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Inflation Misconceptions Hide A Downright U-G-L-Y Real Estate Landscape! – Part 1
Here’s a quiz for you. An ages old correlation that has pretty much remained rock solid is now upon us. Real estate has been highly correlated to inflation and has acted as an inflation hedge for a very long time. This makes sense, since hard assets that both throw off income and have an actual demand for physical use (in other words, they have have intrinsic value) that hold when fiat currencies assimilate toilet paper in both value and use as input prices skyrocket. The question du jour is, “What happens when you have a glut of unused real estate supply abound in a tight credit environment, a guaranteed increase in rates AND higher input prices?”. Of course the smart people out there (in other words nearly everyone with the impetus to read BoomBustBlog) are then forced to challenge the thesis, “So is this time different? After all Reggie, you have been bearish on real estate.”
The short answer is, no this time is not different. It rarely ever – if ever – different this time. The key is the terminology. You see, many in the media are throwing around the word “inflation”, and understandably so as they see prices (particularly staples, commodity and input prices) and money injected into the system go up appreciably. The problem is that the core real assets are not only in a deflationary cycle, but in a downright depression – reference In Case You Didn’t Get The Memo, The US Is In a Real Estate Depression That Is About To Get Much Worse. How can you have inflationary input prices and deflationary real asset prices amid stagnant employment? The answer is STAGLFATION! I have been calling for stagflation since 2008, and it definitely seems as if I called it correctly. Keep in mind that this will be one of the corner stone topics discussed in the ING Real Estate Valuation seminar in Amsterdam on April 8th, which has now sold out its capacity of 250 seats -see www.seminar.ingref.com. Amsterdam is a very interesting city to have such a discussion, for the pundits there are calling for a 25% office vacancy rate at a time of increasing inflationary pressures. On top of that, they have actually called in the world’s leading real estate bear as the keynote speaker! It should be fun. I actually have an implementable solution to this mess. I wouldn’t necessarily call it light at the end of the tunnel, but it is a way of pricing, valuing and transacting in these depreciating, illiquid assets correctly. Something that is currently lacking. Let’s dig in, shall we…
Input Prices Skyrocket world wide just as Reggie Warned back in 2008, but the media mistakenly calls it “Inflation” when the word should start with an "S"!
Stagflation is the more accurate term but inflation seems to be on everyone's mind. From an economic livelihood perspective, inflation would be preferable. I will go into this further in my next post, but first let's explore the the inflation argument.
Inflationary aspects abound in the US, Europe, Asia and particularly in China. China is the exception here, for China has true inflation (not merely inflationary aspects) with increasing money supply, increasing input costs, increasing labor costs, increasing commodity prices and increasing (bubble???) real asset prices. Then again, I also believe China is in an inflationary bubble that needs to either burst or be deflated, You don’t get 30 years of growth in 3 years without breaking something. See What Are the Odds That China Will Follow 1920’s US and 1980’s Japan? and Chubble (The Unmistakeable, Yet Thoroughly Argued Chinese Bubble)...Please upgrade your browser
Choice quotes from the retailer with the most pricing power in the whole, wide world!
Inflation is “going to be serious,” Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY’s editorial board. “We’re seeing cost increases starting to come through at a pretty rapid rate.”
“Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along,” Long says. “Except for fuel costs, U.S. consumers haven’t seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory.”
Wal-Mart, for example, could have “access to any factory in any country around the globe” to mitigate the effect of inflation in the U.S., Long says.
Still, “it’s certainly going to have an impact,” Long says. “No retailer is going to be able to wish this new cost reality away. They’re not going to be able to insulate the consumer 100%.”
We also have the WSJ reporting Euro-Zone Inflation Hits 29-Month High
The euro zone’s inflation rate jumped unexpectedly to its highest level for 29 months in March, strengthening the case for the European Central Bank to raise interest rates.
To add to the above: South African Producer-Price Inflation Accelerates by More Than Expected. How about those input prices???
