Tag Archives: fake news media

STOCK MARKET UPDATE

MAY 10 – Hopefully everyone had a great Mother’s Day and is staying safe and well.

It’s been awhile since I talked about the stock market.  For over a month now the DOW has been in about a 2000 point range.  Quite a change from days in March where it was up or down 2000 points.  All of this back and forth and the market still hasn’t been able to get up to the 25,100 target.

As I mentioned the last time I talked about stocks, we are essentially in a stalemate.  The market should be declining to the 13,000-15,000 range.  However, the Fed is pumping trillions into the system and this is offsetting the selling.  The experts I listen to are taking the stance I am taking – stand aside and wait for a break in one direction or another to occur.

If you have had read my blog and white papers over the past decade, you know I harp on price and value being two very different things.  In real estate, prices rarely reflect the current value of the underlying asset.  Albeit market participants and appraisers believe sale prices are a reflection of market value.  They aren’t.

I bring this up because we may be encountering a historical disconnect between the value of companies and the price of their stock.  A company that was worth $100 a share before the virus hit might now be worth $80 (value is extremely slow to change for large corporations, so a 20% decline is beyond extreme).  However, if the trillions being pumped into the system goes into the stock market in some amount, then that stock that may have went from a high of $150 down to $75 in March and may now be $125.  And might go even higher.

Money is pouring in regardless of what the underlying asset is worth.  Re-inflating prices is what the Fed did starting 12 years ago and it worked for most asset classes.  They are doing all they can to make this happen again.  One day the house of cards will crumble and it won’t be pretty.  They might be able to avoid the end game this time, but I don’t think they will the next time things fall apart.

Right now the World’s Largest Casino (stocks, bonds, currencies) is open and gamblers are taking their position on how things will play out over the next 6-24 months.  But, these are simply gamblers.  True investors are still uncertain of the future and are standing aside.  There are no new mergers.  No new commercial real estate transactions.  When Sam Zell says he is still uncertain of how this will play out and is doing nothing, that speaks volumes.

As they say, better safe than sorry.  Capital preservation is key.  Don’t jump into the game too early.  Be patient.  It is ok to miss the exact bottom and wait for the new trend to start.

As a side note, remember that this is not a liquidity crisis.  That has been solved by Central Banks worldwide.  This is a SOLVENCY issue.  Companies will go bankrupt over the remainder of the year because they have too much debt.  It is that simple.  This will also apply to individuals and real estate owners.  Too much debt and you are likely to go under.  As they say, cash is king.  It will be once again during this downturn.

And a side note to the side note….The bond market is pricing in a 28% chance of the Fed Fund Rate going negative!  Some indicators suggest a drop to -2.0%!!!  Everyone says negative interest rates are not coming to America.  Even Fed presidents say that.  The only problem is the Fed FOLLOWS the bond market.  The bond market will dictate whether America goes to negative interest rates.  Right now it is just starting to head in that direction.  There will be more to discuss as this unfolds going forward.

Unemployment came in at 14.7% albeit the U-6 (whatever that is exactly) suggests we will see 23%+ next month.  The analyst I mentioned that forecast 16.5% was a bit high.  For historical perspective, we went from unemployment rates at 50 year lows to 90 year highs in a month or two.  Just insane, eh.

It’s  a big week for Bitcoin as the 4-year ‘halving’ occurs.  Since I suggested to my friends a month ago to buy some it has gone up 50%.  However, the expectation is still a 10x move from here by the end of 2021.  It seems like everyone is aware of the halving and past events and have been buying in advance.  Since past history has shown a 10% to 30% decline in price right after the halving, that would surely shock the newbies to Bitcoin.  The public usually gets on board when it is too late and then dumps when things turn against them.  I will be watching for some kind of correction between now and the end of June.  If it occurs, I will hop on board and hope the 10x unfolds as predicted.

