Tag: Hawaii

May 8, 2018

If you were only to read one thing…

HuffPost – America’s Housing Crisis Is Spreading To Smaller Cities – Michael Hobbes 5/5

  • “It’s tempting to look at the housing crisis in Boise as just a miniature version of what’s already happened in the Bay Area and the Pacific Northwest and the Northeastern corridor. But in the last 10 years, the American economy has transformed in ways that are going to make it even harder for smaller cities to respond to growth.”
  • “In 2007, the city of Boise was issuing more than twice as many building permits as it is now. Despite having 125,000 more residents, Boise’s metro area built fewer homes in 2016 than it did in 2004.”
  • “The reason, says Gary Hanes, a retired HUD administrator based in Boise, is that the recession wiped out the city’s construction sector. Between 2008 and 2012, Boise home prices fell by 40%. With homebuilding stalled, thousands of construction workers took other jobs or left for North Dakota or Alaska. By 2012, once all the low-cost and foreclosed homes had been scooped up and the city needed new housing again, there was no one left to build it.”
  • “This isn’t just a Boise problem. Construction workers, even in high-paid jobs and booming cities, are in short supply. Plus, thanks to increasing international demand, prices for timber, steel and concrete are going up nationwide.”
  • “The higher costs of materials, financing and labor, combined with the years-long lag in homebuilding, have made construction unbearably expensive. Fred Cornforth, the CEO of the CDI/Idaho Development and Housing Organization, builds affordable housing in 17 states. He tells me that his last project in Boise cost around $155,000 per apartment ― cheaper than Seattle, where he also develops properties, but not by as much as you’d think.”
  • “This, Cornforth says, is the fundamental challenge of the housing crisis in Boise and everywhere else: The only way make prices fall is to overbuild. You need vacancy rates of 8% or more before rents start to come down. But the backlog is so great, and the costs of building are so high, that it’s impossible even to meet the current demand. Every year, he says, as the backlog grows, the costs go up and the challenge of meeting the need gets worse.”
  • “Ultimately, the housing crisis is not about housing. It is about the inability of American cities to grow.”
  • “’It’s hard to acknowledge change,’ says Mike Kazmierski, the president of the Economic Development Authority of Western Nevada. He’s been watching Reno, another medium-size boomtown, play out the same debates as Boise for over six years now. ‘If you say your city is going to grow, that means you need another fire station, more schools, more staff. Cities don’t have the budgets for that, and asking for it means raising taxes. The pushback is, ‘We don’t want to pay for that growth. Let them pay for it when they get here.’”
  • “This is where Boise starts to look depressingly familiar. In the last few years, as the city’s growth has become more visible, NIMBY groups have taken over the political conversation. Of the 21 speakers at a town hall meeting last month, only two said they welcomed more growth. Signs reading ‘OVERCROWDING IS NOT SUSTAINABLE’ are showing up in front yards. Some local residents, taking a page from the San Francisco playbook, are trying to get their neighborhood classified as a ‘conservation district‘ to block new buildings from going in.”
  • “Some of the complaints have merit ― it’s hard not to be sympathetic to residents asking for sidewalks on their streets or more frequent bus service ― but many are simply pleas for the growth itself to stop. A comment on the Facebook page for Vanishing Boise, one of the local anti-development groups, is emblematic of the argument: ‘Why are they coming in the first place?????’”
  • “As in other cities, this dynamic reveals a fundamental weakness in the American political system: Opposition to growth comes from homeowners and voters, entrenched interests who already have the ear of local politicians. Supporters of growth, the beneficiaries of all the new development, haven’t even moved here yet.”
  • “…most local advocacy groups are making the same argument San Francisco homeowners have made for decades: If we don’t build it, they won’t come.”

Perspective

FactsMaps – US States by Population Growth Rate 1950-2016

WSJ – Daily Shot: OECD – Levels of Income Inequality 5/7

Worthy Insights / Opinion Pieces / Advice

FT – Access to energy is an essential step in African development – Nick Butler 5/6

  • “Investment in infrastructure can unlock the continent’s potential but is far too low.”

