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RANT Feb. 10


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#1 johngeorge

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Posted 13 February 2020 - 08:05 AM

The jobs numbers released on Friday were excellent, and using all of the related data, it shows the economy continues to be strong, and is likely to continue strong all year. The slight bounce up in the unemployment figure is simply caused by large number of people coming off the sidelines and seeking work. A very good sign that the last stragglers now believe they can get a job instead of welfare. More important is the labor participation rate moved higher by .2% to 63.4%, That continues the uptrend since 2016. The highest was 67.3% in Feb 2000, but times and demographics were very different.  Productivity also rose. Wages continued up for the 18th month in a row, and nicely exceed inflation  3.1% to 1.6%. With mortgage rates ultra-low refi has skyrocketed, gas prices remain very low, and so disposable income for low income households has risen materially.  Savings rates continue higher than 7% which is excellent. Debt to income rations continue to decline ate the same time savings is rising and 401K and IRA values hit new record highs. Bottom line, consumers may be in the best shape ever. That translates into more good consumer spend and ability for consumers to ride out any slowdown. There is every reason to believe the year will only get better when Boeing returns to production, and CDC continues to do an excellent job of protecting the country from the virus. If world growth were to pick up, factory orders would rise and GDP would rise more, and unemployment would go below 3.5%. It does not get much better than this. It is clear the Philips curve is dead. The Fed is a long time from raising rates. Probably  not at  least until Q1 next year, and maybe longer. The expansion is solid and can potentially continue up for years to come, provided the Dems lose big in November and the R’s regain the House with Trump as president. If the Dems win, even with Bloomberg, all bets are off. The stock market now could hit 3500 on the S&P this year. 30,000 on the Dow is very possible.
 
The possibly more real number of virus cases in China slipped out on Tencent, and it may be true that far more have died, and as many as 150,000- 200,000, or more, possibly are already infected, or are suspected of being infected since there is evidence that infected people are being turned away from hospitals because there are no more test kits or other medical supplies to cope. China only reports what they claim are “confirmed “ cases, not possible cases. And nobody believes what they say. However,  a smuggled video taken inside a Chinese hospital shows extreme chaos with dead bodies in the hall with crowds of patients. A friend, who is a general in the US army medical corps, has been inside Chinese hospitals surreptitiously before the virus. He said they are not capable of coping, which is some verification of that smuggled video. He also has a Chinese sister-in-law still in China who claims things are really bad. Nobody knows what is really going on. Food is becoming in short supply in quarantined areas.  This whole situation is horrendous for China no matter the real numbers. It not only creates vast disruption to their economy now, plus inflation, but the more this continues, the more and faster companies will move out permanently, the fewer tourists will come for a long time. The public is getting very upset by what is happening and the lack of transparency. It is a nightmare scenario for China. At the same time, the CDC and HHS are doing a great job of protecting us, so the US will come out of this with nil impact. This just adds to the US strength over China for future negotiations. We likely will never know the truth, but it is very bad. The condo markets in the US, Vancouver and London will get hit hard with no Chinese able to travel.
 
Fannie and Freddie will stop all use of Libor on Dec 31, 2020, and revert to SOFOR. That will essentially mean an end to Libor for home loans and then it will be a short matter to move all loans form all lenders to SOFOR over the following year. If you have a Libor loan it is best to check with your lender now to find out what is the plan to change the index and how will your loan be priced.  Each lender may choose to handle it differently depending on the term of the loan and their plan to switch to SOFOR. It is unclear what happens to loans in CMBS pools but I assume they might remain as Libor until maturity, but you need to ask now. All new loan docs need to say what index and what happens when the index changes.
 
We are constantly hearing how investors are seeking yield. That is a stupid goal. The whole point of investing is to preserve your capital and to make a reasonable return relative to the risk you take. It is not to take high risk just to make another 100 basis points, and then end up losing principal when the bond matures and does not pay. The junk bond market is now high risk, and getting riskier. Yields do not reflect the level of risk in many cases. Energy bonds are very high risk now. There are numerous over levered companies of all sorts who have issued junk bonds that are at real risk of default. Chasing yield or growth in emerging markets, given the virus impact, is really a good away to lose money. If you just stick with good US based companies whose main business is in the US, and possibly the EU, you will do far better in the long run. If you have been in good US stocks since Dec 2018, you would have made gains equal to several years of junk bond yield, but with much lower risk.
 