Brent Crude is back over $30 a barrel.  Many oil stocks, e.g. Exxon, are up over 50% from their lows.  The damage will last at least another year or two.  But, oil and gas are not going away regardless of what the tree huggers wish and say.  The more electric vehicles they make the more fossil fuel using power plants get built.  Plus, 95%+ of vehicles will run on gas for many decades into the future.  It is unlikely Millennials will live to see a serious decline in the use of oil and natural gas.  There simply are no viable alternatives.

The Fake News Media likes to make the masses think oil and gas are on their way out.  They do the same with meat.  They even talked people in to creating fake meat.  Fake meat means it is NOT meat!  Fake meat is an oxymoron!  But, more importantly, projections call for meat consumption to be 70 percent higher in 2050 than it was in 2010.  PETA won’t tell you that though:)

I only bring the above items up because it all goes back to my constant reminder – EDUCATE YOURSELF!  I think we can switch up an old joke – How can you tell if a broadcaster is lying – s/he is moving his/her lips:)

Educate yourself and then make your own decision.  Think for yourself.  You will be much better off in life.

Stay safe.

The Mann

WEEKLY UPDATE RE REAL ESTATE AND STOCKS

UPDATE APRIL 24 – Nothing new re the markets.  A quick note regarding VIs – Virus Incubators.  A report says that 3% of the counties in the USA account for 50% of GDP and 61% of COVID-19 cases.  Until we empty the large cities and distribute our populations throughout the country, we will have disastrous societal problems.  Less density is naturally better than high density.

That is it for this week.  Have a great weekend and stay safe.

UPDATE APRIL 22 – Well, the talk of the week was Oil futures hitting -$40 per barrel earlier this week.  I wish they would pay me to take some oil:)  I am confident we can say this week saw the conclusion of a 110-120 year cycle for Oil.  The next phase will see Oil soar past its prior high just below $150.  I believe this will be more due to the US Dollar’s devaluation and surging inflation than supply/demand factors.  BTW, June 2021 Oil Futures have stayed around $35.  This gives us an indication of where the market thinks we will be in a year.  That is still cheap.

A few other experts I follow (not to insinuate I am an expert….they are though) have also mentioned standing aside to watch who wins this battle between the bulls and bears.  The stock market should decline significantly from these levels.  But, when the world is implementing QE Infinity it is tough to overcome trillions of Dollars and Euros in buying activity.  It is comforting to know others are watching this unfold from the sidelines, too.

NOTE:  Next week I will post how far I believe real estate prices have declined.  These are being published in Mr. Wirgler’s next Broker Log Report so I want to let that get disseminated first.  I have analyzed several key indicators in a variety of ways and the data is fairly consistent.  So, I am confident enough in the indications to publicize them.

My side commentary this time is about the public and how they usually get things bass ackwards.  When gas prices are low, like now, I ask why aren’t people complaining about C-Store operators gouging them now?  Why do people think C-Store operators are ripping them off when gas prices hit $3 or $4 per gallon?  The operators have virtually no control over gas prices!  When gas prices are high, they still make the typical 20 cents or less per gallon.  As a percentage, their profit declines as gas prices go up!  I read that right now many operators are making up to 80 cents (!!!!!!!) per gallon.  Even if they were only making the normal 20 cents, the percentage would be 10%-15% versus 5% when prices are high.  The time for the public to scream about C-Store operators is when gas prices are low….not high.  But, no one has ever listened to this argument….so nothing will change.  But, I do feel better venting:)

Some Baby Boomer humor in this regard….today is like it was when I was 16 years old – gas prices are low, but I am grounded at home:)

Make a note to come back to my blog next week to see where I think real estate prices are today.

Stay safe.

The Mann

APRIL 19 – First, I hope everyone is well.  Continue to stay safe.

Stocks have been in a trading range for a few weeks.  This has helped many indicators get out of extreme oversold levels.  As I forecast, many analysts are taking credit for going bullish at the March lows and claiming a V-shape recovery is underway.  Admittedly, we are at that point where there is some support for us being in a new Bull Market versus the Wave Theory still calling for the next wave down to be worse than what we saw in March.

