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A Fever Developed, Akin To A Gold Rush

A weekend topic starting with the Financial Times. “Viewed from Bangalore, the purchase of a newly built three-bedroom apartment in London for more than £1.4m (S$2.4m) seemed like a safe investment bet. As Shonu Bhandari considered the purchase two years ago, agents told him he could expect the value to rise 15 per cent before the property had even been finished. But his purchase soured quickly.”

“When Bhandari approached a mortgage lender, it valued the property not at 15 per cent more than he had agreed to pay – but at 20 per cent less. With completion of the building looming, he signed over the property to a new buyer in March this year for £1.2m, losing more than £200,000 of his deposit.”

“”Bhandari’s experience has been repeated around the world. Developers’ over-exuberance and government crackdowns combined to end the selling frenzy and leave developers, lenders and property investors battling to absorb the fallout. ‘I can’t remember the last time I sold a new-build property at a profit,’ said Charles Jordan, an agent who resold Bhandari’s apartment.”

“Jordan recently helped resell another home in a waterfront tower that was bought for £2.8m and sold for £2.05m ahead of completion – so an overseas buyer who had hoped to ‘flip’ for a profit instead lost £750,000.”

“Arriving at Vancouver’s international airport, visitors must walk past advertisements for gleaming new-build condominiums, with text in both English and Chinese. House prices in greater Vancouver rose about 80 per cent in the five years to May 2018.”

“A report this year commissioned by the regional government, which took power in 2017 pledging to combat the housing affordability crisis, described how ‘a fever developed, akin to a gold rush, in which foreign buyers rushed to buy homes, willing to pay over market price for property in order to be in on the rush and avoid what many thought was inevitable – government intervention. Local speculators and prospective buyers, worried about being priced out of the market, further fuelled demand.'”

“House sales in Vancouver this year have dropped to their lowest levels in decades.”

From Bloomberg. “It’s a billionaire’s delight: In a market awash in luxury properties and buyers more skittish about parting with their cash, brokers are working harder to close mega-deals. That sometimes means discounts, and even the super-rich like a bargain. ‘Pricing was a little high, so we went through a correction,’ said Alexander Ali, an external spokesman for Nile Niami, the movie-producer-turned-developer of multi-million dollar mansions in Los Angeles.”

“‘Two years ago, there was a lot of foreign investment, but because international laws changed, it impacted our housing market,’ Ali said. Back then, ‘you could get $100 million for a house.'”

“Eight blocks from where Jeff Bezos recently dropped $80 million on a penthouse and the two units below it at Manhattan’s 212 Fifth Avenue, a $98 million condo has been on the market for about a month. The 19 815-square-foot spread — dubbed ‘Le Penthouse,’ — features an infinity pool facing the Empire State Building and a glass-walled jacuzzi on the private rooftop deck. But for the most part, it’s empty.”

“‘We sell the unit as a white box,’ said Raphael Sitruk, the listing broker with Keller Williams NYC.”

From The Guardian. “Two massive luxury real estate deals in Los Angeles have shone a harsh light on the wealth gap in a region where tens of thousands of people live on the streets while mansions the size of football fields sell for more than $100m. On Monday, Variety reported that the Uber co-founder Garrett Camp and his partner Eliza Nguyen have purchased a Beverly Hills mansion for a record-breaking $72.5m, in what is believed to be the largest-ever sale of a home in the neighborhood.paid for it.”

“Camp’s purchase has drawn the ire of activists and drivers who have long been protesting about Uber’s labor practices and advocating for better working conditions. ‘This is a perfect example of the 1% stealing from the rest of us,’ Nicole Moore, a ride-share driver in Los Angeles, said of Camp’s $72.5m purchase. ‘Drivers are living in their cars. We’re fighting for fair wages. At least share that wealth with the people who have actually built your company.'”

“The purchase by Camp is particularly eye-popping given that Uber continues to lose money and has also aggressively opposed drivers’ efforts to organize and improve their working conditions, said Veena Dubal, an associate law professor at the University of California, Hastings, who is an expert on labor rights in the gig economy.”

“‘It’s a slap in everyone’s face,’ she said, arguing that Uber was built on the idea of breaking labor laws and violating existing regulations. ‘The capitalist system we have has unduly rewarded him with extraordinary, in-your-face wealth.'”

From CalMatters. “Recent weeks have seen a debate of sorts about the image and reality of contemporary California. Is it, as Gov. Gavin Newsom contends, a nation-state proving that economic prosperity, multiculturism and social progress can advance together? ‘California is what America is going to look like,’ he told a television interviewer. ‘California is America’s coming attraction.'”

“Or is it, as Hoover Institute historian Victor Davis Hanson indirectly responded in a Fox News interview, ‘America’s first third-world state’ with widening income and wealth disparities, rampant homelessness, poor schools, and rising disease levels despite high taxes? ‘We have a medieval society,’ Hanson asserted, with a wealthy ‘royal elite,’ including Newsom, that prospers while ordinary Californians ‘are treated like peasants.'”

“Even as he boasts about his first state budget, which he calls an ‘affordability budget,’ Newsom acknowledges the state’s socioeconomic divide. ‘You can’t live in the richest and the poorest state and have a just society,’ he said while touting appropriations to help the 40 percent of Californians rated as poor or ‘near-poor’ by the Census Bureau and the Public Policy Institute of California.”