Jeremy Siegel, the stock market professor at Wharton, now says having 40% in bonds does not make sense, given that rates will likely remain quite low for maybe years. One of his points is that with the aging of population, there are huge increases in the number of investors in bonds, which then drives down yields. The more money pouring into bond funds needs to be invested, so bond prices rise and yields decline. An article in the Saturday WSJ makes an analogous point that there are massive amounts of money pouring into bond funds. Siegel makes the same point I have made for a long time. Over time, stocks will be less volatile than bonds, and will provide a materially higher return. Back to my duration point recently. Short term bonds are less volatile, but yield a lot lower returns as a result of lower risk over time. I reiterate, that unless you need the money in the very short run, holding mostly equities is a far better risk reward structure that 60-40 bonds. A lot depends on your term horizon. If you note, even after the crash in 2008, the equity markets have gone on to record new highs over 11 years. You just need to know when to get out at the start of a massive crash scenario like 2000 or 2008. The key is to not react to short term events, and to take a long term view of rates, inflation  and the US economy. You have to look past the pundits who are paid to react to the latest whatever, and who try to be heroes, and instead  just make your own assessment of the world. The US is on a roll, and it might be able to last for many more years depending on the 2020 election. If Trump wins, then the good times will roll on. If one of the insane Dems like Bernie wins, go all cash or gold. Europe may be in or on the verge of recession, and the EU may be on track to blow apart over the next 5-10 years as I believe it will, China may be a challenge, but now the US has regained its mojo and power, after Obama depleted it. After the virus finally is beaten, China and Xi will be weakened considerably. Iran will be stopped now that they lost their real leader in Soleimani, and the sanctions are collapsing their economy. If Trump is reelected, Iran knows it is at real risk. The chance for a peace deal with the Israelis and Palestinians will increase immeasurably if Trump wins. The election is a key moment. As of now I see Trump in a major win, and Republicans recapturing the House after the impeachment fiasco and Iowa. The Dems will not be able to get the raging factions together. If this does play the way I predict, the stock market will rally into next year.
 
The private sector is not waiting  for the do nothing Congress to do an infrastructure deal. Between the big funds, there is now $212 Billion in free cash available to spend, and that is before any leverage or partnering with other investors or operators who would add to that. That  is a lot of funding for data transmission and storage, pipelines, toll roads, and other needed projects. While some of that will go offshore, there is well over $100 billion going into US projects. Just imagine what could be done if the Congress could ever pass a program that partnered government money with this private capital as Trump envisioned. Thus far, infrastructure funds have returned around 15% with not much risk. This is far better than fixed income, but these funds are mainly for institutional investors. Eventually there will be many more public infrastructure funds. Once again, it is private sector investors stepping in where Congress has failed. If something has a good profit, and risk return ratio,  private capital will flow to it. If you need any further proof that the private sector is far better at rejuvenating poor neighborhoods then the government, just look at the opportunity zone activity vs decades of failed urban renewal programs by the government that wasted hundreds of billions and accomplished nothing good.
 
When I look at the investment banking world of today compared to when I was part of it, there is not a lot of similarity. When I was young, and we were swinging guys, it was great fun and very lucrative. Now it is a much smaller world with many more regulations and strictures, and more limited ways to make the big bucks. Goldman is a shadow of what it was. Credit Suisse is in turmoil, Lehman is gone as is Bear, and Merrill is now part of B of A.  JPM is now a major player, but they are restricted by being a commercial bank with heavy regulation. Morgan Stanley is not the old premier firm it once was, now that it has a major retail operation. I am happy I was part of the old days where wild things happened, and we were free to be real entrepreneurs.
 
Biden is touting that he would not have had Soleimani killed because he did not pose and immediate threat. Supposedly he was against killing Bin Laden. He is just what we need as president so we can go back to the Obama world of ISIS and Iran running rampant with no consequences. At least Biden knows how to point out that Buttaboy accomplished nothing and is unqualified, and also good at positioning his son and brother to take bribes. Biden is done. Many months ago the Rant said Klobachar had a chance. Now it appears she may have a real chance as the compromise. We will see where things stand after S Carolina. That is when it matters. The number of Dems who showed up for the Iowa caucus was far less than usual. Only 176,000 down from well over 200,000 in past elections. It suggests the Dems do not have the energy nor interest by their people to show up at the election. Trump just held a rally in New Hampshire and drew thousands, with some standing in the cold for hours vs small crowds for the Dems.
 
