LaxPower Back-Up Stick

For the lawyers and business advisors or anyone else interested Wsj has a piece on the new Bk law for small businesses

https://www.wsj.com/articles/burger-cha ... 00?mod=mhp

Oil town bust (originally tried copying it, on my phone, but too many pics and charts)

https://www.wsj.com/articles/this-is-wh ... 1594440031

A one-time libertarian has seen the light:

Here then is what the ideals of free markets and limited government have come to stand for after small-government ideology was filtered through American political realities for a few decades:

• A dogmatic attachment to tax cuts, especially tax cuts for the rich, as the appropriate response to virtually any conceivable circumstance;

• A strong pro-business, as opposed to pro-market, tilt on regulation, too often attacking needed pro-market regulations because they impose costs on business while ignoring anti-market regulations that benefit favored constituencies;

• A focused hostility toward government efforts to help the poor, pursued with much greater vigor than any opposition to subsidies for the middle class and rich or government policies that injure the poor;

• A general aversion to government transfer payments that has resulted, not in significant reductions in social spending, but in the redirection of social spending through tax preferences to provide lopsided benefits for the well-off;

• Incessant bashing of the public sector and public service as inherently dysfunctional and dangerous, while attention to how public policy might actually make Americans’ lives better has dwindled toward zero.

This is actually existing small-government conservatism, and it is not a pretty picture. I know this is not what a lot of smart and talented libertarian and free-market intellectuals and activists stand for personally. This certainly wasn’t what I saw myself standing for during the more than two decades I worked as a professional libertarian at the Cato Institute. But as libertarians are always fond of reminding us, good intentions aren’t enough. Efforts to influence politics must ultimately be judged by their consequences, not their motives, and the fruits of libertarian anti-statism have grown rancid and unhealthy.

https://www.niskanencenter.org/the-dead ... overnment/

That’s what I keep saying: actions matter more than intentions.

CU77 wrote: ↑Sat Jul 11, 2020 3:11 pm A one-time libertarian has seen the light:

Here then is what the ideals of free markets and limited government have come to stand for after small-government ideology was filtered through American political realities for a few decades:

• A dogmatic attachment to tax cuts, especially tax cuts for the rich, as the appropriate response to virtually any conceivable circumstance;

• A strong pro-business, as opposed to pro-market, tilt on regulation, too often attacking needed pro-market regulations because they impose costs on business while ignoring anti-market regulations that benefit favored constituencies;

• A focused hostility toward government efforts to help the poor, pursued with much greater vigor than any opposition to subsidies for the middle class and rich or government policies that injure the poor;

• A general aversion to government transfer payments that has resulted, not in significant reductions in social spending, but in the redirection of social spending through tax preferences to provide lopsided benefits for the well-off;

• Incessant bashing of the public sector and public service as inherently dysfunctional and dangerous, while attention to how public policy might actually make Americans’ lives better has dwindled toward zero.

This is actually existing small-government conservatism, and it is not a pretty picture. I know this is not what a lot of smart and talented libertarian and free-market intellectuals and activists stand for personally. This certainly wasn’t what I saw myself standing for during the more than two decades I worked as a professional libertarian at the Cato Institute. But as libertarians are always fond of reminding us, good intentions aren’t enough. Efforts to influence politics must ultimately be judged by their consequences, not their motives, and the fruits of libertarian anti-statism have grown rancid and unhealthy.

https://www.niskanencenter.org/the-dead ... overnment/

I understand your point but the flip side of the coin is you can't as a nation tax yourself back to prosperity. I live in NYS and they have been trying to do that for decades. The end result was one business after another leaving the state because high taxes did not allow for profit. There is irony in King Andy offering all kinds of generous tax breaks for manufacturers to come back to NYS. There is conundrum here IMO. Taxes can't be good on one hand and back breaking on the other. If high taxes was not a problem all these manufacturers would not have bailed the hell out of NYS in the first place.

