here: in addition to the aforementioned tepid capital market, stifling bank regulations, the construction labor shortage, city issues, etc are all playing a role in dragging things out.  Our discussion focused on trying to identify the primary cause of all of the delays.  While there is a confluence of factors, I’m becoming more convinced by the day that this is an issue that starts in the city planning department.

Several years ago, builders were buying a fairly large number of projects at Tentative Tract Map and taking it from there, assuming that the hard work had been done once a project had run the gauntlet of discretionary approvals.  However, this assumption was proven false once the builders began to process non-discretionary approvals needed for grading and building permits to get physical construction underway.  The problem was that many planning departments were (and still are) woefully understaffed.  Today’s staffing levels may have been fine during the recession but are nowhere near adequate for a healthy, functioning market.  As a result, projects have taken much longer than anticipated to start, hitting returns hard and causing both capital partners and builders to pull back from buying earlier in the process and insist on only buying “shovel ready” sites.  This puts a higher degree of scrutiny and stress on the process.  Developers who could count on selling a site with a Tentative Tract Map in 24 months now have to underwrite 36 months or more to account for taking the project through final engineering in order to maximize value and ensure a capital event.  This means that carry costs are substantially higher and IRRs are lower, leading to a general desire to delay closing as long as possible.  Add in the fact that banks now do much more detailed underwriting before even issuing a non-binding term sheet and a crippling labor shortage and you have a recipe for major return-killing delays.

So, what is the culprit behind understaffed planning departments?  Conor Sen addressed the issue in a Bloomberg View column earlier this week about how low unemployment and tight state and local budgets have led to a shortage of public servants.  The story primarily dealt with police officers and teachers but could just as easily be applied to planning departments (emphasis mine):

Tax revenue from ordinary economic activity is volatile as is, but the unusual nature of the nationwide housing downturn in the 2008 recession had a profound impact on local tax streams. The run-up in housing prices during the boom years led to higher appraised values and increased property tax revenue for municipalities to spend. The bust led to lower appraised values and budget deficits that had to be closed, in many cases via spending cuts and layoffs, as the private sector was going through the worst recession in 80 years. While home prices have recovered to varying degrees around the country, appraisals often occur with a multiyear lag, which has constrained local budgets during the economic recovery.

The financial accounting of when tax revenue is earned and can be spent is one thing, but the governing philosophies of politicians during this economic cycle are another. Elected officials who came into office in the aftermath of the great recession were mostly focused on shoring up budgets. In part this was because the electoral wave in 2010 following the recession was dominated by austerity-focused Republicans, but it affected Democrats as well. Big city mayors, who tend to be Democrats, had to balance their budgets, and it’s hard to get people to agree to tax hikes to fund services when unemployment is high. Rainy day funds needed to be built up, and in some cases, pension costs needed to be addressed.

Look, it’s easy to bag on government employees and not all of the criticism is unfounded – there is quite a bit of waste in the sector, especially when it comes to guaranteed pensions.  However, it is absolutely necessary to have properly staffed government services.  Fire, police and teachers come to mind.  A competent and functioning planning department falls into that category as well, especially in the midst of a housing crisis brought about by too few units being built.  The results of under-staffing are the now-common developer/builder tales of projects stalling out for months at the plan check phase.  Sen makes a great point about this being an incredibly difficult situation to remedy (emphasis mine):

In the same way that over-hiring during the boom years came back to bite governments, under-hiring now is going to increasingly lead to pain when governments are inevitably forced to catch up. Government payrolls didn’t hit bottom until January 2014, nearly five years after the technical end of the recession. They are back to their level from December 2007, when the recession began. By comparison, over that same time frame, private sector payrolls have increased by 8 million workers.

While it would be nice to think that government has gotten dramatically more efficient over the past decade, the combination of tight budgets and recession-scarred governing mentalities means that public sector employment is short of where it needs to be to return to pre-recession levels of service.