The U of CA, as I have mentioned previously, now requires that professors applying for jobs must first pass a submission as to how they are promoting diversity and inclusion. Some schools in the system have adopted the Advancing Diversity Pilot Program Result is few whites are getting jobs despite sterling records as researchers and professors. They will get hired by many other universities.  So once again the students at UC lose. The university loses. It is akin to the old Jewish quota from decades ago when there was a limit at some universities as to how many Jews they would accept as professors. But now when you discriminate against whites and ignore their proven skills, it is considered a good thing to discriminate, but CA has a law supposedly preventing any racial discrimination when admitting students. Under the Pilot program 679 perfectly  qualified professors were eliminated just on an “inadequate diversity profile” before their qualifications were reviewed. At UC Davis for one search  100% of the hires were minorities for 8 different jobs. Welcome to university education in California.   
 
From: Tom Czech
Date: February 11, 2020 at 9:41:33 PM EST
Subject: Fwd:  Ross Rant  Feb 10
 
 
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johngeorge

#2 Smithy

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Posted 13 February 2020 - 08:48 AM

Thanks for posting thought provoking stuff. We need more of it.



#3 AChartist

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Posted 18 February 2020 - 10:37 PM

clif covering his views of the virus.

 

I think supply chain is a serious consideration to prepare for food and medicines. If the disease is around do you want to out for stuff that is largely unavailable with gouging going on.

Work is cutting back output about 20%.

 

I think it is deepstate scorched earth false flag we were told a bigger 911 was planned to cover their collapse/bankruptcy/prosecution.

 

There were some hits from older reports I have to reread as they are coming about 1-2 years later than expected although no time was offered, 

one that a time when cruise ships were stranded was when cryptos took off. The stages for bitcoin were to be a buying panic and then reach a status unavailable for purchase in

early 2020. I do have a drop in crypto cycles due and maybe that is in these two weeks that gold could be exploding to a cycle peak. It appears he misunderstood the translation

for the term "sun disease" at the time it appeared a few years ago.

 


"marxism-lennonism-communism always fails and never worked, because I know

some of them, and they don't work"  M.Jordan


#4 johngeorge

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Posted 20 February 2020 - 11:13 PM

Date: February 20, 2020 at 11:53:40 AM EST

Subject: Fwd:  Ross Rant  Feb 20



The US just keeps rolling along. The virus has seemingly been locked out and no new cases are being detected for the past few days. While some companies are being affected, most are not. The fast food companies operating in China have implemented delivery procedures to protect staff and customers by having no human contact on delivery. Those with factories there may soon start to run out of some parts that are supplied by China, but so far that seems not to be a major issue to the overall US economy. The boost form the trade deal will be slower starting but since we are shipping to them it is not likely to make a lot of difference by spring. The real drag from foreign sales is the EU which is teetering on recession. German, which is the primary economic power, is not using its surplus to stimulate demand and so is not helping the matter, and they are chastising the ECB for negative rates and other monetary stimulus. We don’t know what is really happening with the EU trade talks, but preliminary reports suggest that the EU is unwilling to give any ground on agriculture, which has always been the real problem. Autos may be possible issue to resolve, although, not easily. Autos are a huge part of German manufacturing and exports to the US. It is unclear if the ag issue can be resolved without the US imposing heavy tariffs as was done with China. The EU cannot afford a trade war with the US after Brexit. . It would send them into real recession, and would then create serious political problems for the current leaders. With the German leadership now undetermined, and uncertain, that would really start problems for the center/left coalition. 2020 is going to be a very tough yar in the EU, and not a place you want to have any money invested. The risks and uncertainty are very high. Unfortunately, the economic slowdown in the EU does impact the US by keeping exports lower than they would be, but the US is not heavily dependent on them for economic growth.
 
