Free Parking Isn’t Free

How much off-street parking should a restaurant have?
This of course, is a pretty important question for the owner of the restaurant, since he or she will need to make sure that people can easily access the building in order to eat there.
Any entrepreneur who wants to run a profitable restaurant will need to guess how many parking spots are needed, based on a variety of factors – such as proximity of housing, public transportation, and the personal preferences and demographics of the clientele.
If the owner supplies too little parking, then motorists will simply drive on by, opting to dine somewhere that offers an easily-accessible parking space.
On the other hand, the owner doesn’t want to provide too much parking because parking spaces use up square footage that could be used for other purposes such as a larger outdoor patio on a restaurant.
Thus, in economic terms, parking spaces are no different than any other amenity that might be offered by a business, such as tables, bathroom stalls, air conditioning, and windows.

This post was published at Ludwig von Mises Institute on December 21, 2017.

Some Classic Short-Sale Candidates Get Even Better

Six months ago, recreational vehicle sales were booming and the companies making those expensive, gas-guzzling rolling houses were riding high. See The Perfect Crash Indicator Is Flashing Red.
And now? Same story, even bigger numbers – but with a decidedly more skeptical treatment in the media:
Hipsters Go Glamping, and RV Makers Soar
(Wall Street Journal) – For anyone who has gotten stuck on a mountain road behind a massive recreational vehicle, get used to it, there are a lot more on the highway. Recreational vehicles, ranging from bus-sized motor homes to retro trailers, have been a boom-and-bust industry since they first became popular in the early 1970s. Now a wave of retiring baby boomers and a surprisingly young new fan base have sent U. S. unit sales above their housing boom peak. Shares of the two leading manufacturers of RVs, Thor Industries and smaller Winnebago Industries each hit records last week.
The fundamentals – fuel prices, interest rates, disposable income and demographics – all look solid. That has the Recreation Vehicle Industry Association projecting a further jump this year and next. Despite that, delighted investors might want to unhitch themselves from these stocks. When things go badly for the economy, they go very badly for RV makers.

This post was published at DollarCollapse on DECEMBER 3, 2017.

Surveillance State: Stanford Researchers Use AI To Determine Neighborhood’s Bias By Its Cars

A team of researchers at Stanford University have trained artificial intelligence algorithms to observe and study millions of images on Google Street View to determine how people vote by the make of their car. The algorithms were trained to recognize the make, model, and year of every car produced since 1990, in more than 50 million Google Street View images across 200 American cities.
The data on car types and location were then compared against the most comprehensive demographic database in use today, the American Community Survey, and against presidential election voting data to estimate demographic factors such as race, education, income and voter preferences, the Stanford News reported.
Fei-Fei Li, an associate professor of computer science at Stanford and director of the Stanford Artificial Intelligence Lab, led the team of researchers who published the study on Tuesday in the official journal of the U. S. National Academy of Sciences, and found a ‘simple linear relationship’ between cars, demographics and political persuasion.

This post was published at Zero Hedge on Dec 1, 2017.

Japan: It isn’t What the Media Tell You

Known for Being Terrible For the past few decades, Japan has been known for its stagnant economy, falling stock market, and most importantly its terrible demographics.
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For almost three decades, Japan’s GDP growth has mostly been less than 2%, has been negative for several of these years, and has often hovered close to zero. The net result is that its GDP is almost at the same level as 25 years ago.

This post was published at Acting-Man on November 29, 2017.

Bulls Beware – We Are Finally Closing In On A Top

When former bears call for a ‘New Golden Age’ of the stock market, with targets of the DOW set at 100,000, well, it is clearly time for bulls to beware.
In fact, the Dow 100,000 prediction of this former bear is explained as follows:
‘This is not some pie in the sky prediction.
It simply assumes a continuation of existing trends in demographics, technology, politics, and economics. The implications for your investment portfolio will be huge.’
I mean, markets always continue their current trend unabated, especially since financial markets are purely linear environments . . . right!?!? So, why not set your target for 1,000,000 rather than 100,000 based upon the exact same thesis?
And, while another widely read author on Seeking Alpha, who has been bearish for the last year and a half, did not exactly turn bullish, he certainly took a major step towards the old claim that we have entered a ‘new paradigm:’
‘This idea of a “Goldilocks” backdrop characterized by solid growth but subdued inflation has become so ubiquitous that it’s being treated not so much as a way of explaining the current state of affairs but rather as a theory about how the world is going to work for the foreseeable future.’

