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Meet Wall Street: Your New Landlord

Tyler Durden's picture




 

Blackstone Group appears to be trying to oligopolize the business of renting single-family homes in the U.S.. As Bloomberg reports, after the housing crash left more than 7 million foreclosed homes in its wake, the investment firm has spent more than $7.8 billion purchasing about 41,000 single-family homes for rental conversion. The world's largest private equity firm has quickly become the largest landlord (of rental homes) in the U.S. and in October, Blackstone offered the first-ever "rental-home-backed" security on Wall Street. One has to wonder if this was the plan all along?

 

 

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Fri, 12/20/2013 - 10:14 | 4263525 Incubus
Incubus's picture

Ah, Jesus christ.  When are we just going to drag these motherfuckers out onto the streets and just hang them by their nuts from the power lines?

Fri, 12/20/2013 - 10:26 | 4263568 Manthong
Manthong's picture

Only 41,000?

Geez, I should think the brain trust there could have least gotten to six figures.

Wake up, kids...  

Fri, 12/20/2013 - 10:41 | 4263621 Beam Me Up Scotty
Beam Me Up Scotty's picture

Wrong. The biggest landlord is Uncle Sam. Ever hear of property taxes? You are renting from .gov. Try not paying them and see how fast you get evicted!!

Fri, 12/20/2013 - 10:48 | 4263644 Richard Chesler
Richard Chesler's picture

To Blackstone renters:

Trash that shit!

Fri, 12/20/2013 - 11:07 | 4263713 akarc
akarc's picture

whoops

Fri, 12/20/2013 - 12:47 | 4264013 hedgeless_horseman
hedgeless_horseman's picture

 

 

Wall Street investors were not the only ones to see the wisdom of becoming landlords...

 

Thu, 05/06/2010 - 08:45 | Link to Comment hedgeless_horseman

I repeat, all of this funny business in the markets should drive thoughtful investors to disintermediation:

1. In finance, withdrawal of funds from intermediary financial institutions, such as banks and savings and loan associations, in order to invest them directly.

2. Generally, removing the middleman or intermediary.

Of course, disintermediation is bad for governments selling debt and all financial firms, but often very good for small businesses needing capital. I am suprised to not read more about disintermediation here, and on similiar blogs, apart from advice to buy gold and take posession. Micro lending in your own community, angel investing, and even certain types of municipal debt offerings are good topics for consideration.

Disintermediation, bitches!!!!!

How can you implement it in your portfolio, business, and life?

    

Thu, 05/06/2010 - 09:53 | Link to Comment hedgeless_horseman

Landlord/landlady + tenant - real estate agent = disintermediation

 

    

Sat, 08/14/2010 - 23:11 | Link to Comment hedgeless_horseman

I do not advocate inaction, only disintermediation, that is the removal
of banks as intermediaries to investment. As an example, one can buy a
property with cash, and without an agent, and be a landlord directly. 
It used to be the case that one needed to be very, very wealthy before
really needing the services of a bank.

 

Fri, 09/14/2012 - 12:12 | Link to Comment hedgeless_horseman

I agree.  Disintermediate.  Be a land lord.

Fri, 12/20/2013 - 12:51 | 4264072 DaveyJones
DaveyJones's picture

"the 'services' of a bank"

I think I finally understand how an oxymoron works

Fri, 12/20/2013 - 13:09 | 4264166 eatthebanksters
eatthebanksters's picture

So, millions lose their homes...no bailout for them by the government/taxpayer....the big banks who made the loans didn't do workouts because of moral hazard - imagine that, TBTF banks being concerend about moral hazard....and in the end the TBTF banks get bailed out by the government/taxpayer and make HUGE FUCKING PROFITS from foreclosed property.  

While I'm a conservative I do have a big problem with this scenario...there never should have been a bailout of those corrupt motherfuckers and their big banks....if there was to be a bailout it would have been better to support the masses rather than a small number of Wall Street types.

Fuck Obama and his banker buddies.

Fri, 12/20/2013 - 13:27 | 4264229 Manthong
Manthong's picture

"Try not paying them and see how fast you get evicted!!"

hmm.. but if everybody protested by just STOPPING paying everything..

they would be put in their places real fast.

 how do you spell "up-ended balance sheet"?

