I met a real estate developer in Sarasota who said that his specialty of buying “Class B-/C+” apartment buildings on behalf of investors and lightly fixing them up no longer made sense. “A year ago, I was paying $60,000 to $70,000 per door and now it is $130,000 or more,” he said. “I can build something new for about the same price.” (These are buildings with at least 40 units.)
Why didn’t he buy the fanciest buildings? “You don’t want to buy in the ghetto, but these buildings are like a Toyota Camry,” he responded. “Even if the economy turns down, there will always be a market for a Camry.”
If used apartment buildings are about the same cost as building new, doesn’t that suggest that the real estate market is near a peak? I say “Yes” because (a) new is better, and (b) there is still a lot of land in the U.S. The developer, who surely knows more than I do, says “No.” He expects 3-5 more years of 20 percent annual inflation in SW Florida until prices reach parity with California. “People are moving here every day from California and also from Miami,” he said. “They want to get away from taxes in California and from the crazy congestion in Miami.”
Readers: Is there anything special that happens to the real estate market when used buildings being to cost as much or more than new buildings? Am I right in thinking that the curve will flatten? (after only the first 2 years of 14 days!)
The Mote Marine Laboratory & Aquarium reminded us that invasives will displace a native population.
As we remember the day that the Japanese bombed Pearl Harbor, we can look at a recent attack on our shores by the Omicron variant of COVID, arriving inside the bodies of rich art world people from around the globe. Of course, I’m talking about Art Basel Miami, previously covered here in
My journey began at an Art Basel Week party in a Miami Beach house. The host is a refugee from the disorder and filth of San Francisco (wife insisted on a move due to worthy locals shooting up heroin in the driveway of the $10 million house). By the time the party was in full swing, the street looked like the aftermath of flash mobs robbing Ferrari and Mercedes dealers. The dessert table and dock (yacht on order, but delayed due to “supply chain” issues at Volvo for the engines):
I migrated from the party to the vaccine papers check tent, as previously discussed, and then entered the convention center:
In 2018, sponsor UBS was celebrating women. Not this year, however. It is unclear if this is because the term “women” is undefined in our 2SLGBTQQIA+ world, if the “imbalance” that needed rectifying in 2018 was fully addressed, or what. From 2018:
Monica Bonvicini gets my vote for maximum prescience with this 2019 work, titled “Hy$teria” (13′ wide):
John Giorno (1936-2019) should get some credit for this letter from CO2-emitting humans to our beloved Mother Earth (“You Got to Burn to Shine”; also a good tutorial on black-body radiation?):
Speaking of artwork by deceased artists selling for hundreds of thousands of dollars… The gallery owner calls the artist and says “I’ve got some good news and bad news.” Artist: “What’s the good news?” Gallerist: “A collector just came in and bought all of your paintings at list price.” Artist: “That’s fantastic. What could possibly be bad then?” Gallerist: “The collector is your oncologist.
Christine Wang can’t get credit for prescience, but this 60×60″ 2021 painting would be nice to hang right next to an original Hunter Biden.
Fair to say that this artist has never been to Walmart?
If you’re looking for something that you could replicate via a trip to Walmart, this pegboard piece by Theaster Gates seems like a good candidate:
Do you have $220,000 to spend on a pony? (there are almost no price tags, of course, but I was crass enough to ask)
Note that the guy doesn’t have a lot of hair, but if you average with his female companion, there is enough to go around. In Miami, it is not a good assumption to read this scene as a father-daughter excursion. (forgive the assumed gender IDs, which I adopted for brevity)
Torbjørn Rødland shows that Norwegians might be good at pumping oil and buying Teslas, but they are not competent at interior painting (55×40″):
Here is a can’t-lose investment, consistent with established Wall Street wisdom, “they’re not making any more USB sticks”:
The value-added tax on this one is going to be staggering (cost: some wires and hatchets):
Some local color:
Some folks who refuse to #FollowScience:
(Note the Pomeranian whose only visual hint of qualifying as a service dog is the green hair dye.)
