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The Predatory Real Estate Enabler

A weekend topic starting with the New Yorker. “Jay Peak sits at the northern end of Vermont, twenty minutes from the Canadian border, and has one of the heaviest snowfalls in the region. It was, for many years, an obscure hill known for deep powder and glade skiing, visited primarily by locals, Canadians, and hard-core enthusiasts. But, in the early two-thousands, the general manager of the Jay Peak ski resort, Bill Stenger developed a scheme to expand the resort and create jobs. He raised money using the EB-5 visa program, which aimed to channel foreign investments into businesses that created jobs for Americans, especially in rural or economically depressed parts of the country. For five hundred thousand dollars (the amount has since risen to nine hundred thousand), foreign investors and their families became eligible for green cards, so long as that money succeeded in creating at least ten jobs.”

“On April 13, 2016, he had finished his morning rounds and was drinking coffee with the head of the snow-grooming department when his assistant called. ‘You need to come over to the office right away,’ she said, sounding nervous. ‘Some folks from the S.E.C. are here.’ The S.E.C. had also started quietly investigating the projects, and soon the F.B.I. did as well. The lead F.B.I. agent on the case, Jennie Emmons, told me that she’d visited Jay Peak a few years earlier, on vacation with her kids. After driving through miles of remote farmland, she said, she was ‘blown away’ to see the enormous scale of the construction happening on the hill. ‘Someone told me Chinese money had built this,’ Emmons recalled. ‘The whole thing just sounded crazy to me.'”

The City in New York. “Two decades since New York State launched the 22-acre Atlantic Yards project, the rights to develop its six high-rise sites near Barclays Center in Brooklyn will be up for grabs if a lending group’s auction goes through as scheduled later this month. Last fall, the Shanghai-based developer that took over the project in 2018, Greenland USA, defaulted on loans totaling nearly $350 million. Greenland subsidiaries are slated to go to a private auction Feb. 12 over the two EB-5 pool loans, which provide a pathway to a U.S. visa for investors willing to stake $500,000 and up.”

The Globe and Mail. “This week, Transparency International released the 2023 Corruption Perceptions Index (CPI) – scoring 180 countries and territories around the world on public sector corruption. On the face of it, Canadians have reason to be positive. We’ve moved up to 12th place from 14th place the previous year. But before we pat ourselves on our collective back, we need to note a couple of important facts. First, as a country, we’ve declined in the rankings over the years; until 2019, Canada was always in the CPI’s top 10 list of the world’s least corrupt countries – indicating low levels of perceived public sector corruption. Second, as a major player in the globalized economy, we’re also playing a role in the globalization of corruption – and we’re not doing enough to stop it.”

“They’ve even invented a word for the phenomenon in Canada: ‘snow washing.’ Estimates indicate that $45-billion to $113-billion is laundered in Canada each year. Money launderers use anonymous corporate entities and complex ownership structures to disguise the origin of the funds. This money is both corrupt, and corrupting, because here in Canada it undermines the integrity of our country’s financial system, and it distorts key areas of our own economy, such as real estate markets. Indeed, experts estimate that housing prices in British Columbia are 3.7 per cent to 7.5 per cent higher than they would be in the absence of money laundering.”

The Civil Beat. “Hawaii lawmakers have tried and failed to pass legislation reining in short-term vacation rentals in the past, but this session feels different, says Sen. Jarrett Keohokalole, chairman of the Senate Commerce and Consumer Protection Committee. Keohokalole has authored an ambitious bill that would reshape the way short-term vacation rentals are regulated in Hawaii – and give counties power to phase them out completely over time. ‘Our state is such a desirable destination, and such a profitable investment for many, that people from around the world have purchased property to hold as investments or rent as short-term rentals to visitors — making on average four times what they would if the property was simply rented to a local family,’ said Gov. Josh Green. ‘Right now, 52% of all short-term rentals in Hawaii are owned by non-state residents, and 27% of short-term rental owners own 20 or more units.'”

Hawaii Real Estate Dreams. “The two big stories of this month are raising the minimum wage and the extreme regulation of vacation rentals. Watch for condo sales to slow down and inventory to rise with the huge increases in association fees. There are even a few complexes implementing or facing assessments also. They have been rapidly rising due to costs outside of the associations’ control: water, electric, insurance, landscaping wages, etc. Some complexes have had back-to-back double digit increases. One has gone up 50% in the last two years. Raising the minimum wage for landscaping crews for instance, huge change! And then there is always insurance which in itself has probably gone up over 20% the last two years.”

“To add to this, a few years ago the state decided it wanted to keep all of the TAT tax and not share with the counties… they let the counties add their own 3% tax. Overnight the TAT tax jumped from 10.25% to 13.25% plus 4.71% GET… that is 18% on top of every vacation rental! Occupancy has plummeted down 25%. Now guests don’t look at the room rate, they look at how much the stay will cost them.”