Fri, 12/20/2013 - 14:16 | 4264537 economicmorphine
economicmorphine's picture

You still don't get it, do you Manthong.  I know 41,000 homes that taxes are going to be paid on.  In fact, the actual number is in the millions.  Close to 1 out of 3 US homes are owned free and clear.  Not everybody is a deadbeat.  Not everybody is a stupid fucking idiot who believes everything he is told.  Not everybody is a sheep.  The fact that you are doesn't change the fact that millions of us aren't.  

Fri, 12/20/2013 - 15:44 | 4264963 James_Cole
James_Cole's picture

If i had a nickel for everyone I've come across banking on rents skyrocketing.. invitation homes just seems like another on a long list of financial schemes we'll be hearing about collapsing in a few years. 

Fri, 12/20/2013 - 16:41 | 4265173 Manthong
Manthong's picture

cool.. me too, but I still think the way to f' m is to just stop playing the game.

Fri, 12/20/2013 - 13:27 | 4264243 DaveyJones
DaveyJones's picture

fuck them all

This is a long time coming, an incredibly corrupt system where, in the end it really doesn't matter just who is in control, the corrupt political leaders or the corrupt industry /financial leaders. It takes both to make it happen and it takes the punishment of both to correct. History bears this out - with currencies and debt but just about everything else. We are nearing a breaking point and this time it's a global, mathematical, and raw resource scale never experienced in human history. All I can think is that I owe my children more.  

Fri, 12/20/2013 - 13:36 | 4264291 ultraticum
ultraticum's picture

A 5% cap rate wouldn't work for you and I.  But it will work for the money jobber.  Why?  Because if this 5% carry trade goes south, they don't stand to lose a dime.  Pitchforks!

Fri, 12/20/2013 - 15:10 | 4264758 ajax
ajax's picture

 

 

"One has to wonder if this was the plan all along?"  It wasn't.  What a ridiculous postulation. Blackstone vampires are simple opportunists, end of fucking story.  They'll be renting tents to the poorest of the middle class soon enough, and port-a-cabins as well - anything for a buck.

Fri, 12/20/2013 - 11:04 | 4263714 akarc
akarc's picture

To Blackstone renters. Get a tent and let the motherfuckers beg people to rent.

Fri, 12/20/2013 - 12:02 | 4263906 Ban KKiller
Ban KKiller's picture

If you have time and are a true subversive or just a true "conservative" or wish to be a deadbeat...

Challenge your "servicer" of your mortgage to validate the debt under your state's laws. Where is the note? How was it acquired? With what consideration? Purchased from whom? When? Where? Who holds the note now? 

Learn your state's Uniform Commercial Code regarding: Enforcement of a note, rights of a note holder, transfer of a note, holder in due course, etc. Most of you know about securitization and how "they" never performed all of the assignments within those those PSAs. 

When servicer can not provide any true validation of a debt ( do you accept a letter saying "because we say so"?) get a set of balls and quit paying your mortgage. 

I did all this and am living in my house for free. Not my fault, can not find  any party with standing to foreclose on me. I do pay taxes and insurance of course. 

Fuck the banks over by making them prove chain of title, ownership and possession. I like being an enemy of the banks. 

Fri, 12/20/2013 - 12:11 | 4263939 patb
patb's picture

Good for you.

 

I took the other side of the coin, I bought a house all up with the previous owner having inherited it from his father.

Title search was Farmer, developer, Owner, Son.  

But, I encourage people to challenge title.

Fri, 12/20/2013 - 12:11 | 4263940 patb
patb's picture

Good for you.

 

I took the other side of the coin, I bought a house all up with the previous owner having inherited it from his father.

Title search was Farmer, developer, Owner, Son.  

But, I encourage people to challenge title.

Fri, 12/20/2013 - 14:02 | 4264447 akarc
akarc's picture

Unless you live in a state like Florida wghere the Supreme court said, oh no we will have no more of that. 

Fri, 12/20/2013 - 12:38 | 4264036 Seer
Seer's picture

One has to find a place to locate tents, which can be problematic.  But, yeah, I was going to suggest that parents invite their kids back home: expecting that it only need be for a short period of time, long enough to tank the likes of Blackstone.

