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I Present To You The First Probable US Commercial Real Estate Insolvency Of Many To Come

Reggie Middleton's picture




 

In this post I will present to BoomBustBlog subscribers evidence of the next GGP. For those who don't know the GGP story, it was the nation's 2nd largest

All payingBoomBustBlog subscribers are prompted to download theSample Property Valuationdocument which highlghts the dramatic discrepancies between actual cash flow valuations and the valuation that our subject company is carrying its portfolio inventory at. This document must be read in conjunction with theCashflows and Debt Preliminary Analysis in order to get a fuller picture. Extensive portfolio analysis and online valuation models will be available to professional and institutionalBoomBustBlog subscribersin order to assist in calculating timing and severity in regards to insolvency.

mall REIT, whom I went short on in 11/07 while it had:

  • an investment grade rating (What Is More Valuable, The Opinion Of A Major Rating Agency Or The Opinion Of A Blog?),
  • buy recommendations from all the major investment banks that covered it (Did Reggie Middleton, a Blogger at BoomBustBlog, Best Wall Streets Best of the Best?),
  • a CFO issuing nonsense press releases contradicting my research (BoomBustBlog.com's answer to GGP's latest press release). This press release and my response to it outlines a situation that is eerily similar to that of the subject company that I'm presenting tomy subscriberstoday, to wit:
    • We analyzed GGP's financial position and its expected funds from operations (FFO) to check the company's ability to meet its debt obligations -

      With GGP'soptimisticassumptions of a cap rate of 7.5% and NOI of $365 mn and $415 mn for 2008 and 2009, respectively, (based on its historical growth rate of 5%) valuation for GGP's specific properties (on which debt is due for repayment in 2008 and 2009) comes to around $4.9 bn and $5.5 bn for 2008 and 2009, respectively. Based on LTV of 50% (which looks quite reasonable amid the current turbulence in the global credit markets) GGP should be able to raise $2.4 bn and $2.8 bn in 2008 and 2009, respectively. However, GGP's debt due for repayment in 2008 and 2009, respectively, is approximately $2.6 bn and $3.3 bn, translating into respective short-falls of about $188 mn and $577 mn (as shown below), even under the over-optimistic case presented by the company. Surprisingly, the company's financing requirement (as included in its press release) totally ignores the funding requirement for capital improvement and redevelopment programs required for sustained and long-term growth.

       
 
         
1 $1,246
Capital Improvements $542 $195 GGP's press release
failed to allocate any funds for growth, development, and
expansion
New Developments $1,040 $466
Total Financing
Required
$2,621 $3,344 $5,063 $5,251
Shortfall from
Re-financing
$188 $577 $2,769 $2,792 Even using the
extremely optimistic numbers of the press release, GGP falls short of the
mark!!!

 

    • However, we believe that GGP's assumption of NOI growth of 5% for 2008 and 2009 is unrealistic in view of the softness in the U.S
      commercial real estate market, which has already started to experience the ripple impacts of sub-prime crisis. The (now) highly probable US
      recession, along with deteriorating macro-economic conditions, would make operating environment extremely difficult for commercial real
      estate companies like GGP.

Well, I outlined the fall of commercial real estate in general (September of 2007) and the collapse of General Growth Properties in particular (November 2007) in illustrative detail for both subscribers and the general public:

  1. Will the commercial real estate market fall? Of course it will.
  2. Do you remember when I said Commercial Real Estate was sure to fall?
  3. The Commercial Real Estate Crash Cometh, and I know who is leading the way!
  4. Generally Negative Growth in General Growth Properties - GGP Part II
  5. General Growth Properties & the Commercial Real Estate Crash, pt III - The Story Gets Worse
  6. BoomBustBlog.com’s answer to GGP’s latest press releaseandAnother GGP update coming… (among over 700 pages of analysis, review the January 2008 archives or search for “GGP” for more research).

You see, we had an obvious and evident CRE bubble, particularly in retail and mall properties...

This bubble popped, as most may remember, but we never had the opportunity to have the economic cycle complete itself for the powers that be tried their darndest to defy gravity. How, you ask?