Beat of Hawaii. “It’s starting to look like Hawaii may no longer be for you if you like staying in vacation rentals. The concept of short-terms rentals is popular as a lead balloon among many in power in Hawaii. There’s no doubt that anti-Hawaii vacation rental sentiments are being greatly assisted, intentionally or not, by Hawaii’s governor. He makes no qualms about demanding that vacation rentals be reeled in. And he’s willing to push towards alienation and legal opposition that is surely forthcoming. In its last session, House Bill 84 sought to ‘Make explicit the counties’ authority to enact ordinances to amortize or phase out permitted, nonconforming, or otherwise allowed short-term rentals in any zoning classification. Includes swapping, bartering, or exchange of a residential dwelling, or portion thereof, in the definition of ‘short-term rental’ for this purpose.’ It isn’t clear whether that will be back this year or not.”

KVVU in Nevada. “Homeowners across Las Vegas who list an illegal short-term rental may face steep fines, and one homeowner learned of $180,000 in penalties. As more homeowners slowly get licenses for listings across the Las Vegas Valley, cities and Clark County are enforcing rules banning illegal short-term rentals posted on popular sites like AirBnb and VRBO. In two cases, after the owners got an initial warning and vowed to end their activity, a listing continued to be posted and steep fines accumulated. The case against a home off Sahara Avenue and Rancho went before the Las Vegas City Council; the homeowner and their attorney appealed the fines, and were denied an appeal.”

“‘I am constantly getting texts, emails, calls, pulled aside in the grocery store about short term rentals,’ said Councilman Brian Knudsen. The property in question sits in Ward 1. ‘If we continue to erode laws by not enforcing the fees and fines associated with them, we continue to lose the dignity of our neighborhoods.’ The Greater Las Vegas Short-Term Rental Association has continued its effort to bring a case to the Nevada Supreme Court, arguing county regulations are too burdensome on homeowners.”

The Portugal Resident. “Portugal’s rental market is in turmoil with new licensing restrictions, higher taxation, an outright assault on rental apartment owners, confusion and a vote of ‘no confidence’ from owners failing or refusing to enter financial details to retain their existing Alojamento Local (AL) licences. Is the tourist rental market in Portugal now unworkable or are there ways of increasing investment returns in 2024 and beyond? Despite the politically motivated changes to the short- and medium-term rental market, Portugal remains a sound environment for investors; it all depends on where you buy.”

“Portugal’s rural interior, defined as those council areas with low population density, has avoided many of the recent unpleasant changes to the short-term tourist rental sector and is experiencing a healthy demand from those seeking double-digit returns from their investment properties. In the western Central Region, among other hot spots, there is a clear shortage of rental properties on the market combined with an historic oversupply of houses that can be repurposed as rental properties.”

Two articles from the Telegraph. “Last year the Balearic government sent a warning to British tourists, loud and clear. Misbehave in 2024 and you will be sent home. But tourism chiefs this month said that the Balearics’ biggest problem, far greater than the follies of a few inebriated gentlemen from Braintree, is the issue of illegal holiday rentals that do not comply with local regulations or have the appropriate licences.”

“In October last year, Marta Vidal, the Balearics’ housing minister, said that there were as many as 235,000 unregulated holiday let properties across the islands, as reported in the Majorca Daily Bulletin. Nobody knows the exact figure, but what we do know from the most recent census is that there are around 26,500 legal holiday rentals across the islands. Even somebody who has just consumed their sixth allocated mojito can see that the balance seems a bit off.”

“Majorca’s tourist chiefs have had enough. At last week’s Exceltur Forum, ahead of the Fitur tourism conference, Gabriel Escarrer, the chief executive of Meliá Hotels International, said ‘the uncontrolled growth of tourist rental housing’ is Majorca’s biggest problem. ‘I’m not convinced that tourists fully understand the harm caused by Airbnb,’ says Elizabeth Becker, the author of Overbooked: The Exploding Business of Travel and Tourism. ‘Tourists act like consumers and Airbnb has been pretty effective at publicly pushing back against the mounting evidence of the harm it causes.'”

“‘Tourists want to believe the Airbnb story that this is a ‘sharing’ business, not the predatory real estate enabler that rewards absentee businesses to buy up whole neighbourhoods, pushing out locals, harming the environment and increasing inequality,’ she added.”

“Terrible news, eh? Chilly, gloomy, miserable and pointless February is upon us and it’s not going down well with the Covid refugees. Reports from the UK’s leading estate agents have it that the townies are heading back to the city. According to Hamptons, the number of homes bought outside of the capital by Londoners is at its lowest figure since 2014, while Savills say that the trend of rocketing house prices in rural areas is over and buyers are flocking back to the city.”

“The townies who fled the capital during Covid are represented by Anna Van Praagh, who writes for a London pamphlet called the Evening Standard. ‘I’ve never really understood what people do for leisure in the country,’ she declared this week. She talked of the refugees returning to London and being re-acquainted with their ‘open-minded, totally non-judgmental friends.’ ‘Londoners,’ she added, “feel and look younger.'”

“Well, on behalf of all the swivel-eyed loonies, the opinionated fascists and haggard country bumpkins, I’d like to say: ‘Good riddance, townies!’ You evacuated the disease-ridden city with your viewpoints framed by Heartbeat, Doc Martin and Glastonbury. Actually what you hoped for was a suburban life (parks with bins for dog poo not fields with cowpats, for God’s sake) but what you got was real life. You couldn’t believe that you couldn’t get your kids an oat milk Babyccino with sprinkles on a Saturday morning and were horrified that your white trainers got dirty just when you stood on your doorstep.”