Reality is that there are certain tasks that the private sector can’t accomplish without well-functioning government agencies.  Your local planning department is one of these roles.  In an ideal world, the development process in California would be a lot simpler than it is.  However, we need to deal with the way the world is, not the way that we think it ought to be.  It seems a bit ironic for someone with largely libertarian political leanings like me to be writing this but we need more government hiring in planning departments to get things moving again.  Until that happens, the delays will continue.


Catching Up: Low income earners are seeing weekly pay gain faster than other groups.

Standing By: The Federal reserve has indicated that they may pause their planned rate hikes if inflation continues to come in weak.


Tidal Wave Investors are piling in to alternative investments in general and commercial real estate in particular in a desperate search for yield.

Exodus: As companies re-locate to big cities, suburban towns are left scrambling.

Make it a Double: Retail developers are lobbying cities to allow walking around with open beverage containers to generate buzz in retail spots.  (h/t Stone James)


Fire Hose: Foreign buyers are buying US homes at a record rate, boosting prices in supply-constrained coastal markets, as the dollar plunges.

Severe Impediment: Increased Student debt is responsible for as much as 35 percent of the decline in young American home ownership from 2007 to 2015 according to a new study done by the NY Fed.

Headed In the Wrong Direction: Venice Beach is one of the most desirable places to live in the US, yet it’s housing supply has been shrinking.


Can’t Beat ‘Em, Join ‘Em: Sears announced that they are going to start selling Alexa-enabled Kenmore appliances on Amazon, sending shares soaring.  See Also: Amazon can now crush a company (in this case home meal kit company Blue Apron) just by filing a trademark. And: How Amazon has become a problem for re-flationary monetary policy in Japan.

Dinosaurs? How technology could lead to banks facing Kodak-style obsolescence over the next 15 years.

Rise of the Machines: Walmart is increasingly replacing retail employees with robots. In addition, they area working on facial recognition software to detect customer dissatisfaction and adjust staffing accordingly.  How this will play out in practice will be fascinating since apparently, Walmart management is unaware of this website that sheds some light on what Walmart shoppers actually look like.

Zero Point Zero: In an extremely rare circumstance, a private equity fund that made highly leveraged plays on oil and gas back in 2013 is now worth essentially nothing.  The Orange County Employees Retirement System was an investor and has now marked their position to zero.

Chart of the Day

Courtesy of the WSJ Daily Shot

Mortgage debt service ratio is way down by the non-mortgage consumer ratio is way up:

The share of Americans who rent is at it’s highest level in decades:

Source: @MatthewPhillips, @FactTank

The ratio of home prices to incomes in Canada is insane:

Source: Capital Economics

Here’s who is buying US real estate:

Source: Wall Street Journal


Seems Reasonable: A man who was upset with AT&T trucks parked outside of his house took matters into his own hands and shot their tires out because, Florida.

Not the Sharpest Tool in the Shed: A man who “identified himself as a drug dealer” called police early Sunday to report the theft of cash and a small bag of cocaine from his vehicle because, Florida.

Can’t Catch a Break: In the latest round of terrible PR, rats fell from the ceiling at a Dallas-area Chipotle.  For those keeping score at home, they have now had issues with E coli and norovirus, as well as rats falling from the ceiling – in addition, I’m fairly certain that they put laxatives in their burritos.  Other than that, things are great.

When You Gotta Go: A bear wandered into a house in Wyoming, took two poops in the living room while several people were at home and then ran away.  I guess he just wanted some privacy.

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

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Landmark Links July 21st – Where is Everyone?