  1. A public-private partnership of misdirection allowed the popping bubble to be disguised. See The Conundrum of Commercial Real Estate Stocks: In a CRE "Near Depression", Why Are REIT Shares Still So High and Which Ones to Short?
  2. Money follows an economic "Circle of Life".This Circle Was Purposely Disrupted By Multiple Central Banks Worldwide!!!

  3. Even with the "kicking the can down the road mentality", fundamental and macro realities are bound to rear their heads. See The True Cause Of The 2008 Market Crash Looks Like Its About To Rear Its Ugly Head Again, With A Vengeance and then see Reggie Middleton ON CNBC's Fast Money Discussing Hopium in Real Estate

 Reggie Middleton on CNBC's Fast Money Discussing Hopium in Real Estate

For those of you who desire a long form explanation of the matters at hand in video form...

Reggie Middleton discusses the fall of commercial real estate in the US

Yes, It’s on FIRE!

 In regards to the subject company at hand and proffered to my subscribers as a dramatically distressed concern, I offer you the following excerpts the document recently posted for download...

Valuation of properties

Observation  of Company Reported Valuations

 

Property Name

Acquired Date

Gross Value (as reported by company)

Net Value

Debt

Debt/Net Value

XXX

2003

78,195,000

62,378,000

34,340,000

55.05%

XXX

1998

100,654,000

67,872,000

150,000,000

221%

XXX

2003

92,082,000

70,830,000

85,727,000

121.03%

XXX

2005

185,530,000

157,460,000

151,608,000

96.28%

 

BoomBustBlog Valuation of Properties

 

Property Name

Gross Value (as reported by company)

Debt as per B/S

PV, Net Operating Inc. & Sale Price less cost of sales

PV, CFAT and Sales proceed after Taxes

XXX

78,195,000

34,340,000

(478,503)

(34,000,392)

XXX

100,654,000

150,000,000

171,982,661

17,402,660

XXX

92,082,000

85,727,000

38,948,777

(44,819,724)

XXX

185,530,000

151,608,000

165,892,248

11,805,610

 

Key Observations:

  • Properties acquired in 2003 have negative valuation (after deduction of loan)
  • These properties have lower rentals and lesser operating margins against assumed operating expense of $13.99 per square feet. In other words,they are running negative cash flow, which upon capitalization actually gives them a negative valuation once sales expenses, mortgages and encumbrances are taken into consideration.
  • The properties acquired in 2003 have valuations that are DRAMATICALLY OVERSTATED on the company’s balance sheet. The subject company carries the first property listed on its books at $78,195,000 with a Loan to Net Value of 55%. We have the property valued at ZERO (actually, it has a negative valuation). The 3rd property listed is carried at $92,082,000 where we valued it at significantly less than half of that.
  • Needless to say, these properties' mortgages are substantially underwater.

Extensive portfolio analysis and online valuation models will be available to professional and institutionalBoomBustBlog subscribersin order to assist in calculating timing and severity in regards to insolvency. Other BoomBustBlog links of interest to those interest in the weakening of the CRE space...

The Greatest Risk To Retail Commercial Real Estate Is? Sovereign Debt! Macro Headwinds! Popping Bubbles! Busted Banks! No, It's The Internet!

Prepare For CRE Crash And Burn Marks At A Shopping Mall Near You

Real Estate Cap Rate (Yield) Expanision in Europe

Reggie Middleton Featured in Property EU, one of Europes leading real estate publications

Those who wish to download the full article in PDF format can do so here:Reggie Middleton on Stagflation, Sovereign Debt and the Potential for bank Failure at the ING ACADEMY-v2.

Are The Ultra Conservative Dutch Immune To Pan-European Pandemic Contagion? Are You Safe During An Earthquake Because You Keep Your Shoes Tied Snugly?

 

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Fri, 01/27/2012 - 12:46 | 2102738 the grateful un...
the grateful unemployed's picture

are other states like California going to follow the lead and disband redevelopment agencies? i see they have done this but San Diego is still going ahead with a new convention center, entertainment complex, sports stadium. the local news was crowing about the high dollar value in SDs commercial RE investment. they also expect to get a lot of new business when the military downsizes and transfers more ships to the Pacific. it's all good from where they are sitting.