Fri, 12/20/2013 - 14:19 | 4264554 economicmorphine
economicmorphine's picture

You understand that they're securitizing it right?  You know what that means, right?  Chances are they've already offloaded the risk.  Hell, if you're playing EFTs, you're probably buying the very securities you are encouraging others to trash.  Idi-fuckin-its.

Fri, 12/20/2013 - 13:04 | 4264129 TBT or not TBT
TBT or not TBT's picture

Yeah, go all, like, "securitize this, bitchez!"

Fri, 12/20/2013 - 13:14 | 4264184 Rukeysers Ghost
Rukeysers Ghost's picture

There won't be any Blackstone renters. These clowns have scooped up properties for nothing at the auction, but they are not suitable for renting. These 3-4 bedroom single family homes come with big overhead like property taxes, heating/cooling bills and upkeep that will price them out of the market for the average shlub working 3 jobs to put food on the table. Also there is the added drag of maintaining unrented units.

 

Slumlording is a tough racket.

Fri, 12/20/2013 - 14:19 | 4264566 economicmorphine
economicmorphine's picture

Slumlording is the easiest racket there is.  Don't improve it at all and the government will place trash in it and pay you top of the market.  My God, what the hell has happened to this site?

Mon, 12/23/2013 - 01:39 | 4270108 Promethus
Promethus's picture

In one of the affluent neighborhoods in my area formerly $400K McMansions were turned into section 8 housing complete with marble tiles, swimming pool and three car garage. Park a family of scum bags in, let the taxpaying neighbors pay the rent and pay for the damages done by the FSA, watch the taxpaying neighbors houses lose value, buy more distressed properties, rent to more scum bag, rinse and repeat. Welcome to Mr. Obama's neighborhood.

Fri, 12/20/2013 - 10:50 | 4263647 Ghordius
Ghordius's picture

aren't property taxes local? or is Uncle Sam not the nick for the US federal gov anymore?

Fri, 12/20/2013 - 11:07 | 4263722 Beam Me Up Scotty
Beam Me Up Scotty's picture

You local .gov is nothing more than a suction cup on the tenticle of Uncle Sam.

Fri, 12/20/2013 - 11:32 | 4263783 Osmium
Osmium's picture

Brilliant analogy, well done. +100

Fri, 12/20/2013 - 12:41 | 4264039 Seer
Seer's picture

Check out the Chamber of Commerce web (it's international).

Fri, 12/20/2013 - 13:05 | 4264144 TBT or not TBT
TBT or not TBT's picture

Some local governments are like those dual automatic breast pump systems, not just the one lonely suction cup.

Fri, 12/20/2013 - 11:29 | 4263772 sleigher
sleigher's picture

http://www.hateriarch.com/IRS/DUNS_NUMBER.pdf

 

DUNS numbers.  They are all incorporated under the federal gov.  Local or not, they own it.  

Fri, 12/20/2013 - 15:20 | 4264848 SilverDOG
SilverDOG's picture

Beam Me Up Scotty

 

 

Some states may still allow allodial tax/title payment; removing future tax upon property....

if their is -0-, zero debt.

Fri, 12/20/2013 - 12:50 | 4264066 VD
VD's picture

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

--Jefferson

Fri, 12/20/2013 - 10:33 | 4263592 Jumbotron
Jumbotron's picture

Of course this was the plan all along.  Securitize EVERYTHING !

And if you can't make money on MBS anymore......because everyone has to rent.....well.....it's a no-brainer now, isn't it ?

And soon enough......the Fed will be buying this shit asset as well as MBS's.

Fucking hang these bankers now !!!

Fri, 12/20/2013 - 10:52 | 4263659 MonsterBox
MonsterBox's picture

maybe.   more likely the usual "Never let a crisis go to waste" meme

Fri, 12/20/2013 - 12:26 | 4264001 cynicalskeptic
cynicalskeptic's picture

You're missing the larger picture.

'The Plan' is a revival of Feudalism - where the masses are serfs serving their 'betters', their lords and masters.  All the freedoms hard won since the Magna Carta are being reversed as peopel are loaded with debt and put into defacto indentured servitude.  

Even if earning 6 figures you're screwed - expected to work 60-80 hours a week, don't EVER take all your vacation and even when you do be available 24/7 and be perepared to get laid off at 50 and never again earn what you had been - replaced by a younger cheaper wageslave.