The bullish case has some solid support.  Amazingly, during the initial crash from near 30,000 to about 18,000 in the DOW, over 100% of the decline occurred during the gap down openings!  What occurred in this time frame was extreme buying by the professionals while the public was selling.  I have to admit it is tough to bet on the downside when the pros have bought while the public was throwing in the towel.  Also, very difficult to fight unlimited QE.  I am going to stand aside and see which way this goes.  There is no stress if you are on the sidelines.

I mentioned the ETF VNB in March.  It has recovered from about a 7% discount to NAV to being above NAV now.  This suggests bonds have been repriced to the market’s satisfaction.

Real estate markets are starting to gel regarding forecasts.  Hotels appear to be the first to show a value decline around 30%.  This applies to the mid-level to upper-end hotels, especially those that have closed down.  Economy hotels along interstates have not been hurt as bad.  Contractors and travellers (who are those people! lol) need a place to stay.

The forecast for office buildings has very divergent opinions.  One side believes that people have learned to work at home and many will not go back to the office.  The positive side sees the amount of space per employee increasing drastically due to a desire for some distancing.

I have always, and continue, to disagree with the at-home work movement being successful and significant.  In 1995 when I was getting my MBA, the prediction was by 2000 most people would be working from home.  25 years later this has not come to fruition.  And it won’t because of this virus.  Why, you ask:)

For the same reason as in 1995, humans are a social animal and we prefer to be together.  Also, people like to look you in the eye when decisions are being made.  What I found with email (and the blackberry, remember those) is it was a way for companies to bring work in to your personal life.  Of course, they don’t want you bringing your personal life into the work day.  But, having you work at home in the evenings is ok.

Employers want to have control over their employees.  They want you in the office.  It is not the employees choice how this plays out (Millennials will of course disagree as they think they can dictate to employers what working conditions should be….that is for sure dead now.).

Zoom and such is not a reason to expect more people to work from home.  Zoom is simply a conference call.  We have been able to communicate in groups for 30+ years.  I had my first Zoom meeting with about 20 people last week.  My observations were I am looking at a Brady Bunch intro for an hour and I am distracted by watching the faces of 20 people looking at their computer screen looking at 20 people looking at their computer screen.  Not a thing has been added to the phone conference call.  ((Side note….the meeting was fruitful regarding the information we all shared. But, a phone conference call would have accomplished that, too.))

Where I see videoconferencing having an effect is on business travel.  I see there being two types of company meetings – IntraOffice and InterOffice (both copyrighted, April 2020).    Per above, IntraOffice is not going to change.  Employers are going to make their employees come in to the office.  What might change is a movement back to the Baby Boomer way of doing things – having private offices and less of this common area stuff for employees to gather around and chat and whatever.  You can go back to doing that at the water cooler:)  So, the trend towards less square footage per employee could reverse.  Maybe we will go back to needing 250-300 square feet per employee.

Obviously, I believe executive suites (temporarily known recently as shared work areas…e.g. WeWorks) are dead for another 20 years.  The concept has always been on the fringe and that won’t change.  I think ‘hoteling’ (I recall that starting back around Y2K with accounting firms initiating such) will be adversely affected, too.  I sure wouldn’t want to go into an office that someone else has been in for the last few hours.  Or at least not until someone comes in and decontaminates it!

Where I do think a permanent change is occurring is what I term InterOffice – travelling to other corporate locations around the nation or world.  The current crisis has made it very difficult in the future to justify to your manager that your staff needs to go to New Orleans to have a sales meeting and brainstorm and plan for the upcoming year et al.  All of that travel cost and time away from the office is going to be hard to justify in comparison to a Brady Bunch, er Zoom, meeting.  This doesn’t hurt the office market.  But, it does hurt the airline, rental car, taxi, hospitality, and restaurant markets.

One last argument for the plus side and one for the negative side as I write this and listen to various experts speaking (I must spend 5-8 hours a day right now just listening to various experts that predicted this crisis….can’t wait for things to calm down so I don’t have to listen to all of this every day!).