I absolutely hate this change. Especially with the increase in income oriented mutual fund that offer daily liquidity but have increasingly move out both the credit and liquidity curve to obtain/maintain yield. (Cough...angel oak capital...cough, cough, Great Wolf Lodge Mezz bonds really?)

https://www.wsj.com/articles/sec-rule-p ... 38?mod=mhp

Just another move by the smart money to take more of the dumb (= average joes and janes).

I'm most definitely dumb money, and what's not in US-gubmint backed bonds is all in large highly liquid total-market index funds.

CU77 wrote: ↑Sat Jul 11, 2020 7:54 pm Just another move by the smart money to take more of the dumb (= average joes and janes).

I'm most definitely dumb money, and what's not in US-gubmint backed bonds is all in large highly liquid total-market index funds.

At this point that’s pretty much the smart thing to do. Vanguard, Fidelity, Blackrock and Pimco crowd everybody out. Active asset managers toss around generating “alpha” but it’s often mostly just liquidity risk they are taking on which is mid priced almost always except in fractures in markets, often which are fleeting. Only passive equity managers worth considering are ones who are more concentrated, take on no more that 25 positions at a time, ideally more like 10-20, the rest just overcharge to nut-hug whatever indices they’re benchmarked against for their bonus comp.

I play with 10-15% on my retirement dough in what I call “Yo” money (as in throwing a Yo”) which is either high risk/return flyers I philosophically buy into or to practice some of what I do in business, tastes both sides of those moves.

Story on the single family rental market. SFR-American Homes 4 Rent specifically but funds had been set up by Colony, Blackstone, KKR and others to buy bulk distressed homes in the financial crisis, mostly flipped to retail by using public REIT vehicles as a liquidity event. This is toby aft the single biggest reason theres little supply under $300k in top 25-50 metro areas and sub $150k homes in smaller/weaker areas. Ironically the feds zero rate policy for basically a decade has pushed many folks into REITs and other incomes producing investments because bonds don’t pay jack, institutional money looks to get retail money whenever possible.
https://www.wsj.com/articles/b-wayne-hu ... 33?mod=mhp

Bulk Sales of Foreclosed Single Family Homes
November 5, 2012

Congressman Brad Sherman
5000 Van Nuys Blvd. - Suite 420

Sherman Oaks, CA 91403
Dear Congressman Sherman:

I live in the 27th Congressional District. I know you sit on the House Financial Services Committee and its Subcommittee on Capital Markets and Government Sponsored Enterprises, and I know that you also sit on the Subcommittee on Insurance, Housing and Community Opportunity.

Therefore, it seems appropriate that I bring a concern of mine to your attention.

My concern: While reading an article published in the Wall Street Journal on October 2, 2012 titled, New York Firm to Buy Fannie Foreclosures By Alan Zibel, I noticed the author mentioned the terms were the same for both of Fannie Mae’s first two ‘bulk sales’ (of foreclosed single family homes). An outline of the terms of the deals was provided in the article (the last four paragraphs of the article).

It seems the terms of these first two bulk sales may lead to an uncertain, and very long payback period to for the GSE’s - and an even riskier and even longer payback period for any investor(s) that might be the source of funds for the managers of these deals. As long as the deal terms are fully-disclosed to the fund's (voluntary) investors their investments are their business.

However, because of the history of Federal Housing Policy, and because of the history of the GSE’s, I believe deals such as these should be designed in a way which can actually be expected to produce rapid and less risky payment of the purchase price, than it appears the terms of the first two deals will produce.

I hope the committees you sit on will very closely review and monitor these two existing deals, and that you will have independent evaluators advise on, and audit, the structure and payment of future bulk sales of foreclosed single family homes.

The bulk sale of foreclosed single family homes is a serious concern for homeowners, neighborhoods, and for local legislators. I believe the future financial success of these bulk sales is a critical element of the bulk sales strategy.