“But, once bitten twice shy, we’d take one look at you with your swanky luggage and clean shoes at Taunton station and send you straight back to London. What relief there is, now your ilk have fled back to the big smoke, that house prices will have a chance to settle to what they should be; that estate agents can see a country abode’s practicalities, rather than it being trendy. Maybe, while you’re at it, you can welcome back all those metropolitan numpties who have screwed up property prices and stolen cottages from indigenous locals around places like Chipping Norton and Bruton.”

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This Post Has 49 Comments

  2. The New Yorker article is worth reading in full. I think that graffiti tower in LA was a failed visa deal too.

    1. It is a longgg drive from anywhere and is known for ‘reasonable’ prices. A lift ticket today for a regular adult is $125. Midweek you can enjoy a discounted ticket of $99. It’s not big either, just a handful of trails. What a racket.

  3. ‘They’ve even invented a word for the phenomenon in Canada: ‘snow washing.’ Estimates indicate that $45-billion to $113-billion is laundered in Canada each year. Money launderers use anonymous corporate entities and complex ownership structures to disguise the origin of the funds. This money is both corrupt, and corrupting, because here in Canada it undermines the integrity of our country’s financial system, and it distorts key areas of our own economy, such as real estate markets’

    Remember how the US guberment was going to crack down on money laundering? Have you read anything about it lately? K-da is beyond corrupt. They wallow in it.

    Fact is guberments everywhere encourage money laundering through their laws and turning a blind eye with law enforcement.

    1. As drug traffickers’ bank of choice for many years, HSBC allowed its services to be used as a conduit for money laundering. The US and Mexican governments even slapped historic fines on the bank for its lax controls and permissiveness. Ramón García Gibson was the executive in charge of preventing this from happening. He now holds a high-ranking position in the Mexican government’s anti-money laundering division – a task at which he has failed before.

      https://insightcrime.org/news/analysis/hsbc-dirty-money-white-collars/

    2. ‘For five hundred thousand dollars (the amount has since risen to nine hundred thousand), foreign investors and their families became eligible for green cards, so long as that money succeeded in creating at least ten jobs’

      This is a perfect example: there cannot be a scheme that has seen more fraud and foreclosure than the EB- 5 Visa. And congress raised the limit instead of eliminating the dang thing. If yer looking to launder money, a higher limit is A OK!

  4. A comment from the Beat of Hawaii article:

    Susan S
    January 31, 2024 at 9:29 am

    I have owned a STR on Maui since 2011. The messaging coming from the state has been terrible. I regularly book about 300 nights per year but I am way down for 2024. I have had 2 cancellations for April already and one of my 30-day Guests of many years is going to “pass” on booking next year. A couple of my other long-term Guests are also giving serious thoughts to skipping a year or two and have not booked 2025. As a mainlander I feel like a villain even though my condo brings in tourist dollars. It provides a job for my cleaners, the restaurants across the street, the food trucks, nail salons, etc. All those dollars stay in the local economy unlike the hotels and resorts that send their dollars back to corporate and shareholders.

  5. He raised money using the EB-5 visa program, which aimed to channel foreign investments into businesses that created jobs for Americans, especially in rural or economically depressed parts of the country.

    Globalist scum traitor.

  6. “‘Tourists want to believe the Airbnb story that this is a ‘sharing’ business, not the predatory real estate enabler that rewards absentee businesses to buy up whole neighbourhoods, pushing out locals, harming the environment and increasing inequality,’ she added.”

    Die, speculator scum.

  7. [CAUTION: In no way is this related to the housing bubble.]

    Flashback: Richard Nixon Trashes ‘Media-Elitist Complex’

    https://armageddonprose.substack.com/p/flashback-richard-nixon-trashes-media

    Say what you will of Richard Milhous Nixon — I wouldn’t describe him as anything remotely like a personal hero of mine — but the man understood the mechanics of power.

    Given that the corporate state media of his day largely did him in with Watergate, and granted his seemingly naturally endowed paranoia (some might say rightly so) with respect to his political enemies, it’s not surprising he had the following words — shockingly accurate for the time they were uttered (1983) — regarding what he called the “media elitist complex.”

    (What’s also not surprising, but scandalous, is that public schoolchildren will never be treated to these words; the only factoid they’ll learn about Richard Nixon, if they learn anything at all, is that he was a crook, as if he somehow stood out as uniquely morally deficient in the long legacy of not just immoral but in many cases outright criminal American presidents.)

    “[The media] have much more power than most people would like to think. When we think of the media in this country, the problem is that they have a sense of self-righteousness, a double standard on issue after issue after issue. They can find everything wrong with somebody else, but they will not look inside and ever admit that they could be wrong themselves. And what was involved here in the Watergate thing was the unfairness of it… They allowed their advocacy to get ahead of their reporting, which is their job to do. You know, President Eisenhower, in his farewell address, wrote about and warned against the power of the military-industrial complex. I didn’t get a chance to make a farewell address, but when I get old enough and decide to retire… if I make a farewell address, I think I would warn against the media-elitist complex…
    I think we ought to hear a little bit of discussion of the imperial media and its power. You see, presidential power is limited… The media’s power is unlimited.”
    – Richard Nixon

    The Deep State, of course, long ago realized it could capitalize on the “unlimited” power of the media to pursue its totalitarian ambitions, skirting First Amendment prohibitions on government censorship by infiltrating and co-opting media companies, including social media companies, to disseminate its narratives, ignore or marginalize counter-narratives, and censor and surveil its political opposition.