Of course, if the ECB raises rates, its game over for that European CRE that looks towards a 25% vacancy rate in the upcoming year according to ABN Amro. Reference the Dutch financial rag Financieel Dagblad with a rough translation courtesy of Ernst’s blog:
The number of vacant commercial and office buildings in The Netherlands will only increase the coming years. Influenced by the “new working” trend, the need for office space will drop by 10%. [New working is working at home instead of at the office, using modern communication tools, like computers, smartphones and mobile internet. The countrywide coverage of broadband (mobile) internet enables people to stay at home and do their normal day job – EL]
At this moment already 14% of the office buildings in The Netherlands is abandoned. This is stated by a report of ABN AMRO. The bank fears that in 2015 this number will be about 25%. Also a diminishing civil service is one of the causes. “These factors have a sturdy negative impact on the appraisal of Commercial Real Estate (CRE). Especially in the eyes of the large banks”, according to Erik Steinmaier, manager of Research at the CRE branch of ABN AMRO.
The increasingly serious vacancy of CRE is a millstone for financial companies and pension funds. Steinmaier estimates that banks financed in average 60% of the office buildings. This would mean that banks have for about €30 bln in CRE loans on their balance sheet. A lot of these office building are currently appraised at a too high value. It is unclear how much has to be written off in the bleak scenario of ABN AMRO. Since 2007 the value of investments of institutional investors in CRE has diminished by 15%. And according to Steinmaier the financial crisis in CRE hits silently like an assassin. “The worst has yet to come”.
Consultancy firm Twynstra Gudde that assisted in writing the ABN AMRO report states that one third of the large users of office space is planning to fit up flexible working spaces. Working at home should eventually lead to a decrease in demand for office space of 3 mln sqr meter (32.2 mln sqr feet), according to ABN AMRO. The government, using about 21% of total office space in The Netherlands, will have cutbacks up to 2.75% of the civil service labor force. Civil service currently uses 6 mln sqr meter (64.4 mln sqr feet) of office space. Especially The Hague, The Netherland’s own Washington, is hit disproportionately by these cutbacks. Vacancy of CRE in The Hague could hit the 30% mark.[…]
I am on record saying the same thing on BNR Dutch News Radio just a few months ago. That very same radio station broadcasted an interview with Maarten van Poelgeest, alderman of the city of Amsterdam, who states (summarized, again translation courtesy of Ernst’s blog):
In some areas of Amsterdam the vacancy of CRE hits the 40% mark.Of this about 60% is structural vacancy. These office buildings need a different purpose of usage, as they will probably never be rented anymore. The local government needs to change the zoning schemes for these office buildings and should turn them into homes for students or tennants that have no access to public housing, as their income is too high. A lot depends on the owner of the building, i.e. the large banks, big realtors and pension funds. They should take their losses on CRE.
I called this as far back as 2008 and just did a lecture on the issue a couple of months ago.
As we all know, the US is not one to gloat on the CRE issue. The derivatives based on CRE have actually outperformed, and if you looked at the performance of MBS and REITs, one would have thought that the US was in a real estate bull market, pre-2007. Alas, that is the nigh fraudulent representations of derivative paper traded between insiders. The truth lies in the streets, where you see bricks, mortar and dirt falling in prospective value – particularly if you have your eyes open and just look a few quarters towards the future. I have went over this in detail in Reggie Middleton ON CNBC’s Fast Money Discussing Hopium in Real Estate. It should be read by anybody who is bullish on CRE. Keep in mind that the difference between Dutch CRE and US CRE is that our central bank is much, much more adept at the extend and pretend game, while the Dutch are more on the delay and pray side of things. Look at it from an interest rate increase perspective, which is bound to happen in an inflationary environment:
Listen up people, HERE ARE THE NASTY FACTS!!!
Real estate is a highly rate sensitive asset class. Capitalization rates (the popular method of pricing real estate) is explained in Wikipedia as:
Capitalization rate (or “cap rate”) is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value.[1] The rate is calculated in a simple fashion as follows:
Without going into a CRE class, when interest rates go up, cap rates generally go up as well and the value (or cost to purchase) of the property goes down in sympathy unless the rise in interest rates is offset by a commensurate or greater rise in net operating income. Now, either everybody believes that unemployment is going to drop towards zero in an era of US austerity (reference Are the Effects of Unemployment About To Shoot Through the Roof? then see Budget Austerity: Goldman Sees Danger in US Budget Cuts – CNBC) at the same time that historically low interest rates that actually went negative are going to get lower (see the Pan-European Sovereign Debt Crisis) —- or cap rates are about to skyrocket. I’ll let you decide!