Positive – I was very surprised to hear that a survey of Millennials showed that 77% prefer learning in a classroom to online.  For a generation raised on technology, this certainly shows that the human species prefers in-person interaction.  Also, with my wife being a former teacher, she points out that only in-person learning will account for all the different ways individuals learn.  That cannot be accomplished online.  This supports the argument for an increase in office demand as employees remain in the office, but require more private space.

Negative – A demographer I was listening to said that worldwide the number of professional workers is going to decline 8% to 10% over the next decade.  This directly reduces the need for office space.

As of today, that is all I know about the office and hotel markets.  I always encourage you to gather all of the information you can and make your own decisions and forecasts.  Do not blindly listen to the Fake News Media and the pundits they bring on.  Think for yourself.

I have absorbed information on other real estate property types.  But, this is already a long post.  I will address the other types over the next few weeks.  Hopefully, I will obtain even more information by then.

Thanks again for all that send me information they come across.  I truly appreciate it and I try to digest it and put it here on my blog.

I look forward to seeing which side wins the Bear/Bull stock battle.

Lastly, one of the experts I subscribed to did a lot of math and predicts a 16.5% unemployment rate when the May 8th report comes out.  I like when someone shows the math and the reasoning for a projection.  We shall see how that turns out.

Stay safe and well.

The Mann

ANOTHER WEEK, ANOTHER 8% MOVE IN ONE DAY

APRIL 6 (EVENING) – Today’s huge rally has increased the odds that this Bear Market rally has a ways to go.  The high end for the rally is in the low 25,000s.  This is beyond what I thought could happen initially.  However, the goal of this first major Bear Market rally is to convince the public that a V-shaped recovery is underway and we are headed back to new all-time highs.  A Bear Market’s goal is to get as many people in to it and then go down to a level where people don’t ever want to own stocks again.

Regarding real estate, since this market lags the stock market by 4-5 quarters it will be awhile before things become more clear.

One property type to add to the high-risk list is movie theaters.  DIsney and others had to quickly learn how to get their new movies to the public without going thru the movie theater distribution routine.  Now that they have done this, will the public be content to go back to the old way of doing things?  Forever, new music has been sold directly to the public and the public then decides if they want to go see the artist in concert.  Why should movies be any different?  Sell movies directly to us and we will decide if we want to go see them in a movie theater, also.  Will movie theaters die a slow death like drive-in movie theaters have?  These properties are certainly attractive to those seeking last mile distribution points.

Reports are that developers are moving forward with projects.  Investors may have called a time-out.  But, developers have not.

Dozens and dozens of national and regional retailers have asked their landlords for rent relief.  This puts landlords in a tough spot as their mortgage payments are obviously due each month.  A domino effect will occur with everyone helping each other.  But, there will be enough hiccups that things won’t go smoothly.

Many businesses will close up for good (one report is 30% of all restaurants in California will be closed permanently…..I would think this would occur nationwide, too).  As a result, some property owners will default on their loans.  This won’t be 2006-2011 all over again.  But, there will be enough carnage for everyone to deal with.

A former head of the SBA predicts 20%-30% of all businesses will fail.  This sounds dire.  However, I also heard that 1/3 of businesses fail every year anyway.  As always, I encourage you to do your own research.  Don’t take anything you hear as gospel – especially if it is coming from the Fake News Media!  The number of conspiracy theories grows by the day.  People (who desperately need to do something better with their lives!) are circulating reports that quote Stanford or Johns Hopkins or other such respected organizations as saying this or that.  Those are made up stories.  Go to Snopes.Com or other places to see if they address any story you think may be fictitious.

An interesting  item of note…..Amazon has their annual Prime Day on July 15th.  An internal memo says they plan on delaying this event.  That is a telling sign.  For Amazon to think that consumers will not be ready to spend, even online (!), by mid-July is extremely negative.  Keep that in mind as we hear cheerful news in May and June.