In the context of the GSA’s, it appears the terms of these first two deals were designed to move foreclosed homes off the GSE’s balance sheet, and to claim the 'sales agreement' as an asset.

Thank you very much for this opportunity to express my concern.
Sincerely,

Bill George

Cc. Congressman Gary Miller

2349 Rayburn House Office Building
Washington, DC
Background Information:

(1) Private Equity’s Foreclosure Binge (& Purge) By Michael L Boyer pub. at Seeking Alpha, October 23, 2012 - at: http://seekingalpha.com/article/941291- ... nts_header

(2) The Institutional Home Buying Bubble By Bill George - Posterous - at:
http://billsplace.posterous.com/the-ins ... ing-bubble

This should concern everyone, copying WSJ on my phone is near impossible, but about the growth in global holdings of Chinese govt bonds as a safe haven for liquidity.

https://www.wsj.com/articles/investors- ... 00?mod=mhp

White paper on private equity returns from the Said School of Business

https://papers.ssrn.com/sol3/papers.cfm ... id=3623820

How much does the cc pay in taxes?

Catholic Church lobbied for taxpayer funds, got at least $1,400,000,000.


https://apnews.com/dab8261c68c93f24c0bfc1876518b3f6


NEW YORK (AP) — The U.S. Roman Catholic Church used a special and unprecedented exemption from federal rules to amass at least $1.4 billion in taxpayer-backed coronavirus aid, with many millions going to dioceses that have paid huge settlements or sought bankruptcy protection because of clergy sexual abuse cover-ups.

The church’s haul may have reached -- or even exceeded -- $3.5 billion, making a global religious institution with more than a billion followers among the biggest winners in the U.S. government’s pandemic relief efforts, an Associated Press analysis of federal data released this week found.

Dude, even worse, Grover Norquists outfit took a PPP loan.

This is the cost of not responding properly to the pandemic and it is going to get worse.

https://www.washingtonpost.com/business ... ronavirus/

U.S. budget deficit shattered one-month record in June, as spending outpaced revenue by $864 billion
Huge spending increase and sharp falloff in revenue led to the large gap. The deficit in past nine months has breached $2.7 trillion.
By Jeff Stein

July 13, 2020 at 2:00 p.m. EDT


The U.S. budget deficit widened to a record-high $864 billion last month due to the federal government’s extraordinary response to the coronavirus pandemic, the Treasury Department said on Monday.

In June 2019, the budget deficit was just $8 billion.

Federal spending rose to more than $1.1 trillion in June, more than twice what the U.S. government spends in a typical month. The amount of tax revenue collected by the federal government remained largely flat, at about $240 billion, in part because the Treasury Department delayed the tax filing deadline until July.

The huge surge in June pushed the budget deficit for the first nine months of the fiscal year to $2.7 trillion.

June’s deficit figures highlights just how much havoc the coronavirus pandemic has wreaked on U.S. budgeting. In prior years, the federal deficit was considered large when it approached or eclipsed $1 trillion for an entire year. America spent about $2 trillion more than it took in in tax revenue from April to June alone.

Tensions emerge among Republicans over coronavirus spending and how to rescue the economy

Congress in March approved $2 trillion in spending that took several months to take effect as the economy contracted due to the pandemic. Those efforts included larger benefits for unemployed Americans; $1,200 stimulus payments; and small business relief. Economists say that funding was badly needed to prevent tens of millions of Americans from being hurt by the pandemic, and that more remains necessary.

“Big government deficits are the only thing keeping the U.S. economy on life support and anti-deficit rhetoric threatens to pull the plug,” said Nathan Tankus, research director of the Modern Money Network. “The alternative is mass defaults, evictions and bankruptcies which will devastate the United States.”

U.S. deficit balloons to $738 billion in April alone, a record triggered by coronavirus impact

The big increase in the deficit from May to June is largely due to an accounting change related to the more than $500 billion in small business aid approved by Congress through the Paycheck Protection Program. Previously, Treasury did not count the PPP’s forgivable loans as spending, but that changed from April to June. Most of the PPP loans to companies are expected to be forgiven and paid off by the government.