As you can see above, CRE drops in value whenever yields spike more than the + delta in NOI. Looking below, you can see that US CRE actually runs to the inverse of the 30 year Treasury.
That visual relationship is corroborated by running the statistical correlations…
The relationship is obvious and evident! In addition, we have been in a Goldilocks fantasy land for both interest rates and CRE for about 30 years. CRE culminated in the 2007 bubble pop, but was reblown by .gov policies and machinations. The same with rates. Ever hear of NEGATIVE interest rates where YOU have to PAY someone to LEND THEM MONEY!!!
So, BoomBustBloggers, where do YOU think rates are going to go from here? Up of Down??? Let’s ask Portugal or any of the other PIIGS group. I have shown, very meticulously, how Portugal can not only afford the path that they are on (record high interest rates) but the losses that will come when they restructure (default) – for all to see. I have done the same with Spain, Ireland and Greece (for subscribers only). See The Truth Behind Portugal’s Inevitable Default – Arithmetic Evidence Available Only Through BoomBustBlog followed by The Anatomy of a Portugal Default: A Graphical Step by Step Guide to the Beginning of the Largest String of Sovereign Defaults in Recent History (December 6th & 7th, 2010). Be sure to carefully and very thoroughly peruse the spreadsheet below to see the many scenarios present that show the NPV of investor losses due to haircuts and restructurings…
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Yesterday’s post takes the Portugal risk situation to the next level: Portugal Is On The Verge Of Tapping Out, UFC Style – You Knew It Was Coming, Here’s The Analysis!
Since this has turned out to be quite the lengthy post, I have chopped it up into parts. Part 2 will be forthcoming. In the mean time, anyone who wants to find out more about me can follow this link – Who is Reggie Middleton!!! and/or follow me on Twitter.
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Sell everything but PMs, and buy an old farm or orchard and learn a real trade and actually contribute to GDP. Instead of just chicken hawking others money, lets actually produce something. Sure its not glamarous, and you actually have to WORK, man that blows I know, but were not going to be left with much of a choice here soon. If youre going to survive, you better be useful and have something to provide to the society that will be left over, or youll just be seen as extra mouths to feed. All financial leeches will become just that, mouths to feed with no real input into society. Sell your businesses, your suits and Ferraris, and get to fucking work. Sucks, we all got fucked, but Im not going to let my family or other people starve...if they deserve to eat!
great VDO reggie... yo dogg
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i figure with housing interest rates fixed low and obamas gimmie gimmie 8k $$ tax credits it was at least hard to get hurt bad
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hell pick up any property right if your a first timerrrrrrrrr
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but yo i think all prices are somewhat fixed or insider traded... so society is patiently wating to find a position in a market that is free of subsidies
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and that could prove to be a bitch for some folks beyond rates and historical valuations
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the goons were promiced the world
hwy aussie dollar see saws between 0.60c USD and $1. well has in last 3 years.
if his cash takes a hit his gold goes other way.and visa versa.
now a cash / gold/ gold shares/ RE crash. well we're all doomed.
I actually favor gold stocks or mutual funds like Toqueville to GLD or gold shares. To me it eliminates the very real risk that there is little physical gold to back up the gold shares. Stocks are registered to real companies.
The best, though is physical PM's in your possession but a mix of both is not bad.
Locally Iowa farmland prices went up 25% last year.
http://blogs.desmoinesregister.com/dmr/index.php/2011/03/22/iowa-farmlan...
What is going to maintain the huge price increase in Iowa if our wise and experienced leaders decide they can't afford the ethanol subsidy. It is just another boom and bust financial favoritisim by sedicious government employees causing an unnatural flow of wealth from one boom/bust asset class to another.