Also perhaps suitable to hang next to your Hunter Biden collection, a work by the late Tina Girouard captioned “1992 Immigration Migration 1492”:
Generally the show is geared toward folks who have blank walls that are at least 15′ in width and 12′ in height and/or a lot of empty floor space. Here are some photos showing the scale:
If you missed your chance to buy a 1954 Rothko, come down with your checkbook:
Or just make something kind of like it (Idris Khan, 2020, 100 inches high, no doubt made with far higher quality paint that won’t fade! Apologies for perspective distortion):
Camera notes: These are a mixture of iPhone 13 Pro Max and Canon R5 with 50/1.8 STM lens. The iPhone did a much better job with white balance than the Canon.
Worth a special trip to Miami? Not unless you’re connected enough to the art world to get invited to one networking event after another and can expect to know at least 25 percent of the people who are there. Worth fighting through traffic and $65 for a ticket if you’re already in Miami? I think so!
American athletes will still be able to compete in the Winter Games, but the diplomatic boycott is a slap at China for human rights abuses in Xinjiang.
Pressure has been building for months from members of Congress in both parties to hold China accountable for abuses of Uyghur Muslims in the Xinjiang region and crackdowns on pro-democracy protests in Hong Kong. Those calls only intensified after the disappearance from public life of the tennis star Peng Shuai after she accused a top Communist Party leader of sexual assault.
On the latter point, previously in the NYT: “She said she met Zhang earlier in her career and had a consensual relationship with him. She said he sexually assaulted her shortly after he stepped down as one of China’s top leaders in 2017.” Her story is that she enjoyed having sex with this elderly married guy right up to the day that he no longer had the power to do stuff for her? (He’s 75 now; Peng Shuai is 35)
Jen Psaki, the White House press secretary, said administration officials did not believe it was appropriate to send a delegation of U.S. officials to the Games in February after “genocide and crimes against humanity” in Xinjiang.
“Genocide” is so bad that the word doesn’t appear in the story until after we learn about the young tennis player who was having sex with an old married guy?
But previous attempts to pull athletes out of the Games have fallen flat. The last time the United States pursued a full boycott of the Olympics was in 1980, when President Jimmy Carter rallied against allowing athletes to participate in the Summer Games in Moscow, to protest the Soviet Union’s military presence in Afghanistan.
The New York Times doesn’t mention that, in addition to boycotting the sports event, we poured cash and weapons into the hands of the Mujahideen (“those engaged in jihad”). How did that work out for us? (see also “How Jimmy Carter Started America’s Afghanistan Folly” (Washington Monthly))
So… we won’t send any U.S. politicians or bureaucrats to China, but we will send $1 billion in cash for the host city’s share of the American broadcast rights? How does our family sign up to be boycotted?
Olympics meme (regarding the South Korea games that happened during the cruel reign of the Trumpenfuhrer): I wanted to take a moment to ask readers to invest in thoughts and prayers for the safety of athletes who are threatened by a mentally unstable madman in command of a massive nuclear-and ballistic-missile equipped military (and also the athletes may be threatened by that North Korean guy).
Is it heresy to say that the Olympics could be good for Boston? (from 2015) “Generally civic approval processes in Massachusetts work under the assumption that time is meaningless and money is infinite. With a hard deadline of 2024 people would be forced to make decisions, clear away obstacles, and forgo “let’s do some more study” or “let’s have another lawsuit” conclusions to meetings. There is no question that at least half of the money spent will be wasted. But that’s true of much that state and local governments do. The difference with the Olympics is that at least something would get done, e.g., completion of various T extensions.”
“London’s Summer Games in 2012 generated $5.2 billion compared with $18 billion in costs. What’s more, much of the revenue doesn’t go to the host—the IOC keeps more than half of all television revenue, typically the single largest chunk of money generated by the games.” (CFR)
… is it fair to say that MMT is actually the mainstream economic philosophy in the U.S. and has been since at least March 2020? (In other words, the folks who run the U.S. economy profess belief in neoclassical economics, but their actions reveal a belief in MMT.)
The infrastructure act signed into law last week marked a defeat for the faction of progressive economists in ascendancy in 2020. For these advocates of modern monetary theory, the insistence by both political parties that all the $550 billion of new spending be matched by offsetting revenue, known as “payfors,” goes against their belief that money is merely a tool for government.
This is a temporary rhetorical setback. The reality is that MMT’s ideas have insinuated themselves deep into government, central banking and even Wall Street—and the infrastructure act is in fact deficit-financed anyway.