FT – Fight the Faangs, not China – Rana Foroohar 5/6

  • “The Trump administration must break the power of big tech.”

NYT – Save Barnes & Noble! – David Leonhardt 5/6

WSJ – Xiaomi’s Valuation Isn’t Anywhere Near $100 Billion – Jacky Wong 5/3

WSJ – Tesla’s Numbers Are Even More Dramatic Than Its CEO – Charley Grant 5/5

WSJ – Why It’s Not Crazy to Buy a Mall Giant in the Age of Amazon – Stephen Wilmot 5/6

Real Estate

MarketWatch – With no letup in home prices, the California exodus surges – Andrea Riquier 5/7

  • “Over a million more people moved out of California from 2006 to 2016 than moved in, according to a new report, due mainly to the high cost of housing that hits lower-income people the hardest.”
  • “There are many reasons for the housing crunch, but the lack of new construction may be the most significant. According to the report, from 2008 to 2017, an average of 24.7 new housing permits were filed for every 100 new residents in California. That’s well below the national average of 43.1 permits per 100 people.”
  • “If this trend persists, the researchers argued, analysts forecast the state will be about 3 million homes short by 2025.”
  • “California homeowners spend an average of 21.9% of their income on housing costs, the 49th worst in the nation, while renters spend 32.8%, the 48th worst. The median rent statewide in 2016 was $1,375, which is 40.2% higher than the national average. And the median home price was — wait for it — more than double that of the national average.”
  • “One coping strategy: California residents are more likely to double up. Nearly 14% of renter households had more than one person per bedroom, the highest reading for this category in the nation.”
  • “Coping can also mean leaving.”
  • “The Next 10 and Beacon Economics researchers used Census data to track migration patterns by demographic characteristics. More than 20% of the 1.1 million people who moved in the decade they tracked did so in 2006, at the height of the housing bubble, when prices were, as they write, ‘sky-high’.”
  • “As the housing market imploded and prices came back to earth, migration out of the state slowed. But as prices recovered, ‘out-migration’ has not only picked up steam, it’s accelerated.”
  • “Those migration patterns are shaped by socioeconomics. Most people leaving the state earn less than $30,000 per year, even as those who can afford higher housing costs are still arriving. As the report noted, California was also a net importer of highly skilled professionals from the information, professional and technical services, and arts and entertainment industries. On the other hand, California saw the largest exodus of workers in accommodation, construction, manufacturing and retail trade industries.”

MarketWatch – Americans haven’t been this optimistic about house prices since just before the crash – Quentin Fottrell 5/7

  • “House prices are soaring and, despite warnings from some analysts, most Americans believe they will continue to soar.”
  • “A majority of U.S. adults (64%) continue to believe home prices in their local area will increase over the next year, a survey released Monday by polling firm Gallup concluded. That’s up nine percentage points over the past two years and is the highest percentage since before the housing market crash and Great Recession in the mid-2000s.”

Environment / Science

WP – Hawaii’s silent danger: Volcanic smog, otherwise known as ‘vog’ – Allyson Chiu 5/7

South America

WSJ – Daily Shot: Argentina Central Bank 7-Day Repo Rate 5/4

Advertisements

April 30, 2018

This will be the only post this week from me. This week I’m attending the ULI Spring Meeting in Detroit, MI.

Cheers,

Duff

Perspective

WSJ – Why Tech Titans Are Betting on India, in 14 Charts – Newley Purnell, Min Jung Kim, and Rosa de Acosta 4/18

  • Clearly there is some disconnect between showing just this chart and the title. Emphasis less on India and more on the gender split of Facebook users.