Depending on how the markets move, I may post Wednesday evening or wait til Friday evening.

Everyone stay safe and well.  Have a blessed Holy Week.

The Mann

EDUCATE YOURSELF ABOUT GUNS BEFORE TAKING A STAND

September 16, 2019 – Like many people, I accepted what the Fake News Media promoted about guns and the NRA throughout my life.  I thoughts guns were not needed and the NRA was a communist organization (whatever that means).  Then several years back I took the time to educate myself.

As a result, I became pro-2nd Amendment.  And I became a lifetime member of the NRA.

As I have become involved in the world, I am simply amazed at the incredible focus on safety.  Every gun person I have ever encountered is fanatical about gun safety.  No mass shooter has ever been an NRA member.  The NRA does all it can to promote safety….especially in our schools.

Enough on what I have learned.  Please take the time to educate yourself.  Question anything the Dems/Socialists and Fake News Media says.  Some of it might be true.  I am confident you will find almost all of it is false.

I will provide a few facts and leads….obviously research all of them for accuracy.

First, the general public has not been able to purchase an automatic weapon since the 1930’s.  Only the military (and maybe the police?  not sure about that off hand) has automatic weapons.  So, when you hear people say the public does not need to have military weapons blah blah blah.  Well, we haven’t had access to those for over 80 years!  Maybe some criminals have obtained these – probably smuggled in from Mexico (which wouldn’t be as easy to do if we had a total border wall…).  But, no way does the public have any of these.

Second, AR-15s and AK-47s are NOT assault riffles because they are not selective fire.  If they were, they would come under the 1934 firearms act — anything made after 1986 could not be legally sold in the US to civilians (non-police department).

Thus, once again, the public does NOT have access to assault rifles.

When you get down to it, we already have excessive gun laws.  Why shouldn’t a law-abiding citizen be able to own an assault rifle or automatic weapon?  Other than ‘because people just don’t need those’ there is no valid reason.  If you have a mob of people coming to invade your house and likely harm you and your family and friends, you need an automatic weapon or assault rifle to DEFEND yourself.

If you haven’t bought a gun, then you don’t know how difficult it is to purchase one (I hope you saw the video of the reporter that recently went to Walmart to buy a gun and was not able to….her agenda to show it is ‘easy’ to buy again backfired on her!).  I can tell you they ask so many questions….you have to have a perfect past to buy a gun!  It is insane the things that can disqualify you from buying a gun.  The one thing that continues to annoy me though is the question about being Hispanic or not.  Why in the world do they ask that question?  Why would it matter?

Lastly, I have to be an opponent of any gun registration system.  Being Jewish, no way could I ever approve of a system that helped to kill millions of Jews in the Holocaust.  Venezuelans can confirm the nightmare of such a registration.  They now get massacred with ease by their government/military as all of their guns were confiscated after a forced registration.  Americans learned their lesson in the 1700’s about the need to have guns to oppose an oppressive government.

Again, go do some research on your own.  Do not take anything at face value.  The link below provides some interesting stats.  But, do verify they are accurate on your own.  Do that with EVERYTHING the FNM tells you.

https://fee.org/articles/studies-find-no-evidence-that-assault-weapon-bans-reduce-homicide-rates/?utm_campaign=FEE%20Daily&utm_source=hs_email&utm_medium=email&utm_content=75797081&_hsenc=p2ANqtz-8RP_8RyseY6a_D9poem4LcBHEAn0_rCvAt93O5_BQMhtVq8_6U9tUIU9u25glYNkjm55QsTBfXPVYa1gOoqpT8ald7rw&_hsmi=75797081

And in the end, decide where you stand on this issue….same re abortion…..and other controversial issues.  Educate yourself.  Is your current opinion based on what you have heard over and over….or on substantial research you did on your own.