A recent report on housing trends in the US suggests that there are social, demographic, and culture changes in the US which will limit the growth of housing and value of homes in the long term. .As a result of the housing crash in 2007-8, millennials are no longer believing, correctly, that owning a home is the path to retirement wealth. They realize that they may be better financially to rent, and put their savings into the stock market or a 401K. Others just spend more today and seem not to realize one day they need retirement savings. They seem to believe either that the government will take care of them as Bernie says, or that they can start to save later, or they conclude they will inherit money, and so don’t need to save. That was never an option before current times with stock markets and home prices making their parents able to have money to leave them. Likely they came to this belief because they were given money in college, and after by their parents, and did not have to work and struggle as hard for it the way we did. . Or they continued to live at home, and did not have to fend for themselves as many of us did. It is a whole culture change. My generation had to sacrifice, scrimp and save to get where now are. We were given little or nothing. That is a whole different culture than today. Our success has made it too easy for the millennials and their kids.  On a relative basis this new culture has led to less savings by millennials than by their parents at the same age. In addition, the birth rate is declining and is negative, they are postponing marriage and babies to later, and student debt has crimped the ability to get a down payment saved. This is one of the real negative outcomes created by universities hiring all those costly diversity staffs and pushing up tuition to pay for them, then encouraging the students to borrow to finance all this waste. Getting a mortgage  has been made more of an issue by the much tighter credit requirements and student loans has had a major negative impact. The entire student loan situation, created by huge wasteful spending by universities, has had huge ramifications for society and the economy. This is another wonderful thing the push for diversity in college has brought us. What has made things even worse, is now 40% of entrants never graduate, but they still have the debt. The schools seem not to care as they have become a lucrative business that pays very high wages to faculty and excess staff, and to the president of the school. 
 
Lastly, young people are mainly coming to urban settings to live and play. The internet, and ability to work and communicate instantly remotely, has changed everything. The ability to sell your product online or thru Amazon has meant you can work and produce products at home, and have access to the whole world market. Modern logistics thru Fed Ex and UPS means you can ship to anywhere from anywhere easily. Think about how that has changed the world. There is a hollowing out in many older, small factory towns and cities. As we move to a brain driven economy, vs using manual labor, the location of jobs is in bigger urban areas if you want to earn a good living in the future. Now there are cities such as Raleigh, Pittsburgh, Dallas, Austin, Denver, Boise, Nashville and several others where the start-up tech companies have fled from CA and the insanity of housing costs and the low quality of life due to homeless on the streets has driven out growing numbers. These other cities have taken the initiative and have worked to make themselves business friendly, and entertainment centers with all sorts of gentrified areas of downtown with no homeless ruining the streets. As these other cities grow and become even bigger tech centers, they will attract more young people. In fact, the problem now happening is housing prices in these places are rising very fast, and construction is not keeping up with demand. However, the cost of living and the cost of running a business in these places is still far less than in CA or Seattle, or Portland, and the absence of homeless makes life far more pleasant. While the big tech companies are not leaving CA, and that is a draw to others, these other cities are pulling away thousands of young people who work remotely or start their own company. The big problem, however, is the small cities and towns are shrinking around the Midwest. No new business is coming to replace those that have closed or moved. Result is drugs have become a massive problem that is very hard to contain. Now that opioids are recognized as a major issue and controls are in place, the drug problem has seemingly peaked, but is far from solved. This just leaves these towns on a path to nowhere and house values in decline.
 
Older homes and massive estate homes, as in Greenwich, are no longer in demand. Young people seem to be quite happy to rent, and now they even rent clothes, car rides, and everything else. That means as boomers retire in many older cities and towns, there are no buyers for their house.  You almost cannot give away a big house in Greenwich today. Nobody shows up to even look. The SALT tax law has put the final nail in the coffin in NJ, CT and NY. If you are retiring and moving to a condo, or to FL, you can barely even find a charity to take away your beautiful furniture.  There is no market for it. Nobody wants it today. The point of all of this is that the trend is to urban, smaller, rental, and mobility. While millennials are now finally marrying and having babies, and some are moving to suburbs, the price of housing and massive shortages of lower cost housing is stopping them. The huge increase in regulation regarding zoning and construction, has raised the cost of a basic house in many places to a point that the combination of shortage of inventory and cost to build, has driven up prices. That has meant that with ultra-low interest rates, the monthly mortgage payment has become much more affordable, so now  demand is far above supply, and will be for years to come so long as mortgage rates remain below 4%, which has become the magic level below which demand grows. For homebuilders, especially in the cities that are booming as named above, this is the golden era.  Home construction will be a boom business for several years. In these growing areas. The other impact is that as selling older homes in many places becomes harder, people are choosing to stay in the home and to do some renovation and to age in place.
 
Softbank has another massive bad deal in real estate-hotels. They backed Oyo in India where it was a rerun of We Work. Oyo was another outlandish supposed growth fiasco where they were going to build and develop 1 million hotel and apartment rooms in one year. Ludicrous on its face. Myoshi Son was not fit to run the giant fund and that so many gave him so much capital to invest just shows how out of control the whole venture world had become before We Work blew up. It was a classic case of a promoter and a bunch of foolish young investors at institutions who had never done a real estate development and had never run a company. It is the same stupidity and arrogance we saw in the Dotcom era and in the lead up to 2008 in RMBS and CMBS. .Ignorance and greed make bad combinations for investing every time. 
 