“The Economist quotes a leading in-state critic, Chapman University’s Joel Kotkin, with this appraisal: ‘The Golden State used to be a rising tide lifting all sorts of boats. Now it’s a rising tide lifting a few yachts.'”

The Real Deal on New York. “The waterfront Listowel Estate in Water Mill has listed for $29.5 million after first coming on the market for $39 million in June 2017, according to the New York Post, which also noted that another Southampton home has had its price cut down to $28 million after first listing for $37 million last September.”

“”Listowel Estate, located at 258 Horsemill Lane, has a 12,000-square-foot home sitting on Mecox Bay. It has five bedrooms, six bathrooms, a two-story library, hand-painted chinois wallpaper, marble bathrooms and a chef’s kitchen. The nearly seven-acre grounds include gardens and a pool. The Southampton home, at 17 Channel Pond Court, sits on six acres and has specimen trees, gardens, a pond, a pool, a gazebo and a tennis court. The 17,503-square-foot home, built in 2003, also has eight bedrooms and nine bathrooms.”

“Thomas Sandell, the billionaire Swedish hedge fund manager, has taken a 10-month break from the construction of an 18,000-square-foot Moroccan-style home at 1320 Meadow Lane in Southampton that is about 60 percent complete, the New York Post reported. It wasn’t immediately clear if Sandell planned to fully abandon the project. His local lawyer, Gilbert Flanagan, did not return the Post’s requests for comment. ‘The owner is now weighing his options, including demolition,’ said Chris Talbot, the Southampton Village building inspector.”

“Sandell has already spent about $37.1 million to buy the property and another $19 million on construction since 2012. Multiple architects have been attached to the project, whose stalled status was noted by 27east in January. The partially-built home, which sits on a roughly eight-acre oceanfront parcel, has two stories, numerous arches and a distinctive roof with pyramids and conical peaks.”

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This Post Has 136 Comments

  1. ‘a fever developed, akin to a gold rush, in which foreign buyers rushed to buy homes, willing to pay over market price for property in order to be in on the rush’

    This blog was calling it for what it was at the time. Years ago the Financial Times interviewed me for almost three hours, but declined to include me in their eventual article. I said at the time it was a global real estate bubble, fueled by the “witch doctors” at the central banks. I guess they didn’t like that. But look who was right.

    1. Nobody writing in the MSM is permitted to pull away the curtain to reveal the central bankers frantically pulling levers to control asset prices.

  2. ‘California is what America is going to look like,’ he told a television interviewer. ‘California is America’s coming attraction’

    You know there’s no real reason to dog-pile on California for its head up their ass stupidity – some people like this guy are happy to demonstrate it on TV.

      1. I hear that sentiment a lot these days. Got together with an old military buddy of mine to commiserate about the direction the country is headed in. I got off active duty after ten years, but he stuck it out to retirement. We both feel like we’re living in Clown World, and he adds that today’s military is so pussified and PC that if we go up against a serious adversary like China or Iran, there is a real possibility we could lose and lose big.

        1. I’ve noticed that retired servicemen often assume the younger troops aren’t up to snuff. Heard that alot before the first Gulf War, in fact.

        2. Seems like all the younger veterans are on some percentage of disability these days. I’ve met many of them while servicing government offices, and I couldn’t discern a disability.

          1. Sample selection bias may have been a factor. Did any of them complain about bone spurs?

          2. The military has been leaning on their special forces troops for infantry type roles normally assigned to the general ranks. I’m not sure why, but I suspect the general ranks experience increased difficulties with multiple deployments. Speculation.

          3. When appearances are everything it’s hard to resist putting the racehorses on the plow.

    2. I live in CA and it seems to me Hanson is more accurate. Sad and kinda scary.

      “Or is it, as Hoover Institute historian Victor Davis Hanson indirectly responded in a Fox News interview, “America’s first third-world state” with widening income and wealth disparities, rampant homelessness, poor schools, and rising disease levels despite high taxes?

      “We have a medieval society,” Hanson asserted, with a wealthy “royal elite,” including Newsom, that prospers while ordinary Californians “are treated like peasants.”

      1. I live in CA and it seems to me Hanson is more accurate. Sad and kinda scary.

        I wholeheartedly agree.

        1. Half of Americans Are Effectively Poor
          America’s Collapsing Because it’s the World’s First Poor Rich Country
          Umair Haque
          Medium

          “There are days I feel like I read dystopian statistics for a living. And then there are day when the dystopian statistics take even my jaded breath away. Here’s one: 43% of American households can’t afford a budget that includes housing, food, childcare, healthcare, transportation, and a cellphone. Translation: nearly half of Americans can’t afford the basics of life anymore.”

          “Does that take your breath away too? It should. And yet it might not come as a surprise. You might know it intimately. The statistics say there’s an even chance you’re…living it. What a grim and bizarre reality. Half of people are effectively poor in the world’s richest country. What the?”

          “The folks that did the study above call this new class of people ALICE, for “asset limited, income constrained, employed.” It’s a sharp way to think about American collapse. Let me translate this term, too: the people formerly known as the American middle class.”

          “Somebody needs to say it, and it needs to be said with gentle understanding, real empathy, uncompromising truth, and genuine compassion. America is effectively a poor country now. Not a poor country like poor countries, but a poor country of its own kind. A poor rich country, a rich country where the average person lives like a poor person. That single fact is at the heart of American collapse, my friends. And it’s not OK.”