When 'money' no longer represents the stored value of labor, created through the expenditure of time and effort and creation/addition of 'value' but is an ethereal entity that can be created at will by bankers and government, the value of labor and work goes to zero (and is treated that way).   

Fri, 12/20/2013 - 12:52 | 4264080 Seer
Seer's picture

I don't buy the "it's the plan" angle so much as it's just the natural sequence of events given the reality of a lack of growth due to insufficient resources (all a foreseeable outcome from a "plan" of grow-or-die [perpetual growth on a finite planet]).

If one is not in total control (pretty hard to do) then one isn't the master, and, therefore, is the slave... (everyone has to serve somebody)

"Even if earning 6 figures you're screwed - expected to work 60-80 hours a week, don't EVER take all your vacation and even when you do be available 24/7 and be perepared to get laid off at 50 and never again earn what you had been - replaced by a younger cheaper wageslave."

Do you realize that the MAJORITY of humans on the planet can't even fathom any of this?  There are 750 million people in India living on $0.50/day: 2/3 of the world's population lives on $3/day or less (my wife grew up in such a place).

WE have the power to declare what is of value.  At any time we can totally up-end TPTB; BUT, know this: the outcome will only ever more closely resemble the norm, what it's like for the majority of humans on the planet (and as we contiued to deplete our stash of resources it can ONLY go in this direction, lest, of course, we have some large-scale die-off [and that doesn't sound like much of a plan either]).

Fri, 12/20/2013 - 13:37 | 4264272 SDShack
SDShack's picture

Oh, it's THE plan alright. The only thing you have to realize is TPTB meet the textbook definition of a sociopath. Once you understand what a sociopath is, you understand what their plans are. Make no mistake about it. The NWO will be a New Feudal System. That was the sociopath world order throughout history because their very nature demands it. The only exception to this world history is the very brief period of real democracy that is rapidly ending now. History is rhyming. Plan accordingly.

Fri, 12/20/2013 - 14:24 | 4264590 economicmorphine
economicmorphine's picture

It's not the plan.  The plan is simply to win the game using whatever tools are at one's disposal.  I imagine the bankers are having a good laugh at how incredibly fucking stupid some of you are.  You don't have to go into debt you know.  That's a personal decision.  Right now, there are tens of thousands of homes available from coast to coast for less than the cost of a mid sized sedan.  Here's a thought.  Stop paying top dollar for everything.  Stop trying to one up your neighbor.  PLAY THE  GAME TO WIN and you just might win.  You may win.  You may not.  Either way, it beats the hell out of sitting around whining about how unfair the evil banksters are.  If you think the banksters are evil, stop enriching them.  It's really that fucking simple.

Fri, 12/20/2013 - 14:53 | 4264703 MachoMan
MachoMan's picture

It's more complicated than that, but you've got the vast majority correct...  you can opt out, but the problem is that this is largely "defensive" in nature and you just end up in a mode of maintaining...  the ability to compete and take away their spoils through business endeavors is largely an impossible avenue.

Fri, 12/20/2013 - 11:05 | 4263706 akarc
akarc's picture

"When are we just going to drag these motherfuckers out onto the streets and just hang them by their nuts from the power lines?"

We won't.

Fri, 12/20/2013 - 12:13 | 4263945 Bangin7GramRocks
Bangin7GramRocks's picture

Never! It didn't happen in the 30's and it won't happen now. And don't expect to see bankers in tattered suits begging for change either. They won and they have the resources to escape with all the money. Fucking assholes!

Fri, 12/20/2013 - 12:53 | 4264089 Seer
Seer's picture

Escape to where?

No, the majority (most likely ignorant of how the real world works) are just as vulnerable: really, their "wealth" is determined by otherse accepting what they have to "offer"- this can/will only last until the tide turns, and, the tide ALWAYS turns.

Fri, 12/20/2013 - 13:56 | 4264419 El Vaquero
El Vaquero's picture

Actually, in the '30s, there were several instances where a bank would forclose on farms, and the locals would all show up to the auction armed, keep out any serious bidders, bid something low, like $5, and then give the deed back to the original farmer. 

Fri, 12/20/2013 - 14:07 | 4264478 Bangin7GramRocks
Bangin7GramRocks's picture

But the monied class still escaped the depression with more assets than before. Your shotguns won't be able to resist Goldman's 60,000 man private Blackwater army equipped with tanks, artillery and drones.