Have a nice day
As the good Professor Fekete said a few years ago;" We are going to have the worst of inflation and the worst of deflation." At the time I thought one would follow the other, but couldn't see how that would work in practice. Now I can see how it all fits together. I live on the Sunshine Coast in Australia. A friend heavily involved in CRE in this state said at lunch the other day that the Sunshine Coast is the most heavily traumatised real estate market in the whole country. I see about one in ten commercial buildings up for lease or vacant. If you read the Aussie version of Shadowstats the real U1 in Australia is 7.9% and the real U6 is 13%. That gels with what I see. I have been wondering for a while how come we have a national unemployment rate around 5% when so many people seem to find it hard, or impossible, to get a job. I feel sick when I tally up the number of friends and acquaintances who are geared to the eyeballs in real estate and who are just keeping their heads above water, thinking it will turn around very soon as it usually does! We are sitting in cash and gold shares but it's lonely when all around us are still thinking it's different here in OZ.
I guess the good Professor Fekete said it a few years before I did and distilled it down to one sentence. I concur.
"We are sitting in cash and gold shares but it's lonely when all around us are still thinking it's different here in OZ".
What happens when your cash takes a 40% haircut and the Gold Shares don't pan out (i.e. share default due to nonexisistent physical)... Then what?
First of all, real estate prices are still double what they were in 2000. That is a damn healthy appreciation rate. That said, most people buy a lot of stuff they don't need on credit. Housing is no exception. Since the 1960's the incredible growth in personal wealth and indebted negative wealth has grown at an UNNATURAL and unsustainable rate culminating in the no-money-down, non-credit-worthy indoctrinated consumer trying to get out of impossible-to-pay-off debt. What we have currently is the beginning of the deleveraging of the ENTIRE EARTH.
What has changed is population and the ability of that population to consume more at a parabolic rate. Therefore in developed countries the expansion of credit has caused dramatic over consumption of real estate/infrastructure which does not serve a human need but a human want. In underdeveloped countries with immense populations you have a tremendous need for ever more food, clothing, infrastructure, dwellings et al for human need.
The end result is the beginning of the end of over development back to need based societies throughout the world. Ergo (aren't I just so brilliant!!) people don't need two or three houses, a TV and or computer in every room, a car for each household member, long distance luxury vacations and all the dream stuff that can't be paid off on credit. This results in a dramatic over supply of housing and commercialspace thus lowering prices. The other dynamic is underdeveloped ( all relative ) nations are taking up the slack in demand in the West for ever dwindling natural resources creating price appreciation in the materials of needed not merely wanted resources.There you have my thinking of Western World real estate devaluation and Entire World inflation of shrinking supply of the necessities of life.
Expect more real estate both real and nominal devaluation until oversupply is ended. Expect anything consumed for necessities to increase in real and nominal valuation. I predict that in terms of value = gold, real estate will fall as much as 30%-50% from here. In terms of fiat currency, prices depend solely on the amount of hopium currency created or destroyed. The culprits are all human nature characteristics of consumption, hoarding, greed, ego, power and the greatest is procreation. Solution = chastity belts or permanent condom installation after the first child. A partial solution is realistic artificial personal sex robots. I vote for the hot robot.
Reggie, did I do good or do I get junked?
Cap rates on completed transactions seem to have come down a little bit at the end of 2010, but that is on diminished NOI and low transaction volume. People who don't have to sell, aren't selling. The information I see does not seem to be indicative of any improving circumstances. I personally believe many debtors and creditors are still extending and pretending, hoping for better days, because there is no other way to survive intact right now.
As always Reggie, a great presentation. Thanks.
~Misstrial
I enjoyed this article even though the information is painful. I look around here in the U.S. and I see vacant, often brand new retail and office space empty everywhere. It is possible and even probable to have general inflation and specific deflation at the same time. The real estate bubble caused a large oversupply of homes and commercial properties. It was based on scenarios of never ending demand and appreciation based on the latest data from several years of bubble. So, now as things revert to the mean and lower there is now a huge supply of property with insufficient demand. Other excellent pieces on ZH document home supplies that will take years to liquidate, even with virtually no new construction. I expect the same in commercial property.
So, the Fed and central banks can temporarily maintain artificially low rates and large supplies of money but it cannot really generate the demand necessary to lift prices. It's an ugly game to try and create such strong inflation that it overcomes deflationary pricing due to minimal demand. My gut tells me that homes will have to become the price of cars in order to stimulate sufficient demand. People will have to be able to afford more than one home. That in turn requires disposable income as governments are trying to reduce it with higher taxes to balance the books.
