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Investors Are on the Lookout for a Crash. But Prices Keep Going Up. | Mises Wire

Posted by M. C. on July 16, 2021

https://mises.org/wire/investors-are-lookout-crash-prices-keep-going

Doug French

An insider confided to a friend that all he is doing right now is transaction work for real estate holders who are selling now before the market crashes. His clients, members of Sin City’s illuminati, once bitten by the ‘08 crash, believe they’ll beat the crowd to the sales window before the local retail and office market collapses.

Tiny capitalization rates translating into unsustainable values are being dangled in front of these folks and they are willing to absorb the tax consequences to cash out and be ready to repurchase their properties back at a discount in a couple years.

Easy peasy.

With the country just emerging from lockdown, where’s the crash already? The original grave dancer, Sam Zell, has left the cemetery and is “following the pack and spending big on something safer,” Peter Grant wrote in the Wall Street Journal. 

One of Zell’s companies paid $3.4 billion for Monmouth Real Estate Investment Corp. Not all distressed, Monmouth “owns 120 industrial properties in 31 states,” Grant reported. “The sector is one of the most profitable because of high demand for fulfillment centers from e-commerce companies such as Amazon.com Inc.”

Bloomberg reported a year ago that Amazon-leased buildings could sell for a capitalization rate of 4 percent, the equivalent of twenty-five times earnings. A Las Vegas real estate broker and developer who is also doing business in red-hot Reno said recently, “Amazon buildings will start selling for three CAPs soon.”

Back in the days of quasi-laissez-faire, a pandemic would have created plenty of opportunities for the Zells of the world, but, as Grant explains, “Hotels, malls and other properties have suffered enormous declines in revenue. But few owners have been forced to sell at steep discounts thanks to government stimulus programs and the Federal Reserve’s easy money policy which kept a lid on foreclosure.”

Tenants bellied up to the Paycheck Protection Program (PPP) bar and while having trouble operating due to labor shortages, with staff staying home on the taxpayer’s dime, they are paying rent. As for Amazon and other fulfillment tenants, covid was a colossus. 

“From both a monetary and fiscal perspective, authorities have made sure that distress would be extremely limited in all walks of life,” Cedrik Lachance, Green Street Advisors’ head of global real estate investment trusts (REIT) research told the WSJ. 

Zell does think retail properties are a “falling knife.” Zell said, “There obviously is going to be an opportunity in retail. I just don’t think it’s here yet.” He added that hotels also look expensive: “I can’t relate … pricing to the way I see opportunity.”

Billionaire Charles Koch can relate. His Koch Real Estate Investments took over the unfinished multibillion-dollar hotel and casino Fountainbleau development on the Las Vegas Strip after the previous owner defaulted on the mortgage.

Florida developer Jeffrey Soffer bankrupted the sixty-three-story, four thousand–room project in the 2008 crash, before the doors were ever opened. In 2010, an opportunistic Carl Ichan bought it for $150 million (essentially the trade liens on the property), “sold the furniture, and flipped it to New York developer Steven Witkoff for $600 million seven years later,” Konrad Putzier reported earlier this year. 

Witkoff couldn’t obtain a construction loan to finish and defaulted on loans from JPMorgan Chase and Deutsche Bank AG, as well as more than $200 million in subordinate debt held by South Korean investors.

Koch appeared, bought the JPMorgan note for $350 million, and waved goodbye to the South Koreans and Witkoff. Koch has brought back Mr. Soffer to restart the project. Putzier wrote in March that the project was far from a sure bet. 

However, the opening of Resorts World on the former Stardust site on the Strip’s north end recently has the town abuzz. The Fountainbleau is nearby.

Further south on the Strip, where gaming has taken a backseat to real estate dealing, MGM announced it was buying its 50 percent partner Dubai World out of the sprawling CityCenter project for more than $2.1 billion, providing MGM full ownership of the Aria and Vdara resorts. Not missing a beat, the company then sold the Aria and Vdara real estate to Blackstone for $3.9 billion and will lease the properties back for $215 million a year in rent to start, or a 5.5 percent cap rate. 

Once upon a time, the casino was king of the Strip’s income department. Not so much anymore. Hotel casinos might as well be shopping malls with some slots and table games attached. During the boom years the casino accounted for only 30 to 40 percent of revenues. And while the floor space, with the odds stacked in the houses’, favor has crept upward in recent years, it’s still not half a property’s revenue.