          1. “You might know it intimately.”

            Back around 2003-04, I used to discuss this debt-fueled housing binge of the middle-class among friends until I realized that they had also leveraged themselves up to their eye teeth. I felt like the protagonist Nada with the special sunglasses in the movie, “They Live.”

          2. 43% of American households can’t afford a budget that includes housing, food, childcare, healthcare, transportation, and a cellphone.

            This is incompatible with a middle class housing bubble. If you’re going to cram people down there have to be cheap places for them to live that are close to their jobs. That’s one good thing China has, truly cheap ways to live that are close enough to where the jobs are to get back and forth every day even with no car. We need that too.

          3. 43% of American households can’t afford a budget that includes housing, food, childcare, healthcare, transportation, and a cellphone.

            It is largely due to the other half borrowing many multiples of their yearly earnings to bid up the price of everything they “want”. The debt makes them live like paupers, and it does the same to their neighbors to a lesser extent.

      2. It’s good to bear in mind that anyone named Gavin is most likely in the 1%…

    3. Seems like an opportune thread for a California exodus Uhaul ratio update:
      26 ft Uhaul
      SF to Boise 3375$
      Boise to SF 309$
      LA to Prescott 1539$
      Prescott to LA 101$
      San Diego to Austin 3525$
      Austin to San Diego 925$
      Coming attraction?

      1. If it gets any worse, people will be quitting Uber because they can make more money driving empty Uhaul trucks back to California.

  3. ‘arguing that Uber was built on the idea of breaking labor laws and violating existing regulations. ‘The capitalist system we have has unduly rewarded him with extraordinary, in-your-face wealth’

    Breaking laws and violating regulations is the exact opposite of capitalism. But you left out using Obama lawyers to bribe local governments.

  4. ‘I can’t remember the last time I sold a new-build property at a profit,’ said Charles Jordan, an agent who resold Bhandari’s apartment.”

    I bet Charles was one of the touts tell telling marks like Bhandari that 15% a year appreciation was locked in. But I guess that’s just the way the cookie crumbles, ay, Charles?

  5. ‘The owner is now weighing his options, including demolition,’ said Chris Talbot, the Southampton Village building inspector.”

    What a colossal waste of money and resources. When the pitchforks and torches hit the streets after the Fed’s house of cards comes crashing down, the owners of such gaudy, over-the-top monstrosities are going to be prime targets, unless they can flee in their Gulfstreams to some off-shore bolt-hole.

    1. Yeah, and I’d like to point out more striking hypocrisy:

      ‘It’s a billionaire’s delight: In a market awash in luxury properties…the movie-producer-turned-developer of multi-million dollar mansions in Los Angeles. ‘Two years ago, there was a lot of foreign investment, but because international laws changed, it impacted our housing market,’ Ali said. Back then, ‘you could get $100 million for a house’

      ‘Eight blocks from where Jeff Bezos recently dropped $80 million on a penthouse and the two units below it at Manhattan’s 212 Fifth Avenue, a $98 million condo has been on the market for about a month. The 19 815-square-foot spread — dubbed ‘Le Penthouse,’ — features an infinity pool facing the Empire State Building and a glass-walled jacuzzi on the private rooftop deck. But for the most part, it’s empty’

      Note this is Bloomberg, the owner of which regularly lectures us all about climate change, but sees nothing wrong with canyons of empty towers all over the world. Just how much energy is used to keep these empty towers humming all day and night? How much steel and concrete and delivery systems were gobbled up so these rich people could lose their ass on safe deposit boxes in the sky?

      1. Note this is Bloomberg, the owner of which regularly lectures us all about climate change, but sees nothing wrong with canyons of empty towers all over the world. Just how much energy is used to keep these empty towers humming all day and night? How much steel and concrete and delivery systems were gobbled up so these rich people could lose their ass on safe deposit boxes in the sky?

        This

      2. When the dust settles on this most insane white elephant construction binge ever in the history of mankind, hopefully some enterprising natural resource economist will tally up the environmental damage costs of wasted building materials, fuel, construction equipment, human resources, and eventual bulldozer utilization to return the bubble rubble to the ground. And hopefully someone will also convincingly point out that Keynesian ditch digging is a dumbass idea.

  6. “Camp’s purchase has drawn the ire of activists and drivers who have long been protesting about Uber’s labor practices and advocating for better working conditions. ‘This is a perfect example of the 1% stealing from the rest of us,’ Nicole Moore, a ride-share driver in Los Angeles, said of Camp’s $72.5m purchase. ‘Drivers are living in their cars. We’re fighting for fair wages. At least share that wealth with the people who have actually built your company.’”
    “The purchase by Camp is particularly eye-popping given that Uber continues to lose money and has also aggressively opposed drivers’ efforts to organize and improve their working conditions, said Veena Dubal, an associate law professor at the University of California, Hastings, who is an expert on labor rights in the gig economy.”

    This is the damage that the QE programs caused. A handful of people got access to the QE money and became insanely wealthy exploiting the desperation of people who found themselves jobless after the last bubble popped. Just as the pool of desperate people started to dry up due to lower unemployment, billionaires funded organizations which taught illegals to claim asylum and overwhelm the system and their friends in Congress made sure neither the needed changes in law nor the funds to prevent the new influx of workers. Uber, Lyft, Amazon etc. must have cheap desperate workers and the Democrats and the Rinos are happy to provide them for campaign cash. All these internet based “gig” economy depend on desperate people to work for low pay and no benefits to prosper. While never discussed in papers owned by people like Bezos, many of the people working for them as “independent contractors” or even as employees are immigrants both legal and illegal. The greatest danger to these companies is a full employment economy where it is harder to exploit workers.