The medical schools and hospitals have decided that the exam that tests new grads from medical school on their knowledge and ability at graduation, and is used by hospitals to weed through residency applications, is excluding too many minority students from selection for top quality residency programs because their test grades were not good enough to be accepted by the top hospitals for residency positions. Apparently the hospitals get hundreds, or more applications and need a way to sort through them objectively in order to narrow the numbers of applicants to those deemed good prospects to interview. The medical associations and hospitals, along with the students, have determined it is “too stressful” for the students to have to take these tests knowing it will determine where they get residency. The snowflakes are unable to deal with stress. And too few minorities score high enough to be considered for positions at top hospitals.  Research has shown, however, that high scores are linked to good outcomes in clinical settings and other measures. In short, high scorers make better doctors.  As a result of the stress and the perceived failure of minorities to score well, it has been decided to use pass/ fail, which tells nothing about skill level, and to use instead “holistic” measures. In summary, we will have residents chosen not for proven ability as doctors, but for some airy fairy holistic way to get more minorities into top hospitals—result- patients lose -maybe their life, on the alter of diversity. Just in case you wondered what the benefits of diversity really are.  This same race  to the least common denominator is behind pushing for more minority students getting accepted to STEM graduate programs, and the elimination of SAT scores, which are now claimed to be discriminatory even though it has been well demonstrated that high scoring kids have better school outcomes, and graduation rates. China has no such stupid selection process. They go for the best talent. Merit is what they measure, like we used to do.
 
If you want to see an example of what is occurring on elite college campuses today, the link is just one example of what is going on at some other universities across the country.
 
The Dems have a growing mess. Now Bloomberg is in serious trouble with the left wing for his past comments even though much of what he said was correct and spot on, especially about stop and frisk. It is just that now everything one says is misconstrued to be racist and terrible, so he likely just lost.  I watched 20 minutes of the debate.  They let everyone dump all over Mike then did not call on him other than for his very brief rejoinder.  The rest was like watching a debate in Alice In Wonderland. The stuff some of them are promoting is so absurd and lacking in any understanding of economics, it is amazing to realize this is a debate for candidates for president, and not for some campus left wing organization. If this is what the Dems offer against Trump it is a joke. I could easily destroy their positions, and Trump can do it much better than me. Bernie’s army is going to dig up anything they can and seek to stop Mike. They are succeeding. Just makes Klobachar more viable as the only one left standing. Bernie  has never held a real job, lived off welfare and wives of which he had 4, he never had any bill passed in Congress other than 2 post office names. Nobody likes him. He is basically a Communist and early on had Castro and other communists as his heroes. And now he wants to destroy the economy. Yet he is the leader???? What is going on? Warren is a yelling, arm waving lunatic. Buttaboy is the gay mayor of a tiny city that has only a small number of residents when Notre Dame is not in session, and he promotes that as making him the best candidate. Wow. S Bend is not dealing with mullahs or Xi or Kim. Putin would chew him up and spit him out. What we see is the direct result of what is happening on campus where the kiddies are indoctrinated by the far left professors who think Bernie and his policies are great. Makes you wonder what the hell kids are being taught in university these days. Bernie should make you very worried about what is being turned out of the schools and what the politics will be going forward.  You need to try to educate your kids and grandkids about capitalism and about how they have been mislead in college.  If we don’t run this around soon, the country is in big trouble as these kids get out in the working and political world.  Just look at Bernie to see what has happened. .
 
Now they are intensifying attacks on Barr since impeaching Trump failed so badly. If you think the 2000 person DOJ former employee petition and the judges “emergency meeting” is not an orchestrated and staged effort, you need to move back to a cave. Roger Stone was being unfairly charged and sentenced as payback to Trump. Barr was right to step in and correct and massively unfair situation. Real felons get much lesser sentences and all he really did was lie and try to get his friend to lie. Bad things, but not 9 years. The real people who should be admonished are the four prosecutors, two of whom were Mueller alumni who probably need to get someone to justify the Mueller investigation. The lead prosecutor for Stone said the sentence was far too  harsh, but the other 4 threatened to quit if he prevailed. That was well before Trump said anything. This is like the Ukraine-the Dems take something out of context and run for impeachment-this time of Barr.  And the press piles on. It is all a script. Trump was right to be angry, but he needs to keep his mouth shut and let Barr handle things. Flynn was horribly mistreated. The false FISA warrant was a travesty. The Dems are terrified of what is coming from Durham, and so they are trying to destroy Barr for nothing factual, so they can try to blow off Durham’s indictments. They forget Holder being called Obama’s wingman, and who was blatantly doing Obama’s bidding. Barr is not going to resign. Trump will keep quiet.  In the end everyone gets pardoned after the election.
 
