News Items

Is the “Buy to Rent” Party Over?

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For well over a year now, I have been writing about how this whole “buy to rent” investment strategy is one of the biggest disasters waiting to happen within the U.S. economy.  I have repeatedly noted that these private equity clowns were crowding into these markets with reckless abandon and that this would ultimately crush their business model as there’s no way rents can rise enough to keep yields attractive in a country where most people are struggling to meet their daily expenses.  Well it seems the day of reckoning may be at hand.  From Bloomberg:

Rents for single-family homes are rising slower than property prices as firms such as Blackstone Group LP (BX) flood the market with homes for lease, posing risks to investors betting billions on the burgeoning market.

Monthly payments for properties in Phoenix rose 1.3 percent in February from a year earlier, compared with a 25 percent jump in for-sale asking prices, according to Trulia Inc. (TRLA), which operates an online listing service. In Atlanta, asking prices climbed 14 percent as single family rents gained 0.5 percent, and in Las Vegas rents dropped 1.7 percent even as asking prices soared 18 percent.

Seems like a fantastic business model…

“Investors are buying homes, in part, to rent them out, and that has added a lot of rental supply, and that’s preventing rents from rising,” Jed Kolko, San Francisco-based Trulia’s chief economist, said in a telephone interview. “It means some investors will start to think about selling those single-family rentals.”

“They’re effectively pushing prices up on each other,” Chang, a former Morgan Stanley housing analyst, said in a telephone interview.

Tina Africk, a Las Vegas broker who manages 60 single- family home rentals, said houses that might have rented in 30 days in the past can now take 60 to 90 days to fill, while rents have dropped about $100 a month from a year ago.

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Bruce Schneier: “The Internet is a Surveillance State”

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Last week, I wrote an article on “encryption” that highlighted Kim Dotcom’s effort to create an encrypted email service and Bitcoin’s successful foray into the creation of a decentralized crypto-currency.  Some of the feedback I received from several tech savvy people I know is that the spying is so pervasive there’s really no chance at true anonymity at the moment no matter what we do.  A few days later, this article by legendary American cryptographer and computer security specialist, Bruce Schneier came out.  Here’s what he had to say:

Increasingly, what we do on the Internet is being combined with other data about us. Unmasking Broadwell’s identity involved correlating her Internet activity with her hotel stays. Everything we do now involves computers, and computers produce data as a natural by-product. Everything is now being saved and correlated, and many big-data companies make money by building up intimate profiles of our lives from a variety of sources.

This is ubiquitous surveillance: All of us being watched, all the time, and that data being stored forever. This is what a surveillance state looks like, and it’s efficient beyond the wildest dreams of George Orwell.

This isn’t something the free market can fix. We consumers have no choice in the matter. All the major companies that provide us with Internet services are interested in tracking us. Visit a website and it will almost certainly know who you are; there are lots of ways to betracked without cookies. Cellphone companies routinely undo the web’s privacy protection. One experiment at Carnegie Mellon took real-time videos of students on campus and was able to identify one-third of them by comparing their photos with publicly available tagged Facebook photos.

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Wall Street: $474 Million, Detroit: 0

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The more time passes, the more skeletons emerge from the closet.  So what’s the punishment for an industry that has literally destroyed countless communities across the American landscape?  Trillions in taxpayer bailouts and even more control over our government.  They say “it would’ve been much worse without the bailouts.”  Tell that to Detroit.  From Bloomberg:

The only winners in the financial crisis that brought Detroit to the brink of state takeover are Wall Street bankers who reaped more than $474 million from a city too poor to keep street lights working. 

The city started borrowing to plug budget holes in 2005 under former Mayor Kwame Kilpatrick, who was convicted this week on corruption charges. That year, it issued $1.4 billion in securities to fund pension payments. Last year, it added $129.5 million in debt, 9.3 percent of its general-fund budget, in part to repay loans taken to service other bonds.

“We have no lights, no buses, poor streets and now we’re paying millions of dollars a year on our debt,” said David Sole, a retired municipal worker and advocate for Moratorium Now Coalition, a Detroit group that fights foreclosures and evictions. “The banks said they need to be paid first. But there is no money.”