Governments loved the bubble as property taxes (a really stupid method of taxation) rose with the bubble. With no real extra demand for services, tax revenues skyrocketed from all sources. Programs expanded to rosey never ending revenue projections. The bubble bursts for everyone.
I myself am debating whether or not to buy a home. The key factors are employment (I've had two layoffs in two years) and more germain to the discussion here, future inflationary and interest rate calculations. I am one who thinks that economically speaking renting has most the advantages. It's one salient disadvantage is that rents can rise and rise rapidly under inflationary pressure. A fixed rate homeloan does not. In hyperinflation you get your home for free as the money drops to zero in value. Renters will not be so lucky barring rent laws. So, my dilemma is guessing what interest rates will do, compared to prices (they USUALLY correlate inversely) over the next six months to two years. I qualified for a 4% 15 year loan which is probably a once in a lifetime rate. However, homes may depreciate another 10% this year. If I wait six months rates could easily double given a few economic events. Tough call. Advice and forecasts welcome.
With respect, it's not a tough call. If interest rates go up drastically, or even a little, the price of houses will come down even faster. How are you going to service your mortgage if you get laid off again? Be patient and wait. I promise you will be able to buy a house, comfortably, in the future as long as you can stay employed. Only buy if you can get a property at 40-50% less than current market value AND, you can rent it out to cover your mortgage costs in the event you lose your job. Remember, be patient.
Oh, and remember the old saying; 'Location, location, location.' Property in desirable positions will maintain it's value better.
Good advice. I thought many of the same things, especially location. Being a landlord sucks these days, though. Laws favor renters and I hear the horror stories of my landlord buddies.
Since my orignal post I did my taxes and it looks like Uncle Sam will get most of my down payment in taxes, so it's pretty much off the table. Being single with no significant tax deductions and a good middle class income sucks.
I could trade PM's for a down payment but I'd rather hold on to them. My instincts tell me a second crash is coming and maybe we will hit the discounts you mention. Thanks for the advice.
Freedom... , you want to own a home to live in located in the area where you want to live to be the community with the most pro-education electorate: well funded schools, low taxes and happy teachers. Find that and you will have a place where home values are the most resilient and "sticky". People who want a good public education for their kids will always seek out those districts and there is where you will find the most stable pricing and long term rising value in the housing market.
I've seen this recipe work for a long time as it is the backbone of Location X3.
Reggie, you're pretty much right on. If you go to any college level real estate appraisal text and learn to derive 'cap rates' you will find that they are basically risk adjusted returns. Cap rates have risen mildly to severely in the last 4 years depending on the asset class (Class A core hirise with great credit tenants still commands mid 5 caps, subburban office with substantial vacancies is not even valued on a cap rate basis). Investment real estate prices act just like bond prices when rates are low and begin to rise...you lose your ass if you own, and, when refi time comes, well then the next round of the CMBS hurt locker begins. Without jobs and across the board economic expansion my opinion is that things in the real estate market will get worse before they get better. Until the government stop delivering truckloads of ZIRP money to the TBTF banks and starts getting in the hands of the small businessperson, things won't change. If congress wants a real revolution, I can't think of a better way to get one started than to create a banana republic. Viva la bananas!
Seems to me the price pressures cited are transient, based largely on speculators gambling with cheap money. Rates go up, that will vanish. The depressionary influences are Far more stable.
pity no-one is as bullish on real estate as this guy any more
http://www.youtube.com/watch?v=cMVvTl83gWg
While I am definitely pessimistic towards real estate, there will be pockets and segments that in fact perform well. The analysis here is pithy and over generalizing and, frankly, amateur-ish. There's a lot out there to read up on before trying to correlate T-bills with the NCREIF Index. For starters, NCREIF data is quarterly and based on a combination of appraisals and realized proceeds. NAREIT might be better basis for correlation analysis. Since you are comparing a quarterly set of data to a daily set (I assume of course you use T-bill daily data), any near term and medium term analysis is bunk.