There is a prize for any man who can certify that he has been to the supermarket three times in a row, and when arriving home with the groceries he was NOT told he had bought the wrong brand, wrong size, wrong thing, or forgot to buy something. In short that he had done nothing wrong three times in a row.
 

 


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#5 dougie

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Posted 21 February 2020 - 01:19 AM

Date: February 20, 2020 at 11:53:40 AM EST

Subject: Fwd:  Ross Rant  Feb 20



The US just keeps rolling along. The virus has seemingly been locked out and no new cases are being detected for the past few days. While some companies are being affected, most are not. The fast food companies operating in China have implemented delivery procedures to protect staff and customers by having no human contact on delivery. Those with factories there may soon start to run out of some parts that are supplied by China, but so far that seems not to be a major issue to the overall US economy. The boost form the trade deal will be slower starting but since we are shipping to them it is not likely to make a lot of difference by spring. The real drag from foreign sales is the EU which is teetering on recession. German, which is the primary economic power, is not using its surplus to stimulate demand and so is not helping the matter, and they are chastising the ECB for negative rates and other monetary stimulus. We don’t know what is really happening with the EU trade talks, but preliminary reports suggest that the EU is unwilling to give any ground on agriculture, which has always been the real problem. Autos may be possible issue to resolve, although, not easily. Autos are a huge part of German manufacturing and exports to the US. It is unclear if the ag issue can be resolved without the US imposing heavy tariffs as was done with China. The EU cannot afford a trade war with the US after Brexit. . It would send them into real recession, and would then create serious political problems for the current leaders. With the German leadership now undetermined, and uncertain, that would really start problems for the center/left coalition. 2020 is going to be a very tough yar in the EU, and not a place you want to have any money invested. The risks and uncertainty are very high. Unfortunately, the economic slowdown in the EU does impact the US by keeping exports lower than they would be, but the US is not heavily dependent on them for economic growth.
 
A recent report on housing trends in the US suggests that there are social, demographic, and culture changes in the US which will limit the growth of housing and value of homes in the long term. .As a result of the housing crash in 2007-8, millennials are no longer believing, correctly, that owning a home is the path to retirement wealth. They realize that they may be better financially to rent, and put their savings into the stock market or a 401K. Others just spend more today and seem not to realize one day they need retirement savings. They seem to believe either that the government will take care of them as Bernie says, or that they can start to save later, or they conclude they will inherit money, and so don’t need to save. That was never an option before current times with stock markets and home prices making their parents able to have money to leave them. Likely they came to this belief because they were given money in college, and after by their parents, and did not have to work and struggle as hard for it the way we did. . Or they continued to live at home, and did not have to fend for themselves as many of us did. It is a whole culture change. My generation had to sacrifice, scrimp and save to get where now are. We were given little or nothing. That is a whole different culture than today. Our success has made it too easy for the millennials and their kids.  On a relative basis this new culture has led to less savings by millennials than by their parents at the same age. In addition, the birth rate is declining and is negative, they are postponing marriage and babies to later, and student debt has crimped the ability to get a down payment saved. This is one of the real negative outcomes created by universities hiring all those costly diversity staffs and pushing up tuition to pay for them, then encouraging the students to borrow to finance all this waste. Getting a mortgage  has been made more of an issue by the much tighter credit requirements and student loans has had a major negative impact. The entire student loan situation, created by huge wasteful spending by universities, has had huge ramifications for society and the economy. This is another wonderful thing the push for diversity in college has brought us. What has made things even worse, is now 40% of entrants never graduate, but they still have the debt. The schools seem not to care as they have become a lucrative business that pays very high wages to faculty and excess staff, and to the president of the school. 
 