Some budget experts believe U.S. spending will have to be cut after the economy improves. The current deficit is more than triple what was lodged over the same period last year. Before the pandemic, the previous biggest one-month deficit in the U.S. was $234 billion.

“Today’s record deficits are mainly a product of our response to the current pandemic -- once the economy recovers we need to get our deficit under control,” said Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget.

Numerous White House officials and conservative Republican lawmakers have expressed frustration with the amount of spending approved by Congress and stressed caution over further efforts. As a result, the GOP opted for a “wait-and-see” approach while House Democrats approved more than $3 trillion in new spending in May. Concerns about the deficit have impacted the current round of negotiations, with some White House and GOP officials pushing for the next stimulus package to only cost $1 trillion.

Discussions are expected to pick up in the coming days, as they must decide what to do with expiring emergency unemployment benefits.

Farfromgeneva wrote: ↑Mon Jul 13, 2020 9:03 am White paper on private equity returns from the Said School of Business

https://papers.ssrn.com/sol3/papers.cfm ... id=3623820

tl;dr: all the alpha went to the managers, none to the clients.

This is in line with general theory. If a high-fee manager has true alpha, s/he will attract new money until the alpha is diluted to the point that it only covers the high fees.

Nice to see the theory confirmed in the real world.

Not shocking. But combined with Apollo raising a large fund to borderline disintermediate super regional and large banks it should be noticed. This is a real thing. May come and go over a decade, but the large PE shops are getting squeezed, 2 and 20 doesn't really exist anymore for institutional investors, so it's logical they need to move to large credit to continue to move the needle since debt is larger than equity in most capital structures.

Alpha, IMO, is mispriced liquidity risk 90%+ of the time.

Rent collections report: https://www.nmhc.org/research-insight/n ... t-tracker/

NMHC Rent Payment Tracker Finds 77.4 Percent of Apartment Households Paid Rent as of July 6


Washington, D.C. – The National Multifamily Housing Council (NMHC)’s Rent Payment Tracker found 77.4 percent of apartment households made a full or partial rent payment by July 6 in its survey of 11.4 million units of professionally managed apartment units across the country.

This is a 2.3-percentage point decrease from the share who paid rent through July 6, 2019 and compares to 80.8 percent that had paid by June 6, 2020. These data encompass a wide variety of market-rate rental properties across the United States, which can vary by size, type and average rental price.

"It is clear that state and federal unemployment assistance benefits have served as a lifeline for renters, making it possible for them to pay their rent," said Doug Bibby, NMHC President. "Unfortunately, there is a looming July 31 deadline when that aid ends. Without an extension or a direct renter assistance program, that NMHC has been calling for since the start of the pandemic, the U.S. could be headed toward historic dislocations of renters and business failures among apartment firms, exacerbating both unemployment and homelessness."

TALF data from the Federal Reserve:

https://www.newyorkfed.org/markets/term ... lity-rates

TALF loans requested at July 6, 2020 Subscription:
SECTOR AMOUNT
Auto $0
Commercial Mortgage $223,820,194
Credit Card $0
Equipment $0
Floorplan $0
Leveraged Loan $0
Premium Finance $51,142,943
Small Business $440,400,661
Student Loan $7,791,950
TOTAL $723,155,749

Most Importantly, new CNBC girl, Chrissy Far! If you click on the picture in this link you'll see the red leather skirt she has on....

https://twitter.com/chrissyfarr/status/ ... 0383371264

Borrowing 6ft's red font I see..

Re the skirt - very sharp!

There’s a time and place for everything. In this case I considered it a public service announcement. Spent five min on google images. Just a super cute woman.

Farfromgeneva wrote: ↑Mon Jul 13, 2020 5:38 pm Alpha, IMO, is mispriced liquidity risk 90%+ of the time.

Sounds right to me.