    1. New York Post
      Page 6
      Newly-divorced MacKenzie Bezos is being bombarded by dating proposals online

      2. It pisses me off that all these money-hungry dudes are trying to convince MacKenzie Bezos that they’re in love with her, when I actually am.

        1. LOL!

          Like grandpa always said, “You can marry more in 5 minutes than you can make in a lifetime!”

        2. I used to know a young lady (fellow musician) who grew up middle class and married into the third generation of a local corporate dynasty. She once described to me the various familial obligations that came with her marital situation. It involved a considerable loss of autonomy, and clearly was not a free lunch.

    2. I realized a long time ago that neither party wants to or has any incentive to shut down illegal immigration.

      1. True. But only because neither party really represents the average J6P. And if any party ever tries to they’ll be called Nazis by everyone who isn’t J6P.

        1. Not sure the average J6P has any incentive to shut down illegal immigration. Do the

          1. …minimum wage workers here really want to spend their time doing really dirty jobs that the illegals now take under the table?

          2. Want has nothing to do with it. I think they instinctively know that if the illegals weren’t here the pay for the “dirty jobs” would rise until either the job disappeared or became much more attractive. And then whatever legal workers took them would no longer be competing for other low level jobs, causing those jobs to get better pay or conditions to attract workers. A virtuous circle as far as J6P is concerned.

            According to a study I read ~15 years ago they were estimating that illegals were suppressing wages at the low end by about 20%. If accurate I would assume it’s an even higher percentage now.

    3. hunter gatherers to farmers to manufacturers each caused disruptions.

      Now its changed from who owns the means of production “manufacturing” to the age of who can access cheap capital . And in this brave new world they don’t have to pay it back if they screw up.

      information age = who get the money age

  7. Even as he boasts about his first state budget, which he calls an ‘affordability budget,’ Newsom acknowledges the state’s socioeconomic divide. ‘You can’t live in the richest and the poorest state and have a just society,’ he said while touting appropriations to help the 40 percent of Californians rated as poor or ‘near-poor’

    It’s been the poorest US state for years. Everyday, third world diseases, rats, thousands of people living in tents (and they ain’t camping). Drug needles and poop everywhere. But hey, “this is America’s coming attraction” says the idiot in charge.

    1. “affordability budget”

      Is that secret code for taxing the crap out of the middle class until they all leave the state and handing the proceeds to the less fortunate who recently moved across the southern border?

      1. Is that secret code for taxing the crap out of the middle class until they all leave the state”

        Yes liberal elite don’t like middle class workers around here. Too close to them I guess ? They vote wrong IDK ? While desperate immigrants don’t pose a threat. I guess they think they can mold them unlike those stupid middle class workers .

    1. Second from the last: “South Burlingame fixer-upper: 1421 S.W. Spring Garden St. in Portland is listed at $259,900. The bungalow, built in 1939 on a 4,791-square-foot lot, has one bedroom, one bathroom and 1,120 square feet of living space ($232 a square foot).”

      Below grade foundation in Portland, OR? No extra charge for the moldy carpets and closets!

  9. Everything that is going on today is so 1850’s to 1910 in the USA. Monopolies with price fixing, powerless labor force, corruption on steroids and Globalism with casino/speculation with inflating false markets.

    We went backwards. All the hard fought gains that allowed the majority middle class worker bee to have a standard of living that was the envy of the world was highjacked.

    Really, a strong middle class, who is also the productive class, is the greatest protection against Communist ideas and big government taking over.

    Look at California, nothing but rich and poor with the middle class there getting weaker by the day

    It’s interesting how the rich and the poor are the class that is most in favor of unearned handouts. The big government picks the winners and losers from those two classes and the middle is screwed by the policies.

    In terms of population, doesn’t the middle class have the highest numbers?
    They were just to busy being the productive class to perceive they were being sold out by the political class step by step.

    I don’t see any other choice but to go back to the policies that were the most favorable to the majority middle class most reflected in the 1945 to 1985 period in the USA.

    1. I don’t see any other choice but to go back to the policies that were the most favorable to the majority middle class most reflected in the 1945 to 1985 period in the USA.

      So what top marginal income tax rate during this time period would you support? 90%, 70%, 65%, etc.? How about eliminating the Bush tax cuts on capital gains?

      1. The reality is that the tax rates did not create the society that existed, they just were incapable of destroying the advantage we had when all of Europe and Japan laid in ruin. If we had a way to destroy all of our competitors we could tax at any level we wanted and still have a prosperous country. The tax rates did allow us to greatly reduce the debt we took on to fight the depression and WWII at least as a percentage of our GDP. Hard to see how we are going to do that this time.

        1. I’m not saying that it wouldn’t be a lot of pain in undoing what we have now.
          But, I think it’s possible to do it. Otherwise look at where everything is headed right now.

          The idea that everybody has to be equal is also absurd. I never liked working more than 40 hours a week because I liked spending more time with family. Does this mean the guy who worked 60 hours a week has to give me some of his higher earnings to make us
          equal, I think not. Your never going to have equal because of the different choices people make!