This post was published at GoldSeek on Monday, 27 November 2017.

REALIST NEWS – In praise of Tesla’s bankruptcy?

When former bears call for a ‘New Golden Age’ of the stock market, with targets of the DOW set at 100,000, well, it is clearly time for bulls to beware.
In fact, the Dow 100,000 prediction of this former bear is explained as follows:
‘This is not some pie in the sky prediction.
It simply assumes a continuation of existing trends in demographics, technology, politics, and economics. The implications for your investment portfolio will be huge.’
I mean, markets always continue their current trend unabated, especially since financial markets are purely linear environments . . . right!?!? So, why not set your target for 1,000,000 rather than 100,000 based upon the exact same thesis?
And, while another widely read author on Seeking Alpha, who has been bearish for the last year and a half, did not exactly turn bullish, he certainly took a major step towards the old claim that we have entered a ‘new paradigm:’
‘This idea of a “Goldilocks” backdrop characterized by solid growth but subdued inflation has become so ubiquitous that it’s being treated not so much as a way of explaining the current state of affairs but rather as a theory about how the world is going to work for the foreseeable future.’
Don’t get me wrong, I think there’s some truth to the idea that the old models don’t work anymore . . .
And, despite his recognition that the old models no longer work, he then proceeded to explain why those old models should still be given significant weight, despite their admittedly clear lack of efficacy.

This post was published at GoldSeek on Monday, 27 November 2017.

The Results of Financialization – Part III

THE BIG REVERSAL
After three and half decades the global economy has now entered a three and half year period of slow rotational change which will likely be seen in future years as the “Great Reversal”.
DEBT + DEMOGRAPHICS + DISRUPTION = DEFLATION
We are leaving an era which as witnessed unprecedented global debt growth, work force demographics and the emergence of profoundly disruptive technologies. These trends through globalization, labor arbitrage, and oversupply have coupled to deliver slow inflation, disinflation and even deflation in various areas of the world.
What we have experienced during this era on a global basis is:
A decline in real interest rates (which have been a prime supporter of asset prices), A drop in real labor earnings in advanced economies, and, A meteoric rise in inequality within countries alongside a drop in inequality between them.

This post was published at GoldSeek on 5 November 2017.

How Many Hours Americans Need To Work To Pay Their Mortgage

When it comes to the cost of living in cities, a general rule of thumb is that housing prices are much higher in the country’s economic and population hubs, especially in the cities along the coasts.
As Visual Capitalist’s Jeff Desjardins notes, particularly in recent years, prices have been pushed sky-high in places like New York City or San Francisco through a combination of limited supply of new homes, increasing demand, shifting demographics, and government regulations.
PUTTING IT INTO PERSPECTIVE Today’s visualization from HowMuch.net applies a common denominator to compare 97 of the biggest cities in the United States. Using a measure of median household income against the average mortgage payment in each city, we get a gauge of how many hours must be worked each month just to pay down the house.
The visualization uses data from the U. S. Census for household income and Zillow for median home listing price, while calculating mortgage payments based on a standard 30-year term.

This post was published at Zero Hedge on Oct 19, 2017.

The Tale Of Two Americas – Urban Rise, Rural Demise, & The Rationale To Hyper-Monetize

Authored by Chris Hamilton via Econimica blog,
(The following was written as an outline for a potential book. To this point no publisher has shown interest and time and funds have run out.)
America is in the midst of an ongoing and accelerating shift in demographics and population growth. These trends, long in place, are at a tipping point that are simultaneously driving urban economic growth (plus associated asset bubbles) and rural economic declines (plus associated asset collapses). The spin up and spin down are mutually interconnected, the result of movement in a zero sum game. But for select regions (and rural America in general), there is a surging quantity of sellers and a dwindling quantity and quality of buyers that will result in the primary asset of most Americans, their home, transitioning from an asset to an outright liability.
Many will point to record stock market valuations as an indicator of positive economic and/or business activity to refute my claims. Instead, I argue it is the Federal Reserve and federal government policies, in place as a quasi “life support” for the negatively affected regions and rural America at large, that are driving the asset valuation explosions of equities (chart below, representing all stocks publicly traded in the US) and urban housing. I will outline why the situation in the affected regions will only get worse and thus the Fed believes its hands are tied. Why any amount of normalization will only induce localized collapses across much of the nation. The total market capitalization ($ value) of the Wilshire has nearly doubled the acknowledged “bubbles” of 2000 and 2008 and is likely to continue rising further, precisely due to the worsening issues I detail below.

