Landmark Links October 7th – Urban Legend

urban-legend

Lead Story…  Chances are that you’ve heard tales about alligators living in the NY sewers, Coca Cola’s magical ability to dissolve teeth overnight, that Elvis Presley is still alive and in witness protection, or even the old  Weekly World News standby of a bat child found living in a cave. These urban legends and others like them have spawned a virtual cottage industry of cable TV shows and websites seeking to either prove or debunk their claims.  Likewise, if you’ve attended development industry conferences in the past 4 years or so, you’ve probably heard some variation of the following on a capital panel: “There is too much money chasing too few deals.”   It’s been repeated so frequently through the past few years that the concept of “too much money chasing too few deals” is almost universally accepted as truth in the residential development industry.  However, just like tooth-dissolving cola, it falls apart under further scrutiny when discussing for-sale residential real estate development.  When viewed from 30,000 feet, the previous sentences probably looks crazy.  Many private equity funds, hedge funds, etc have raised money to invest into housing development.  However, it’s not the amount of money raised that’s been problematic in recent years.  Instead it’s that the type of money available is often a poor fit for projects in need of financing in today’s relatively stable housing market.

In the years before the housing bubble and subsequent bust, private home builders typically utilized bank debt and pension fund capital to build subdivisions and master-planned communities.  The debt component was readily available and attractively structured and pension fund capital had relatively long investment horizons and reasonable return expectations when compared to opportunity fund money which was typically used for entitlement projects and other, more risky ventures.  It wasn’t unusual back then to have decent sized private builders in California build and sell several hundred homes a year or more.  With a couple of notable exceptions, they were not going to compete with public home builders when it came to cost of funds.  However, they were still substantial players in the market and were able to build at decent levels of production while often delivering higher quality homes than their public competitors.  This all changed when the housing market crashed.  Banks reduced exposure to the home building and development space by a substantial amount, as did pension funds.  Some left the space entirely.

At the same time that pension funds and banks were pulling back, opportunity funds ramped up their fundraising in order to capitalize on the carnage that the Great Recession wrought on land values.  They offered their prospective investors high-octane returns that would be realized when they bought trophy properties at bargain-basement prices in a distressed environment, to develop or sell as the market began to recover.  This capital was and is well suited for opportunistic investments brought on by a market crash – thus the label opportunity fund.  What it isn’t a great fit for is investing in home builder and land development deals in a stable market.  In reality, the window to buy distressed assets wasn’t quite as long as many had anticipated and the doldrums of 2010-2011 quickly gave way to a run-up in transactions and land values in late 2012 into early 2014.  All of which brings us to where we are today: a stable market with tight inventories where there is a ton of capital that has been raised – but very little of that capital has a return profile that fits where it is needed most: lot manufacturing and production home building.  There are several reasons that this is happening:

  1. Unrealistic Investor Returns in a Stable Market – As stated above, much of the capital that has been raised to deploy for home building and land development in the market today is much better suited for a distressed market than a stable one.  However, there is something bigger at play: equity funds are targeting the same mid-20% IRR returns with the 10-year Treasury yielding 1.75% that they were when the 10-year was yielding 5%.  All returns are relative, meaning that, in real terms, today’s targeted returns are actually substantially richer than they were when the 10-year was substantially higher.  This has more to do with fundraising and marketing than anything else.  Funds are reluctant to pitch investors at the returns they are likely to achieve (mid to high teens) since their competitors will still promise mid-20%s, meaning that they won’t be able to raise capital, even if the underwriting that they are using to get to those returns is aggressive BS.
  2. Private Builders Get Squeezed Leading to Less Competition – In order to offer high returns to investors in a lower return environment, funds need to grab a bigger piece of a smaller pie, leaving less for builders and developers.  Typically, this means putting steep minimum multiple hurdles in their waterfalls.  Ironically, minimum equity multiples are incredibly short sighted as it encourages builders to push prices rather than absorption since the multiple hurdle is almost always substantially higher than the IRR hurdle, leading to longer sell out periods.  As if that isn’t enough, the few bank lenders left in the space are typically quite conservative and require a full persona guarantee.  So if you are a builder, you now have to put up 10% of the equity or more in order to get a deal done and put your balance sheet on the line to finance it and you’re getting a smaller piece of the returns.  Eventually, you have to wonder what the point is.  This is a huge reason that there are very few decent sized private builders left – in many cases the reward simply isn’t worth the risk.
  3. Lack of Debt Capital Resulting in Broken Deal Structures – Many land deals purchased during the aforementioned 2012-2014 run-up were bought under the assumption that either debt would be available to improve lots or public builders would purchase paper lots.  Fast forward to 2016 and the public builders still don’t have much of an appetite for paper lots nor is there debt readily available for horizontal development.  That means that the owner is either going to need to sell for a substantially lower number than they had in their proforma (sometimes even a loss), or improve the lots themselves by raising additional equity.  As a result, many of the sites that were bought in 2013 with a business plan to entitle and flip are effectively underwater.  Mind you that home prices have almost universally INCREASED during this time frame but a lack of reasonably-priced development debt or public home builders with an appetite for paper lots has caused a stealth land correction of sorts that has been playing out for months.
  4. No Investor Appetite for Long Duration Deals – Ask an opportunity fund investor what they fear most and you will probably hear something about getting stuck in a multi-cycle development project.  High octane capital needs to get in and out relatively quickly in order to make the out-sized returns promised to investors.  Many opportunity funds are of the mindset that we are getting late in the cycle since prices have risen so substantially from the bottom despite the fact that housing starts in key production markets haven’t picked up much and inventory is still bumping along near record lows.  Many funds have been looking to trim project duration in an effort to ensure that they are out when the cycle inevitably turns.  As a result, there are some incredible opportunities out there that require capital to execute a 5-7 year business plan that no one will touch due to duration.  We have seen several of these sort of projects where sponsorship is strong and land basis is very attractive due to a lack of bidders.  However, it’s incredibly challenging to find capital that is willing to go out that far, even if the returns are exceptional.  This short-term mentality has left a large hole in the market for anything but bite-sized infill deals.

If this actually were a  market with the aforementioned “too much capital for too few deals” we would expect to be seeing increasing transaction volume and increasing land prices as the supply of capital led to a seller’s market. However, neither of these are occurring in all but a select few markets (at least on the west coast).  Instead, we are seeing light (at best) land transaction volume.  In order for the land market to turn the corner, either  the public builders need to regain their appetite for buying paper lots and developing them or we need more sources of capital that are properly aligned with the projects that they are financing under normal market conditions.

Home building and land development can both provide great returns in a healthy market. However, trying to finance these ventures with little-to-no debt and opportunistic capital raised to buy distressed assets is like trying to fit a square peg in a round hole.  Does this sound like a market with too much capital to you?  Better keep searching for those sewer-dwelling gators.

Economy

Pay Up: A look at who pays the most for housing, healthcare, energy and groceries by state.

Lag Time: How the psychology of the Housing Bubble helps to explain today’s odd labor shortage.

Commercial

Office Space: Open office concepts are becoming a bit less open as many tenants build out more private space.

Residential

Delusional Narcissism: Celebrities really suck at selling homes, mostly because they dramatically overestimate the value of their fame on the house they are trying to sell.

Flattening Out: Residential construction spending was down again in August despite strong gains in multi-family.

The Pendulum: There is a fairly strong demographic argument that we are approaching “peak renter.”

Profiles

Clowning: The clown industry (yes, there is such a thing) is not happy about all of the creepy clown sightings occurring across the US. See Also: Penn State students lose their minds after creepy clown sighting.  And: Someone even started a Clown Lives Matter movement, complete with organized protests.