    1. Nixon will live in infamy as the president who took us off the gold standard, vastly accelerating our national decline into a rapacious oligarchy.

      2. I think the guy who confiscated gold and made it illegal for us to own was the primary criminal. Nixon just told France no more gold for you.

    2. One of my favorite DJT quotes:

      “The media is the enemy of the American people”

      Because it’s true. And especially the New York Times and Washington Post, those publications, and anyone who writes for them, are truly irredeemable vermin.

  8. [Yet another non-housing bubble related post.]
     
    THEY DON’T WANT A NATION OF CRITICAL THINKERS

    https://www.theburningplatform.com/2024/02/01/they-dont-want-a-nation-of-critical-thinkers/

    When you read quotes from H.L. Mencken and John D. Rockefeller from over a century ago describing how government schools, in conspiracy with Big Business, had the sole purpose of matriculating non-thinking, non-questioning, standardized robotic workers into the workforce, you understand why the country is in such a state of degeneracy, degradation, debt, and dumbed down state of infantilism. This didn’t happen overnight.

    “The aim of public education is not to spread enlightenment at all, it is simply to reduce individuals as possible, to breed and train a standardized citizenry, to put down descent and originality.”
    – H.L. Mencken

    “I don’t want a nation of thinkers, I want a nation of workers.”
    – John D. Rockefeller

    It was a plan implemented methodically over the last century by those controlling the levers of society. They were described succinctly by Edward Bernays in his 1928 book Propaganda as:

    “Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.”

    These men operate in the shadows; have enormous wealth which they use to buy politicians, academics, government bureaucrats, the media, international organizations, and technological platforms; and have a primary objective of increasing their wealth, power and control, while enslaving the working class in debt, and keeping them distracted with high tech bread and circuses. Even though a few slip through their net, educate themselves, think critically, question everything, and distrust their government, they probably comprise less than 5% of the population.

    After decades of government indoctrination, propaganda, disinformation, and Big Corporation poisoning of mind and body, the ignorant masses have become so mentally and physically debilitated they are incapable of comprehending how they have been manipulated and misled and unequipped to revolt against their captors. The covid/vaccine scamdemic was the ultimate test, and the ignorant masses failed miserably. The noose is tightening and they are still focused on Taylor Swift, the stock market, climate change, border invasion, and ongoing presidential political clown show.

  9. Was looking over my latest copy of “Time” magizine , yeah ,they still publish it weekly, for like $10 a year , but It’s not even worth that , about 90% of it ,and the ads ,are only about ethnic issues ,
    CNN came back to news somewhat , after the Trump years , when they were 100% anti-trump ,all the time , maybe ‘Time’ will too…..real news is hard to find nowadays ….

  11. Tucker Carlson had a interview with Bret Weinstein yesterday.
    Weinstein exposed that they are bringing thousands of military aged Chinese males through Panama to migrate to US.

    Another thing Weinstein brought up, that I have brought up a bunch of times, was that China never used the MNRA, fake vaccine on their popular. IN spite of China being ground zero for Covid.
    Another think talked about was why was the US doing bioweapon research with China, a rival Nation, that ends up getting released.
    So they get you to argue over lab leak or from wet market, but no talk about the partnership between China and US on bioweapons.
    So, the people falling in the streets in China they showed footage of that was so fake to get the Panademic fear going was bizarre.
    Than, China became the model, which is a odd statement in that they were ground zero for the so called release.
    Than 21/2 years after Covid started than China does a strict lockdown policy in their most populated Cities.
    And this was in spite of them having one of the lowest Covid death rates in world, China not doing Western MNRA vaccinations , and them claiming they wanting a zero Covid Policy.
    It ended up the China populas rebelled against the strict lockdowns, so they took the cameras off China again.
    But, why was there a almost 3 year delay in these lockdowns in China’s most populated Cities. DID the virus just pause and go to the rest of the world, and circle back to China. And add to that China never did a western vaccine program, yet had this low death rate.
    I was noticing all this stuff at the time. But than when it came out recently on studies of excess mortality, it showd there wasn’t really a Panademic in 2020, and the excess mortality occurred directly following the vaccine jabs.
    And this ongoing narrative by fake news, with censorship of dispute, and no real questioning of the odd things going on.
    It’s a valid question of why US was doing bioweapon research with China, and than oops it gets released, faked or not.
    So, ground zero highly populated China getting one of lowest death rates, they don’t vaccine their population with gene therapy vaccine, or even very much old school vaccines. And they delay their populated Cities strict lockdowns by almost three years.
    And WHO and WEF always claiming China was the Model.
    And China total surveillance, digitization currency, social credit score nonsense is also the model.
    THE LEADER of China being a speaker at Davos treated like Royalty. NEWSOME cleaning up San Francisco for a visit by China’s Dictator.
    China buying up US farmland, they export ingredients to make fenneyal to Mexico, China migration by Panama, and US partnership with bio weapon research, Biden giving our oil reserves to China, etc etc etc.
    All good according to fake news.