MMTers detest payfors as wrongheaded thinking about money. Money only exists because of government spending, and under MMT, the government should just create as much as it needs to finance its projects. In a tight economy—like we have now—MMT might want offsets to new spending. But higher taxes or lower spending elsewhere would be aimed at avoiding inflation, not at balancing the budget.
The government hasn’t embraced MMT. But important elements of it are now accepted by much of the economic and financial establishment, with major implications for how the economy is run.
“Governments have lost their fear of debt,” says Karen Ward, chief market strategist for EMEA at JPMorgan Chase’s asset-management arm. “They were terribly worried about bond markets and investors punishing them. What they saw last year was record high levels of debt at record low levels of interest rates.”
Central banks that had struggled for a decade to boost inflation using monetary tools found that fiscal tools were far more powerful. Government spending does far more for inflation than quantitative easing, it turns out, and central-bank calls for more fiscal action to boost the economy are more likely to be accepted next time deflation looms.
In the next downturn it is going to be very difficult for governments to resist calls to provide huge support, now that it has been shown that bond markets don’t care. That should mean recessions are shallower, debt is higher, the government is more involved in the economy and, assuming the Fed doesn’t accept that its tools are useless, interest rates are higher on average than in the past. Bond markets aren’t pricing in anything of the sort, though. The 30-year Treasury yield is only 2%, well below the 3.2% average of the 10 years up to 2020.
MMTers mostly aren’t worried about President Biden’s spending plans causing inflation anyway. But MMT prescribes that if tax rises are needed to slow demand, billionaires wouldn’t be the target: The rest of us would.
This guy predicts a future of higher interest rates and higher tax rates for the upper-middle class! (on the other hand, how can the bond markets be so wrong?)
Note that MMT doesn’t have to be correct for the WSJ article to be right and/or relevant. MMT just has to be the prevailing belief among those who direct the U.S. economy (roughly 50 percent of which is now direct government spending or government-controlled (health care, arguably banking)).
Speaking of inflation, some Bitcoin enthusiasts with whom I spoke at a Miami Beach party recently estimated that the inflation rate as perceived by a middle class American is 10-14 percent and closer to 22 percent for a high-income or wealthy individual. The house is on a side street, which became littered with exotic cars (you could be parked in by a Ferrari and a Mercedes G-Wagon), many of which had California plates and/or dealer insignia from California. One California refugee had recently moved into a condo that is part of high end hotel. A Web search revealed a price range of $7-50 million for the various condos, but it is unclear if those were pre-Biden prices or current. “Did you sell some of your Bitcoin to buy the condo?” I asked. “No,” he replied. “I sold a bunch of Sh*tcoin.”
The crypto enthusiasts disagreed about various technical topics (trust in financial transactions is problematic if you can’t be 100 percent confident that certificate authorities won’t be hacked into or grabbed by a central government), but one thing that they all agreed on was that it was insanity to hold dollars. “You’ve lost at least 20 percent on any cash dollars that you held this year,” one pointed out. (See above for the 22 percent inflation estimate. Consistent with this estimate, the S&P 500 is up roughly 23 percent over the past 12 months.) I don’t think they’d be any happier to hold a U.S. Treasury bond, even one that is pegged to the official CPI.
I have been fighting a losing battle all semester with students who do not see the importance of plural versus possessive, capitalizing proper nouns, distinguishing between “it’s” and “its”, etc. Many won’t take the trouble to click right when Microsoft Word underlines something in red or blue to suggest a correction. I have stressed that in the world of Information Technology details matter and it is important to demonstrate the characteristic of attention to detail and conscientiousness (prized by employers and mostly genetic so it can’t be fixed on a post-hire basis).
On the very eve of the latest class, a tweet from one of America’s leaders:
I can’t tell students that they’ll never get anywhere in life if they won’t adhere to the demands of Standard English if one of our top 535 legislators (out of 200 million potential within the estimated 333 million residents of the U.S.?) got this position without being a slave to grammar and spelling.
A repeat of an earlier question asked here: What is the point of our travel restrictions?
Knowing that current testing technology will flag perhaps at most half of those who are infected with SARS-CoV-2, we insist that people can’t come to the U.S. from abroad unless they’ve tested negative. This means that we’ve slightly cut the number of people who arrive into a country with 108,000+ “new cases” per day among those who are already here. NYT:
Our restrictions on documented travelers have proven useless in preventing a new variant from arriving in the U.S. and then spreading (see “Before Even Receiving a Name, Omicron Could Have Spread in New York and the Country” (NYT, 12/5)). The undocumented, of course, continue to cross the southern border without going through the testing and vaccine papers checks.