Fri, 01/27/2012 - 11:25 | 2102498 lynnybee
lynnybee's picture

I just sent this to my realtor .    I gave her an earful of all the education & info I've gotten from both Reggie & Zerohedge.    Her eyes are open now & is really getting into the charts & graphs & Reggies blogs & writings.      He's super !   He's beyond super !  & bless his heart for the great reading .    P.S.   Reggie, any advice for me on selling my condo ?      six price reductions & i can't even give it away !  

Fri, 01/27/2012 - 11:05 | 2102431 Xkwisetly Paneful
Xkwisetly Paneful's picture

Reggie you are the best guy on this site.

They always only remember the losers.

I realize it is off topic but one thing I think being overlooked in the current economic malaise,

is the lack of purchasing power of recent college graduates thanks to the insane debt levels.

College debt in the US passed $1trillion last year which is more than credit card debt,

and about 8.5% of total first mortgage residential  debt or a boatload of vanished purchasing power.

 

 

Fri, 01/27/2012 - 10:32 | 2102333 falak pema
falak pema's picture

That line up of RM and friends reminds me of The Platters and their greatest hits : 

Only you, the great pretender, the magic touch, smoke gets in your eyes...

You sing em all RM, especially the "smoky song" with Apple pie. Kudos to the Platters and to you...

Rumor had it that the Platters gal, knew them all, like a plate of old mash potatoes. Just saying...

'You're the devil in disguise...Jezebel!...

Fri, 01/27/2012 - 10:17 | 2102280 hotkarlandthecl...
hotkarlandtheclevelandsteamers's picture

Reggie,

I think you do some nice work but for the love of god will you come out and give a mea culpa on the whole GOOG/AAPL call you made.  In two years AAPL's cash balance will be more than the market cap when you started bashing it.  Just be a man and admit you blew one it happens to all of us.

Thu, 01/26/2012 - 23:21 | 2101597 Georgesblog
Georgesblog's picture

Commercial Real Estate was one of the hot topics on the talk radio programs that I worked on, 5 years ago. It's an issue that's been hiding in the shadows that I talked about in today's "The Daily Climb". 

http://thedailyclimb.wordpress.com/

Thu, 01/26/2012 - 18:02 | 2100990 SAT 800
SAT 800's picture

If you keep one retiree from investing in an over-hyped, underfunded, commercial REIT; you will be a blessing to your fellow man; and I suspect you will do better than that.

Thu, 01/26/2012 - 15:49 | 2100619 Lost My Shorts
Lost My Shorts's picture

Hey Reg ... how's that AAPL short treating you?  Just wondering.

Thu, 01/26/2012 - 18:07 | 2101000 SAT 800
SAT 800's picture

About as well as your hero Tyler;s BAC short is treating him; duh.

Fri, 01/27/2012 - 11:07 | 2102443 Xkwisetly Paneful
Xkwisetly Paneful's picture

Don't waste the time.

90% of the self loathing doomsdayers around here were touting silver long after QE or it's impetus upwards ceased.

Greatest poster fade site on earth, I just wish the predictions were summarized conveniently somewhere.

Thu, 01/26/2012 - 17:27 | 2100896 KingPin 999
KingPin 999's picture

Hey Reggie Apple had a billion more in profit last quarter than google had in revenue. Why you pick on Apple is beyond me. Google's business strategy is to give away a shitty OS and spam the crap out of it. 5 years from now they will probably have 70% market share and no real profit to show for it. What a brilliant business strategy.

Of course that market share prediction depends on how much they have to pay apple and microsoft for stealing their technology. Microsoft already gets $7 for every android phone sold, i bet apple will get more in the end. So microsoft and apple will make more money per android phone than google ever will. Google is a really smart company?

 

 

Fri, 01/27/2012 - 10:47 | 2102385 Christophe2
Christophe2's picture

Regarding Apple and it's 0.1 trillion $ in cash reserves, I can't help but wonder what their return on investment is for all that money.  More significantly, I can't help but wonder if it hasn't been leveraged 100X in off-balance-sheet investment vehicles a-la-Corzine...  A 2% return on 10 trillion$ is 200 billion$ / year (and is equal to most of Apple's profits for the year, I believe), but at what risk?

