Landmark Links March 22nd – People of Walmart


Lead Story…. When many people think about retail, they focus on sexy urban locations such as 5th Avenue or Rodeo Drive.  However, many of the dominant trends in American retail actually arise out of small rural towns and working or middle class suburbs.  For years now, the trend in these areas has been that big box stores (often Walmart) move in to town and provide more access to goods at a better price in one store.  In doing so, they tend to push out smaller mom and pop businesses that dominated small town life for decades or more.  Lately, the big boxes have gotten a taste of their own medicine with the ascendance of e-commerce, causing sales to slow and forcing Walmart to close a large number of stores.  According to Joel Kotkin at the Daily Beast:

“In the 40 years after the first Walmart opened in Rogers, Arkansas, in 1962, the number of specialty retailers declined by 55 percent nationwide. In the same time period, the number of retail chain store locations , including Walmart, nearly doubled. Research conducted at Iowa State University in the ’90s found that, after a Walmart opened in a town, sales at specialty stores—sporting goods, jewelry, and gift shops—dropped by 17 percent within 10 years.”

This leaves smaller, poorer outlying areas at a crossroads: “the Walmart effect” effectively shut down their downtown specialty stores in exchange for cheaper goods so what happens when Walmart leaves?  The answer that emerges will likely have a huge impact on American retail for years to come.


Inventory Issues: On the surface, bond yields have been falling for the most part in 2016 as prices rose. However, there are some issues lurking beneath the surface and the fact that the worlds largest bond dealers holding the largest amount of inventory since 2013 could be an ominous sign.  See Also: The suddenly dovish Fed is crushing the dollar.

Shipping Out: The US has been sending its oil pretty much everywhere since the 40 year old export ban was lifted in December.

Don’t Leave the Lights On: Despite a resurgence in domestic manufacturing, there are certain portions of the business that will likely never return to the US. See Also: The mystery of America’s missing capital investment.


Out of the Basement: Millennials are moving out from their parents’ homes and into apartments stoking the demand for units and driving rents up.

Hipster Haven: WeWork is likely the most unique real estate company of all time.  It’s business plan is completely different than anything we’ve seen before as is it’s valuation.  The company’s backstory is just as fascinating.

Recycled: After years of vacancy and neglect, America’s abandoned factories are in high demand as startups and multi-nationals look for large, inexpensive spaces to house their US operations.


Scarce: Existing home sales for February were a big disappointment, falling 7.1% to a three month low while prices rose on average.  A big part of this story is inventory, which has been declining for four years now, especially among the least expensive properties.  Conclusion: it’s hard to have many transactions if there isn’t much available for sale.

High Price Tag: The summer rental market in Malibu is booming with some oceanfront estates asking as much as $750k per month and giving the Hamptons a run for its money as a vacation destination for the insanely wealthy.

Best of the Available Alternatives: There is one thing that seemingly everyone in Washington can agree on: they want to kill off government backed mortgage giants Fannie Mae and Freddie Mac.  Fannie and Freddie are far from perfect.  However, wiping them out completely rather than enacting reforms to fix them would be a very costly and potentially painful mistake.


Growing Pains: LA is getting some long-needed makeovers but changes, for better or worse always have consequences.  First off, the city is undergoing a massive and much-needed expansion of the Metro including the soon to open new Expo Line routes largely in order to increase mobility and decrease pollution.  As can be expected, rents are already soaring in areas that will be served by new Expo routs…and they haven’t even  opened for service yet. In addition, LA is turning it’s drainage ditch back into a river.  This is a much needed development since the LA “River” currently doesn’t present a great image for the city and accounts for a large area of underutilized open space.  Predictably, the project is creating a frenzy as wealthy investors and developers rush to get in before older, poorer neighborhoods like Frogtown that will benefit from the new outdoor amenity inevitably gentrify.

Wonder Drug: New research shows that you can increase the performance enhancing benefits of coffee to maximize it’s benefits if you dose it correctly: primarily before brainstorming or studying.
Happy Birthday: Despite many recent struggles, Twitter turned 10 years old yesterday.  GQ put together a tweet hall of fame to celebrate the occasion.

Chart of the Day


Feel-Good Video of the Year: Watch a mall Easter Bunny in New Jersey rip off his furry paws and take part in a brawl with parents after a kid fell off his lap.  Personally, I’ve always found the Easter Bunny to be a moderately terrifying character.  I wouldn’t want to get stuck with the therapy bills after this one.

Burn: A Florida Community College recently held a pep rally to get students excited for a round of standardized tests (because nothing is more exiting than filling in bubbles with a number 2 pencil).  Apparently the organizers never watched Old School because the show involved pyrotechnics and a fire breather accidentally lit himself aflame, suffering 1st degree burns to his face.  Several students were also treated for inhalation issues resulting from the fire extinguishers used to put out the blaze.  No word yet as to whether or not this epic FAIL actually helped test scores.

What’s the Matter Colonel Sanders?  A Romanian member of parliament was recently jailed for 2 years on corruption charges.  His crime?  Giving away 60 tons of fried chicken in order to gain favor with voters.  Investigators found out after the chicken producer turned him in.  Two takeaways: 1) that A LOT of chicken, 2) apparently it’s much cheaper to buy an election in Romania than it is in the US.

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