  15. User
    Are tech stocks likely to remain on a permanently high plateau, thanks to the AI craze?

    ChatGPT
    It’s difficult to predict if tech stocks will remain on a permanently high plateau due to the AI craze. While AI technology has the potential to revolutionize many industries and drive growth in tech stocks, market dynamics, economic factors, and regulatory changes can all influence stock prices. It’s important for investors to carefully assess the underlying fundamentals of individual companies before making investment decisions.

    1. Stay away from US stocks, expect the AI bubble to burst, and brace for a recession, elite investor Jeremy Grantham says
      Theron Mohamed
      Feb 3, 2024, 2:32 AM PST

      – US stocks are heavily overvalued, a recession is coming, and AI is overhyped, Jeremy Grantham said.

      – Stocks would have plunged another 20% or 30% in 2023 if not for the AI craze, the investor said.

      – Grantham said he’s worried about foreign wars, especially when asset prices are at record highs.
      …
      https://markets.businessinsider.com/news/stocks/us-stock-market-outlook-grantham-ai-bubble-crash-recession-economy-2024-2

    2. Economy
      There’s little reason to be optimistic about a soft landing this year as the ‘runway is in an earthquake zone,’ Harvard economist says
      Jennifer Sor
      Feb 2, 2024, 10:15 AM ET
      REUTERS/Eduardo Munoz
      – Growing hope for an economic soft landing is misplaced, economist Ken Rogoff wrote this week.
      – The Harvard economist sees the runway for the economy in an “earthquake zone” in 2024.
      – The US faces a tough balancing act between controlling debt and inflation, he said.

      There’s little reason to be optimistic about a soft-landing, as the economy is set to land in an “earthquake zone” in 2024, according to top economist Ken Rogoff.

      In an op-ed for Project Syndicate on Friday, the Harvard professor and former International Monetary Fund chief economist pointed to rising optimism on the global economy.

      In the US, more investors and forecasters are betting on a soft-landing and another stellar year for stocks, with S&P 500 recently notching a string of record high as markets price in rate cuts from the Fed. Even known doomsayers on Wall Street, like “Dr. Doom” Nourel Roubini, have softened their worst-case scenario outlooks for the coming year.

      But that optimism is likely misplaced. And even if the world does manage to avoid a recession, it’s still facing a rocky economic backdrop, Rogoff warned.
      …
      https://www.businessinsider.com/recession-us-economy-outlook-soft-landing-earthquake-harvard-ken-rogoff-2024-2

    3. One of Wall Street’s top technical analysts says now is the time to short stocks as a correction looms
      Matthew Fox
      Feb 1, 2024, 7:05 AM PST
      NYSE trader worried
      Lucas Jackson/Reuters

      – Now is the time to short stocks, according to technical analyst JC Parets of All Star Charts.

      – Parets nailed the bull market rally in stocks since the 2022 lows, but now he expects a correction.

      – “Welcome to February, what is historically one of the worst months of the entire year,” Parets said.
      For technical analyst JC Parets of All Star Charts, now appears to be a great time to sell stocks short.

      Parets nailed the stock market rally that began in 2022, but now he expects a correction as defensive sectors start to outperform the broader market, the US dollar shows continued strength, and the stock market enters what has historically been one of the worst months of the year.

      “The best 3-month period of the year is officially over (Nov-Jan). As usual, that worked out really well, as long as you owned stocks. Now welcome to February, what is historically one of the worst months of the entire year,” Parets tweeted on Wednesday.

      February is on average the third most volatile month of the year for stocks, according to S&P 500 data going back to 1950, and it’s the second worst month of the year for returns, according to All Star Charts analyst Grant Hawkridge.

      According to Parets, several clues suggest a correction in the stock market is imminent.

      “The dollar has been strong throughout all of January. That was the first heads up. The new highs list peaked in mid-December on both the NYSE and Nasdaq. So you can argue that we’ve been in a correction already, and that it’s just about to get worse,” Parets wrote in a note on Wednesday.

      But the biggest sign of imminent stock market weakness, according to Parets, is the fact that investors have been rotating into defensive assets over the past few weeks.
      …
      https://markets.businessinsider.com/news/stocks/stock-market-outlook-sell-stocks-now-correction-bull-rally-looms-2024-2

    4. Markets Roundup
      The latest news & analysis
      Today’s Action
      Market Data
      Stocks
      Quick Takes
      Personal Finance
      Your Money
      Stock Market News, Feb. 2, 2024: Dow, S&P 500 Set Fresh Records After Strong Hiring Data
      Meta shares surge; Chevron, Exxon post strong earnings
      Last Updated:
      Feb. 2, 2024 at 6:13 PM EST

      The labor market is in robust health, scrambling rate-cut expectations. Stocks flew anyway, with the S&P 500 and Dow industrials closing Friday at record highs.

      January’s jobs report showed an acceleration in hiring, with employers adding a larger-than-expected 353,000 jobs, along with an upward revision to December’s payrolls and unemployment at an unexpectedly low 3.7%.

      That sent investors scurrying to adjust bets on when, and how fast, the Federal Reserve might cut rates. Bond yields soared. Read the day’s full markets roundup here.

      Some tech stocks shined after reporting their latest results. Meanwhile, Chevron and ExxonMobil banked their second-highest annual profits in a decade.

      As of late Friday:

      – Indexes rose. Tech stocks climbed, boosting the Nasdaq Composite 1.7%. The Dow set its ninth record of the year, while the S&P 500 reached its seventh.