=> Apple's incredible cash reserves are illegal and should have become dividends (according to SEC rules, apparently), so what is their purpose?  I cannot believe it isn't machiavelian and extremely deceitful.

Tue, 07/10/2012 - 01:22 | 2601203 jaffa
jaffa's picture

In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich and poor, a significant fraction of the total wealth is in the form of land and buildings. Thanks a lot.
Regards,
Mesa Real Estate

Thu, 01/26/2012 - 15:43 | 2100601 israhole
israhole's picture

AAREPNY?  African-American Real Estate Professionals of NY.

LMAO!!!  

Thu, 01/26/2012 - 19:18 | 2101168 lincolnsteffens
lincolnsteffens's picture

Wow!!! That was a really insightful comment, youzahole!

Thu, 01/26/2012 - 15:37 | 2100579 Bob Sacamano
Bob Sacamano's picture

RM is not articulate or bright.....and constantly self promoting.  ZH needs to delete him.

Thu, 01/26/2012 - 18:04 | 2100994 11b40
11b40's picture

Vote up, down.

ZH Deletes Bob Sacaman.

Thu, 01/26/2012 - 16:01 | 2100652 CompassionateFascist
CompassionateFascist's picture

Token negro.

Fri, 01/27/2012 - 12:28 | 2102699 AbruptlyKawaii
AbruptlyKawaii's picture

say that to his face loser

Fri, 01/27/2012 - 12:07 | 2102637 falak pema
falak pema's picture

much better than token fascist negro hater.

Thu, 01/26/2012 - 15:13 | 2100489 Dermasolarapate...
Dermasolarapaterraphatrima's picture

 

 

On January 15 we discussed the Canadian housing bubble and many people fell off their rockers as if this was some sort of spectacular revelation.  Reading through the comments on the Canadian bubble post is very reminiscent of 2007 in California where the “not in my back yard” arguments dominated the discussion.  The nature of this housing bubble is global and the collapse of markets across the globe will have wide ranging impacts that are yet to be felt.

 

 

http://www.doctorhousingbubble.com/

Thu, 01/26/2012 - 15:01 | 2100452 williambanzai7
williambanzai7's picture

Do you have the chart tying this into the Mayan calendar ;-)

Thu, 01/26/2012 - 14:11 | 2100252 New American Re...
New American Revolution's picture

Reggie, your eyes in the picture are looking straight at the camera.   Congratulations!   What discipline.   Keep up the good work.

Thu, 01/26/2012 - 13:58 | 2100192 DymanicDoug
DymanicDoug's picture

Internet only biz model...down with RE box's....applies to "higher" education also...21st century the end of "facilitys"??

Thu, 01/26/2012 - 13:46 | 2100136 supermirage
supermirage's picture

let me say again 

Thu, 01/26/2012 - 13:46 | 2100129 supermirage
supermirage's picture

Such bad writing in the first paragraph, the content loses credibility.

Thu, 01/26/2012 - 17:42 | 2100929 ebworthen
ebworthen's picture

supermirage - two blank posts, followed by a critical one, followed by an unfinished one (below), don't help credibility either.

Thu, 01/26/2012 - 17:24 | 2100889 Reggie Middleton
Reggie Middleton's picture

I doubt you would know if the content loses credibility. How's the math below it? Didn't even bother to review it, did you? This is an investment opinion post, not a journalistic piece. I have limited time to post things for free and I choose to direct most of that time in the posting as much raw content as possible. Editing comes in a far second. Now that you know that to be the case, if you are more concerned with run-on sentences than you are about REIT's with a substantial amount of their portfolio underwater being stated on the balance sheet at multiples of actual cash flow value, then you know my posts are not the place for you. There, now we should not have to read these comments from you any more, eh?