Fri, 12/20/2013 - 14:14 | 4264532 El Vaquero
El Vaquero's picture

If a bunch of guys living in caves can stand up to more than what Goldman could throw at us, what makes you think that 60,000 is enough to control 315,000,000 people?  Even one percent of the US populace is a huge fucking army.  And it takes real, tangible resources to keep an army going.  Where are they going to get those resources from? 

Fri, 12/20/2013 - 12:57 | 4264104 devo
devo's picture

Never, because we'll whine about how someone else should do it, on ZH.

Fri, 12/20/2013 - 15:06 | 4264747 sgt_doom
sgt_doom's picture

The best comment is by Incubus today!

As anyone who has read my comments over the years knows, I have always attacked the Blackstone Group at every opportunity, be it their closing of refineries to drive up the price of oil, their involvement in 9/11 attacks from following the money trail, and the cached data transmission emanating from the WTC on 9/11/01, and various and assorted perfidy (like they way the Spanish-language radio stations they owned, organized several national immigration marches, which successfully knocked warrantless wiretapping off the front pages on those two occasions), etc., etc., etc.

The Blackstone Group, founded by David Rockefeller's lackey, Peter G. Peterson and co-founder, Stephen Schwartzman (a Yale Skull & Bones guy, picked for that fraternity by upperclassman, George W. Bush).

This private equity/leveraged buyout firm was begun with seed money from Rockefeller, and not too many years afterwards, Peterson and Rockefeller would create the Peterson Institute (or Peterson Institute for International Economics) whose agenda was:  the ending of Medicare/Medicaid, Social Security, the offshoring of as many American jobs as possible, and bringing America into complete adherence with the WTO's Financial Services Agreement (which that Trans-Pacific Partnership will most certainly do).

The world's telecoms are pretty much, and most conveniently, owned by the top private equity firms, Blackstone Group among them.

The Blackstone Group was the mortgage holder of record of Building 7 of the World Trade Center when it was attacked, and the Blackstone Group would later be named the coordinator of the captive insurance fund, awarded by FEMA under the Bush Administration, ostensibly to payout to the families of the victims of the WTC attacks on 9/11 (with super-shyster, Feinberg the attorney overseer --- isn't he always?).  The Blackstone Group was also the broker of record of, at that time, the fastest and largest RE deal in NYC history, the deal between NY Port Authority and the Silverstein Properties and Westfield Enterprises, the exchange of the World Trade Center between those entities.

The Blackstone Group structured that captive insurance fund like a hedge fund, and at $1 billion, who knows how much they actually earned from it?

Peterson is the ultimate douchebagger, and he established an outfit pushing austerity, within the so-called nonpartisan New America Foundation (financed by the Peterson Foundation and Pew Charitible Trusts, of course).

The head of the New America Foundation is (assuming he still is, that is) Steve Coll, who wrote a book on ExxonMobil but somehow couldn't name who the majority owner is (can you spell Rockefeller?).

Just google my signon name and Blackstone Group, and you'll find out other interesting tidbits about them.

 

Fri, 12/20/2013 - 15:16 | 4264811 sgt_doom
sgt_doom's picture

This is what happens with criminal landlords:

http://www.thestranger.com/seattle/property-management/Content?oid=18503172

 

Fri, 12/20/2013 - 15:36 | 4264936 ExpendableOne
ExpendableOne's picture

Company store (walmart), now a company house.  The add next to this post (at the moment) offers a nice townhouse for only $300k!  Slavery didn't die.  Now, back to work, the NSA (banks) are watching.

Fri, 12/20/2013 - 10:13 | 4263529 TeamDepends
TeamDepends's picture

A new derivative wrapped in a bow under the tree.  Merry Christmas!

Fri, 12/20/2013 - 10:15 | 4263532 LawsofPhysics
LawsofPhysics's picture

Do people need wages in order to pay these rents?

Fri, 12/20/2013 - 10:32 | 4263582 Whoa Dammit
Whoa Dammit's picture

Go long Section 8 vouchers LawsofPhysics.

Anyone who has a decent job will be paying those rents (but not living there).