Ludwig von Mises explained, “Interventionism means that the government not only fails to protect the smooth functioning of the market economy, but that it interferes with the various market phenomena; it interferes with prices, with wage rates, interest rates, and profits.” 

Mr. Zell’s goal was always to reinvest that cash. “What it tells you about the Covid era is that they just couldn’t find true distress,” Mr. Lachance said. No distress means a manipulated market that economic actors cannot assess properly. 

In the end, “as the government goes farther and farther,” Mises wrote, “it will finally arrive at a point where all prices, all wage rates, all interest rates, in short everything in the whole economic system, is determined by the government. And this, clearly, is socialism.”

Las Vegas was once a city driven by odds. No more. Now government has loaded the dice. Author:

Doug French

Douglas French is former president of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master’s degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe.

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War on poverty, or just war on the poor? – Claudio Grass, Precious Metal Advisory In Switzerland

Posted by M. C. on July 17, 2020

But these are things no central planner understands, or even cares about. All these transformative forces and all the little miracles that the free interaction and voluntary exchanges between individuals bring about are unimportant to the bean counter, the bureaucrat and especially to the career politician. Improving people’s lives, reducing poverty, creating jobs and opportunities, are only seen as desirable outcomes if they can take credit for them. It important to remember this, next time someone argues we must turn to the state in order to erase inequality. For the state is the machine that mass-produces it, that incentivizes, enforces and gleefully perpetuates it.

https://claudiograss.ch/2020/07/war-on-poverty-or-just-war-on-the-poor/

Claudio Grass

As the dust is now begging to settle, both from the heights of the COVID panic and from the riots that shook the western world, we are starting to get an idea about where we stand after this unprecedented and tumultuous time. We are able to begin taking stock of the damage that was inflicted by the lockdowns and to evaluate the governmental efforts to help those affected and to provide support to the economy. More interestingly, we are finally in a position to see clearly who amongst us paid the highest price, who suffered the most and whose livelihood was taken away.

This picture is especially clear in the US, where the numbers speak for themselves. One look at the unemployment figures as seen in the chart below is enough to demonstrate the extent of the damage of the economic shutdown. However, a more detailed examination of the data reveals a lot more. It shows the sharp inequality in those lost jobs. Low- and minimum wage employees, seasonal, part-time and low-skill workers, were fired from their jobs at an astoundingly higher rate than their white-collar and better-paid peers. It makes sense, of course. Not only could these jobs be performed from home more easily, but these employees were also largely less replaceable. Being by and large more educated, more experienced and more skilled, there were seen as more “essential”, to use the government’s own terminology. Of course, all jobs are essential for those who need them to survive, but then again that argument never managed to gain any traction when bureaucrats were deciding who gets to keep their job and whose source of income is simply surplus to requirements.

Despite widespread “expert” commentary to the contrary, this economic disaster is not behind us. Even as the US economy now reopens, with setbacks and reversals, strict measures remain in place in most states. Social distancing restrictions and other requirements are still placing heavy burdens on the retail sector and the travel and hospitality industry, in many cases making it impossible to operate a business profitably.  It is thus no wonder that so many have chosen to operate with greatly reduced staff, reduced hours, or just not to reopen at all. In this environment, it is clear that those who can’t do their jobs from home will continue to suffer disproportionally. According to a new study by the University of Washington, there are over 108 Million Americans in that category. That’s three-quarters of the US workforce, who also happen to be among the lowest income levels in the country, and they are facing a considerably higher risk of layoffs, furloughs, or workhour reductions. Among them, there is a sub-group of 27.4 million workers, or 18.9% of the workforce, who work in retail, food and beauty services, protective services, and delivery of goods. This group, with a median income of $32,000, at the very end of the pyramid, is staring at an even greater risk of job insecurity and displacement.

Assessing the “relief” packages

The numbers are finally in for the Paycheck Protection Program, or “PPP”, that was supposed to safeguard jobs and to keep workers on the payroll throughout the shutdown. The program, which was part of the $2.3 trillion CARES Act, was meant to give out loans to businesses and non-profits with fewer than 500 employees, that would then be “forgiven” if the recipients allocated a certain portion of the loan on retaining or hiring back employees. The Small Business Administration (SBA) recently published a list of companies and organizations that received more than $150,000 in PPP. The picture painted by the data is not pretty, but that’s hardly a shock.