Mon, 01/30/2012 - 15:02 | 2110387 STS813
STS813's picture

Reggie- I find it puzzling that someone would focus on the gramatical aspect of your post more than the message, as you are spot-on in your analysis.  Before relating my opinion on the CRE space, I would like to first provide credibility for my support of your work and my opinions.  From 2003 to 2009, I was a CRE investment sales professional.  Based in Houston, I brokered office and industrial assets, with a sub-specialty in medical office buildings.  My team and I transacted approximately $750MM in total asset value during that period.  Furthermore, I was the lead underwriter for the team.  Spanning from "mom & pop" to institutional quality portfolios, I analyzed/underwrote an estimated $1.5Bn in commercial real estate.  

Although 2007 was the pinnacle of my CRE career, I could not stomach selling compressed CAP rate investments to individuals.  For the most part, these individuals had very little understanding about CRE investing.  Due to my integrity and morals, I turned away from the listing side of the business in the latter part of 2007 and focused on buyer-rep deals.  As a buyer's rep, I was able to help my clients purchase properties correctly.  My direction was to purchase properties at a CAP of >/= 9% (unless there was a compelling story), never put any less than 25% down and only seek 10-year debt.  To note, my position on financing was constant during my career.  Even if I sold a deal on a compressed CAP, 10-year debt with a 75% LTV was always my minimum recommendation.  To date, not a single individual or group is under water on an asset purchased through me.

I called 2008 the year of two hurricanes, Ike and Lehman.  Upon the collapse, I devoted my time to studying what happened and how to survive in an industry that died along with Lehman.  When TARP passed, banks had a free pass and were not discounting REO assets.  Thus, I knew that the CRE market would take at least two years to recover.  Prices needed to fall and TARP ensured that there was no chance of this happening until 2012.  My assumption may be wrong; however, I believe 2012 is the beginning of a perfect storm in CRE, which will build momentum through 2018.

To say the least, this year and next will be the most interesting to watch unfold in the CRE space.  The reason I believe this to be true is that 2002/2003 10-year loans will intersect the nonsensical 2007 5-year loans.  When someone can borrow on a 90% LTV, sub-4% rate for five years, they are only setting themselves-up for massive failures and defaults.  Although not being able to recall the exact numbers I estimated in 2009, nearly $1Trn in CMBS loans will mature over the next couple of years.  This doesn't account for Life Insurance loans either, which was the preferred financing vehicle in 2002/2003.  Unless politicians and banks are able to facilitate another "extend and pretend", mark-to-market will be the only way to receive refinancing dollars.

In August 2009, I left CRE and joined the financial industry.  Until recently, I was affiliated with a major wirehouse and my firm did not allow us to sell Private REITs; though, even if they were allowable, I wouldn't have touched them with a 10-foot pole.  Having moved to the independent channel, I am able to sell private REITs to clients.  Now that private REIT wholesalers come knocking on my door, I would say the 10-foot pole is now more like a 100-foot pole, for reasons described by the following.

Institutional underwriting didn't make sense to me during my CRE career.  After recently being reintroduced to their underwriting, I was shocked to find that their 10-year DCF models have drifted into a land of fairytales and unicorns.  From what I've discovered, REITs are currently using even more smoke and mirrors to support buying 6% to 7.5% ProForma CAP rate deals.  Whereas REITs are utilizing 10-year DCF models to evaluate projects; they are using 3 to 5-year assumptions within 10-year DCF models.  This move is equivilent to putting lipstick on a pig, in my opinion.  

Temporarily, REITs have been successful with bandaids through underwriting tricks.  If CRE can weather the 2002/2003 loans intersecting the 2007 loans this year and next, we are setting ourselves up for an even greater bubble that will start showing stress in 2015.  If there's doubt, simply pull the SEC filings on some of the private REITs.  Many of them have a bulk of their loans rolling from 2015 to 2018.  Unless the lending market is well healed by then, the RTC-like days that should have started in 2009 will most likely begin to emerge in 2015.

In October, I contacted a friend of mine with intimate knowledge on the private REIT sector.  Not only did he confirm my worries regarding the outlook for CRE due to REIT underwriting, he stated that 99.9% of the investment community is oblivious to this mounting situation.  Reason being, investors and analysts only evaluate the REITs and not the derivative; the real estate.  