          1. Does this mean the guy who worked 60 hours a week has to give me some of his higher earnings to make us
            equal, I think not.

            If only wealth inequality stemmed from people working harder or longer. Sadly, in our version of capitalism it does not. In this analogy, it would be more like men and women working 40, 50, and 60 hours a week giving more and more of the economic gains that accrue to those working no hours a week. Redistribution upwards.

          2. what top marginal income tax rate during this time period would you support?

            Wealth inequality doesn’t stem from taxes not being wonderful enough. Something else happened.

      2. How about eliminating the Bush tax cuts on capital gains?

        …and this is why it’s probably a good idea to take gains/re-establish your cost basis every so often. Just investing and forgetting is likely to bite you in the future, as tax policy will shift to punish those “evil capital” folks who thought they were just saving for retirement….

        1. “evil capital” folks who thought they were just saving for retirement….

          What’s wrong with taxing capital gains at the same rate as income? Our current tax structure disincentivizes wage earning and incentivizes speculation. Only fools work for a living when you can try your hand at house flipping.

          1. when you can try your hand at house flipping ??

            You don’t get Capital Gains tax treatment on a flipped house…Its ordinary income…You can’t do a 1031 exchange either unless you rent it out for sometime…

          2. So my dad bought our family home for about $30,000 back in 1973 or so. We sold it for about $400,000 maybe 40 years later. So you are saying we made a profit of $370,000 that should be taxed as regular income? You are just taxing inflation and punishing people for investment. I could live with taxing capital gains as income if you applied it to capital gains that exceeded inflation. Of course, I don’t think anyone should be taxed over 15 percent for anything.

          3. So you are saying we made a profit of $370,000 that should be taxed as regular income? You are just taxing inflation and punishing people for investment.

            I am saying that capital gains should be taxed higher than labor income tax rate. It would be perfectly acceptable to index for inflation IF the capital gain tax rate were higher than the labor rate.

            This idea comes from National Bureau of Economic Research and University of California-Berkeley economist Emmanuel Saez and Harvard University economist Stefanie Stantcheva:

            Feeding data from U.S. tax returns into their model, Saez and Stantcheva find that the optimal capital income tax rate is definitely higher than zero.

            “In fact, it appears that the optimal capital income tax rate is higher than the labor income tax rate. If individuals are equally likely to change how much they work or how much they save due to a change in taxes, then capital income will always have a higher optimal rate than labor income. That’s because capital income is much more unequally distributed. Saez and Stantcheva also point out that the tax rate on capital income will increase if people think that wealth inequality is unfair and want to redistribute to those with less wealth.”

            https://equitablegrowth.org/optimal-tax-capital-income/

          4. people think that wealth inequality is unfair and want to redistribute to those with less wealth

            Some of us think that greed and jealousy are wrong. In my case, I earned a good wage because I developed special skills and worked my butt off for decades. I saved. Unfair? I think not.

        2. probably a good idea to take gains/re-establish your cost basis every so often ??

          Vs. getting a full stepped up basis upon death ?? Will this tax law change…I doubt it…Remember the poor farmers…

          1. Vs. getting a full stepped up basis upon death ??

            I wasn’t talking in terms of handing down accumulated wealth, but more about drawing down savings in old age, and getting hit with a nasty tax bill because someone thought I should get punished for “speculating” by investing in the market with my savings.

      3. Tax rates were higher for the rich, but they had right offs that offset the higher rates. I remember for a while 70% was charged for a a portion of higher earnings.

        But, back in those days Corporations and business were investing in the USA work force. Also I think they were content in having smaller profit margins because they made it up on volume.
        Employers paid for health care for most part. There just seemed to be a investment in the American labor force by big business that we don’t have today.
        Globalism screwed America.
        Greed took over.

        1. But, back in those days Corporations and business were investing in the USA work force.

          I do believe there was a correlation. When there is a high marginal tax rate, corporations are more incentivized to reinvest than award large salaries to captured C-suite investors (who largely determine their own pay with chummy boards of directors). This is because with a progressive income tax system, overpaying executives incurs a hefty tax bill when pay becomes outrageous.

          But when the tax code changed to basically allow stock based compensation above $1 million to be completely tax deductible for corporations during the Clinton era, that is when CEO skyrocketed (NPR Planet Money did a good synopsis on this).

          The greed you speak of can be traced back to changes in the tax code in my view.

        2. OneAgainstMany

          Of course the fat cats are getting far more unearned income than they deserve.
          That’s why I am in favor of
          higher tax rates up the ladder. They had higher tax rates between 1945 and 1985 .

          The difference now is we have to bribe the big capitalist by to low rates to get them to even invest in the USA work force and manufacturing base.
          That why there should be a penalty tax or tariff on USA companies that give jobs and manufacturing to foreign countries. Treat them like foreign countries.

          Unless all countries had the same pay scale, same constitution, same safety regulations, same benefits,etc, you can’t have globalism/free trade. This set up only benefited the fat cats betraying so called USA companies.

          1. @Wizard

            I totally agree with what you are saying. I too believe that top marginal tax rates should be raised. But like you, that won’t solve the problem completely. Corporations are paying lower and lower taxes and they haven’t responded by investing more in American workers, giving pay raises that outpace inflation, etc. Instead you see more stock buybacks, dividends, and overseas moves. That is why I was a big proponent of a Destination-Based Cash Flow Tax.