It would seem that we’ve had sufficient data to declare failure. If we want to keep people with COVID-19 out of the U.S. we have to close the borders to the documented and also somehow close the southern border to the undocumented. Or we could decide that, for whatever reason, we need open borders and we won’t bother hassling the documented travelers with demands for medical test results. But the current system seems irrational (especially closing the borders to people coming from certain African countries because we say that they’re likely to have a variant of COVID that is already in the U.S. and Europe and spreading in both places).
I know that we are #FollowingTheScience so obviously there is something I’m missing… but what is the explanation for keeping the current system after we have direct evidence of failure? The current system can’t be denting the number of infected people in the U.S. because there aren’t all that many documented travelers showing up compared to the 108,000+ daily positive tests here. The current system can’t be discouraging participation in the global COVID variant pool because the Omicron variant was first reported to WHO on November 24 with a first sample dated Nov. 9; it arrived in the U.S. no later than November 22 (CDC).
In case the testing hassles are discouraging you from going to Italy, a recent photo from Naples, Florida:
A friend just returned from Europe with the following report:
No Americans anywhere! … Rental cars in Italy were practically free as were hotels. Italians and Germans seem to have accepted their permanent masked fates with zero drama. They tend to wear inside and out, all ages. Everyone thinks Sweden is nuts and that the world has ended in America. Most I met with think the travel restrictions to the US are insane.
Rapid testing is everywhere, although on way home no one at any airport asked to see my test result, just vax status.
The systems in the EU all were digitally linked so a scan of their vax cards loads everything up everywhere. They thought my vax card was fake.
Edwin Barnhart‘s 22nd lecture in Maya to Aztec: Ancient Mesoamerica Revealed explains that ancient cultures in Central America and Mexico collapsed due to overpopulation combined with governing elites demanding too much from the common people.
Teotihuacan (flourished from 100 BC through 550 AD; photographed 2003):
Also from 2003 (Mexico City), for young folks who think that they’re the first to wave the rainbow flag:
One thing I love about SARS-CoV-2 is that the inevitable mutations enable me to ask the same questions over and over.
Suppose that Johnny starts feeling unwell after Art Basel. It takes him/her/zir/them a day or two to decide that it might be COVID and it is time to get tested. In a lot of states it might take at least one more day to arrange a test. After that, 2-3 days to get a result from the PCR toaster oven. Assuming a positive test, that puts Johnny 4-6 days after his/her/zir/their symptoms began when he/she/ze/they goes into isolation.
Each wave of the pandemic has underscored just how gravely contagious COVID-19 is, but there is less clarity among experts on exactly when—and to what extent—infected individuals are most likely to spread the virus.
Now, a new study co-led by a School of Public Health researcher has found that individuals infected with the virus are most contagious two days before, and three days after, they develop symptoms.
(They forgot to write “global pandemic”.)
In other words, by the time Johnny gets the PCR result, he/she/ze/they is mostly past the contagious phase. Wouldn’t the world have been far safer if we had a rule that anyone who is sick in any way has to be isolated (or, if unvaccinated, euthanized)?
I recently parked in a garage in Florida that has been converted into the world’s loneliest drive-through COVID-19 testing facility (there is hardly any COVID left in Florida).
After $10 trillion in COVID-related federal spending, how long to get a result in a state with hardly anyone infected? “Two to three days,” said the helpful lady who was checking the non-existent customers in. (I went back and forth to the car a few times and never saw anyone come in to be tested; about 6 people seemed to be working at this facility.)
Readers: Please explain to me under what circumstance this kind of PCR test has a practical value.
If you’re a middle class or richer person in our corner of Florida you essentially never touch anything that is more than 25 years old. The Target that you walk into is new and is a Platonic ideal Form of a Target. The road that you drove on to get to said Target could be an example from a road system engineering textbook. You never turn left except from a dedicated left turn lane with a dedicated left turn signal. You never turn right except from a dedicated right turn lane. If you’re going straight, consequently, you never wait for someone turning left or right. When you return home to walk the dog, you’re on a perfect sidewalk. If a child is with you on the sidewalk riding a bike, there is always a brand new curb cut exactly where needed/wanted. If you are a little sloppy parking, the curb is never so high or jagged that it will tear up the car’s wheels. Gas, water, sewer, and power grid are all new and reliably functional.
