The Nation's Financial Condition

[Farfromgeneva]

You want power and water to be fully privatized? Otherwise they can run concurrently. Agree but don’t think they are mutually exclusive.

Begging my FIL who’s company builds a lot of data centers to get into solar and other renewable development w excess cash flow they just otherwise dividend out to shareholders (private so top 15-20 guys incl him). Kind of a natural fit with their customer base as they only do certain work as they are 100% Union labor (IBEW) and so work with gift agencies and tech type companies a lot

[Farfromgeneva]

Demographics is destiny in current economic framework. And they don’t look good for large swathes of humanity. As this framework increasingly fails to efficiently allocate capital, coupled with climate change disruptions, there will be some profound economic and political changes. Knowing humans, it won’t be pretty.


https://seekingalpha.com/amp/article/44 ... hic-vortex

I usually get yelled at for making this argument by a highly sensitive boomer cohort around here

[youthathletics]

You want power and water to be fully privatized? Otherwise they can run concurrently. Agree but don’t think they are mutually exclusive.

Begging my FIL who’s company builds a lot of data centers to get into solar and other renewable development w excess cash flow they just otherwise dividend out to shareholders (private so top 15-20 guys incl him). Kind of a natural fit with their customer base as they only do certain work as they are 100% Union labor (IBEW) and so work with gift agencies and tech type companies a lot

Curious.....does your FIL see the bids for these 'tilt-ups" data centers as Cost-Plus, where the data center knows the price and they are just the hired labor...make smaller margins and hoping on accelerated scheduleds and change orders to make more cash?

[Typical Lax Dad]

You want power and water to be fully privatized? Otherwise they can run concurrently. Agree but don’t think they are mutually exclusive.

Begging my FIL who’s company builds a lot of data centers to get into solar and other renewable development w excess cash flow they just otherwise dividend out to shareholders (private so top 15-20 guys incl him). Kind of a natural fit with their customer base as they only do certain work as they are 100% Union labor (IBEW) and so work with gift agencies and tech type companies a lot

Curious.....does your FIL see the bids for these 'tilt-ups" data centers as Cost-Plus, where the data center knows the price and they are just the hired labor...make smaller margins and hoping on accelerated scheduleds and change orders to make more cash?

Norther Virginia is data center capital of the world.

[Farfromgeneva]

You want power and water to be fully privatized? Otherwise they can run concurrently. Agree but don’t think they are mutually exclusive.

Begging my FIL who’s company builds a lot of data centers to get into solar and other renewable development w excess cash flow they just otherwise dividend out to shareholders (private so top 15-20 guys incl him). Kind of a natural fit with their customer base as they only do certain work as they are 100% Union labor (IBEW) and so work with gift agencies and tech type companies a lot

Curious.....does your FIL see the bids for these 'tilt-ups" data centers as Cost-Plus, where the data center knows the price and they are just the hired labor...make smaller margins and hoping on accelerated scheduleds and change orders to make more cash?

Yes mostly cost plus in the 7-10% range and less accelerated schedules but change orders and then ongoing maintenance. The maintenance has like 30-50% margins on lower $ but long term total return gets to low mid teens blended between initial contract, change orders and maintenance contracts.

But some of these are large dollar contracts for a company that ha 50-100 W2 employees and then employ a ton of the labor year round.

Wife is cost manager on this large 3 phase Facebook one alone that’s $300mm+ over a decade, phase 1 was $180mm. I see some of the #s from her.

There’s a ton of pas through like meals and gas for PMs as well, some extends to others. Then there might be a box for an employee but they just have a name fill it in but it drops to company w CFO and controlled trying to extract part of that in their bonuses. Even cost plus has angles

[Farfromgeneva]

You want power and water to be fully privatized? Otherwise they can run concurrently. Agree but don’t think they are mutually exclusive.

Begging my FIL who’s company builds a lot of data centers to get into solar and other renewable development w excess cash flow they just otherwise dividend out to shareholders (private so top 15-20 guys incl him). Kind of a natural fit with their customer base as they only do certain work as they are 100% Union labor (IBEW) and so work with gift agencies and tech type companies a lot

Curious.....does your FIL see the bids for these 'tilt-ups" data centers as Cost-Plus, where the data center knows the price and they are just the hired labor...make smaller margins and hoping on accelerated scheduleds and change orders to make more cash?

Norther Virginia is data center capital of the world.