Useless: Robo-callers and internet scammers have turned the National Do Not Call List into one big joke.

Soul Crushing: The average white collar worker will spend 47,000 hours on work email over his or her career.

Scapegoat? Meet the whiz kid behind the sketchy Russian mirror trades that are causing Deutsche Banks whole bunch of trouble that it really doesn’t need right now.

Chart of the Day

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WTF

Bite to Eat: Some lunatic threw an alligator through a Wendy’s drive thru window. Because, Florida.

Incestuous: A 68 year old man unwittingly married his 24 year old biological granddaughter. They don’t plan on getting divorced. Once again, because, Florida.

Crimes Against Humanity: Today’s video of the day is a bunch of adults beating the crap out each other in a massive brawl at a Chuck E Cheese in, you guessed it: Florida.  Kudos to the guy in the Eli Manning jersey who appears to have a much better arm than the real Eli Manning.  (h/t Ethan Schelin).

P.S.  I know that we spend a lot of time laughing at Florida’s expense on here. However, please keep Florida residents (including my parents) in your thoughts and prayers as they batten down the hatches to deal with Hurricane Matthew. Hopefully everyone will be ok so that they can get back to their goofy antics ASAP. 

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

Visit us at Landmarkcapitaladvisors.com

Landmark Links October 7th – Urban Legend

Landmark Links June 21st – Worth the Investment?

bluto3

Welcome to summer!  Fortunately, we avoided the apocalypse that a crackpot astrologer (redundant) predicted last night when the full moon coincided with the summer solstice.  I know you’re all as relieved as I am.  Now, on to the news:

Lead Story… I recently read two studies that came out in the last week or so that appear contradictory, at least on the surface.  First off, the National Association of Realtors and SALT published a survey that strongly suggests that student debt is holding back the housing market:

Seventy-one percent of non-homeowners with debts from student loans said the burden of those monthly payments was keeping them from buying a home. More than half said it would likely continue do so for more than five years, according to a new study by the National Association of Realtors and SALT, a consumer literacy program provided by nonprofit American Student Assistance.

Second, John Burns Real Estate Consulting posted a story on their blog about rising college graduation rates are contributing to income inequality:

Rising college graduation rates, particularly for women, have significantly contributed to a greater share of high-income households. Among married couples, 23% now both graduated from college—a percentage that has steadily risen for decades. When both spouses went to college and work, household incomes at the top rise!

Consumer spending data provides strong support to the JBREC hypothesis of college education contributing to income inequality:

So which one is it?  Is college debt holding graduates back and not allowing them to take place in the “American Dream” of owning their own home or is the rising percentage of couples where both have a college education (and probably a bunch of student debt) leading to out-sized earnings for a percentage of the population?  I would contend that it’s both.  First off, we need to distinguish between cost and return.  Yes, college is expensive – arguably too expensive seeing as it’s cost has far outrun inflation for a long period of time.  However, if we are making the case, as the Realtor study is that college debt is holding back the housing market then we have to ask a simple question: what, is the alternative?  That’s where the problem lies.  Sure there are tech founders that didn’t graduate college only to become billionaires but they are extreme outliers, pure originals that can’t be replicated.  If they weren’t outliers, by definition they would never be able to earn that type of out-sized return.  Unfortunately, not everyone is able to change the world, even if they all got a trophy in youth soccer.  If a student isn’t independently wealthy enough to not take on debt (a proposition similar to winning the lottery – pure luck), the alternative is not to go to college.  Statistically speaking, that is a horrible bet.  This piece of Study.com sums it up perfectly:

Considering the high cost of a college education, potential students may question whether the expected earnings after graduation outweigh the possible debt incurred from student loans. In 2002, the Census Bureau looked at lifetime earnings of employees with bachelor’s degrees and those without for 1999: non-degree holders could expect to earn 75% less than bachelor’s degree holders, who could expect to earn $2.7 million over their lifetimes. However, since 1999, bachelor’s degree holders can now expect to make 84% more than high school graduates.