            From Wikipedia:

            A destination-based cash flow tax[1]:27[2] (DBCFT).[3] is a form of border adjustment tax (BAT) that was proposed in the United States by the Republican Party in their 2016 policy paper “A Better Way — Our Vision for a Confident America”,[4] which promoted a move to the tax. It has been described by some sources[by whom?] as simply a form of import tariff, while others have argued that it has different consequences than those of a simple tariff.[5][6]

            The proposed tax is a destination-based, border-adjustable international corporate consumption tax system in which a tax is “applied to all domestic consumption and excludes any goods or services that are produced domestically, but consumed elsewhere.”[3][7] The border adjustments included in the proposal are “taxes or tax reductions that apply when payments for goods and services cross international borders.”[8] Imported goods purchased/consumed domestically are subject to the tax while goods produced domestically and sold internationally are exempt.[2]

            According to economist Alan J. Auerbach at the University of California, Berkeley, who is the “principal intellectual champion” of the “package of ideas” surrounding border-adjustment tax that had been evolving in academia over a number of years,[9] the destination-based system, which is focused on where a product is consumed, eliminates incentives that multinationals now have to “game the system” through tax inversion and other means, in order to “avoid taxes” and to “shelter profits” by “shifting” “intangible assets to low-tax nations.”[9][10][11]

      4. How about disallowing stock buy backs which game the system for the execs with large numbers of shares at the expense of hiring, higher salaries (for the non-execs) and capital improvements?

        Seriously why is you answer always more taxes and more government? You parrot the thinking of the leftest technocratic oligarchy. Could it be that as our government has grown in power so have the corporations that influence said government through regulatory capture and other means?

        Do you not s

        1. I don’t want big government or big taxes. I want big tariffs and big penalities for taking jobs and manufacturing outside the USA. The uSA prospered by the big business being loyal to the American nob force.

          1. Apply corporate taxes based on where their end-user sales are, not where their IP is. That avoids the loopholes of putting intellectual property in the Virgin Island, Ireland, Netherlands, Singapore and paying no taxes and also outsourcing production (and jobs) to the countries lowest tax rate while simultaneously taking advantage of a large American consumer base.

        2. stock buy backs which game the system for the execs with large numbers of shares

          Sounds like insider trading to me.

          Wouldn’t happen so much without cheap credit from the Fed I imagine.

    2. Everything that is going on today is so 1850’s to 1910 in the USA.

      Interesting. Isn’t that the time period that libertarians like to point out as the golden age of liberty and growth/prosperity in America? Honest question from a guy who leans libertarian compared to the other philosophies at least in regard to personal freedom…

      1. Carl Morris,

        I happened to be around during the period I speak of.

        The freedom and liberty was what I liked the most. Now I have to watch what I say. I remember in general people being happier. It had more of a rah rah America tone to it, but nothing getting in the way of personal liberties, except maybe the draft for the Vietnam War.

        1. Oh, now I understand your statement Carl.
          1850 to 1910 was a rigged deck. Terrible for the working stiff with low wages and no benefits. Monopolies controlled everything and they were greedy and couldn’t care less for the worker who had bad and unsafe working conditions.

    3. ByHousing Wizard I think that’s true. like the game of monopoly at the end there is no middle class playing that game.

      1. That’s been a decade ago. Guess it’s never too late for a megabank to restructure and try something new?

  11. “The Golden State used to be a rising tide lifting all sorts of boats. Now it’s a rising tide lifting a few yachts.”

    That’s a good one. I’m going to hang onto that one for future use.

  12. “The Golden State used to be a rising tide lifting all sorts of boats. Now it’s a rising tide lifting a few yachts.”

    In California, a rising tide only lifts the turds.

    2. Did anyone survey that crowd to get an average age of the opponents?

      I think that Huff Post headline could have been shortened by one word.

    3. We need a DJT approach to fix something like this. The proposed tariffs (taxes) on Mexico was genius in getting Mexico’s attention on the central Americans flooding into the US. They needed a strong economic incentive to care about it and they quickly came to the table. I say do the same thing with local residents. If NIMBYist boomers they are going to pull out the phony environmental card and engage in NIMBYism and whine about preserving the character of a neighborhood or protecting their heirloom tomato plants from apartment complexes, then they should automatically have their property taxes go up. Otherwise there is no incentive for them to dig in and oppose new building because it only benefits them.

      1. Otherwise there is no incentive for them not to dig in and oppose new building because it only benefits them.

    2. Mike Lee is a strong libertarian. Many libertarians have a very open borders approach (see Gary Johnson’s position for instance). He likely sees more as a way to make healthcare more affordable with a pure open market by exporting foreign doctors, IT talent, etc. I see this as consistent with his Libertarian-GOP ideology more than I see this a reflection of his faith.

      2. Mike Lee is a corporate whore like most Senators. Rand Paul is one of the few exceptions.

      3. Koch libertarians are not true conservative s in my book because if you are trying to create global government you are not being true to the constitution. As far as libertarians I think they are being ivory tower intellectuals. It is true that if not for government programs the illegals would be less if a burden. However their belief that they can do away with transfer programs is just delusional. Moreover by importing more poor we are increasing the pressure for more socialism. Prior to being overwhelmed with illegals while the Bush Republicans did nothing California actually leaned Republican with the conservative southern part of the State offsetting the Bay area. If that was not enough to show libertarians their delusional thinking nothing will. As far as Utah, the church controls the Republican party. Voices such as Limbaugh were taken off the church owned major radio station decades ago because he was out of line with the LDS church. Flake, Romney and other opposition to Trump is not accidental. I guess you have not lived in Utah long enough to understand the power the church has in Utah and LDS parts of Arizona.