This post was published at Zero Hedge on Oct 9, 2017.

The NFL Is Now The Least Popular Professional Sports League In America

While mainstream media outlets like the New York Times have continued to assert that the dip in NFL ratings that began last season is in no way connected to the controversy surrounding players kneeling during the National Anthem, yet another poll has reaffirmed what many football fans have suspected for weeks: The protests have transformed the NFL into the least popular professional sports league in America.
From the end of August to the end of September, the favorable ratings for the NFL have dropped from 57% to 44%, and it has the highest unfavorable rating – 40 percent – of any big sport, according to the Winston Group survey provided exclusively to Secrets.
Worse for football, which was already seeing lower TV ratings and empty stadium seats, the month of protests and calls from President Trump for fans to boycott the league or ‘walk out’ of games if they see players taking a knee has apparently turned off men aged 34-54 – one of the league’s most important demographics and a troubling sign that the league isn’t in touch with its fans. The Winston Poll from the Washington-based Winston Group found that the attitude of those fans went from an August rating of 73 percent favorable and 19 percent unfavorable to 42 percent favorable and 47 percent unfavorable, a remarkable turn against the sport.

This post was published at Zero Hedge on Oct 8, 2017.

The EU Needs A Three-Child Policy – And China Should Pay For It!

Authored by Andrew Korybko via Oriental Review,
The EU’s policy of ‘replacement migration’ is an economic failure and threatens to undermine China’s New Silk Road strategy for Europe by diminishing the continent’s much-needed consumer market potential, which should thereby serve as an impetus for Beijing to consider investing in social programs there as a means of encouraging replacement fertility for the EU’s citizens.
The Roots Of ‘Replacement Migration’
The EU’s liberal-progressive ruling elite aided and abetted the Migrant Crisis as a means of encouraging ‘replacement migration’ to compensate for their falling populations, naively believing in the dogma of their bloc’s de-facto ‘Cultural Marxist’ ideology that civilizationally dissimilar migrants will seamlessly adapt to their new host societies and quickly become productive citizens. They expected that the relatively impoverished and in many cases largely uneducated ‘New Europeans’ from Africa, the Mideast, and South Asia who have uncontrollably flooded into Europe would have no problem climbing the ladder of socio-economic success in one day replacing their dying European counterparts in all professional spheres.
It should also be reminded in this vein that these ‘New Europeans’ didn’t just appear out of nowhere, but are the product of the unipolar wars that created them in the first place and the NGO-assisted human trafficking networks that then imported these ‘Weapons of Mass Migration’ to Europe, both activities of which the EU elite have been complicit in. As could have been anticipated by any objective observer not under the influence of ‘Cultural Marxism’, this irresponsible multi-layered policy has totally failed in its presumed economic intentions, though it’s cynically succeeded in planting the seeds for a massive socio-cultural reengineering of some leading European countries’ demographics.

This post was published at Zero Hedge on Sep 25, 2017.

Finnish Politician Tells Women ‘Be Patriotic, Have More Babies’ As Birth Rates Crashes To 150 Year Lows

For years, the Japanese government has been desperately trying to encourage its citizenry to have more sex to combat the collapsing demographics the nation faces, trying guilt (blasting their “sexual apathy”) and punishment (imposing a “handsome tax” to make lief more even for ugly men), to no avail.
Now it appears Finland is suffering a similar fate. As Bloomberg reports, Finland, a first-rate place in which to be a mother, has registered the lowest number of newborns in nearly 150 years.

The birth rate has been falling steadily since the start of the decade, and there’s little to suggest a reversal in the trend.
Demographics are a concern across the developed world, of course. But they are particularly problematic for countries with a generous welfare state, since they endanger its long-term survival.

This post was published at Zero Hedge on Sep 20, 2017.