As the above numbers, and the JBREC study show, college is becoming more and more of a necessity to get ahead in the modern world.  If you want to join the middle or especially upper-middle class, a high school degree is not going to get you there (unless of course you happen to be the aforementioned tech genius/ future billionaire).  Yes, the debt is a necessary evil with an important caveat: not all colleges or all majors within a college are created equally and that’s where I believe that studies like the NAR one are in error: they overly generalize a very complex issue.

The seventy one percent referenced in the NAR study is an eye-popping number but there are a few issues with the way that the study was conducted: 1) There is a no segmentation (at least none was provided in what they published).  For example, the results aren’t sorted based on whether the respondent attended a 4-year college, a 2-year junior college or a for-profit college let alone what their course of study was.  2) There is no differentiation made between those that received a college degree and those that took out loans but did not complete a degree.  It’s easy to see where this is problematic.  I highly doubt that student debt is as large of an issue for an engineering grad from a top school as it is for a someone who dropped out of a for-profit college before receiving a degree.  Alas, we don’t know from this study since the data wasn’t provided.

Yes, the rate of increase in the cost of a college degree in recent decades has been massive.  However, if looked at strictly from an economic standpoint, the yield on investment is still quite good, IF you graduate AND and chose a major that will get you somewhere other than flipping burgers or spending your time at political rallies asking for debt forgiveness (yes, I know that was a cheap shot).  The primary reason is that the baseline for comparison: a high school degree provides little if any earning power even when debt is taken into account.  Like it or not, many jobs that previously required only a high school degree now require college.  So when will college cost begin to moderate?  IMO, it’s when the return on investment no longer justifies the outlay.  You can already see this happening in for-profit schools which have proven over time to be a poor investment for students which is why their stock performance has been utter crap.  As a further illustration, here are the 25 colleges with the best Return on Investment and the 25 colleges with the worst ROI.

The NAR study is factually correct: every dollar of additional debt that you take on be it student or otherwise will indeed make it more difficult to qualify for a mortgage. However, if one graduates with a worthwhile degree, that debt should still be a good investment over time and make the borrower more likely to be able to purchase a house than the alternative of not taking 0n debt by not attending college at all.  It’s a shame that the NAR data didn’t include a further breakdown because it would have made for a far more interesting story than the shocking 71% number.  It’s almost as if they had an agenda here….

Economy

What Gives?  Gregory Mankiw of New York Times on five possible reasons for our sluggish economy.

Cream of the Crap: The US economy is doing great….compared with pretty much everywhere else.  See Also: Swiss government debt now has a negative yield all the way out to 33 years, which makes even Japan look good in comparison.

The Fed Who Cried Wolf: The Federal Reserve has spent the last few months saber-rattling about imminent interest rate hikes only to backtrack at their monthly meetings.  The act is getting old and they are now at risk of losing investor faith in their policy rate path.

Demographics Are Destiny: This animated demographics chart from Calculated Risk is almost mesmerizing to look at.

Commercial

Refi Madness: America’s malls have been on the ropes for quite some time and would have plenty of issues even if they were not leveraged at all.  Unfortunately for their owners, they have billions in debt coming due.

Storm Clouds: PIMCO sees a potential downturn in the next 12-months for U.S. commercial real estate as tightened regulations, a wall of debt maturities and property sales by publicly traded landlords take their toll.

Residential

It’s Complicated : Morgan Housel of the Motley Fool is one of the best financial writers in the world.  He has also long been a critic of the concept of a home as an investment.  Recently he and his wife bought their first home after they started having kids.  I think this assessment of the complicated nature of the home buying process and it’s impact on transaction fees is spot on:

I consider myself reasonably astute in personal finance, because it’s so much of what I write about for a living. But I can’t count how many times I had to stop, realize something confused me, and spend an hour of research to understand what I was about to sign. After going through our loan documents I sent at lest 10 emails to the bank with various forms of, “What’s this?” What is this?” “WHAT IS THIS?”