Worthy Insights / Opinion Pieces / Advice

Bloomberg Businessweek – China Quietly Rolled Out a Very Big Bang – John Micklethwait 4/19

Bloomberg – Latest Climate Threat for Coastal Cities: More Rich People – Christopher Flavelle 4/23

Financial Samurai – Why Households Need To Earn $300,000 A Year To Live A Middle Class Lifestyle Today – Sam

WSJ – Real Estate Stocks Are on Sale but No One Is Buying – Ken Brown 4/27

Markets / Economy

WSJ – Cable TV’s Cord-Cutting Woes Grow, Highlighting Divergence With Netflix – Shalini Ramachandran 4/27

Energy

Reuters – Venezuela faces heavy bill as grace period lapses on China loans – Corina Pons 4/27

Finance

FT – WeWork bond finds home in yield-starved market – Alexandra Scaggs 4/26

  • “This week high-yield bond investors faced a puzzle: how to value a bond sold by an unprofitable company that does not own hard assets or offer a clear outlook for its free cash flow?”
  • “The company in question was WeWork, the office-sharing company that last year attracted a $4.4bn equity investment from Japan’s Softbank. WeWork, which hired JPMorgan to lead the sale but had more than a dozen other banks working as well, attracted enough demand to increase the sale to $702m from $500m.”
  • “Several investors who steered clear of the bond — and one who bought it — said WeWork’s debt was not the type that typically appealed to high-yield investors. But nor was it the first company vowing to disrupt an industry to have found buyers in the junk market. Last year electric carmaker Tesla sold a $1.8bn high-yield bond, and in March, Uber raised $1.5bn in a leveraged loan.”
  • “A combination of low interest rates and shrinking supply has made it harder for money managers to find bonds with attractive yields. WeWork’s bonds were sold at a yield of 7.875%.”

Environment / Science

LAT – A Hawaiian island got about 50 inches of rain in 24 hours. Scientist warn it’s a sign of the future – Heidi Chang 4/28

Construction

WSJ – Daily Shot: CME Lumber (Jul) 4/26

China

FT – China’s HNA reports debts have soared to $94bn – Lucy Hornby 4/28

Middle East

Visual Capitalist – Knight Frank: A Time-lapse of Dubai’s Astonishing Growth – Nick Routley 4/28

  • Very cool animation.

South America

NYT – ‘Their Country Is Being Invaded’: Exodus of Venezuelans Overwhelms Northern Brazil – Ernesto Londono 4/28

April 6, 2018

If you were only to read one thing…

Bloomberg Businessweek – How Facebook Helps Shady Advertisers Pollute the Internet – Zeke Faux 3/27

  • Affiliate networks (‘affiliates’) = companies/brokers that design advertisements and pay to place them on social media sites on behalf of merchants.
  • “Granted anonymity, affiliates were happy to detail their tricks. They told me that Facebook had revolutionized scamming. The company built tools with its trove of user data that made it the go-to platform for big brands. Affiliates hijacked them. Facebook’s targeting algorithm is so powerful, they said, they don’t need to identify suckers themselves—Facebook does it automatically.”
  • “The basic process isn’t complicated. For example: A maker of bogus diet pills wants to sell them for $100 a month and doesn’t care how it’s done. The pill vendor approaches a broker, called an affiliate network, and offers to pay a $60 commission per sign-up. The network spreads the word to affiliates, who design ads and pay to place them on Facebook and other places in hopes of earning the commissions. The affiliate takes a risk, paying to run ads without knowing if they’ll work, but if even a small percentage of the people who see them become buyers, the profits can be huge.”
  • “Affiliates once had to guess what kind of person might fall for their unsophisticated cons, targeting ads by age, geography, or interests. Now Facebook does that work for them. The social network tracks who clicks on the ad and who buys the pills, then starts targeting others whom its algorithm thinks are likely to buy. Affiliates describe watching their ad campaigns lose money for a few days as Facebook gathers data through trial and error, then seeing the sales take off exponentially. ‘They go out and find the morons for me,’ I was told by an affiliate who sells deceptively priced skin-care creams with fake endorsements from Chelsea Clinton.”
  • “In a sense, affiliate scammers are much like Cambridge Analytica. Because Facebook is so effective at vacuuming up people and information about them, anyone who lacks scruples and knows how to access the system can begin to wreak havoc or earn money at astonishing scale.”
  • This is not a new game.
  • Affiliates are “…applying tricks on Facebook that had been invented by email spammers, who’d in turn borrowed the tactics of fax spammers in the 1980s and ’90s. New forms of media have always been hijacked by misleading advertising: 19th century American newspapers were funded in part by dishonest patent medicine ads. Within days of Abraham Lincoln’s inauguration, the makers of Bellingham’s Onguent were placing ads claiming the president had used their product to grow his trendy whiskers.”
  • “Fake personal endorsements and news reports are still the most effective tricks. Dr. Oz, the Shark Tank judges, and Fixer Upper co-host Joanna Gaines are among the most popular imprimaturs…”