Lastly, young people are mainly coming to urban settings to live and play. The internet, and ability to work and communicate instantly remotely, has changed everything. The ability to sell your product online or thru Amazon has meant you can work and produce products at home, and have access to the whole world market. Modern logistics thru Fed Ex and UPS means you can ship to anywhere from anywhere easily. Think about how that has changed the world. There is a hollowing out in many older, small factory towns and cities. As we move to a brain driven economy, vs using manual labor, the location of jobs is in bigger urban areas if you want to earn a good living in the future. Now there are cities such as Raleigh, Pittsburgh, Dallas, Austin, Denver, Boise, Nashville and several others where the start-up tech companies have fled from CA and the insanity of housing costs and the low quality of life due to homeless on the streets has driven out growing numbers. These other cities have taken the initiative and have worked to make themselves business friendly, and entertainment centers with all sorts of gentrified areas of downtown with no homeless ruining the streets. As these other cities grow and become even bigger tech centers, they will attract more young people. In fact, the problem now happening is housing prices in these places are rising very fast, and construction is not keeping up with demand. However, the cost of living and the cost of running a business in these places is still far less than in CA or Seattle, or Portland, and the absence of homeless makes life far more pleasant. While the big tech companies are not leaving CA, and that is a draw to others, these other cities are pulling away thousands of young people who work remotely or start their own company. The big problem, however, is the small cities and towns are shrinking around the Midwest. No new business is coming to replace those that have closed or moved. Result is drugs have become a massive problem that is very hard to contain. Now that opioids are recognized as a major issue and controls are in place, the drug problem has seemingly peaked, but is far from solved. This just leaves these towns on a path to nowhere and house values in decline.
 
Older homes and massive estate homes, as in Greenwich, are no longer in demand. Young people seem to be quite happy to rent, and now they even rent clothes, car rides, and everything else. That means as boomers retire in many older cities and towns, there are no buyers for their house.  You almost cannot give away a big house in Greenwich today. Nobody shows up to even look. The SALT tax law has put the final nail in the coffin in NJ, CT and NY. If you are retiring and moving to a condo, or to FL, you can barely even find a charity to take away your beautiful furniture.  There is no market for it. Nobody wants it today. The point of all of this is that the trend is to urban, smaller, rental, and mobility. While millennials are now finally marrying and having babies, and some are moving to suburbs, the price of housing and massive shortages of lower cost housing is stopping them. The huge increase in regulation regarding zoning and construction, has raised the cost of a basic house in many places to a point that the combination of shortage of inventory and cost to build, has driven up prices. That has meant that with ultra-low interest rates, the monthly mortgage payment has become much more affordable, so now  demand is far above supply, and will be for years to come so long as mortgage rates remain below 4%, which has become the magic level below which demand grows. For homebuilders, especially in the cities that are booming as named above, this is the golden era.  Home construction will be a boom business for several years. In these growing areas. The other impact is that as selling older homes in many places becomes harder, people are choosing to stay in the home and to do some renovation and to age in place.
 
Softbank has another massive bad deal in real estate-hotels. They backed Oyo in India where it was a rerun of We Work. Oyo was another outlandish supposed growth fiasco where they were going to build and develop 1 million hotel and apartment rooms in one year. Ludicrous on its face. Myoshi Son was not fit to run the giant fund and that so many gave him so much capital to invest just shows how out of control the whole venture world had become before We Work blew up. It was a classic case of a promoter and a bunch of foolish young investors at institutions who had never done a real estate development and had never run a company. It is the same stupidity and arrogance we saw in the Dotcom era and in the lead up to 2008 in RMBS and CMBS. .Ignorance and greed make bad combinations for investing every time. 
 
The medical schools and hospitals have decided that the exam that tests new grads from medical school on their knowledge and ability at graduation, and is used by hospitals to weed through residency applications, is excluding too many minority students from selection for top quality residency programs because their test grades were not good enough to be accepted by the top hospitals for residency positions. Apparently the hospitals get hundreds, or more applications and need a way to sort through them objectively in order to narrow the numbers of applicants to those deemed good prospects to interview. The medical associations and hospitals, along with the students, have determined it is “too stressful” for the students to have to take these tests knowing it will determine where they get residency. The snowflakes are unable to deal with stress. And too few minorities score high enough to be considered for positions at top hospitals.  Research has shown, however, that high scores are linked to good outcomes in clinical settings and other measures. In short, high scorers make better doctors.  As a result of the stress and the perceived failure of minorities to score well, it has been decided to use pass/ fail, which tells nothing about skill level, and to use instead “holistic” measures. In summary, we will have residents chosen not for proven ability as doctors, but for some airy fairy holistic way to get more minorities into top hospitals—result- patients lose -maybe their life, on the alter of diversity. Just in case you wondered what the benefits of diversity really are.  This same race  to the least common denominator is behind pushing for more minority students getting accepted to STEM graduate programs, and the elimination of SAT scores, which are now claimed to be discriminatory even though it has been well demonstrated that high scoring kids have better school outcomes, and graduation rates. China has no such stupid selection process. They go for the best talent. Merit is what they measure, like we used to do.
 