Landmark Links June 18th – Fake Out


Lead Story… Since the end of the Great Recession, California’s cities have failed to produce anything close to the number of housing units needed to accommodate the state’s growing population.  The responses from cities has run the gamut from inaction at best and open hostility to new development at worst.  We are now dealing with the fallout: a crushing housing affordability crisis in which a state with some of the highest wages in the nation also has the highest poverty rate.  This has finally got the attention of politicians in Sacramento who have offered up a slew of legislative measures to address the crisis.  Today, I want to focus on SB 35, authored by Senator Scott Wiener of San Francisco since it is the bill that has gotten substantial press of late since passing through the state Senate last month.  At a high level, SB 35 – also called the Housing Accountability and Affordability Act (per the OC Register):

Creates a streamlined approval process for multi-family developments that are in “infill” areas and jurisdictions falling behind on providing housing for all income levels.

Since 1967, California cities and counties have been required to develop plans every 8 years for construction of new residential units in their communities under the Regional Housing Needs Assessment (RHNA).  Under the RHNA, cities and counties are required to account for units at all income levels under a jurisdictions housing element. The problem is that there is no enforcement mechanism for cities who choose to ignore their own plans.  In other words, it’s little more than urban planning Kabuki theater where cities put on a big show to pretend to care about housing and then quickly give in to NIMBY constituents when it’s over.  If you want more background on why the RHNA is a farce, Liam Dillon of the LA Times  wrote a terrific piece about it late last month.  So, how does SB 35 aim to fix things? Here is the press release from back in January (emphasis mine):

Today, Senator Scott Wiener released a detailed description of Senate Bill 35 – the Housing Accountability and Affordability Act – which he first introduced in December. SB 35 will create a streamlined approval process for housing when cities are not meeting the housing creation goals required by the Regional Housing Needs Assessment (RHNA), which will expedite the construction of affordable housing. SB 35 also creates a more robust reporting requirement for housing production by requiring all cities report their annual housing production to the California Department of Housing and Community Development (HCD).

Before I jump to my analysis of a couple of major issues, I want to be clear on one thing: this bill is a step in the right direction.  The RHNA is generally a good idea but needs an enforcement mechanism, otherwise it’s existence is pointless.  This should have been done years ago before we got to today’s miserable state of affairs but this is at least a start.  Here’s more from the above-quoted press release (emphasis mine):

Under SB 35, if cities aren’t on track to meet those goals, then approval of projects will be streamlined if they meet a set of objective criteria, including affordability, density, zoning, historic, and environmental standards, and if they pay prevailing wage for construction labor. Currently, RHNA goals are reassessed and updated every 8 years. Under SB 35, cities will submit their progress on housing production to HCD every 2 years. If the city is not on track to meet its RHNA goals at one of these progress checks, streamlining will be in effect for the entire next two-year cycle. A city is “on track” if it is 1/4 of the way to its goal by year 2 of the 8-year cycle, 1/2 of the way to its goal by year 4, and so on. The streamlining applies only to the income levels that aren’t being built for – so if a city is building sufficient market-rate units but not enough low-income units, the project must add low-income units to qualify for streamlined approval.

Despite the clear good intentions, there are two big issues in that highlighted passage that will make it very difficult for this bill to do much of anything to mitigate the housing affordability crisis:

  1. Existing Zoning – The streamlined process only applies to projects that already comply with existing zoning.  This seems to makes sense until you consider just how much California cities have been down-zoned since the 1960s.  Want an illustration?  This graph is from a dissertation by UCLA Ph.D. student Greg Morrow and looks at potential residential capacity in Los Angeles:

         LA’s population was 2.5 million in 1960 and city zoning allowed for enough housing          for 10 million residents.  The population has grown to 4 million today but the city            only has capacity for 4.3 million people – nearly at capacity.  If this strikes you as ass-backwards, that’s because it is.  This is why streamlining only for conforming zoning doesn’t mean much.  The playing field has already been tilted so far that there simply isn’t much capacity left.  The only way to truly address this issue is through amending restrictive zoning which will still require the same brutal discretionary process that has us in this predicament to begin with whether this bill passes or not.