      – Meta jumped after unveiling its first dividend and posting its biggest quarterly sales rise in two years. Amazon rose after reporting strong growth in sales and profit, finishing with a higher market cap than Alphabet for the first time since late 2022. Apple edged lower.

      – Treasury yields surged as bonds sold off. The benchmark 10-year yield settled at 4.03% after its largest one-day yield gain since September.

      – The dollar rallied against a basket of currencies. The WSJ Dollar Index was up 0.8%, reaching its highest level of the year.

      —By Patricia Kowsmann and Hannah Miao
      …
      https://www.wsj.com/livecoverage/stock-market-today-dow-jones-earnings-02-02-2024

    5. User
      ‘Even known doomsayers on Wall Street, like “Dr. Doom” Nourel Roubini, have softened their worst-case scenario outlooks for the coming year.

      But that optimism is likely misplaced.’

      Are stocks a dangerous gamble when even the most notorious doomsayers capitulate in agreement with the bulls that the stock market can only go up from here?

      ChatGPT
      While it’s true that a shift in sentiment from notorious doomsayers like Roubini might signal a potential change in market dynamics, it’s essential to remain cautious. Stock market movements are influenced by a myriad of factors, and excessive optimism can sometimes lead to complacency and risk-taking behavior. It’s important for investors to conduct thorough research, diversify their portfolios, and stay informed about market conditions rather than solely relying on the sentiment of prominent figures.

  17. ‘In its last session, House Bill 84 sought to ‘Make explicit the counties’ authority to enact ordinances to amortize or phase out permitted, nonconforming, or otherwise allowed short-term rentals in any zoning classification. Includes swapping, bartering, or exchange of a residential dwelling, or portion thereof, in the definition of ‘short-term rental’ for this purpose.’ It isn’t clear whether that will be back this year or not’

    So like most places the short term rental industrial complex bribes the upper crooks who prevent locals from casting out these scalawags.

  18. ‘Portugal remains a sound environment for investors; it all depends on where you buy. Portugal’s rural interior, defined as those council areas with low population density, has avoided many of the recent unpleasant changes to the short-term tourist rental sector and is experiencing a healthy demand from those seeking double-digit returns from their investment properties. In the western Central Region, among other hot spots, there is a clear shortage of rental properties on the market combined with an historic oversupply of houses that can be repurposed as rental properties’

    These people are leg humping dogs.

  19. ‘The townies who fled the capital during Covid are represented by Anna Van Praagh, who writes for a London pamphlet called the Evening Standard’

    That’s funny.

    ‘Well, on behalf of all the swivel-eyed loonies, the opinionated fascists and haggard country bumpkins, I’d like to say: ‘Good riddance, townies!’

    That’s the spirit!

  22. Financial Times
    Hui Ka Yan: the Evergrande tycoon faces his downfall
    Once the richest man in China, the liquidation of his property empire marks the end of an era
    Joe Cummings illustration of Person in the News Hui Ka Yan.
    Joe Leahy, Wenjie Ding and Chan Ho-him yesterday

    Evergrande’s homepage is frozen in time at just over a year ago. Back then its founder, Hui Ka Yan, still seemed hopeful he could save the world’s most indebted developer. “All Evergrande employees must . . . never give up,” the charismatic tycoon tells executives in one video, exhorting them to finish thousands of apartments left incomplete after the company officially defaulted on its $300bn debt in 2021.

    But the brave words could not avert disaster. This week a Hong Kong judge declared “enough is enough”. Evergrande, whose collapse helped spark a property crisis that has spurred a slowdown in the world’s second-largest economy, should be liquidated. Hui was not able to react. The entrepreneur, named Xu Jiayin in Mandarin, disappeared in September and is being held somewhere in China on suspicion of involvement in “illegal crimes”.

    But the ruling and his detention are an ignominious end to the rise of a former steelworker who became one of China’s highest-rollers during the boom years. In less than three decades, Hui created one of the country’s largest property companies while dabbling in football, electric vehicles and theme parks. He used his fabulous wealth to ingratiate himself with elites from Beijing’s “red aristocracy” to the British royal family.

    “Of all the developers, I have to say he was one of the more aggressive ones,” says Desmond Shum, author of Red Roulette, a book about elite Chinese business and politics, who knew Hui in his heyday. “So when the market turns, that these people are the first ones to go on the chopping block, it’s not surprising.”
    …

  23. Federal Appeals Court Halts Florida Ban on Property Buying by Chinese

    By Tom Ozimek
    2/2/2024

    A federal appeals court has issued a limited temporary block on a Florida law that bans citizens of China from buying property in the state that Florida Gov. Ron DeSantis said was needed to counteract the “malign influence” of the Chinese Communist Party (CCP) in his state.

    The 11th Circuit Court of Appeals issued an order on Feb. 1 that temporarily halts enforcement of a law called SB 264, or the Interests of Foreign Countries Act, with respect to two out of five plaintiffs who sued Florida over the law, claiming unconstitutional discrimination.

    SB 264 was signed by Mr. DeSantis on May 8, 2023, and it was almost immediately challenged in court by four Chinese citizens residing in Florida and a real estate brokerage firm primarily serving Chinese and Chinese American clients.