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GATA Meets CNBC: Host Calls Gold Market a “Matrix”

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First off, fantastic job by Chris Powell in this interview.  The host cracked me up when he describes the gold market as “almost like the matrix.”  My favorite line from Chris is when he says “the banks are bigger than the government.”  Those two lines sum up a lot of what’s wrong with the world … Read more

Food Stamp Use in NYC Doubles Under Bloomberg: 1.8 Million are on EBT

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Good thing Mayor Bloomberg has his priorities straight.  Just think about it, had he not focused so heavily on banning large sodas he could’ve actually focused on the fact that 1.8 million New York City resident are on food stamps. That’s an incredible 22% of the city’s population.  That’s not it either.  While Bloomberg spends … Read more

“It’s National Security”…Government Transparency Hits Record Low in 2012 Under Obama

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Surprise, surprise…the “most transparent administration ever” is, well, the least transparent.  Not that any of you are shocked by this revelation, but a new report by the Associated Press demonstrates just how secret our government and intelligence agencies have become.  Not only did they claim “national security” over and over like a bunch of drunk parrots, they also claimed the need to protect “internal deliberations.”  Specifically, the number of times the government withheld or censored reports in 2012 was 479,000 times, up 22% from 2011.  The CIA denied 60% of requests, up from 49% in 2011.  From the Associated Press:

The AP examined more than 5,600 data elements measuring the administration’s performance on government transparency since Obama’s election.

When the government withheld or censored records, it cited exceptions built into the law to avoid turning over materials more than 479,000 times, a roughly 22 percent increase over the previous year.

In a year of intense public interest over deadly U.S. drones, the raid that killed Osama bin Laden, terror threats and more, the government cited national security to withhold information at least 5,223 times — a jump over 4,243 such cases in 2011 and 3,805 cases in Obama’s first year in office. The secretive CIA last year became even more secretive: Nearly 60 percent of 3,586 requests for files were withheld or censored for that reason last year, compared with 49 percent a year earlier.

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Bitcoin and Kim Dotcom: Why it’s Time to “Encrypt Everything”

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Encryption may end up being the biggest trend in 2013, as the concept, usage and term itself move from the realm of computer geeks and hackers into mainstream consciousness.  The reason why such a moment must occur relates to the fact that governments and intelligence agencies the world over are rapidly moving in the direction … Read more

Boeing Declares War on Privacy in Washington State

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Washington state has led the way in many respects when it comes to the drone issue, something I highlighted recently in my article: Just Say NO: Seattle Residents Kill the City’s Drone Program.  It’s not just Seattle though, there is a bi-partisan bill in the Washington state legislature, H.B. 1771, which limits drone use within the entire state.  The bill has already passed its House Committee hearing and, as expected, the state’s corporate overlords have started to fight back.  Specifically, Boeing.  From the Examiner:

A bi-partisan bill to limit drone use within Washington state is meeting resistance from the aerospace and defense corporation Boeing.

Just last month, H.B. 1771, a bill to put limits on government drone use within Washington state, passed its House Committee hearing. The bill establishes guidelines and standards for the use of drones by public entities to protect the privacy rights of Washington residents.

“This bill quite simply provides protection to the citizens of Washington state from warrantless surveillance. That’s our intent here. To start a conversation and say if these things are going to be used, you will protect the constitutional rights of the citizens,” said Rep. David Taylor (R), the bill’s primary sponsor.

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Rand Paul Filibuster Shockwaves Continue…Now the Democrats are at War

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Dear Mr. President: In response to partial release of the Department of Justice memos describing the underlying legal justifications for the targeted killings of American citizens and others in the course of counterterrorism operations, we are writing to emphasize Congress’ vital oversight role in these matters.  Every American has the right to know the underlying … Read more

The 1984 Playbook Has Arrived: U.S. Air Force Deletes Drone Strike Data

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If you recall, Winston Smith’s job in George Orwell’s classic novel 1984 was to go into historical records and literally change history.  He would alter photographs and text in the archives so that history would always portray “The Party” in a positive light and as omniscient.  Well folks, this behavior has arrived in America and we better nip it in the bud fast before one of these drones is flying right over our heads.  From the Air Force Times:

As scrutiny and debate over the use of remotely piloted aircraft (RPA) by the American military increased last month, the Air Force reversed a policy of sharing the number of airstrikes launched from RPAs in Afghanistan and quietly scrubbed those statistics from previous releases kept on their website.

Last October, Air Force Central Command started tallying weapons releases from RPAs, broken down into monthly updates. At the time, AFCENT spokeswoman Capt. Kim Bender said the numbers would be put out every month as part of a service effort to “provide more detailed information on RPA ops in Afghanistan.”

The Air Force maintained that policy for the statistics reports for November, December and January. But the February numbers, released March 7, contained empty space where the box of RPA statistics had previously been.

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