The Most Important Paper Of The Next Decade

Whenever I tell people the next big crisis will come from inflation, not deflation, the looks of disgust are worse than when someone says Justin Bieber’s music is not that bad. And when I try to tell them that the true bubble is in fixed income, not stocks, they look at me as if I just slipped the Biebs into the next-up slot on the Spotify playlist.
‘Where will the growth come from?’ they often ask or, ‘demographics will keep inflation subdued for another generation,’ they retort.
And I must admit, I have always had difficulty articulating how inflation would manifest. Usually, I would go with the classic, ‘throughout the millennia, governments have always resorted to inflating their way out of debt, and this time will prove no exception.’
But that has always left a sour taste in the mouths of the deflationistas who cannot imagine anything but falling prices and moribund growth. These investors need a theory why the trend will change. And it has always been difficult to slap any research in front of them as the Lacy Hunt deflation crowd seems to have the market cornered with their articulate forecasts that the trends of the last 30 years will continue ad infimum, and that interest rates are going to zero throughout the entire developed world.

This post was published at Zero Hedge on Sep 11, 2017.

Systemic Uncertainty, Meet Fragility

That’s the problem with fragility: everything looks fine on the surface until a crisis applies pressure. Then the whole rickety contraption collapses in a heap..
This doubt is fact-based; as the number of retirees swells, as Medicare costs soar ever higher and the number of full-time jobs paying into Social Security/ Medicare stagnates, these pay-as-you-go programs break down; Social Security is already paying out billions more than it collects from employers and employees. Life is inherently uncertain, but systems that were once considered certainties have increasingly become uncertain. Social Security is one example; recent polls reflect widespread doubts among Millennials and Gen-Xers that there will be any Social Security benefits left for them by the time they reach retirement age. Uncertainty is one thing, fragility is another. The socio-economic systems we rely on are also becoming increasingly fragile and prone to failure, for an entirely different set of reasons than those driving uncertainty. Changing fundamentals drive uncertainty. The nation’s demographics and stagnant wages for the bottom 95% are extremely unfavorable for pay-as-you-go programs like Social Security and Medicare; their future is uncertain because the inputs and outputs are changing.

This post was published at Charles Hugh Smith on TUESDAY, AUGUST 29, 2017.

Visualizing The Diversity Of The Tech Industry

With the recent leak of the ‘Google Manifesto’ and the maelstrom of media backlash that followed, Visual Capitalist’s Jeff Desjardins notes that it seems that concerns around diversity in the technology industry have finally reached a boiling point.
Today’s infographic from Information is Beautiful breaks down the demographics of 23 major tech companies, based on statistics from 2016. It also provides comparisons to the composition of the U. S. population in general, the top 50 U. S. companies, Congress, and Fortune 500 CEOs.

This post was published at Zero Hedge on Aug 15, 2017.

Drugs & Demographics – National Tragedy, But Where From?

Authored by Jeffrey Snider via Alhambra Investment Partners,
In 1928, the fertility rate of American females (aged 15 to 44) was 93.8 per 100,000. By 1931, the first year of full Great Depression and collapse, the rate had declined to 84.6. It would bottom out, unsurprisingly, around 1933 and 1935 and the end of the contraction part of the depression. But what made that economic event ‘great’ wasn’t just that one forward piece. It was instead the fact that it lingered on and on for more than a full decade.
As such, fertility rates in America would remain subdued until the later years of WWII. It was one reason economist Alvin Hansen conjured his (incorrect) secular stagnation thesis. Without the demographic tailwind, he surmised, growth would be exceedingly difficult as a baseline matter.
But what if it was the other way around? What if growth came first and then came the babies, as they did following WWII and the restoration of economic function after sixteen years of pent up demand and persisting unwanted pessimism (plus more than a little stabilization to the global monetary system).
Fertility rates during the Baby Boomer years, defined as 1946 through 1964, were an impressive and wholly unexpected 113.4.

This post was published at Zero Hedge on Aug 11, 2017.