They used to have a lot of business up that way but shrunk footprint up there for some reasons

[youthathletics]

You want power and water to be fully privatized? Otherwise they can run concurrently. Agree but don’t think they are mutually exclusive.

Begging my FIL who’s company builds a lot of data centers to get into solar and other renewable development w excess cash flow they just otherwise dividend out to shareholders (private so top 15-20 guys incl him). Kind of a natural fit with their customer base as they only do certain work as they are 100% Union labor (IBEW) and so work with gift agencies and tech type companies a lot

Curious.....does your FIL see the bids for these 'tilt-ups" data centers as Cost-Plus, where the data center knows the price and they are just the hired labor...make smaller margins and hoping on accelerated scheduleds and change orders to make more cash?

Yes mostly cost plus in the 7-10% range and less accelerated schedules but change orders and then ongoing maintenance. The maintenance has like 30-50% margins on lower $ but long term total return gets to low mid teens blended between initial contract, change orders and maintenance contracts.

But some of these are large dollar contracts for a company that ha 50-100 W2 employees and then employ a ton of the labor year round.

Wife is cost manager on this large 3 phase Facebook one alone that’s $300mm+ over a decade, phase 1 was $180mm. I see some of the #s from her.

There’s a ton of pas through like meals and gas for PMs as well, some extends to others. Then there might be a box for an employee but they just have a name fill it in but it drops to company w CFO and controlled trying to extract part of that in their bonuses. Even cost plus has angles

Thanks....same thing here in DC. My neighbor is high up with Dynalectic IBEW and has been on these for the past couple decades...has certainly been lucrative for them.

[Farfromgeneva]

You want power and water to be fully privatized? Otherwise they can run concurrently. Agree but don’t think they are mutually exclusive.

Begging my FIL who’s company builds a lot of data centers to get into solar and other renewable development w excess cash flow they just otherwise dividend out to shareholders (private so top 15-20 guys incl him). Kind of a natural fit with their customer base as they only do certain work as they are 100% Union labor (IBEW) and so work with gift agencies and tech type companies a lot

Curious.....does your FIL see the bids for these 'tilt-ups" data centers as Cost-Plus, where the data center knows the price and they are just the hired labor...make smaller margins and hoping on accelerated scheduleds and change orders to make more cash?

Yes mostly cost plus in the 7-10% range and less accelerated schedules but change orders and then ongoing maintenance. The maintenance has like 30-50% margins on lower $ but long term total return gets to low mid teens blended between initial contract, change orders and maintenance contracts.

But some of these are large dollar contracts for a company that ha 50-100 W2 employees and then employ a ton of the labor year round.

Wife is cost manager on this large 3 phase Facebook one alone that’s $300mm+ over a decade, phase 1 was $180mm. I see some of the #s from her.

There’s a ton of pas through like meals and gas for PMs as well, some extends to others. Then there might be a box for an employee but they just have a name fill it in but it drops to company w CFO and controlled trying to extract part of that in their bonuses. Even cost plus has angles

Thanks....same thing here in DC. My neighbor is high up with Dynalectic IBEW and has been on these for the past couple decades...has certainly been lucrative for them.

9% on Facebook project FYI. And they are accelerating the schedule though that's driven by the GC (who's share of the total is absurdly skewed towards the GC fee in terms of budget when you consider they sub the steel and electrical is 70-80% of cost) rather than EE firm.

[Farfromgeneva]

Alec Gores is the father of SPACs pretty much, long before people knew what a spac was

Exclusive: Alec Gores tries to solve for the SPAC market
A SPAC led by the buyout specialist Alec Gores, which announced a merger with the boutique apartment-hotel company Sonder in April, is restructuring the terms of its deal. The revised transaction will value Sonder at just over $1.9 billion, rather than $2.2 billion as originally planned. Affiliates of the Gores Group will contribute an additional $110 million in financing, alongside Fidelity, BlackRock and others. That’s on top of the deal’s original $200 million “PIPE” (private investment in public equity), which is a pot of money raised alongside a SPAC’s I.P.O. There’s also a new, $220 million debt facility.

The restructuring comes as SPACs strain under pressure. Wariness of the blank-check vehicles is dragging many down below their $10-per-share I.P.O. price, enticing investors to exercise their right to redeem their shares at that price when a merger is announced, a unique feature of the SPAC structure. Every redeemed share means less cash available to newly merged company. (The Gores SPAC merging with Sonder has been trading just a few cents below $10 per share in recent months.)