Perspective

howmuch.net – How Much Income You Need to Afford the Average Home in Every State in 2018 – Raul 4/2

WSJ – Daily Shot: Deutsche Bank – US Households with Zero or Negative Home Wealth 4/5

WSJ – Daily Shot: Deutsche Bank – Road Quality in the US 4/5

Worthy Insights / Opinion Pieces / Advice

A Wealth of Common Sense – Situational Awareness – Ben Carlson 4/5

Bloomberg Businessweek – The Ancient History of Bitcoin – Peter Coy 3/29

  • “Cryptocurrencies may seem brand-new and disruptive, but look to the past and it’s clear they can be regulated.”

Civil Beat: The Associated Press – Hawaii’s Low Unemployment Rate Masks Underlying Problems 4/4

  • “In a state with a jobless rate of 2.1%, island residents have work if they want it. But their incomes often don’t pay the bills.”

NYT – Why China Is Confident It Can Beat Trump in a Trade War – Steven Lee Myers 4/5

  • “In the political realm, however, Mr. Xi enjoys advantages that may allow him to cope with the economic fallout far better than Mr. Trump can. His authoritarian grip on the news media and the party means there is little room for criticism of his policies, even as Mr. Trump must contend with complaints from American companies and consumers before important midterm elections in November.”
  • “The Chinese government also has much greater control over the economy, allowing it to shield the public from job cuts or factory closings by ordering banks to support industries suffering from American tariffs. It can spread the pain of a trade war while tolerating years of losses from state-run companies that dominate major sectors of the economy.”
  • “’The American agricultural sector is quite influential in the Congress,’ said Wang Yong, a professor of economics at Peking University, explaining why China has targeted farm products such as soybeans with possible retaliatory tariffs. ‘China wants the American domestic political system to do the work.’”

Visual Capitalist – The Jump from Millionaire to Billionaire, and How Long That Takes – Jeff Desjardins 4/4

WSJ – Even After a Tumble, the Stock Market’s Price Isn’t Right – Spencer Jakab 4/4

WSJ – At Quarter End, Tesla Suddenly Got Busy – Michael Rapoport 4/4

Markets / Economy

howmuch.net – How Vulnerable is Each State to a Trade War – Raul 3/27

Real Estate

WSJ – Daily Shot: LendingTree – Home Mortgage Purchase APR by Credit Score Range 4/5

Energy

FT – Alphabet becomes biggest corporate renewable energy buyer in US – Leslie Hook 4/4

  • “Alphabet bought enough renewable energy last year to match the power needs of all its data centers and global operations, making it the biggest corporate buyer of renewable power in the US.”
  • “The company has secured 3GW of renewable energy, making it the largest corporate buyer of renewable power, according to Bloomberg New Energy Finance, while Amazon and Apple are in second and third place.”
  • “Amazon has pledged that its cloud computing business will be 50% matched by renewables in 2017, while Apple has promised to source four gigawatts of renewable power by 2020, and has been trying to reduce the emission footprint of its supply chain.”

Finance

WSJ – Bill Ackman’s Pershing Square Faces Wave of Investor Redemptions – David Benoit 4/5

Cryptocurrency / ICOs

WSJ – Daily Shot: Barchart.com – Bitcoin 4/4

Automotive

WSJ – Car Makers Step Back From Cars – Mike Colias and Christina Rogers 4/4

  • “GM to stop production of the Chevrolet Sonic, Ford plans to end U.S. sales of Fiesta and Taurus amid Detroit’s broader exodus from passenger cars.”