It is imperative that more people (like you) pull back the curtain, expose the problems and work towards a solution.  Unfortunately, I believe our voices will fall on deaf ears and these looming issues will spark the next CRE crash.  If you are one of the bottom feeders who were upset in not getting an RTC-like opportunity, it is my opinion that you will get your buying opportunity sooner than later.

Fri, 01/27/2012 - 11:51 | 2102571 francis_sawyer
francis_sawyer's picture

Good piece of work Reggie...

All I can add is that Anthony Deering (former Rouse), probably made the move of a lifetime for himself and former Rouse shareholders (the ones who were smart enough to know that it was the end of the line at that time)...

I grew up in Columbia, Md. so I knew a lot of those folks...

I always kind of wondered about this though...

http://news.google.com/newspapers?nid=1320&dat=19900825&id=P0tWAAAAIBAJ&sjid=QuoDAAAAIBAJ&pg=4000,8206651

 

Thu, 01/26/2012 - 19:13 | 2101156 Melin
Melin's picture

I wrote you an impassioned plea once to let me provide free pre-posting help.  There's no reason to let typos and other vexing problems persist even if your analyses are brilliant. It's not of primary importance to get the grammar, diction, etc. correct but it is distracting when problems persist.   

I didn't send it tho.  Thought it might offend you. Plus, I'm trying to be a good Capitalist and not offer free services.

Thu, 01/26/2012 - 19:20 | 2101172 Reggie Middleton
Reggie Middleton's picture

Proofread the pieces and send them to me via email - reggie at boombustblog. It's not as easy at it sounds since my blog uses different html tags than zerohedge, hence many of the formatting issues.

Thu, 01/26/2012 - 23:20 | 2101596 StychoKiller
StychoKiller's picture

sed -e "s/<reggieTag>/<ZeroTag>/g" <input.html >output.html

Repeat as necessary for each tag that needs to be modified (assuming you're using Linux/Unix -- Windoze?  Bwahahaha!)

Thu, 01/26/2012 - 22:16 | 2101518 JeffB
JeffB's picture

"my blog uses different html tags than zerohedge, hence many of the formatting issues."

I've found a nice little Firefox extension that works well on a lot of web pages to make them much more readable. It works well for a lot of ZeroHedge pages. It's a simple one button click to make pages more readable:

Enjoy Reading .1

 

Thu, 01/26/2012 - 13:47 | 2100114 supermirage
supermirage's picture

 

 

 

Thu, 01/26/2012 - 13:47 | 2100100 supermirage
supermirage's picture

 

 

Thu, 01/26/2012 - 13:35 | 2100075 boeing747
boeing747's picture

I know GGP (general growth properties) which manges EastRidge Mall in San Jose.

Thu, 01/26/2012 - 13:14 | 2099976 ebworthen
ebworthen's picture

Brick and Mortar is going the way of the USPS.

What incentive do companies have to rent space they have to fill with employees, then customers who present litigation risk?

So much more profitable to put up an Internet store front and send everything UPS/Fed Ex.

Fewer returns, less liability, lower overhead, and no concerns about regional strengths/weaknesses.

Thu, 01/26/2012 - 13:10 | 2099959 LFMayor
LFMayor's picture

Those are the worst dressed pimps I've ever seen.  What are they, Amish or something?

Thu, 01/26/2012 - 12:59 | 2099915 falak pema
falak pema's picture

Reggie love the protective arm hug; we know who is the real boss in this line up. Kaiser Soze moment, harpooning the squid and all other minnows too. Does she sing like a night club bird out of her cage? RE is such arid stuff...like junk food, Freddie and Fanny have now made it so downgrade. 

My Tongue in cheek won't hurt your "fake it to make it" moment. You are tops. Spinning in your own field.

BTW...there is this Apple pie awaiting you somewhere on the Hedge, in a well hidden mouse trap I guess.

Can you find it? More xciting than RE! As its up, up, up.

Thu, 01/26/2012 - 12:47 | 2099880 spekulatn
spekulatn's picture

Reggie,

Any comments re: AAPL's latest quarterly report?

Thu, 01/26/2012 - 17:18 | 2100873 Reggie Middleton
Reggie Middleton's picture

I have anecdotal comments on Apple's results on my site and my Twitter feed. I haven't had a chance to post on it here because there were higher priority items in line. I should get to it sometime tomorrow.