“The market has shifted — and we totally get that,” Gores told DealBook. “As long as you have a great company, the market is going to go in 100 different ways, and we just have to be smart enough to recognize where the market is.” The Gores Group, a serial SPAC sponsor, has access to capital and a network that other SPACs might not, giving it the ability to shift with market conditions. Still, there are drawbacks to these adjustments: A larger PIPE means more dilution for shareholders.

“Our focus,” said Sanjay Banker, Sonder’s president and C.F.O., “is to make sure the plan is fully funded — and so the arithmetic in the short run is much less important.” The hospitality firm, which reported record revenue and widening losses this month, recently opened a property in Paris as well as expanded in the Middle East and Mexico.

[Farfromgeneva]

Is it a surprise that MTG bought Digital World stock two days ago. At least it's being taken out of congressional acolytes...

[Farfromgeneva]

U.S. Prices, Wages Rise at Fastest Pace in Decades
Strong consumer demand and supply shortages test economy with rapid uptick in inflation

Consumer spending rose at a seasonally adjusted annual rate of 0.6% in September.
PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
By David Harrison
Updated Oct. 29, 2021 1:09 pm ET

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Consumer prices rose at the fastest pace in 30 years in September while workers saw their biggest compensation boosts in at least 20 years, according to new government data released Friday.

Consumer spending also rose in September despite the expiration of enhanced unemployment benefits, the data showed.

The reports point to a recovery caught between robust consumer demand and severe supply shortages, leading to a rapid uptick in inflation. They also put pressure on the Federal Reserve. Officials say they expect the recent burst of inflation will be temporary, but they have also raised the possibility they could pull back support for the economy faster than anticipated.


Personal Consumption Expenditures
Source: Commerce Department
Note: Seasonally adjusted at annual rates
2017
'20
11.5
12.0
12.5
13.0
13.5
14.0
14.5
15.0
15.5
16.0
$16.5
trillion
The Fed’s preferred inflation gauge, the personal consumption price index, rose 4.4% in September from the previous year, the fastest pace since 1991, the Commerce Department said Friday. The index was up 0.3% in September from the previous month.

Excluding food and energy categories, which tend to be more volatile, the index rose 0.2% over the month and 3.6% over the year.

The employment-cost index, a measure of worker compensation that includes both wages and benefits, rose 1.3% in the third quarter from the second, the fastest pace since at least 2001, the Labor Department reported.

Workers in the leisure, hospitality and retail sectors saw particularly high compensation boosts, as employers struggled to fill open positions.

Wage Pressure
Employment-cost index, change from previous quarter.
Source: Labor Department
Note: Seasonally adjusted
2015
'20
0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
%
An index of consumer sentiment also released Friday by the University of Michigan showed Americans remain in a glum mood. The index fell to 71.7 in October from 72.8 in September. It remains well below the level of 101 registered in February 2020, before the pandemic hit.

Consumers in October also anticipated the highest year-ahead inflation rate since 2008 at 4.8%, according to the sentiment survey. Higher consumer inflation expectations are a concern for policy makers because they could prompt firms and workers to raise prices and salary demands in the future, making the expectations self-fulfilling.

Constrained global supply chains have made it difficult for businesses and consumers to find the products they want to buy. Continued fears of the Covid-19 virus and difficulty finding child care have kept workers out of the labor force, despite rapidly rising wages.

About 62% of American adults are either working or looking for work, the lowest rate since the 1970s.

Accelerating Inflation
Personal-consumption-expenditures price index, change from previous year.
Source: Commerce Department
Note: Seasonally adjusted
2016
'20
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
%
Those factors have combined to push inflation well above the Fed’s 2% target. Economists say they expect inflation to remain elevated until the pandemic-related disruptions settle down, perhaps sometime next year.

“This is a really rough ride for the next few months,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.


Each passing month of rapidly rising consumer prices puts added pressure on Fed Chairman Jerome Powell, he said.

“It lays out the possibility that the Fed has to move earlier, not because they’re walking away from their central view but because the risks of being wrong have gone up,” he said.

The central bank is expected to announce next week that it will begin paring back its asset purchases in November. Officials have penciled an interest-rate increase next year once that tapering is complete.

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“The Fed now has to navigate that very difficult transition from accommodation to tightening,” said Joe Brusuelas, chief economist at RSM US LLC.

The biggest concern right now, he said, is the persistent supply problems, which could keep prices elevated.