If you want to see an example of what is occurring on elite college campuses today, the link is just one example of what is going on at some other universities across the country.
 
The Dems have a growing mess. Now Bloomberg is in serious trouble with the left wing for his past comments even though much of what he said was correct and spot on, especially about stop and frisk. It is just that now everything one says is misconstrued to be racist and terrible, so he likely just lost.  I watched 20 minutes of the debate.  They let everyone dump all over Mike then did not call on him other than for his very brief rejoinder.  The rest was like watching a debate in Alice In Wonderland. The stuff some of them are promoting is so absurd and lacking in any understanding of economics, it is amazing to realize this is a debate for candidates for president, and not for some campus left wing organization. If this is what the Dems offer against Trump it is a joke. I could easily destroy their positions, and Trump can do it much better than me. Bernie’s army is going to dig up anything they can and seek to stop Mike. They are succeeding. Just makes Klobachar more viable as the only one left standing. Bernie  has never held a real job, lived off welfare and wives of which he had 4, he never had any bill passed in Congress other than 2 post office names. Nobody likes him. He is basically a Communist and early on had Castro and other communists as his heroes. And now he wants to destroy the economy. Yet he is the leader???? What is going on? Warren is a yelling, arm waving lunatic. Buttaboy is the gay mayor of a tiny city that has only a small number of residents when Notre Dame is not in session, and he promotes that as making him the best candidate. Wow. S Bend is not dealing with mullahs or Xi or Kim. Putin would chew him up and spit him out. What we see is the direct result of what is happening on campus where the kiddies are indoctrinated by the far left professors who think Bernie and his policies are great. Makes you wonder what the hell kids are being taught in university these days. Bernie should make you very worried about what is being turned out of the schools and what the politics will be going forward.  You need to try to educate your kids and grandkids about capitalism and about how they have been mislead in college.  If we don’t run this around soon, the country is in big trouble as these kids get out in the working and political world.  Just look at Bernie to see what has happened. .
 
Now they are intensifying attacks on Barr since impeaching Trump failed so badly. If you think the 2000 person DOJ former employee petition and the judges “emergency meeting” is not an orchestrated and staged effort, you need to move back to a cave. Roger Stone was being unfairly charged and sentenced as payback to Trump. Barr was right to step in and correct and massively unfair situation. Real felons get much lesser sentences and all he really did was lie and try to get his friend to lie. Bad things, but not 9 years. The real people who should be admonished are the four prosecutors, two of whom were Mueller alumni who probably need to get someone to justify the Mueller investigation. The lead prosecutor for Stone said the sentence was far too  harsh, but the other 4 threatened to quit if he prevailed. That was well before Trump said anything. This is like the Ukraine-the Dems take something out of context and run for impeachment-this time of Barr.  And the press piles on. It is all a script. Trump was right to be angry, but he needs to keep his mouth shut and let Barr handle things. Flynn was horribly mistreated. The false FISA warrant was a travesty. The Dems are terrified of what is coming from Durham, and so they are trying to destroy Barr for nothing factual, so they can try to blow off Durham’s indictments. They forget Holder being called Obama’s wingman, and who was blatantly doing Obama’s bidding. Barr is not going to resign. Trump will keep quiet.  In the end everyone gets pardoned after the election.
 
There is a prize for any man who can certify that he has been to the supermarket three times in a row, and when arriving home with the groceries he was NOT told he had bought the wrong brand, wrong size, wrong thing, or forgot to buy something. In short that he had done nothing wrong three times in a row.
 

 

isnt this sort of politics off limts JG?

if it isnt, it should be.



#6 johngeorge

johngeorge

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Posted 21 February 2020 - 02:03 AM

dougie

 

"

isnt this sort of politics off limts JG?

if it isnt, it should be"

 

After rereading the post I agree with you.  Will ask the moderator to remove it. 

 

johngeorge


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