China

Reuters – China’s HNA to sell some or all of $6.3 billion Hilton stake – Ankit Ajmera and Koh Gui 4/5

 

November 17, 2017

Perspective

WSJ – Leonardo da Vinci Painting ‘Salvator Mundi’ Smashes Records With $450.3 Million Sale – Kelly Crow 11/16

  • “Leonardo da Vinci’s rediscovered portrait of Jesus Christ sold at auction for $450.3 million, making it the most expensive work of art ever sold.”
  • “The estimate for the work was around $100 million. But before Wednesday night’s sale in New York, dealers had wagered the image of an enigmatic Christ dressed in a blue robe and holding a crystal orb could sell for far more—given that da Vinci is a household name, fewer than 20 of his paintings survive and this is the last one deemed by him in private hands.”
  • “The price more than doubled the $179.4 million spent two years ago for Pablo Picasso’s 1955 ‘Women of Algiers (Version O),’ as well as an earlier record of $170.4 million for Amedeo Modigliani’s 1917-18 ‘Reclining Nude.’ In private sales, paintings by Paul Cézanne and Paul Gauguin have commanded as much as $250 million and $300 million, respectively.”
  • “Alex Rotter, chairman of Christie’s postwar and contemporary art department, fielded the winning telephone bid after a 19-minute bidding war with at least five rivals in which bids were initially lobbed in $10 million increments. Billionaire collectors in the saleroom watched with their cellphone cameras held aloft as though they were at a rock concert.”
  • “’I’ve been going to auctions for decades, and I’ve never heard that room let out a collective gasp like they did when it sold,’ said Joanne Heyler, founding director of the Broad, a Los Angeles museum. ‘It’s hard for me to even comprehend that level of bidding.’”
  • “’Salvator Mundi’ isn’t instantly recognizable, like da Vinci’s ‘Last Supper’ or ‘Mona Lisa.’ This painting was considered a plum for its rarity. Auction records show only a trio of da Vinci’s 2,500 drawings have ever even come up for sale—the highest fetched $11.4 million in 2001—and no authenticated paintings have entered the market in at least a century.”
  • “Da Vinci painted the portrait around 1500, and it bounced among European royals for hundreds of years before shoddy cleaning efforts and overpainting rendered it almost unrecognizable.”
  • “When it surfaced in 1958 at Sotheby’s, it sold as a ‘school of da Vinci’ work for only £45 (about $125 at the time). But in 2005 a group of Old Master dealers and a conservator took a closer look and campaigned for its reauthentication. Ultimately, they won validation from museums and da Vinci scholars.”
  • “’Salvator Mundi’ comes from the collection of Dmitry Rybolovlev, a Russian fertilizer billionaire.”

Bloomberg – Billionaires Stunned as Da Vinci’s Christ Sells for $450 Million – Katya Kazakina 11/16

  • More information on the seller. Rybolovlev purchased the painting for $127.5 million in 2013, part of his $2 billion art collection. Which he has been in the process of trimming.