    The appeals court has halted enforcement of the law with respect to two of the five plaintiffs until it rules on the merits of the case (oral arguments scheduled for April), with the judges arguing that because of recent and pending transactions, the two plaintiffs face “imminent risk of irreparable harm” if enforcement of the law isn’t paused.

    The temporary limited freeze of SB 264 was met with a critical response from Mr. DeSantis’s office.

    “We disagree with the 11th Circuit’s decision to grant a preliminary injunction pending appeal to two of the plaintiffs in this case,” Julia Friedland, deputy press secretary for the Florida governor’s office, told The Epoch Times in an emailed statement.

  26. The Financial Times
    The best books of the week
    FT Books Essay Books
    Why are America’s suburbs failing?
    In ‘Disillusioned’, Benjamin Herold follows five families coping with the wreckage created by outer city development
    Houses on a street
    A residential housing development in north-west Atlanta, Georgia, 2018
    Brooke Masters February 1 2024

    The US is fundamentally a country of suburbs. More than 55 per cent of Americans live in the communities that surround the nation’s major cities in ever-widening concentric rings.

    Starting in the 1940s with Long Island’s Levittown, new developments offered GIs returning from the second world war and their families the promise of a fresh start with thousands of cookie-cutter homes and state-of-the-art parks, recreation centres and above all schools — all at affordable prices. While some larger cities built rail networks, most relied on the burgeoning highway system to open up new land for development and get people to and from work.

    The rituals of American suburban life, from country club tennis tournaments to carpools and high school proms, went on to permeate global culture for decades through movies and television shows from Sixteen Candles to Desperate Housewives. And US presidential elections have often been won or lost in the suburbs, as independent voters once stereotyped as “soccer moms” shifted between the Republican and Democratic parties depending on the issues of the day. This year’s likely rematch between Joe Biden and Donald Trump is no different: the winner’s path to the White House lies through swing state suburbs outside Pittsburgh and Atlanta, rather than the already deeply blue cities of New York or the bright-red rural counties in Iowa.

    But all is not well with this slice of Americana, as Benjamin Herold reports in a deeply researched new book, Disillusioned. He argues that decades of short-sighted planning decisions, which produced “slash and burn” development, have left many communities struggling to fulfil their promise, even as a wider range of Americans moved in.

    “In every corner of the country, the ensuing disillusionment was forcing families to reckon with an unsettling new question: what if the American dreams suburbia was built on weren’t enough to lead us out of the enormous problems that nearly a century of mass suburbanisation had created,” writes Herold.
    …

    1. ChatGPT 3.5
      User
      ‘Short-sighted planning decisions, which produced “slash and burn” development, have left many communities struggling to fulfil their promise, even as a wider range of Americans moved in. ‘

      Was America’s “slash and burn” suburban residential real estate development any different than China’s?

      ChatGPT
      While both America’s “slash and burn” suburban residential real estate development and China’s urban expansion share similarities in terms of rapid and sometimes unsustainable growth, there are differences in their contexts, scale, and specific challenges. For example, in the United States, suburban sprawl often resulted from decentralized decision-making, prioritizing short-term economic gains over long-term sustainability. On the other hand, China’s urban expansion has been heavily influenced by centralized planning and rapid industrialization, leading to issues like mass displacement, environmental degradation, and infrastructure strains. However, both cases underscore the importance of balancing growth with sustainable development practices to ensure the well-being of communities and the environment.

      ChatGPT can make mistakes. Consider checking important information.

  27. GPT 3.5

    User
    Are there any similarities between the Evergrande liquidation and the Fall 2008 Lehman Brothers collapse?

    ChatGPT
    Yes, there are some similarities between the Evergrande liquidation and the Lehman Brothers collapse. Both events involve major financial institutions facing insolvency due to excessive debt and risky financial practices. Additionally, they both have the potential to trigger broader economic repercussions due to their interconnectedness with other firms and financial markets. However, there are also significant differences in terms of the specific circumstances, industries involved, and regulatory responses to each crisis.

    User
    How do the specific circumstances differ?

    ChatGPT
    The specific circumstances of the Evergrande liquidation and the Lehman Brothers collapse differ in several key aspects:

    Industry: Evergrande is a Chinese real estate developer, while Lehman Brothers was a global investment bank. The industries they operate in have different dynamics, regulations, and vulnerabilities.

    Geographical Impact: Lehman Brothers’ collapse had global ramifications, affecting financial markets worldwide. In contrast, while Evergrande’s situation also has international implications, its primary impact is within China’s real estate and financial sectors.

    Regulatory Environment: The regulatory response to financial crises has evolved since the 2008 financial crisis. China’s regulatory framework and government intervention in managing Evergrande’s situation differ from the responses seen during the Lehman Brothers collapse, which occurred within the context of Western financial systems.

    Debt Structure: The nature of Evergrande’s debt, including its complex web of debt obligations, reliance on property sales, and exposure to shadow banking, differs from Lehman Brothers’ debt structure, which involved complex financial products tied to the housing market.

    Economic Context: The economic context surrounding each event is different. The Lehman Brothers collapse occurred during a global financial crisis triggered by the bursting of the U.S. housing bubble, while Evergrande’s troubles coincide with broader concerns about China’s economic slowdown and regulatory crackdowns on various sectors.