Even with a realtor, home buyers need to be amateur lawyers to fully understand what they’re doing. I can’t imagine what it’s like for people for whom finance is already a daunting topic. And that’s most people.

This probably explains why transaction fees are still high. When you combine emotion with legalese, the path of least resistance is to just sign your name without considering what you’re doing. I had a few moments of, “They wouldn’t be offering me this if it wasn’t in my best interest” only to stop, want to slap myself, and keep researching.

For a Price: Multi-family landlord’s are offering free rent as a concession in San Francisco as a flood of units finally hit the market but you can’t get it unless you can afford a luxury apartment (h/t Jeff Condon).  See Also: San Francisco’s housing mania may finally have reached it’s limit.  And: Luxury housing demand appears to be on the wane.

Profiles

Hero: Meet the hacker who is fighting ISIS by spamming their Twitter accounts with porn.

Worker’s Paradise: Venezuela’s descent into failed state status where citizens fight in the streets for food is even worse when you consider that, based on it’s vast natural resources it should be one of the wealthiest countries in the world.

Bird Hunting: After Microsoft purchased Linkedin, the next question in Silicon Valley is who will buy perpetually-struggling Twitter.

Chart of the Day

A couple of fascinating graphics from JBREC.  It amazes me that still only 23% of the married population consists of couples who both have degrees.

share of married couples with college degree

percent of adults with bachelor's degree

WTF

What a Gas: Activists are planning a “Fart-In” at Hillary Clinton’s DNC acceptance speech this summer in Philadelphia (h/t Steve Sims).

All the Rage: England’s newest fitness craze known as Tantrum Club involves screaming obscenities and popping balloons with bad words written on them while stomping on bubble wrap.  This is right up there with the Shake Weight when it comes to dumb workout fads.

Keeping up with the Floridians: An obese naked man was videotaped relieving himself outside of a Georgia Waffle House in broad daylight.  When asked for comment, a spokesperson for Florida replied “see, it’s not only us.”

Boom: A group of arsonists set off fireworks in a Walmart in Phoenix leading to the building needing to be evacuated.  Fortunately, someone had the good sense to videotape it.

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

Visit us at Landmarkcapitaladvisors.com

Landmark Links June 21st – Worth the Investment?

Landmark Links April 15th – Looming

Golden Gate

Lead Story…  Another day, another story about one of America’s astronomically expensive and typically chronically under-supplied markets getting hit with a massive wave of high end condos (and high end apartments).  Over the past few weeks, we focused on New York, Miami and even Hong Kong.  Today it’s the patron saint of expensive US housing markets, San Francisco.  Even casual follower of the residential real estate market are well aware of the lack of supply and nose-bleed prices that people pay to live in SF for a whole bunch of reasons.  However, as Wolf Richter notes in Business Insider this week, things appear to be changing.  According the the SF Planning department, there are 44,700 units in the pipeline from “building permit filed” to “under construction.”  That doesn’t include the 17,900 units approved but not yet permitted.  Nor does it include the 23,980 units that are approved in the Park Merced, Candlestick and Treasure projects that are approved but could take well over 10 years to build out.  That’s a ton of inventory coming online in a city with only 382,000 units in it’s existing housing stock.  The impact is already being felt in the condo market:

In the first quarter of 2016, various market segments in the city began to trend in significantly different directions. Houses, especially those below $2 million, are still often selling in a frenzy of bidding: Recent reports of houses selling with 5, 10 or more competing offers are not uncommon, especially in neighborhoods considered more affordable (by San Francisco standards). Demand remains very high, supply remains extremely low, and new house construction is virtually nil.