And, yes, if its not obvious I do tire of the incessant Apple worship. Its a damn company, not a religion, a spiritual movement or a way of life. A C corporation...

Here's a question that should get the Fanbois riled up. Who's had more of a meaningful impact on the world Steve Jobs1 or Bill Gates? That's right, not many in the fight club are willing to pick fights at the level that I am. Let's dance, y'all

Fri, 01/27/2012 - 12:20 | 2102671 falak pema
falak pema's picture

point taken, not religious my self. But as a company it is doing fine in that strategic line of analysis that your fed with such brilliant analysis. You feed our hunger RM, and I'm not blaming you for that, on the contrary. So lets dance!

I have always admired Steve Jobs even when he was a heretic who had been ousted by Apple in 1985! After the Macintosh caper, world shaker!  Why? Because his whole approach was out of the box, think original, more so than Bill Gates, and he wanted a total innovation of hardware and software as his own very baby to make the individual IBM free! He managed it very well on his return with his Imac and never looked back. So my vote goes to Steve, the out of the box man, who crossed so many rivers, and did not just become big boss in ONE niche like Bill did. I don't look at BG's bottom line wealth as it means nothing to be that rich in my book. That's my perception, if you want to dance to it.

Sorry for repainting his Sistine chapel. Won't do it again, but RM asked for it!

Fri, 01/27/2012 - 14:29 | 2103230 ucsbcanuck
ucsbcanuck's picture

"Who's had more of a meaningful impact on the world Steve Jobs1 or Bill Gates?" 

That was RM's qn. And note the use of the word "WORLD". Which means developed and developing countries. The entire planet.

Agree with all you said about Steve Jobs - hey I admire the man greatly as well. But as far as meaningful impact on the world - consider this:

Why did PCs proliferate all over the world? Due to cheap clones which came into the market in the late 80s and early 90s. And what was the OS driving these cheap clones? Microsoft DOS. Followed by MS Windows

Sure, all the same as what Apple did years ago. Except that it was priced affordably for the ordinary man, not just in the US/Europe but in Lat Am, Asia, Africa. Which meant computers took off world wide.

Gates also bundled the following with MS Windows:

Excel

Word

Powerpoint

Explorer

So, as far as the ordinary man on the planet was concerned, buying a computer meant buying a cheap tool which empowered you so much more than anything Steve Jobs ever did. As a final admission of MS's ubiquity, Apple had to start including MS Word, Powerpoint and Excel with Macs. Otherwise no one was going to touch them - what's the point if I can't do my work, or look at my workmate's presentation, or read a spreadsheet?

That is BG's true impact on the planet.

A lot of people in the developed world forget that there are 5.8 bn people outside of the developed world, and that BG's products probably empowered them more than Steve Jobs ever could or did.

Even today - people forget that more than 75% of mobile phones sold world wide are "dumb" phones, because many in the world can't afford a USD 700 iPhone. If anything, Nokia ushered in the mobile revolution world wide more than Apple ever did.

Sure Steve Jobs was cool and all that. But as far as the average man in the world goes, not just developed countries, Steve J sold things that were out of his price range.

Fri, 01/27/2012 - 09:51 | 2102180 fonzannoon
fonzannoon's picture

It's amazing how many rascists there are on this site. I thought people here were more evolved. It's disgusting. Reggie regarding Apple...how could they not make money when they are paying 31 cents an hour for the product assembaly at Foxconn? As far as Bill Gates vs Steve Jobs..it comes down to charitable giving. So I don't know how you would analyze that because no one knows for sure about what Jobs gave. As far as invesntion of technology I'd say they both contributed to the mind numbing of humans fairly equally. Also I think Steve Jobs was taller so you would have to factor that in somehow. Honestly who gives a shit.

Fri, 01/27/2012 - 11:18 | 2102483 ucsbcanuck
ucsbcanuck's picture

"It's amazing how many rascists there are on this site. I thought people here were more evolved. It's disgusting. "

Not only that, it's amazing how utterly STUPID they are. Actually, that makes sense - racist bigots tend to be pretty stupid.

