Landmark Links December 14th – Downstream Pressure


Must Read: A housing market slowdown where builders retrench further from already meager construction starts would be bad news for renters (and good news for multi-family investors).  Household formation has a positive demographic tailwind and there is not a readily available substitution for either owning or renting.  Therefore, fewer new for-sale units = more renters = higher rents.


Overburdened: Former Fed Chair Janet Yellen is sounding a warning about ballooning levels of corporate debt that she says could prolong a downturn.

High Cost: Markets are now judging the US to be a riskier borrower than China for 1 year treasury notes.

Peace Out: Workers are increasingly ghosting their employers like bad dates – in other words, just leaving without telling anyone.  This is the perfect storm of a strong economy and weak social skills.


Rotten Core? Returns on investment for core properties are relatively low compared to other risk profiles due to their perceived safety.  However, publicly traded REITs are signalling a coming expansion in cap rates which could lead to substantially more return erosion than investors commonly think.

Looking Ahead: From Opportunity Zones to prop tech to value-add multi-family, multi-story warehouse and a resurgence in retail investment – here are 18 commercial real estate trends to watch in 2019.


In Good Company: My critique of Robert Shiller’s housing article that the current “housing boom” has been in price only, not production is similar to what Bill McBride of Calculated Risk had to say so I guess I’m in good company.

Money Where Your Mouth Is: California governor elect Gavin Newsom promised to fix California’s housing crisis.  If he’s really serious, he should come out in full support of State Senator Scott Wiener’s SB-50.


Often Wrong, Never In Doubt: This piece by Bloomberg View’s Barry Ritholtz about why you should disregard all coming predictions about 2019 is hysterical (also true) and contains this gem:

Gold: Before all the gold bugs migrated to Bitcoin, the precious metal was where they went to make their bad forecasts.

Remarkable: A decade after Bernard Madoff was arrested for running the world’s biggest Ponzi scheme, Trustee Irving Picard is close to recovering $19 billion of the $20 billion in principal lost by clawing back capital from those who received fake profit distributions.

Don’t Call it a Comeback: After a catastrophic year that saw its stock price drop from $3,000 to under 2 cents (after a 250-1 reverse stock split), Moviepass is licking its wounds and trying to revive its fortunes with a new tiered pricing structure.

Only One Way Out: Why Uber’s only road to potential profitability is becoming an ad company.

Chart of the Day

A market that overheats in price doesn’t necessarily overheat in terms of production.

Source: Freddie Mac


Burn it With Fire: We can now add dead mice in soda machines to raw sewage leaks and E. coli in the visitor’s training room at the Oakland Coliseum.

Snitches Get Stitches: China’s government anti-porn force is offering to pay people $86k to snitch on porn watchers and sharers because dystopia.

Best Foot Forward: A man was arrested for shoplifting after a job interview at Kohl’s because Florida.

Love is Dead: An Irish woman who married the ghost of a 300-year old pirate sadly announced that the couple has split up.

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