Our corner of Massachusetts was super rich, fattened by a 60-year flow of taxpayer cash into health care, pharma, and higher education. Everything that was practical to improve had been improved. Nonetheless, the results were often poor quality. The capacity of the road network was perhaps 1/3rd of what has been achieved in Florida. One person choosing to make a left turn could cause a 1-mile backup. The (old) gas lines near our old house always leaked slightly, giving parts of the neighborhood a consistent ethyl mercaptan smell. Power failures lasting 3-50 hours were routine.
It occurred to me that Massachusetts is like an old Cessna airframe that has been lavishly maintained. The bones are old, but the avionics in the panel are new. In theory, it should be just as good as a new airplane.
Florida, on the other hand, is like a brand new Cirrus, engineered to the latest standards (seats that will crush on impact; parachute if things are truly going badly, ideal shape from a composite mold, thought-out ergonomics, etc.).
An experienced aircraft mechanic, when I would ask him for advice regarding the merits of a new part or a remanufactured/rebuilt one that should be just as good and/or why someone would spend 2-3X on a factory-new Bonanza compared to a perfect-condition older one. “New is new,” was often his response (in favor of the new part or aircraft!).
I’m not sure that the analogy holds up in all areas of Florida, e.g., Miami, but it seems like a useful shorthand for explaining MA vs. FL to general aviation pilots at least!
A hangar at KSUA featuring a classic Cessna 170 taildragger (no newer than 1956) and a brand new C8 Corvette (both owned by the same dentist):
We’re told that house prices across the U.S. are up by 20 percent compared to a year ago (see Inflation would be 10 percent per year if house prices were included). Yet in our neighborhood here in the Florida Free State, both prices and rents are up closer to 50 percent. A community built for middle class (town houses) and upper middle class (single-family homes) now has single-family homes listed for more than $2 million (would have been $1 million two years ago).
Vast areas of the U.S. are blighted and undesirable, yet one could still buy a house in those areas and those house prices presumably feed into the statistics. What if we looked at areas that have at least some of the following characteristics:
good public schools
convenient to jobs
walkable
low crime
convenient to services for the middle class and above
Would the inflation rate still be only 20 percent?
A Long Island man who only ever made one mortgage payment has deftly used the courts to stay in the house for 23 years — for free, according to legal papers.
Guramrit Hanspal, 52, has filed four lawsuits and claimed bankruptcy seven times to avoid being booted from the 2,081-square-foot East Meadow home he “bought” for $290,000 in 1998.
So far, it’s worked: Two different banks and a real estate company have owned the three-bedroom, 2.5-bath home since Hanspal was foreclosed upon in 2000. But Hanspal remains.
Hanspal’s not the only occupant of the home leveraging the US Bankruptcy Code’s “automatic stay” rules, which give debtors a temporary reprieve from all collection efforts, harassment and foreclosures.
At least three other people listing the home at 2468 Kenmore St. as their address have also filed for bankruptcy in Brooklyn federal court, winning the “automatic stay,” only to have the claims eventually dismissed, court records show.
And a good deal: Hanspal, who had an initial 7.375 percent interest rate on the $232,000 adjustable-rate mortgage, likely saved himself upwards of $440,000 by not paying his bills.
Meanwhile, in 2004, Hanspal transferred the deed of the home to a friend, Rajender Pal, even though he had no legal right to do so, according to court papers. Pal, using the Kenmore Street address, filed for bankruptcy in 2005, staving off eviction yet again.
By May 2018, Chase unloaded the property to Diamond Ridge, which offered Hanspal $20,000 to leave. He didn’t take the deal, and instead, filed for bankruptcy again in 2019 and 2020. Another purported occupant of the house, Boss Chawla, filed bankruptcy four times in 2019, as did another resident — allegedly named John Smith — who filed once.
“The history of this case going on for approximately 20 years must come to an end,” Nassau District Judge Scott Fairgrieve wrote in a December 2019 housing court proceeding.
The last one is my favorite! The judge says “it must end”, but Messrs. Hanspal, Pal, and Chawla are still there two years later.
Loosely related… the happening downtown neighborhood of Delray Beach, Florida (I stopped there for dinner after teaching a class that ends at 9:20 pm):