It would be useful of course to break down real estate into segments and talk about what is vulnerable and not because the truth is one could argue that well located land will in fact perform well as an inflation hedge. It's got a very low carrying cost, is easy to own and doesn't depreciate. To boot, figure out some way to extract income and you've got yourself an interesting little hiding place while interest rates normalize.......
Don't do it gringo.
"well located land" and "low carrying cost" are usually not found in the same space-time coordinate. I'm beginning to think obscurity is the best hedge asset to "own". The proud nails will get hammered, the bent nails will be pulled and disposed. Unless you're a hammer, it's best to be a minor knot somewhere in the woodwork.
The best I've been able to find is deeply discounted 15-30 AC heavily wooded on county highway 1 hr. outside core of medium SMSA with well and septic in place... but the the "house" will have to go.
It is semi-obscure.
Dunno if it is worth it yet.
Jim Sinclair's latest advice is to do just that.
How will this type of stagflation affect precious metal prices?
You're going to have to ask the manipulators for the answer on that one. Call HSBC, Chase, COMEX, LBMA, or the CFTC. I'm sure they respond with your answer in a prompt and professional manner.
Up, up and away! PM's are finite. Product of the printing press is not. Many more dollars, same amount of gold/silver.....
Printed dollars are finite. Zeroes are not!
we are in a Depression because we have Stagflation
inflation? russell 2000 skyrockets, climbing from 340 to 850 in 24 months... is that inflation? or should the RUT be measured in constant dollars (deflation)?
eureka! inflation (rising prices) divided by deflation (deflating dollars) equals stagflation (goldilocks equilibrium). fuck i'm smart.
Maybe we should open our doors to immigration from Japan as they are more educated that our present immigrants. Plus they may have some cash to purchase our vacant houses. Just a thought.
Wadayamean present immigrants?? We've got lots in my non-urban enviro. that are from former Soviet Republics. I think the Japanese would be great not only because they are well educated but used to taking and accepting orders ( they don't want no stinking trouble). The rest of the latest crop of immigrants in the last 20 years have a lot more going for them in the practical intelligence side of the brain than most people born here whose practical sense has atrophied.
Double true.
yes, they will be spending their USTs. We can hire them as border guards.
Great post, and Amsterdam has so many wonderful "alternative" uses for commercial space. Food for thought.
ABN Food for Thought
From the ABN Amro website:
Risk management
As a bank, we can choose who we want to do business with – and we use that privilege to investigate how our customers handle social and ethical issues and environmental risks when considering loan applications. We review customers, loans and transactions on the basis of our policies and guidelines.
Sector policies
At ABN AMRO, we have designed sustainability policies for the various sectors in which the bank operates, e.g. forestry, mining, oil and gas, palm oil, defense industry, gambling, the sex industry and “Dutch-style” coffee shops. In addition, we have developed a policy framework for social and ethical country risks, and issued a number of statements – on the protection of human rights for instance.
http://www.abnamro.com/en/about-abn-amro/sustainability/riskmanagement/index.html
Yeah, and don't forget ABN Amro was nationalized in 2008 and what's left of it is fully owned by the Dutch gubbermint. For the time being, they have to be playing by the rules.
All the dead CRE in major eurabian cities is being converted into mosques and madrasas. Even catholic/christian temples with no attendees are now being retrofitted with a nice minaret and a huge boombox blasting out prayers in arabic.
Go long burkha manufacturers.
They should have brought in the Mexicans. They are wonderful workers, and share the same (Christian) root culture. They would have revitalized Europe. Alas, a lot of European cities are now all but doomed.
You haven't spent much time in the Mexican colonias in California or texas. I know. You're still alive.