Fri, 12/20/2013 - 10:36 | 4263584 Ghordius
Ghordius's picture

actually, in countries where homeownership is not an article of faith there are powerful interests in having decent wages on the "rentier" and financial side. so who knows, if Blackstone really becomes the "landlord of the US" it might start lobbying for less "free trade", tariffs, incentives for local industry... (don't know if /sarc or not)

further, whenever and wherever renters become a majority, renting laws become often more sensible, making renting a true functioning industry in itself

of course my words are anathema to a big chunk of the "American Dream". meanwhile the FED is only buying 35 billions mortgage-backed bonds a month, so decreasing the newest subsidy to homeownership in the tune of half a trillion per year

I'm sorry, but homeownership in the US is still one of the most government-incentivized programs of the planet. imho without all those funds since WW2, it would be at 30% max

Fri, 12/20/2013 - 10:36 | 4263600 LetThemEatRand
LetThemEatRand's picture

More likely they will start lobbying for tougher bankruptcy laws, and for laws giving landlords automatic garnishment and other rights without the usual legal process.  They never see the solution as a stronger middle class.  They don't like a strong middle class as evidenced by the last 40 years or so of systematic destruction of same.

Fri, 12/20/2013 - 10:47 | 4263636 Ghordius
Ghordius's picture

possible, yes, then they have the mentality of sharks and voltures

yet again, how big would the US middle class be without all those government subsidies, last seen at half a trillion this year? if you believe Pareto (a though and dangerous course, btw) the "natural" middle class is 20% of any population (including an upper class of 4%)

every house market I've studied where gov stays out of housing tends to have lots of renters, with real numbers which would amaze you

meanwhile if you read the complaints of ZHrs who have a house or flat that they rent out, it's a horror

note that in the eurozone we have nearly every possible mix, a true study of possibilities from the daft to the glorious. and don't get me started on the UK, which is beyond the pale, and gave you the cultural "My Home is My Castle" fixed idea

methinks renting is the new future in the US, if there is no strong inflation in the next decade

Fri, 12/20/2013 - 11:03 | 4263699 akarc
akarc's picture

"then they have the mentality of sharks and voltures"

Yepper.

Fri, 12/20/2013 - 13:50 | 4264364 SDShack
SDShack's picture

= See the definition of a sociopath

Fri, 12/20/2013 - 13:16 | 4264183 TBT or not TBT
TBT or not TBT's picture

"My home is my castle" is an explicit threat of violence to unwanted guests, which is now an alien concept to the mostly deballed serfs who still call themselves British. You defend yourself too effectively against armed robbers over there you go to prison for hard time and the robber is the victim. The real castle doctrine can be found in US red states, where the cops might complement you for your shot grouping and not even take you downtown.

Fri, 12/20/2013 - 13:02 | 4264126 Seer
Seer's picture

"They don't like a strong middle class as evidenced by the last 40 years or so of systematic destruction of same."

It's NOT a "plan."  They got where they are by having some sense of stability, "status quo."  This all is going to get out of (their) control.  Yeah, sure, "they" will pull this lever and that, but eventually they run out of energy (because folks are not contributing to it).

In addition to the FACT that this is a finite planet and that with continued/perpetual growth we were always guaranteed to hit the growth wall (from which the "middle class" was created) I would like to point out that there are only THREE states that things can be said to exist in:

1) Stasis (consider this "status quo");

2) Expanding;

3) Contracting.

Stasis is only really a brief respite between conditions/states #2 and #3.  Those later states, therefore, ARE what lies in the future.  Given the growth issue, the lack of it, I'm pretty much ruling out a future of #2, which means that we're pretty much facing #3 -contraction- and That certainly dooms the "middle class."  Since the "middle class" provides a safety buffer for TPTB I'm kind of not thinking that they're wanting it to disappear; no, what they are doing is just playing the same game they've always played and that, whether they realize it or not, the future is destined to remove the very support from underneath them: non-growth is unthinkable, therefore they have NO means of altering anything (and there are so many special interests that it's pretty futile to even try).

Fri, 12/20/2013 - 13:58 | 4264418 akarc
akarc's picture

" Yeah, sure, "they" will pull this lever and that, but eventually they run out of energy (because folks are not contributing to it)."

This thing called slavery that we have exported will come home to roost. You will contribute or die.