At least 12 members of Congress received PPP money through connected businesses. New York law firms, Wall Street investment firms, luxury clothing brands, like that owned by presidential candidate Kanye West, golf and country clubs also apparently qualified for what is essentially a cash gift of taxpayer money. Large corporations and national chains, that obviously did not qualify for these loans, also got paid, by simply filing for each branch and location separately as a small business, which is perfectly legal by the way. Lobbying firms and advocacy groups featured prominently on that list too; even long-time critics of excessive government spending, like “Americans for Tax Reform”, and fierce detractors of handouts and the welfare state, like the Ayn Rand Institute. Controversial and chronically divisive organizations like Planned Parenthood came out on the winning side of the shutdown too: According to reporting by NBC, PPP loans amounting to $150 million went to Planned Parenthood affiliates. Millionaire artist Jeff Koons, famous for this balloon animal sculptures, received a loan of $2 million to preserve 53 jobs at his New York studio. Just for reference, Koons’ estimated net worth is $200 million and in March 2019, his “Rabbit” sculpture sold for $91.1 million, setting a record as the most expensive work sold by a living artist at an auction.

And while the taxpayer-funded party was raging for crony capitalists, celebrities, and government-connected organizations, there were thousands of actual small businesses that were denied access to the PPP and were turned down for loans of even a few thousand dollars. Overrepresented among those who had the door shut on their face were minority-owned businesses. This failure is especially specular, given that the program had earmarked $30 billion for smaller lenders, with the explicit aim of supporting business owners of color in poorer neighborhoods and “underserved” markets. Overall, the smallest of small businesses, those owned by a single person and arguably needing that money the most, were the ones most egregiously treated: they were forced to apply for their share of the PPP money one week after everyone else, which in many cases meant that the first round of the funding had already run out when their turn came.

The state doing what it does best

A lot of these businesses that fell victim to the shutdowns and then were further betrayed by the “relief” spending that never reached them, were playing a crucial role and not just economically. They were local restaurants and bars, small corner shops, neighborhood salons and mom and pop operations. They were serving their local community, being supported by their regular customers and patrons and in return provided jobs, generating income on a local level. The net effect of these local business dynamics and the jobs they created and sustained goes beyond just providing a regular paycheck, which is in itself hugely important for so many people. They also ensure that this productive activity, the income it generates, the value it creates and the wealth it eventually builds all develop and remain within the community. These synergies and the combination of these forces can be extremely effective in elevating even the poorest communities, giving people more opportunities, financial security, independence and a sense of ownership. In turn, this literal and figurative enrichment helps support a climate of cooperation, responsibility and respect, which can also bring criminality under control in an organic way or even prevent it altogether, especially by staving off youth delinquency. Now, all these jobs and all the benefits they brought with them have perished, along with the businesses that created them.

But these are things no central planner understands, or even cares about. All these transformative forces and all the little miracles that the free interaction and voluntary exchanges between individuals bring about are unimportant to the bean counter, the bureaucrat and especially to the career politician. Improving people’s lives, reducing poverty, creating jobs and opportunities, are only seen as desirable outcomes if they can take credit for them. It important to remember this, next time someone argues we must turn to the state in order to erase inequality. For the state is the machine that mass-produces it, that incentivizes, enforces and gleefully perpetuates it.

Claudio Grass, Hünenberg See, Switzerland

This article has been published in the Newsroom of pro aurum, the leading precious metals company in Europe with an independent subsidiary in Switzerland.

This work is licensed under a Creative Commons Attribution 4.0 International License.

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The Biggest Global Hoax In History

Posted by M. C. on July 10, 2020

The corona scare has absolutely nothing to do with health and safety and everything to do with money, politics and power. And almost everybody wants in on the action. And almost no one gives a tinker’s dam about Liberty.

Cross Church of Arkansas, whose pastor emeritus has been a member of Trump’s evangelical advisory board, received a $1.8 million loan and will seek loan forgiveness if the requirements are met, a spokesman told Reuters.

https://chuckbaldwinlive.com/Articles/tabid/109/ID/4033/The-Biggest-Global-Hoax-In-History.aspx

Pastor Chuck Baldwin

I’ll say it straight out: The propaganda about COVID-1984 is the biggest global hoax in history. Corona poses zero threat to 99.9% of the population. Masks are a joke. Social distancing is a joke. Business closures are a joke. Church closures are a joke. Theater closures are a joke. Sporting event cancellations are a joke. All of the corona-based television commercials are a joke. All of the fearmongering by radio disc jockeys and television news broadcasters is a joke. All of the theatrical grandstanding by politicians on Capitol Hill is a joke.