And knew about it since 2006,so what?FED continuead to fix prices on real estate and this is same picture in all of the countries,its simple,because its pirymed which gonna crash,the prices was pumped up to rip byside products from house/officers holders-municipal taxes,you forgot what kind of reveniew is it and when house of 100k pushed into 400k territory you strating bills with 400$ per month and not 100$,thats why housing was excellent business idea where the governments is the long term renter ripping "rent" municipal taxes,water and electricity bills-most people idiots and do not understand that this crazy idea to sell you stones at bullied prices just to keep you pay them ong term rent-remember,on mortgage you pay around 3house prices for 25-30 years mortgage.FED keeping in parralel with Abama prices of houses fixed,just not to loose biggest reveniews they have from this business,by the way-ask governments where the all taxes going that their budgets deficits going up???Because huge disconnection between voters and govenments its a gap where there is black uncontrolled hole which can not be controlled.What about NL-this is a country with most corrupted banking allianz,its bought all lawyers firms and if you have a "Case" with a bank-forget it,nearest available advocate will be just in 2months frame,also,it will be looser case,because they have bank representetives in each firm,there is may be 10lawyers firms in all NL.ABN AMRO bank is one of the most corrupted banks i had ever be in,i had with them suit case,but after i paid to the Dutch lawyers which pretended to work as double unite and so it was 450Euro per hour,one was "specialist" in stocks and another general lawyer,both looked in case and it was clear that one stock specialist is absolutly stupid one,as he claimed:"The ABN AMRO thinking that you criminal(russian mafia then was very popular,later because every one became mafia-they stoped talking russians,you could be american too called by dutch russian mafia) or they are unbelievably stupid".Second suggestion was right and before they came into it we spent 2 meetings where then MR.Jong had of the Rotterdam branches was confirmed liying openly and had stollen one of my FX trades 350k$ per one week.I paid 7000Euro for two meetings and 3faxes and 2letters,i said :"Stop",i had see future of no chance to recover my assets,but i lost less that could,they threaten me to sell assets on open market 24hours-morons,untill lawyer with who i re-writed like two monthes ahead feeling bad things,interrupted and asked mr.Jong to feel place(because he gave me 24hour note of assets liquidation or closing portfolio based on margin,but without any margin call).The problem is with dutch is that they watching you as client in the bank,traders even openly ugly laughing over you activities not understanding what in reality you do or see,but as soon as you making 80% year over year(1998-2000) they starting to trade in parallel opened on your name account which liquidates immeduately as any conspiciouse rise.Imaging,it took 2weeks investigation as this bank could not find why they could not execute Nortel Networks telecom at open market price-stock with about few billions trading daily volumes.This bank actually was sold partly off to oher banks and probably left some basic devision which is under most three big NL banks,i would be more speculative based on their resear,speculative up on falling office prices and crash in commercial real astated sooner rather that later.
Paragraphs were invented for a reason.
Agreed; white space has meaning.
Punctuation and spelling help, too.
Yeah, but you get the general idea.
actually i don't. i would like to know more, too. i hear Rotterdam is very beautiful this time of year....
Real Estate & Inflation
Would have expected something on average home values in oz. of gold, or CRB purchasing power or time.
Or how 30 years ago, one could go from a middle class dwelling in a US city to a palace in Rio, now that same US dwelling is good for a retirement dump in a favella.
Perhaps BRL is too volatile a currency, how about CHF it never moves- nope, same story.
Reggie's Part 2 perhaps?
Americans whose main asset is their home are getting royally screwed in a globalized economy.
Reggie, you're almost right. Here in socialist Europe as you guys like to call it, wages are protected by the inflation index. That means when inflation goes up, wages need to go up to. IT'S THE LAW!
In Januari we got 2.4% and we already know we'll get at least the same increase in jan. 2012.
The problem in the US is that the unions got kicked in the ass and sold out the workers.
It's actually your beloved President Reagan who to away those union powers.
All over Azia, wages also went up. But not in the US.
Sure, we all suffer from inflation, but here our governments help us at least a bit with it by ordering manditary wage increases.
So the real problem in the US is the lack of Union power. The stuff you guys where told was evil.
And how Evil are they now that US wages don't go up while inflation rockets?
America needs another revolution, or if you guys wait to long, you'll lose it all.
You're right about an issue in the US being the lack of union power (gov unions being right behind private unions but now experiencing their .gov right hand), but even if that wasn't the issue, they'd still be raising wages according to a purposefully and dramatically understated inflationary index.
In the U.S., there's not many places to run from confiscation.
Be damn sure when you're within the confines of the crumbling modern roman empire you will pay Caesar what is Caesars.
Yeah, sure. The government and unions can just mandate prosperity. That always works out well. /sarc off
America may indeed need another revolution, but it sure as hell won't be to have government mandated pay raises.