"As far as Bill Gates vs Steve Jobs..it comes down to charitable giving."

Billy G beat Stevie J on that one hands down then. Stevie never donated anything... oh shouldn't have said that, the cult worshippers will defend Stevie till the bitter end. Mac worshippers are like people who believed Obama gave a good SOTU speech.

"As far as invesntion of technology I'd say they both contributed to the mind numbing of humans fairly equally."

Neither of them really invented new technology. As for mind-numbing, not as much as MTV did.

"Honestly who gives a shit."

You will, when you have to put up with a rabid Mac cult worshipper who tries to force their agenda down your throat.


Fri, 01/27/2012 - 22:06 | 2104696 JeffB
JeffB's picture

The problem with Gates isn't how much he gave, but the causes he gave it to... He's big into eugenics.

http://archive.theamericanview.com/index.php?id=648

an April, 2000, $8 Million Grant to “Family Care International” to “Improve Women’s Health.” It says that among the things “FCI” is addressing around the world is “unsafe abortion.” Unsafe abortion?! That’s right. “FCI” is trying to make abortion “safe.” But “safe” for whom? Certainly not the unborn baby who is murdered by abortion.

 

THE HISTORY OF PLANNED PARENTHOOD

Planned Parenthood's Racism

Meeting of World’s Richest Names Pro-Abortion Population Control as Main Cause


The "billionaires club" meeting, according to the Times, included such notables as Bill Gates, David Rockefeller, Ted Turner, Oprah Winfrey, Warren Buffett, George Soros and Michael Bloomberg.

 

They all have a history of promoting abortion and using their vast fortunes to benefit groups like Planned Parenthood, the nation’s largest abortion business.

 

That Gates pushed the wealthy group into settling on population control as their "umbrella cause" isn’t surprising given that he outlined an ambitious project in February to reduce the world’s population by one billion, would eliminate one of out every projected nine people on the planet, or 11 percent.

 







 

Fri, 01/27/2012 - 12:30 | 2102704 fonzannoon
fonzannoon's picture

Yup. The singularity is near.

Thu, 01/26/2012 - 18:15 | 2101023 ucsbcanuck
ucsbcanuck's picture

"Who's had more of a meaningful impact on the world Steve Jobs1 or Bill Gates?"

Oh no. RM... No RM, no. Now we have to listen to how Steve Jobs started the Renaissance, painted the Sistine Chapel and then wrote Ulysses for an encore.

"And, yes, if its not obvious I do tire of the incessant Apple worship. Its a damn company, not a religion, a spiritual movement or a way of life. A C corporation..."

Agreed. Bores the hell out of me as well. 

The worst is when you have to work with a cult worshipper in a corporate environment, and it's "OMG I can't use that on a Mac" or "Oh that didn't work on the Mac version". The best one I've heard at a training session for introductory employees: Just acquired a new company, and one of the founders was a Mac cult worshipper. Some of the in-house software which he had to use wouldn't work on a Mac.

Immediately he starts whining "You guys are putting a gun to my head! You're forcing me to use a PC."

Steve Jobs was a talented businessman and entrepreneur NOT A COMPUTING PIONEER! That honour goes to people like

- Alan Turing

- Vint Cerf and Kahn (inventors of TCP/IP, not f*&king Al Gore)

- Ritchie and Kernighan (inventors of C++)

- Douglas Englebart (inventor of mouse)

- Bob Noyce and Jack Kilby (inventors of integrated circuit, winners of Nobel Prize)

- Tim Berners-Lee (World Wide Web)

- Marc Andreesen (first browser)

- Robert Metcalfe (ethernet)

- John von Neumann

Thu, 01/26/2012 - 22:14 | 2101513 StychoKiller
StychoKiller's picture

Ritchie and Kernighan (inventors of C++)

Incorrect!  Ritchie and Kernighan created C, NOT C++, which is Bjarne Stroustrup's abortive attempt at an objective programming language!  (Calling C++ an Objective language is like nailing 4 more legs on a dog and calling it an Octopus!)

Viva Eiffel, Smalltalk and Objective-C!

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