Of course, by joke, I don’t mean funny (it would be funny if it wasn’t so deadly serious). I mean stupid, idiotic, moronic, asinine, senseless, imbecilic, dumb, etc. Then again, what it really shows is the pure evil and wickedness of the people fomenting all of this fear and the crass gullibility and slavish spirit of a sizable percentage of the American population.

The one lesson we have learned from the corona hoax is that virtually everything BIG is in bed with the forces of global tyranny. I’m talking about big business, big media, big medicine, big pharma, big entertainment, big industry, big technology, big politics, big government and big religion. It’s all controlled by the forces of global tyranny.

The corona scare has absolutely nothing to do with health and safety and everything to do with money, politics and power. And almost everybody wants in on the action. And almost no one gives a tinker’s dam about Liberty.

I have already documented in this column how hospitals and medical professionals are being paid to NOT treat people; how they are being paid to keep hospitals empty; how they are being paid to fabricate and exaggerate corona cases and deaths; and how they are being paid to go along with the phony CDC narrative.

Here is Dr. Ron Paul exposing the lies about corona.

But what is most disconcerting (at least to me) is the way pastors and churches grovel before these tyrants. For years, I have tried to warn Christians about the evils of the 501(c)(3) non-profit government churches.

In order to stay on the smiley side of the Internal Revenue Code 501(c)(3), churches have sold their spiritual birthright and Bible convictions. They are happy to crawl on the floor and eat the crumbs that fall from the king’s table, like dogs on a chain.

Do you want to know why so many of these government “churches” are STILL closed? I’ll tell you why: They are being paid by the government to stay closed. That’s why.

Megachurches and other religious organizations with ties to vocal supporters of U.S. President Donald Trump were approved for millions of dollars in forgivable loans from a taxpayer-funded pandemic aid bailout, according to long-awaited government data released this week.

Among those approved for loans through the massive government relief program were a Dallas megachurch whose pastor has been an outspoken ally of the president; a Florida church tied to Trump spiritual adviser and “prosperity gospel” leader Paula White; and a Christian-focused nonprofit where Jay Sekulow, the lawyer who defended the president during his impeachment, is chief counsel.

Vice President Mike Pence spoke at a rally last month at the First Baptist Church of Dallas, whose pastor, Robert Jeffress, has been on Trump’s evangelical advisory board. The church was approved for a $2-5 million loan, the data showed.

Launched on April 3, the Paycheck Protection Program (PPP) allows small businesses, nonprofits and individuals hurt by the pandemic to apply for forgivable government-backed loans. Some say allowing religious institutions to qualify for loan forgiveness highlights a breakdown in the American tradition of a strict separation of church and state.

“The notion of separation of church and state is dead, and the PPP loan program is the evidence of that,” said Micah Schwartzman, a professor at the University of Virginia School of Law. “The money is going to fund core activities of many organizations, including religious organizations. That’s something we’ve not seen before.”

The list of religious organizations approved for about 88,400 small business loans also included Faith and Freedom Coalition Inc in Georgia, which qualified for a $150,000-$350,000 loan. The evangelical group’s founder and chairman Ralph Reed praised Trump for his photo-op at a church nearby the White House after authorities hurled tear gas and shot rubber bullets at protesters.

Cross Church of Arkansas, whose pastor emeritus has been a member of Trump’s evangelical advisory board, received a $1.8 million loan and will seek loan forgiveness if the requirements are met, a spokesman told Reuters.

The American Center for Law and Justice Inc, a nonprofit founded by televangelist Pat Robertson and also known as Christian Advocates Serving Evangelism Inc., was approved for a $1-2 million loan. Sekulow is listed as chief counsel on the organization’s website.

City of Destiny Inc. of Florida, where, White, Trump’s spiritual adviser, is listed as an oversight pastor, was approved for a loan of $150,000-$350,000, the data showed. (Source)

Of course, it’s not just conservative Republican-leaning churches that are cashing in on the corona hoax; so are liberal Democrat-leaning congregations. See this report.