WSJ – Daily Shot: RadioFreeEurope – Where Do IS Foreign Fighters Come From 11/16

Economist – The rich get richer, and millennials miss out 11/16

  • “Buoyant financial markets meant that global wealth rose by 6.4% in the 12 months to June, the fastest pace since 2012. And the ranks of the rich expanded again, with 2.3m new millionaires added to the total, according to the Credit Suisse Research Institute’s global wealth report.”
  • “The report underlines the sharp divide between the wealthy and the rest. If the world’s wealth were divided equally, each household would have $56,540. Instead, the top 1% own more than half of all global wealth. The median wealth per household is just $3,582; if you own more than that, you are in the richest 50% of the world’s population.”
  • “America continues to dominate the ranks of millionaires with 43% of the global total. Both Japan and Britain had fewer dollar millionaires than they did in June 2016, thanks to declines in the yen and sterling. Emerging economies have been catching up in the millionaire stakes; they now have 8.4% of the global total, up from 2.7% in 2000.”
  • “In the 12 months covered by the report, the biggest proportionate gains in wealth occurred in Poland, Israel and South Africa, thanks to a combination of stock market and currency gains. Egypt is by far the biggest loser, having lost almost half its wealth in dollar terms. Switzerland is still the country with the highest mean and median wealth per person.”
  • “There is a wide generational gap: millennials (those who reached adulthood in the current millennium) have a lot of catching up to do in the wealth stakes. Americans currently aged between 30 and 39 years of age are calculated to have amassed 46% less wealth on average in 2017 than the equivalent cohort had gathered in 2007.”
  • “Higher student debts and the difficulty of getting on the housing ladder have made it harder for millennials to build a nest-egg. That disparity might come back to bite the baby-boomer generation, who are fast moving into retirement. When baby-boomers want to cash in their assets, they may find millennials can’t afford to buy them at current prices.”

Worthy Insights / Opinion Pieces / Advice

A Teachable Moment – Insanely Expensive Life Insurance – Anthony Isola 11/15

Civil Beat – Here’s What It Really Takes To Survive in Hawaii – Neal Milner 11/16

  • “Hate them if you must, but homelessness, vacation rentals and unlicensed care homes are natural responses to problems plaguing the islands.”

FT – The Zuckerberg delusion – Edward Luce 11/15

  • “Talking about values has the collateral benefit of avoiding talking about wealth.”

NYT – Deception and Ruses Fill the Toolkit of Investigators Used by Weinstein – Matthew Goldstein and William Rashbaum 11/15

Real Estate

WSJ – Daily Shot: Moody’s – Housing Market Valuations 11/16

Finance

WSJ – Daily Shot: Bitcoin 11/15

  • And there it goes again.

Entertainment

WSJ – The Music Industry’s New Gatekeepers – Neil Shah 11/15

  • “Playlist professionals have replaced radio DJs as the new power brokers, as streaming services’ ready-made song lists become hitmakers.”

China

Reuters – Beijing hits brakes on subway boom over debt concerns – Brenda Goh 11/14

  • “China has been in the grips of a metro-building binge with more than 50 cities working on over 1 trillion yuan ($150.8 billion) worth of projects, after population restrictions were loosened last year to allow more cities to have metro systems.”
  • “Such infrastructure spending has helped to shore up economic growth but is now being scrutinized more closely after the government pledged to clamp down on financial risks.”
  • “China has hit the brakes on subway projects in at least three cities and Beijing is asking others to slow down their plans, local governments and media have reported, indicating concerns over high debt from city-level infrastructure spending.”

FT – China’s laid-off workers pose daunting welfare challenge – Emily Feng 11/15

  • “Early retirement for 1.8m in coal and steel sectors imposes heavy burden on state.”

India

Bloomberg – A Dud Diwali For Developers This Year – Purva Chitnis 11/16

  • “Developers hoping for a Diwali revival were left disappointed. Enquiries surged to their highest since demonetization during the festival season. Sales didn’t.”
  • “Fewer apartments were sold in the top eight cities in the quarter ended September, according to property research company PropEquity. Sales declined 13-60% in the three months, according to its data. Sales haven’t picked up since January even as initial cash crunch after the note ban began to ease. New launches that contribute the bulk of the demand plunged as well.”
  • “The housing market continues to hurt from Prime Minister Narendra Modi’s decision to outlaw old high-value bills and a new housing law. Demonetization had hit real estate the hardest as buyers had to pay up to 40% cash upfront – unaccounted. The Real Estate Regulation Act that followed protects customers against false promises and bars builders from shifting funds from one project to another (a good thing). A combination of the two triggered a cash crunch, bringing down demand and new launches.”

Japan

WSJ – Daily Shot: Topdown Charts – Japan Labor Force Participation 65yrs and older 11/16