VIDEO
What America's Supply-Chain Backlog Looks Like Up Close
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What America's Supply-Chain Backlog Looks Like Up Close
California’s Port of Los Angeles is struggling to keep up with the crush of cargo containers arriving at its terminals, creating one of the biggest choke points in the global supply-chain crisis. This exclusive aerial video illustrates the scope of the problem and the complexities of this process. Photo: Thomas C. Miller
In Madison, Wis., Benjamin Wellington has seen his appliance-repair business suffer from a shortage of parts. Those parts that are available cost more, he said. He passes on what he can to his customers.

Although he is getting more calls from customers, the shortages have prevented him from taking on as much work as he would like.


“My profits are way down because I’m not getting those completed jobs anymore,” he said.

Consumer spending rose at a seasonally adjusted annual rate of 0.6% in September, down from 0.8% in August, the Commerce Department said, as higher prices, product shortages and a surge of new Covid-19 cases caused by the Delta variant tempered buying.

Personal incomes fell 1% last month, driven by a 72% decline in unemployment insurance benefits that offset a 0.7% increase in wages and benefits, the report said.

SHARE YOUR THOUGHTS

What did you notice about your spending in September? Join the conversation below.

The expiration of enhanced jobless aid at the start of September forced people to rely on the savings they had built up thanks to multiple waves of government stimulus during the pandemic. The savings rate—the share of disposable income unspent every month—fell to 7.5% in September from 9.2% in August, bringing it to a level last seen at the end of 2019, before the state of the pandemic.

Economists say the spending slowdown will be short-lived. The decline in new Covid-19 caseloads and rising wages should keep demand elevated heading into the holiday season.

“If Delta was a net negative for the third quarter and for September, then I think it should be a net positive for the fourth quarter,” said Mark Zandi, chief economist at Moody’s Analytics. “We should see some revival.”

In Raleigh, N.C., Paul Warren, a music teacher, has seen more students willing to take in-person guitar and drum lessons despite lingering fears of the virus.


“The demand is picking up but it’s slow. Slow and steady,” he said.

Mr. Warren used to run a music school but shut it down when pandemic-related lockdowns kept students away. Since then, he has been teaching classes online and, increasingly, face to face.

—Gwynn Guilford and Xavier Fontdegloria contributed to this article.

[old salt]

Unforeseen consequences of the Dem's child care proposal :

https://www.peoplespolicyproject.org/20 ... -by-13000/
The Democrats’ child care proposal mandates higher wages for child care workers but then does not follow through on the public subsidies for all families. The result will be a massive increase in child care fees for families with incomes slightly above their state’s median income.

...there will be many dual-earning couples who cannot afford child care if both of them continue to work, but could afford child care if one of them quit their job and thereby brought their family income below the eligibility cutoff. Normally people who quit jobs to take care of their kids do so in order to save the money they’d have to spend on child care. Under this plan, they have to quit their job in order to afford child care!

For all the talk of child care benefits being a boon to women’s labor force participation, this design clearly pushes against it by making it virtually impossible for a dual-earning middle class couple to afford child care in the first three years of the program.

As with most of the goofy designs Democrats come up with, this problem is an easy one to solve. Making it so that all incomes are eligible for the income-based subsidies starting in year one would make it so that at least middle class parents are spared from this perverse outcome, though higher income parents would still be hit with it. And of course simply copying and pasting the Democrats’ pre-k proposal but applying it to ages 0 to 2 would solve the problem entirely.

As it stands now though, the Democrats are walking towards disaster, both as a policy matter and, very likely, as a political matter.

[Farfromgeneva]

I spent probably $75-$90k on child care net of my wife’s take home so, like forgiving student debt after I paid off $85-$90k in predominantly grad school debt inside of ten years, about 2yrs post financial crisis, I don’t care as much about middle class people getting a free ride.

Much more concerned that inflation will occur in childcare and an administrative class bloat would happen as I’ve seen the worst of administrative waste in childcare at my kids former spot.

This is:

A. About the kids
B. A safety net for the lower income
C. Of course these things have unintended consequences and conflicting results/impacts as does every bit of legislation which is why I only advocate for transparency and thoughtfulness of planning/strategy.