As of early April, the number of condo listings actively for sale in MLS is up over 40% year over year, and that does not include most of the new-construction condo units hitting the market (not listed in MLS).

These condos often go into contract during the construction phase, long before sales actually close, and access to information during that period is very limited. There can be no doubt that they comprise serious competition to resale condos in the areas they’re being built.

– Patrick Carlisle, Chief Market Analyst at Paragon

According to Richter “It’s chilling: for condos under $1.5 million, the number of withdrawn or expired listings soared 94%, and for condos above $1.5 million 128%.”

First off, this had to happen at some point but it should have been more incremental and should have happened earlier.  San Francisco’s market has been notoriously tight for years and the entitlement process there is reminiscent of running the gauntlet.  If entitlements weren’t so difficult to come by, many of these units could have been delivered years earlier when demand began to ramp up but construction didn’t.  Instead, many developers started at roughly the same while prices of SF condos ran up 70% in the interim, meaning that we now have a tidal wave of units starting to get delivered just as the VC market is slowing and tech firms are beginning to lay people off.  Reality is that the local market desperately needed more units but that doesn’t make it any less painful for the developers holding the bag or the home owners who bought in the late stages of the run-up.  Either way, we are certainly going to test the true depth of demand for high priced housing in the next few years.

Second, this is what happens when everyone builds the same thing.  The only thing getting approved in SF are high density, high end condos and apartments.  That’s where all of the units are so that is where the glut is going to occur.  Want to know why the single family home market is holding up much better?  Simple.  Almost no SFD’s are getting built so supply hasn’t increased.

Third, several fund investors the we respect a lot are telling us that they are taking a wait and see approach on current investment opportunities in anticipation that there will be large distressed opportunities in the NY and Miami high rise condo markets in the coming quarters that will result in a buying opportunity.  Their investment thesis is that many of these high end condos will end up going back to the lenders since foreign investors have begun to retrench from the market and there isn’t enough domestic demand to buy up the units at their high pro-forma prices.  I guess we can now add San Francisco to that list.

San Francisco housing

Economy

Black Gold?  According to the talking heads, it was bad for the economy when oil prices were plunging so is it now good that they have rebounded to $40/barrel?  See Also: Why wasn’t there any economic boost from low oil prices?

It’s All Relative: Top Venture Capitalist Peter Thiel says that pretty much everything is overvalued but some things are more overvalued than others.

Get Real: Real (inflation adjusted) 10-year treasury yields have gone negative for the first time since 2012.

Commercial

Just Speculating: Growth in the San Francisco office market has been a safe bet for several years as VC money poured into new investments and tech companies gobbled up any available space in order to account for aggressive growth projections in a supply constrained market.  Times are changing though and the assumption that the good times would continue has put some speculative office investments at risk now that the VC spigot is slowing while several landlords are trying to unload buildings for over $1,000/sf.  At the same time, available sublease space from downsizing tech companies, an indicator of a slowdown, is creeping up.  From the Wall Street Journal earlier this week:

“We’ve started seeing the cautionary winds start blowing,” said Steve Barker, executive vice president at Savills Studley, which advises companies on their real estate. “In the last two to four months, you’ve really seen the impact of the strained capital environment hitting the real-estate market.”

A cautionary tale exists with online game maker Zynga. In 2012, the then-rapidly growing company bought its 680,000-square-foot building at 650 Townsend St. It saw plenty of space to grow, and at one point occupied 480,000 square feet.

Soon after, its growth stalled, and stock price plunged, layoffs followed, and now the company is trying to sell the building.

Subleasing, though, carries its own risks.

Health-care startup Practice Fusion, which leased former Zynga space in the same building, underwent layoffs in February. Now Practice Fusion, too, has put its 60,000-square-foot space up for sublease.