    2. Cost – The streamlined approval process only applies to projects that pay prevailing           wage for construction labor.  This is the equivalent of digging a hole next to your               house with a shovel in an effort to get up on your roof.  Much to the chagrin of                     certain powerful interests in Sacramento, increasing construction costs by 25% or              more does not make it easier to build affordable housing.  Governor Brown tried to           do something similar to SB 35 last year but scrapped the plan after union interests             insisted on inserting prevailing wage language because it would drive up costs to much to be economically viable.  Here at Landmark, we look at multi-family construction projects in California cities all of the time.  These days, they are barely clearing a 6% return on cost at stabilization.  Affordable projects are typically substantially lower and rely on the sale of tax credits and cheap bond financing to be viable.  That’s a 6% yield to take on construction and market risk.  Hardly a developer making a killing.  The counter argument to this is usually that land is overvalued and needs to fall.  However, apartment projects aren’t single family homes in Irvine where the land makes up nearly 50% of the home sale price. Land is typically around 15% of the cost of an average apartment project while construction costs are well over 50%.  If you increase construction costs substantially, it’s actually quite easy to get to the point where the project doesn’t work, even at a land cost of zero.  Any way that you look at it, increasing construction cost substantially is not a wise way to incentivize affordable housing development.  If the project can support the increased cost that’s great but a substantial number can not.

I really hope that I’m wrong and that bills like SB 35 lead to more development in areas of California where it is most needed.  However, the provisions in the bill that I mentioned above leave me with a very skeptical outlook.  In order to fix this problem, the state of California is going to need to take an honest look at the factors that are causing it in the first place and then take action that may piss off powerful political constituents.  We are no where near that point yet but, as a wise man once said, “the journey of a thousand miles begins with one step.”


Hoarders: Americans are holding a record amount of cash in checking accounts as the shadow cast by the Great Recession continues.

Can You Spare a Dollar: Americans are finding it hard to get a raise despite a tight employment market.  It seems as though companies have forgotten how to compensate workers fairly and workers have forgotten what they deserve.  Yet again the shadow cast by the Great Recession remains.

Wrong Impression: Markets rallied last week after the Fed gave what was widely perceived as a dovish testimony last week.  However, Bloomberg’s Tim Duy argues that dovishness was not the Fed’s intent at all.


Big Short Redux: Will the death of the shopping mall be the next big short for hedgies?


Barbarian at the Gates: Amid all of the hoopla around the Whole Foods acquisition, Amazon has quietly revealed a possible expansion into the residential real estate sales business as a potential new target of it’s disruptive business plan.

A Picture Worth 1,000 Words: Thanks to our friends at McKinley Capital Partners for this amazing chart that summarizes why California is so expensive and Houston is not.

Side Effect: Why a subdued housing recovery has resulted in lower volatility in the stock market.


So It Begins: Amazon anti-trust concerns are starting to emerge in Washington and on Wall Street.

Vomit Comet: Self driving taxis have two major problems: 1) people are slobs; 2) many people are drunks and tend to puke in moving vehicles after a night of boozing.  Both make it incredibly expensive to maintain a fleet when it comes to cleaning.

Can’t Make This Up: Nevada is in a weed state of emergency as newly-opened dispensaries run out of product.

Chart of the Day

Consumer credit update, courtesy of the always insightful WSJ Daily Shot:

Credit card debt, as a percentage of disposable income, has been far below the peak levels, barely rising over the last few years.

On the other hand, auto loans and student debt levels, as a percentage of disposable income, are at record highs.

With persistently low interest rates and a post-recession decline in mortgage balances, total interest obligations as a percentage of disposable income remain benign.

Source: Wall Street Journal


Goals: An unidentified person ripped one on an American Airlines flight, forcing an evacuation.  Update: the airline is now denying it.  However, if my teenage years taught me anything it’s that he who denied it, supplied it.

There’s a Metaphor In There: A truck carrying 7,500 lbs of slime eels overturned in Oregon and shut down a highway.  The pictures are epic.

Withdrawal Symptoms: A man who was stuck in an ATM machine escaped by slipping “please help” notes through the slot.

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

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Landmark Links June 18th – Fake Out