Fri, 12/20/2013 - 13:36 | 4264277 RSloane
RSloane's picture

Blackstone has spent about 8.5$ million on political campaign contributions since the 1990's. Expect much tougher laws for renters. 

Fri, 12/20/2013 - 11:18 | 4263744 moneybots
moneybots's picture

"if Blackstone really becomes the "landlord of the US" it might start lobbying for less "free trade", tariffs, incentives for local industry..."

 

Local industry will hire more robots.  Robots don't need a home, other than the industry.

Fri, 12/20/2013 - 12:33 | 4264023 cynicalskeptic
cynicalskeptic's picture

Wealth in a rentier focused society becomes more and more concentrated in fewer and fewer hands so you end up with fewer and fewer people able to afford enve the hovels offered for rent.  Look at Ireland and Scotland where landlords would evict tennants unable to pay rent even though those properties might then sit empty and vacant, unproductive (though in Scotland it was found that sheep coud be more profitable than tennants).

There's a reason inheritance taxes came into existence - to redistribute the concentrated wealth of the rentier European nobility.   Even see some of the estates built in the 1700's?  A ridiculous amount of money spent on the lord's residence while his tennants lived in squalor.

Fri, 12/20/2013 - 13:07 | 4264143 Seer
Seer's picture

Hey!  Don't go around promoting "death taxes!" </sarc>

In the end it really doesn't matter, as population increases will eventually overrun resource capacity.

Fri, 12/20/2013 - 13:21 | 4264217 TBT or not TBT
TBT or not TBT's picture

Most of the developed and developing world is in or ineluctably headed for severe multidecade population decline, and this got baked in while material wealth and the standard of living were rising blindingly fast, so FAIL, and FAIL.

Fri, 12/20/2013 - 13:44 | 4264340 fallout11
fallout11's picture

Even before the concept of a "death tax", the wise and astute understood the need to "wipe the slate clean" (an ancient saying dealing with debt foregiveness, btw) periodically. For example, the Pharoah and his various elites would simply be buried with their accumulated wealth, removing it from circulation and topping the tree (instant deflation). Others would hold a huge feast and celebration, and give the previous ruler's wealth away in the form of handouts, under the premise that each must forge their own way anew.
All of this was essential in economies that grew very slowly, or were essentially steady state, and tended to emphasis the long view. For example, in the middle ages those with excess wealth would invest in the construction of cathedrals, a project that would typically not even show a return on the investment in their lifetimes, but were considered a good investment all the same.

Fri, 12/20/2013 - 15:03 | 4264739 MachoMan
MachoMan's picture

The concept of debt forgiveness is dramatically more important than taxing wealth at death for the well functioning of society...  I'll also add that all those astute folks died just the same and their observations or practices don't necessarily have anything to do with what works for us nor what we should do.

Fri, 12/20/2013 - 13:38 | 4264301 SDShack
SDShack's picture

"Your family, I want to buy them.... How much for your children, your wife, your little girl?"

Fri, 12/20/2013 - 10:14 | 4263537 SWRichmond
SWRichmond's picture

One has to wonder if this was the plan all along?

A rentier society, created by Wall Street?  I'm shocked, shocked!

Fri, 12/20/2013 - 11:13 | 4263602 Jumbotron
Jumbotron's picture

It's all part of the Capitalist plan......meaning using Capitalism to create Feudalism.  Just like their ancestors.

Welcome to Prison....errrr....Feudal Planet.

Fri, 12/20/2013 - 12:19 | 4263981 Bullionaire
Bullionaire's picture

Correct.  History will note that the "Neofeudal Era" began in 1999 courtesy of Mssrs. Gramm, Leach, Bliley and Clinton.

 

Schoolkids will snigger about the name Leach...

Fri, 12/20/2013 - 13:11 | 4264168 Seer
Seer's picture

It was inevitable.  1971 is THE year to focus on: USD off of gold standard; peak of US oil production; establishign of "trade relations" with China.  This was just the apex to the parabola: we were ALWAYS on the parabola's curve (silly us in not understanding that that which goes up must come down).

Fri, 12/20/2013 - 10:52 | 4263664 putaipan
putaipan's picture

....calling henry george.

Fri, 12/20/2013 - 00:56 | 4263023 putaipan
Vote up!

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Vote down!