From what we’ve been hearing from local market sources, this is much more of an issue in downtown San Francisco which is heavily dominated by startups that aren’t profitable and are reliant on VC money fund operations.  It isn’t as much of an issue in Silicon Valley where huge and incredibly profitable mature companies like Apple and Google and the myriad of companies in their ecosystem have come to dominant the local commercial real estate markets.  Why? Because these companies don’t rely on VC money and aren’t impacted by it’s availability.  Still, it bears watching to see if the issues starting to appear in SF spread to other Bay Area markets.

Residential

Stay in School: New research suggests that student debt is a substantial impediment to college dropouts buying a home a home but only has a marginal impact on those with a Bachelor’s degree or higher.  Moral of the story: if you borrow money to go to college, you had better graduate.

Signs of Strength: Mortgage rates have dropped to an annual low and apps for mortgage refinances have been surging  for several weeks.  However, purchase money mortgage applications had not moved much recently.  That all changed last week when purchase apps increased to the second highest level since May 2010.

Graphic of the Day: I found this 3-D image from The Visual Capitalist fascinating:

The Salary Needed to Buy a Home in 27 Different U.S. Cities

Profiles

Long Shot: Leicester City entered the English Premier League season as a 5,000 – 1 underdog to win the league championship.  To put some context to that, you can place a bet with the same odds that Elvis is still alive.  Furthermore, the Cleveland Browns are only 200-1 to win next years Super Bowl.  You read that correctly, they were 25x LESS likely to win a championship than the Cleveland Browns. The key word there is “were.”  With 4 games left in the season, the perennial doormat which was nearly relegated last season is in 1st place, 7 points ahead of the second place Tottenham.  Hang in there Cleveland fans.  There is hope.

The New Buggy Whips? The i-Phone is doing to cameras what the automobile did to horse carriagesBut See: The Apple Watch has not been the FitBit killer that may thought it would be.

Really Bad Idea:  Stalkers rejoiced when new app allows anyone to spy on Tinder users and track them to their last location, an invasion of privacy that would make Zuckerberg blush. See Also: Body parts from a missing woman were found in a dumpster outside the home of a man she went on an online date with.

Chart of the Day

LOL

crude

Source: The Reformed Broker

WTF

The Saddest Record: A Brooklyn man set a record by watching TV for 94 hours straight. That’s just under 4 days for those of you who don’t like math. This is one of those situations where there are no winners, only losers.

They Flying Farm – It’s gotten ridiculously easy (and cheap) to bring a comfort animal on a flight.  All you need is a doctors note and a $65 certificate for your pet. This started in 2012 when the US Department of Transportation amended a statute that was originally intended to cover guide dogs.  Since then, service animal registrations have risen from 2,400 to over 24,000.  It’s not just dogs and cats either. People are bringing all sorts of barnyard and exotic animals aboard especially in LA and NY, leading some to wonder how much is too much:

The zaniest anecdotes (like the “support pig” ejected from a D.C.-bound plane after it relieved itself in the aisle or the “therapy turkey” whisked via wheelchair onto a recent Delta flight) tend to go viral. But the habit has become particularly commonplace on the LAX-JFK route favored by fussy celebrities and industry execs.

Having to call home to say “honey, my flight is going to be late because a pig crapped in the aisle” was something that was only previously an issue in 3rd world outposts with names like The People’s Democratic Socialist Republic of __.  Now we have barnyard animals on planes in the US ostensibly to keep someone from getting nervous on a plane. I think it’s safe to say that this has gone a bit too far.

In Soviet Russia: Saying that Russia is a bit of a freak show is a bit like saying that water is wet.  It’s a factually accurate but unnecessary statement given that anyone over the age of four already knows it to be true.  Example A: a Russian entrepreneur recently opened a cafe in East Siberia that’s a tribute to Vladimir Putin.  It’s complete with Putin shrines and the toilet paper in the restrooms has pictures of Barack Obama and other western leaders on it. (h/t Steve Sims)

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

Visit us at Landmarkcapitaladvisors.com

Landmark Links April 15th – Looming