Here’s The Real Reason The Fed Is Making Absurd Monetary Decisions

John Mauldin has often written about the Fed’s abysmal track record in managing the economy. Here Lacy Hunt and Van Hoisington of Hoisington Investment Management explain the reasons for the Fed’s consistently poor track record.
They start by considering the Fed’s ‘dual mandate,’ which sets ‘the goals of maximum employment, stable prices and moderate long-term interest rates.’ (And yes, that is actually three goals, not two.)
But a problem arises, the authors note, ‘because considerable time elapses between the implementation of the monetary actions designed to follow the mandate and when the impact of those actions take effect on broader business conditions.’
The time lag can easily be three years or longer, with the result that policy changes often end up being pro-rather than countercyclical.
To make matters even worse, ‘the economic risks from adherence to this dual mandate are now much greater than historically due to the economy’s extreme over-indebtedness, poor demographics and a fragile global economy.’

This post was published at Zero Hedge on Jul 31, 2017.

Outside the Box Hoisington Quarterly Review and Outlook, Second Quarter 2017

I have often written about the Fed’s abysmal track record in managing the economy. In today’s Outside the Box, Lacy Hunt and Van Hoisington of Hoisington Investment Management give us an in-depth tutorial on the reasons for the Fed’s consistently poor record.
They start by considering the Fed’s ‘dual mandate,’ which sets ‘the goals of maximum employment, stable prices and moderate long-term interest rates.’ (And yes, that is actually three goals, not two.) But a problem arises, the authors note, ‘because considerable time elapses between the implementation of the monetary actions designed to follow the mandate and when the impact of those actions take effect on broader business conditions.’ The time lag can easily be three years or longer, with the result that policy changes often end up being pro- rather than countercyclical. To make matters even worse, ‘the economic risks from adherence to this dual mandate are now much greater than historically due to the economy’s extreme over-indebtedness, poor demographics and a fragile global economy.’
In the real world, the dual mandate can break down. Now, the Fed is tightening over concerns about wage pressure from a low level of unemployment, yet inflation has run consistently below the Fed’s 2% target for the past year or more. Enter the Phillips curve.

This post was published at Mauldin Economics on JULY 26, 2017.

David Rosenberg: “This Is The Single Most Important Thing For The Market Over The Next Decade”

Several years ago, Gluskin Sheff’s superstar economist (previously at Merrill), David Rosenberg (in)famously flipped from bear to bull, predicting what amounts to a victory for the Fed: a jump in (wage) inflation, a burst in economic growth, and an overall selloff in that most deflation-dependent asset, the US Treasury. None of those happened, and while we (gently) mocked Rosie’s transformation at the time, recently Rosenberg himself admitted that our skepticism was accurate, when he reverted to his bearish bias over the past year, predicting that deflation would end up winning after all.
Today, in his latest market musings chartpack, we present the key reasons why Rosenberg has never been more convinced that all those calling for an end to the secular bond bull market, are wrong and why despite the Fed’s best intentions to create the impression that the global economy is stabilizing, what is about to be unleashed on the global economy is at least 5 years of accelerating deflationary pressures.
As the main catalysts for his gloomy outlook, Rosenberg lists the obvious ones, debt and deflation, but by far the most important factor that prompted Rosenberg to revert to the “dark side”, the one about which Rosie says “nothing is more important than this if you are looking at what will fundamentally influence the financial markets for the next decade-plus”… is demographics.
“The first of the boomers turned 70 this past year, that 80 million proverbial pig-in-the-python in North America, and 1.5 million will be doing so each year for the next fifteen years.”
That fact, Rosenberg believes, will be the single most important driver of returns over the next decade.
Below, he explains why those seeking to understand market moves and inflationary forces over the coming ten years, should first and foremost focus on demographics. Everything else will follow.

This post was published at Zero Hedge on Jul 22, 2017.

Incoming MASSIVE Quantitative Tightening

No, the “risk” from “quantitative tightening” is not The Fed.
Yes, the reduction of their balance sheet will be a tightening.
But you’re a fool if you think this is the only — or even the largest source of such tightening over the next number of years — 10 to 15 years from now, in fact and starting effectively now.
There is in fact, as of right now, $5.486 trillion worth of “tightening” that will take place between now and 2034 and it will probably start in permanent form within the next two years.
Where is it?
Social Security and Medicare.
The system holds bonds as a buffer between demographics. This is a good thing, by the way, because there are baby booms and baby busts in any economy. By holding bonds during “boom” times the system has the assets to pay liabilities during busts.

This post was published at Market-Ticker on 2017-07-21.