    Overall, while there are parallels between the two events, the specific circumstances surrounding Evergrande and Lehman Brothers reflect the distinct characteristics of their respective industries, regulatory environments, and economic contexts.

    User
    “In contrast, while Evergrande’s situation also has international implications, its primary impact is within China’s real estate and financial sectors.”

    This statement seems specious.
    Did you miss all the stories about how Evergrande stiffed its creditors in the international financial community?

    ChatGPT
    You’re correct; my apologies for the oversight. Evergrande’s situation indeed has significant international implications beyond China’s borders. The company’s default on its debt obligations has reverberated throughout the global financial community, affecting creditors and investors worldwide. The impact extends to various sectors, including real estate, finance, and commodities markets, highlighting the interconnectedness of the global economy.

    User
    How does China’s regulatory response to the Evergrande situation differ from the US response to Lehman Brothers’ collapse?

    ChatGPT
    China’s regulatory response to the Evergrande situation differs from the US response to Lehman Brothers’ collapse in several ways:

    Intervention Approach: China’s response to Evergrande has involved a more proactive and direct intervention by the government and regulatory authorities. Chinese regulators have implemented measures to manage Evergrande’s debt restructuring, including coordinating with creditors, facilitating asset sales, and guiding the company’s operations to minimize systemic risks. In contrast, the US response to Lehman Brothers’ collapse initially involved a reluctance to intervene directly, as policymakers grappled with the appropriate level of government intervention in the free market.

    Systemic Importance: Chinese authorities have recognized Evergrande’s systemic importance within China’s real estate and financial sectors and have taken steps to prevent a disorderly collapse that could destabilize the broader economy. In contrast, while Lehman Brothers was a major player in global finance, its collapse was initially perceived as a more isolated event within the US financial system, leading to a different response from regulators.

    Regulatory Framework: China’s regulatory framework differs from that of the US, with a more centralized and interventionist approach to managing economic and financial risks. Chinese regulators have broader powers to intervene in the operations of companies like Evergrande and implement measures to stabilize financial markets. In contrast, US regulators operate within a framework that emphasizes market discipline and the protection of investors, with a focus on enforcing existing regulations and providing liquidity support to financial institutions during crises.

    Overall, China’s regulatory response to the Evergrande situation reflects the country’s unique economic and political context, with a greater emphasis on government intervention and control compared to the US response to the Lehman Brothers’ collapse.

    1. Fox Business
      China
      Published February 3, 2024 7:00am EST
      Liquidation of China’s Evergrande has ‘a lot of similarities’ to Lehman Brothers, analyst says
      Lehman Brothers’ bankruptcy filing was largest in US history

      Comments

      By Jim DeRosa FOXBusiness
      China’s economy is in shambles: Jeff Sica

      Circle Squared Alternative Investments founder Jeff Sica explains how the AI ‘hype’ could impact earnings of Apple, Alphabet and Microsoft on ‘Varney & Co.’

      China’s Evergrande Group, the most heavily indebted real estate developer in the world, sent the Chinese real estate market into a tailspin when it defaulted on its debt in 2021. Now, a Hong Kong court has ordered the company to liquidate — a ruling that could send ripples through China and possibly the rest of the world.

      “I don’t know if this is Lehman Brothers for China today, but I do know it has a lot of similarities,” said Dennis Unkovic, an M&A attorney at Meyer, Unkovic and Scott with experience with China. “If I’m in a U.S. company that is exporting products to China now, it’s going to affect me.”

      The collapse of Lehman Brothers was the largest bankruptcy filing in U.S. history and played a major role in the 2008 global financial crisis.
      …
      https://www.foxbusiness.com/economy/liquidation-chinas-evergrande-has-similarities-lehman-brothers-analyst-says

  28. U.S. Markets
    Bracing for the commercial real estate ‘reckoning’
    By Jamie McGeever
    February 2, 2024 4:00 AM PST
    Updated 2 days ago
    Commentary
    By Jamie McGeever
    Commercial office space is seen empty in a building in Seattle, Washington, U.S. May 14, 2021. REUTERS/Karen Ducey/File Photo
    REUTERS/Karen Ducey Acquire Licensing Rights, opens new tab
    ORLANDO, Florida, Feb 2 (Reuters) –

    The first proper U.S. financial market tremors of 2024 have been felt and unsurprisingly, perhaps, commercial real estate is at the heart of the dislocation.

    Unsurprising, at least, to the thousands who descended on Miami this week for the investor conferences and meetings collectively termed “Hedge Fund Week,” who put commercial real estate as perhaps the most scarlet of red flags for the year ahead.

    Just as New York Community Bancorp shares were plunging nearly 40%, unleashing the biggest sell-off in regional U.S. bank stocks since the shock of March last year, some of the most powerful names in finance were sounding the warning.

    “There’s going to be a reckoning. How contained that is is TBD (to be decided),” Drew McKnight, co-CEO at Fortress Investment Group, said on a panel at the iConnections Global Alts 2024 conference on Tuesday.

    “Even in a benign environment, even in a soft landing … that is an area that will provide stress. I don’t think it will be a bloodbath … but there is turmoil, and the worst of that turmoil is yet to come,” he said.
    …
    https://www.reuters.com/markets/us/bracing-commercial-real-estate-reckoning-mcgeever-2024-02-01/

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