Direct taxpayer support for churches (something anathema to America’s Founding Fathers and our U.S. Constitution) started in earnest under the corrupt presidency of George W. Bush and his “Faith-Based” initiatives. Under Donald Trump, these putrid, pernicious, pathetic and perverse programs are in full bloom.

Thomas Jefferson rightly noted, “To compel a man to subsidize with his taxes the propagation of ideas which he disbelieves and abhors is sinful and tyrannical.” Amen!

My tax dollars go to fight foreign wars that I abhor, to foreign governments that I abhor and to left-wing organizations that I abhor. And, likewise, I abhor my tax dollars going to fund the Trump-fawning, Zionist-controlled, statist “ministries” of Paula White, Robert Jeffress, Pat Robertson, Jay Sekulow, Ralph Reed and thousands like them. I don’t ask for any of their tax dollars to support my ministerial work, and I sure don’t appreciate being forced to give my tax dollars to support theirs.

While on the subject of war, I guess you saw that the U.S. Senate just voted to continue the never-ending war in Afghanistan and the global “war on terror” by a vote of 60 to 33, with 7 abstentions. Only 4 Republican senators voted to end the wars. (The Republican Party has been a War Party ever since Abraham Lincoln launched his ungodly and unnecessary war against the South.)

And I’m happy to report that both of our senators from Montana (one a Republican and the other a Democrat) voted to STOP the wars. How did your senators vote?

Furthermore, since I mentioned Zionism, here is a report that you absolutely must read on how the Zionist military/intelligence/surveillance apparatus is partnering with the State of Rhode Island and healthcare providers (with several others soon to follow) in developing and implementing advanced surveillance, tracking and profiling of Americans—all in the name of “protecting” us from corona.

A company tied to Israel’s military signal intelligence unit, Unit 8200, has recently partnered with the state of Rhode Island to use an artificial intelligence-based system developed in tandem with the Israel Defense Forces (IDF) to profile Americans potentially infected and/or “at risk” of being infected with coronavirus, then informing government authorities of their “risk profile.” Once flagged, state health officials can target those individuals as well as their communities for mandatory testing, treatment and/or more restrictive lockdown measures.

The firm, Israel-based Diagnostic Robotics, is poised to announce a series of new such partnerships with several other U.S. states as well as major U.S. hospital systems and healthcare providers in the coming weeks, according to a company spokesperson. The first of these announcements came on June 30 regarding the firm’s new partnership with Mayo Clinic, which will soon implement the Diagnostic Robotics’ “artificial intelligence platform that predicts patients’ hospitalization risk.” They have also been in discussions with Vice President Mike Pence about the platform’s implementation nationwide since April.

Their creeping expansion into the U.S.’ state coronavirus response and that of other countries has been directly facilitated by the organization Start-Up Nation Central, funded by controversial hedge fund manager Paul Singer and directly partnered with an Israeli government-backed intelligence initiative aimed at making the United States dependent on technology developed by the Israeli military or intelligence community as a means of preventing the adoption of policies that support the non-violent Boycott, Divest and Sanctions (BDS) movement at the state and local levels. This initiative also serves the dual purpose of ensuring Israel’s political influence and positioning as the global “cyber power,” an oft-repeated policy goal of Israeli Prime Minister Benjamin Netanyahu. (Source)

You can bet that this is the precursor for mandatory vaccinations, with which Donald Trump is totally on board. Anyone who believes that Trump will stand in the way of forced vaccinations is delusional.

And if you don’t think vaccinations are dangerous, read this in-depth study that shows vaccinated children have a 470% higher rate of autism than non-vaccinated children.

But you can bet your life that the CDC/Fauci/Gates corona vaccine will be the most dangerous and destructive drug ever injected into the human body by a physician. Only the drugs that are used to murder unborn babies could be categorized as more destructive (and the drugs administered to death row inmates, of course).

As I said, the corona propaganda is the biggest global hoax in history. The totalitarians believe they can use the coronavirus to finally implement their plans of global oppression and control.

There is one positive in all of this: It has produced a great winnowing process. More than anything in my lifetime, this is separating the lifeless chaff of statist slaves from the genuine wheat of Liberty-loving patriots.

Now, we can all clearly see that the great divide is NOT race or political parties or religious denominations or Christians v. secularists or liberals v. conservatives; it is freedomists v. statists.

It’s good to finally get a clear picture of who is standing where.

© Chuck Baldwin

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