As an example of some research I recently did.  I looked up how many guns (approaching 400 million) and cars we have in America.  I then looked up how many people are killed annually by guns and cars.  I excluded suicides as not many people kill themselves using a car and if they didn’t have guns they could use pills or other means.  I found out that more people per 1,000,000 die in car accidents than by guns by over 2x.  Even if you included gun suicides, cars are still more deadly.  So, why isn’t there a cry to reduce the number of cars on the road by tens of millions.  Why don’t we raise the age to get a drivers license to 21?  If Walmart can raise the age to buy a gun to 21, why don’t we do that (driving and owning) with cars?  I am sure the number of deaths to car drivers under 21 years old is proportionally higher than those over 21.  The point is getting into the data on your own is quite revealing.  Mass shootings are a blip on the radar.  On the day of any mass shooting way more people die in car wrecks, die to opioid overdoses, die in abortions, die to medical malpractice, et al.  Those are the real causes of death we need to go after.

Enjoy researching….have fun….keep an open mind.

The Mann

INCOME ACHIEVEMENT IS MORE LIKE IT

July 15, 2019 – The article at this link was just too good to not pass along.  It is always good to debunk the Fake News Media and the PC junk they promote.  Enjoy the truth, supported by facts.

https://mises.org/wire/debunking-income-inequality-research?utm_source=Mises+Institute+Subscriptions&utm_campaign=3987532102-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-3987532102-228262361

The Mann

IT’S HUMAN NATURE – THE SUBURBS WILL ALWAYS RULE

July 3, 2019 – First off, Happy Birthday to our great republic.  I hope everyone had a safe and enjoyable 4th.

The following article is just one more tidbit of data that proves that the younger generations NEVER moved into the CBDs at any rate greater than prior generations.  Since 2000, the percentage of the population in CBDs has not changed!

As I continue to tell any city planner I see speak at a conference, you best be spending 99% of your money on infrastructure in the suburbs.  It is a waste of money to spend fortunes on downtown parking garages, apartment buildings, trains, etc.  The cost is extremely high and the population using it is insignificant.

City planners simply mislead the public as it is all ABOUT THE MONEY.

Environmentalists mislead the public because it is all ABOUT THE MONEY (e.g. The USA has 17 coal plants….1600 coal plants are under construction and planned in 62 countries…the FNM tells you the use of coal is declining, when in fact it will increase 43% with just these new plants, much less new ones after these).

And vegans make it sound like plant-based food is catching on and is the future for the world.   Again, they are simply AFTER THE MONEY!  Between now and 2050, worldwide meat consumption will increase from 330 million tons to 560 million tons!  Someone please tell PETA to stop wasting all of that donation money they get on trying to make people stop eating meat.

It is sad to see how the masses get used by the Fake News Media that promotes these money-grabbing agendas.  But, as I have always said, thankfully the masses are predictable in this way and that makes it easy for everyone to profit off of them.  I guess that includes me, albeit I am not an unethical, greedy corporation.

You cannot save this planet.  Whatever you do as an individual (not eat meat, walk or bike instead of using your car when possible, buying an electric car [thanx for increasing the need for more coal plants to provide electric for all of these electric cars!], recycle, et al) is not going to help.  Nor is a multitude of Americans and Europeans doing the same thing.  China and India alone will offset any benefits provided by the climate change believers 10-fold over.  My dad had a saying for your efforts, but it is a bit vulgar so I won’t write it out.  Just shake my head about the futile efforts and how legislation continues to price the poor out of housing and automobiles.

In the end, only Mother Earth can save herself.  And she will!  She always has.  Mass extinctions.  Bubonic Plague.  Man might help with World War III and the use of nukes.  But, I believe Mother Earth will unleash a disease that will kill billions before mankind figures out how to stop it.  I won’t be around to see if that happens.  Neither will anyone reading this.  But, down the road our over success as a species will have to be corrected….or we do as I have always proposed as an option – move to Mars:)

Enjoy the suburbs, life is so much more beautiful and relaxing there.

The Mann

https://www.foxbusiness.com/features/millennials-leaving-cities-rising-costs