My sister and her family were pretty broke in the Bay Area the last 10yrs because she gave up her $60-$70k director gig at Berkeley Repertory Theater to be a full time mother late 90s/early 2000s and those kids grew up pretty well adjusted. Nephew is maybe a little under-motivated but engaged to a great girl (whos mother is a regional head for the FBI so not sure if I’m well covered now or screwed ) and starting graduate school at USF (San Fran not S Fla) in sports management (worry about debt but got a decent schollie portion) and daughter is a senior at Lewis & Clark in OR and going to do something hippy-ish involving environmental science and social justice (and probably be a broke but well adjusted and happy adult). Sister is back in Pre school high end Jewish childcare having gotten (another, but this time mostly not debt fueled like the drama one) a covered masters in early childhood education (also at a hippy college called Mills) and while making less than she did as a stage director 25yes ago happy and productive.

It all works out if we stop whining, put our heads down and live with the non linearity.

[Farfromgeneva]

Listened to this podcast while working out this am on mortgage forebearance ending 9/30 and related consequences for banking system and borrowers

https://podcasts.apple.com/us/podcast/b ... 0535302203

[youthathletics]

Listened to this podcast while working out this am on mortgage forebearance ending 9/30 and related consequences for banking system and borrowers

https://podcasts.apple.com/us/podcast/b ... 0535302203

You want a cookie?

[Farfromgeneva]

Listened to this podcast while working out this am on mortgage forebearance ending 9/30 and related consequences for banking system and borrowers

https://podcasts.apple.com/us/podcast/b ... 0535302203

You want a cookie?

You missed the point of me sharing an interesting podcast.

I am pretty hungry. Have had a pot of coffee and exercise without eating yet. Heading to engineer on engineer crime now, Ga Tech v Va Tech FB game, can’t listen to Hobart (and lacrosse alum now FB HC Kevin DeWall) stubbornly run out the worst QB in 20yrs while having a viable backup on the rod against a top 15 Union Douchmen, er Dutchmen, today…

[Farfromgeneva]

Listened to this podcast while working out this am on mortgage forebearance ending 9/30 and related consequences for banking system and borrowers

https://podcasts.apple.com/us/podcast/b ... 0535302203

You want a cookie?

You missed the point of me sharing an interesting podcast.

I am pretty hungry. Have had a pot of coffee and exercise without eating yet. Heading to engineer on engineer crime now, Ga Tech v Va Tech FB game, can’t listen to Hobart (and lacrosse alum now FB HC Kevin DeWall) stubbornly run out the worst QB in 20yrs while having a viable backup on the road against a top 15 Union Douchmen, er Dutchmen, today…

0-2 today. Braves at least like winning close games

[youthathletics]

Listened to this podcast while working out this am on mortgage forebearance ending 9/30 and related consequences for banking system and borrowers

https://podcasts.apple.com/us/podcast/b ... 0535302203

You want a cookie?

You missed the point of me sharing an interesting podcast.

I am pretty hungry. Have had a pot of coffee and exercise without eating yet. Heading to engineer on engineer crime now, Ga Tech v Va Tech FB game, can’t listen to Hobart (and lacrosse alum now FB HC Kevin DeWall) stubbornly run out the worst QB in 20yrs while having a viable backup on the road against a top 15 Union Douchmen, er Dutchmen, today…

0-2 today. Braves at least like winning close games

Let's hope Trump being there tonight does not eff things up. My guess....he wants to go in hopes of hearing his name chanted at the world series.

[Farfromgeneva]

Listened to this podcast while working out this am on mortgage forebearance ending 9/30 and related consequences for banking system and borrowers

https://podcasts.apple.com/us/podcast/b ... 0535302203

You want a cookie?

You missed the point of me sharing an interesting podcast.

I am pretty hungry. Have had a pot of coffee and exercise without eating yet. Heading to engineer on engineer crime now, Ga Tech v Va Tech FB game, can’t listen to Hobart (and lacrosse alum now FB HC Kevin DeWall) stubbornly run out the worst QB in 20yrs while having a viable backup on the road against a top 15 Union Douchmen, er Dutchmen, today…

0-2 today. Braves at least like winning close games

Let's hope Trump being there tonight does not eff things up. My guess....he wants to go in hopes of hearing his name chanted at the world series.

The ballpark is in Cobb Co now it’s not Atlanta despite the name, kind of like when the Angels moved to Anaheim. Their fan base is more up I75 and other more rural parts. Guess what else is further up off I75? Rome GA home of MTG. I don’t think he will have his name chanted but probably more positive than negative.

If they lose maybe we get lucky and someone busts out an actual tomahawk and gives him the treatment that Kurt Russell gets to watch in Bone Tomahawk. (Grindhouse movie)

[PizzaSnake]

Capitalism isn’t your friend, friend.

https://www.theguardian.com/commentisfr ... hild-labor