        1. I guess you have not lived in Utah long enough to understand the power the church has in Utah and LDS parts of Arizona.

          I have lived in Utah almost all my life (born in Idaho) and spent a couple of years in eastern Canada (Quebec and Montreal). I fully understand the church-political connection. But the latest proposition on legalizing marijuana the church came out against it, and the ballot measure still passed. Just goes to show that though very influential, the church doesn’t run the show (a majority of members had to vote for the ballot measure for it to pass). The population of Utah has changed pretty dramatically over the past 20 years and will continue to do so. As far as church’s stance on immigration/refugees, there are more members of the church outside of the US than in the US. Also, there is Christ’s teachings regarding Good Samaritan, strangers, etc.

          1. Perhaps the church sees increased immigration as a way to get more new members?

          2. Perhaps the church sees increased immigration as a way to get more new members?

            Hard to know for sure. Church growth in the US and Europe is stagnant, but strong in Africa and South America. Retention is highest in US/Canada though. There are lots of membership ties to other countries through proselyting efforts and marriages between cultures, so I see that being a factor.

      4. Depends I suppose. The AnCap libertarians over at lewrockewell.com are anti-open boarders. Hans Herman Hoppe puts forth a consistent viewpoint with regard to citizens javing a nominal say in where their tax dollars are spent and how their standard of living if not property are impacted by illegal immigration.

        Sure in a world without a state borders would not be considered but I think the AnCap small (l)ibertarians take a pragmatic approach to the matter.

        https://www.lewrockwell.com/2018/07/hans-hermann-hoppe/immigration-and-libertarianism/

        1. I know there are a few libertarians who support immigration regulation, just like there are some democrats who are pro-life. But they are the exception rather than the rule.

    3. Mike Lee was forced to sell his shack in a short sale in the last housing bust. But maybe we can get some Indian guest workers to replace the high priced American senators?

  15. But are the upper middle and rich from China going to (or have their kids or wife) move into the condos. Or was this just asset protection from the Chinese govt.

    If you look at the original rush from Hong Kong ahead of the 1997 turnover – the families mostly moved. But in some cases the fathers moved back to Hong Kong.

    I have been on the Air Canada flight between Vancouver and Hong Kong. It is a lot of family trips …

    ————————-
    “Arriving at Vancouver’s international airport, visitors must walk past advertisements for gleaming new-build condominiums, with text in both English and Chinese. House prices in greater Vancouver rose about 80 per cent in the five years to May 2018.”

    “A report this year commissioned by the regional government, which took power in 2017 pledging to combat the housing affordability crisis, described how ‘a fever developed, akin to a gold rush, in which foreign buyers rushed to buy homes, willing to pay over market price for property in order to be in on the rush and avoid what many thought was inevitable – government intervention. Local speculators and prospective buyers, worried about being priced out of the market, further fuelled demand.’”

    “House sales in Vancouver this year have dropped to their lowest levels in decades.”

    1. The young Chinese couple, who paid $50,000 over comparable value for the cramped 2br half of a duplex next door, and their 2-child family recently moved out on short notice. Actually the chain smoking husband, whose wife could often be heard through the walls screaming at him, disappeared first. For a while there was a US serviceman regularly showing up to hang with the wife, which I found odd (albeit it is California). Their period of residency lasted maybe 3 years, and they never really integrated into the neighborhood before leaving. I don’t especially miss them, but am curious about what drove their sudden appearance and just-as-sudden departure.

      1. Actually the chain smoking husband, whose wife could often be heard through the walls screaming at him,”

        The yelling and smoking part. Stressed out wife engineer with husband let go and at home day trading. Often Chinese.

    1. Not to worry. It’s primarily 1%ers and real estate investors living in coastal housing near sea level. And most of the California coast would require much more than any playsible predicted level of near-term sea level rise to submerge it. (E.g. we are maybe 20 miles inland and 500 ft above sea level.)

      Florida and NOLA are another story entirely, especially given hurricane and attendant storm surge risk.

          1. California is a dangerous place. All California homeowners should take heed, sell their houses, and move somewhere safe before The Big One happens.

            “A 2017 study concluded that, together, the Newport–Inglewood Fault and Rose Canyon Fault could produce an earthquake of 7.3 or 7.4 magnitude.”

    2. “I’m a left-of-left Democrat, but these environmental zealots are next level.”

      Actually sounds more like a liberal that got mugged.

    3. First article I’ve ever read about the issue that indicates sea walls facilitate the decline in adjacent beach sand. Been saying this for years, erosion 101 from books on the subject a century old. In addition overpopulation and the use of water from the streams and rivers also chokes off additional replenishment of the beaches. Of course the climate change frauds scream the beach loss is due to Gaia pi55ed off we havent all gone vegan and started driving teslas.

      None of those fools that build near the ocean understand the power – none of them fish, surf, swim, etc. They just want to brag about their view, nestled behind their 58″ TV.

      1. “First article I’ve ever read about the issue that indicates sea walls facilitate the decline in adjacent beach sand.”

        Most of the coastal fishing ports have jetties that contribute to erosion hydraulics, and these artificial channels need regular dredging so that ship may pass through. These structures probably cost more to build and maintain than the value of the sea food being harvested.

    1. The weaslye$t weake$t link$, are di$playing stre$$ … loverly!I

      Coming $oon, the ice $heet doesn’t have to melt, before it $lips! … Oop$!

  22. Civil War 2? Here’s the truth about America’s future:

    https://www.youtube.com/watch?v=ZN9O0o4zw8o

    This is a fun narrative. There’s no visuals it’s more like a powerpoint presentation so good to listen to instead of radio or books on tape if you’re driving. See also the three follow-up narratives from the same publisher.

  23. A recent post on the volume of VA loans prompted me to look up some stats. The average cash out refi for VA loans has been 240-250k since 2015. I’m not in the business, but that seems like a lot of equity to extract when the home price has been 200-220k in that time frame. The VA will guarantee up to 100% of equity for cash out refi. Is it human nature…people will borrow every dollar the government will guarantee?

    1. “Is it human nature…people will borrow every dollar the government will guarantee?”

      +1 Behavioral Economics.

    2. “Is it human nature…people will borrow every dollar the government will guarantee?”

      One the other side of the same coin, bankers will lend every “government guaranteed dollar” regardless of the borrower’s ability to make the payments.

  24. On Friday Treasury yields rose due to the strong jobs report. Today they fell for the same reason. Curious!

    1. CNBC TV
      Top Stories
      Bonds
      US Treasury yields fall after strong jobs report
      Published 29 min ago
      Ryan Browne

      U.S. government debt prices rose on Monday as investors continued to digest stronger-than-expected jobs data.

      The yield on the benchmark 10-year Treasury note fell to 2.0268%, while the yield on the 30-year Treasury bond dipped to 2.5318%. Bond yields move inversely to prices.

      Investor focus was largely attuned to the latest nonfarm payrolls report out of the U.S., which showed the economy added 224,000 jobs in June. That was way above an expected 165,000 increase.
      …

    2. Davos
      July 8, 2019 / 3:25 AM / Updated 2 hours ago
      Greek bond yields hit fresh all-time low after conservatives win election
      Virginia Furness
      * Euro zone periphery govt bond yields
      By Virginia Furness

      LONDON, July 8 (Reuters) – Greek government bond yields fell sharply to new all-time lows on Monday after snap elections which saw Greece’s opposition conservatives return to power, sparking hopes there will be a renewed focus on strengthening economic recovery.

      Elsewhere, euro zone bond markets reversed some of the sharp yield rises seen on Friday after better than expected U.S. jobs data prompted investors to speculate that the U.S. Fed would not cut rates by as much as expected.
      …

    3. If investors are lining up to pay for the privilege of loaning money to governments, why wouldn’t the governments graciously accept the offers?

      And in what anti-gravity economic universe does this make sense?

      France issues first 10-year bond at negative interest rate
      Date created : 04/07/2019 – 12:51
      Investors are now willing to pay, rather than receive, interest for the privilege of owning French government bonds
      Paris (AFP)

      France issued its first-ever 10-year bond at a negative borrowing rate on Thursday, meaning investors pay, rather than receive, interest for the privilege of owning French sovereign debt, said the state debt management agency, AFT.

      AFT said in a statement that it issued 9.996 billion euros ($11.3 billion) in long-term bonds, with just under half — or 4.972 billion euros — in the form of 10-year bonds at a rate of -0.13 percent.
      …

    1. I want to see a video walk through of someone who actually installed one of these on their property.

  27. Will women soccer players have to step up and compete with men to get equal pay?

  28. Sports are a form of entertainment. In the entertainment industry you get a percentage of what you generate. The only way the female teams should get paid the same as the male teams is if they generate the same revenue. Right now the female team is being paid a greater percentage of the revenue than the male team. Factually there is no discrimination against the women’s team. However in today’s world emotion rules over logic.

  29. Check your numbers ABQDan:

    “U.S. women’s soccer games have generated more revenue than U.S. men’s games over the past three years.”

    “That’s according to audited financial statements from the U.S. Soccer Federation (USSF) obtained by The Wall Street Journal. In 2016, women’s games generated $1.9 million more in revenue than men’s games. From 2016 to 2018, women’s games generated approximately $50.8 million in revenue, compared with $49.9 million for men’s games.”

    Pay the women.

    1. I read the whole article before you posted and it did not include money from corporate deals. However if the revenue mix changes the compensation should change that is all that I am saying. Women should not be paid the same as men just to promote equality it should be because they contribute the same to the bottom line.

      1. From pure economic (not moral) perspective, I can understand that point of view. But what I would argue is that women’s sports needs to be treated more like a brand. It needs investment and incubation and it will do just as well as men’s sports. It’s a bit of a chicken and the egg situation now. It takes money to build a brand, following, fan base, etc.

        Pay them the same I say.

          1. There’s a hell of an endorsement. He should know about sorry a** men. It annoys me that I hear his name mentioned, with great admiration, so often here in Las Vegas, along with OJ Simpson who also lives here.
            rollingstone.com/music/music-news/snoop-lion-opens-up-about-his-pimp-past-76752/

            Talked to a woman originally from PA yesterday. She moved here in 1969. We both agreed that LV’s changed a lot in the last ten years. Thinking “where to?” next.

          2. I kind of like Vegas on occasion. It’s not far from St. George (my home base). I manage a unit at the Palms Place hotel. Very nice place to visit when I have the chance.

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