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and another perspective .... (includes-securitized low income rents! that's gonna work out well)...

http://www.truth-out.org/news/item/20285-the-empire-strikes-back-how-wal...

 

Fri, 12/20/2013 - 09:49 | 4263650 putaipan
Vote up!

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Vote down!

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and micheal hudson's perspective- cool yearend round up - http://podcast.3cr.org.au/pod/3CRCast-2013-12-10-93939.mp3

Fri, 12/20/2013 - 10:16 | 4263538 Shizzmoney
Shizzmoney's picture

LOL at the graph of the Blackstone owned home in Maricopa County, AZ:

http://occupywallst.org/article/1-are-still-stealing-our-homes/#.UrRPcv_...

Fri, 12/20/2013 - 10:16 | 4263539 AvoidingTaxation
AvoidingTaxation's picture

Median asking price in 2000 was less than 500USD, 750 now. No inflation here.

 

Fri, 12/20/2013 - 10:17 | 4263541 max2205
max2205's picture

If they can short themselves,  I'll pass.....two bucks says Ben ends up at Blackstone I

Fri, 12/20/2013 - 10:59 | 4263679 akarc
akarc's picture

Two bucks says he has been working for them all along.

Fri, 12/20/2013 - 10:18 | 4263547 swedish etrade baby
swedish etrade baby's picture

I read somewhere that the norwegian oilfund is investing in real estate in the U.S. 

Fri, 12/20/2013 - 10:21 | 4263552 the not so migh...
the not so mighty maximiza's picture

the rent will have to be low enough for part time workers

 

Fri, 12/20/2013 - 11:13 | 4263616 Jumbotron
Jumbotron's picture

No it won't.  You just have the government subsidize it.

Haven't you learned anything about money laundering yet ?

Step 1:  The Fed prints the money

Step 2:  The Fed buys back bad assets denominated in money

Step 3:  The Fed funnels new money to banks that have all their dirty money bought back by Fed to be cleaned.

Step 4:  Banks hold on to most of the new money.....buys up distressed properties or sells others to Blackstone.

Step 5:  Securitize Rentals because there is less money now to securitize mortgages....which they are not making because they are holding on to newly printed and clean money.

Step 6: When the RBS get dirty,.....sell to Fed

Step 7: Fed prints newly clean money

Step 8: Repeat.....ad infinitum

Fri, 12/20/2013 - 10:22 | 4263558 Payne
Payne's picture

Best rental plan so far, buy a house with no money down.  Stop making payments.  Live there for 4-8 years without making payments.

Fri, 12/20/2013 - 10:39 | 4263601 jtz5
jtz5's picture

Pay your bills.  That is the problem with this country, handout nation.  Nobody lives within their means or gives a shit if they don't pay their obligations.  Contract law is dead.

 

I'm not siding with the corporations/Wall St by any stretch (they are evil and mostly to blame), but come on, do the responsible thing.  That's a nice example you are setting for your kids.

Fri, 12/20/2013 - 10:49 | 4263641 Jumbotron
Jumbotron's picture

Pay your bills.......LOL !!!

With what money ?   You're Wal Mart job and you're McDonald's job you go to when you check out for the day at your Wal Mart job?

The capitalist system begs for you to buy shit

The banking system begs for you to get a credit card to buy shit from the capitalist system

The auto industry begs for you to get a loan to buy a car so you can drive to work in order to get your measly pay that is so low you can't pay your car loan or for the stuff you are told to buy by the capitalist system so you use your credit card the banks begged you to get.

The government begs you to go to college to get a degree so you can get a job to pay taxes that it needs so it offers you a loan to get that degree to get a job that can't pay your student loan that you needed to get a degree to get a job at Wal Mart that you need a loan to get a car to go to Wal Mart to pick up check that's not enough to pay student loan, or rent, or car loan or gas or credit card to pay for stuff that the capitalist system told you you needed to buy only at Wal Mart........because China needs your money.

There.....got it now?

Fri, 12/20/2013 - 11:12 | 4263671 akarc
akarc's picture

@JTZ5 Had it right. Pay yer bills. Teach your kids to be accountable. If we were all acountable the corporate/government alliance would not be what it is today. "We the people" allowed it and We continue to allow it. We are to blame because we do not have the balls to hold "THEM/WE" accountable! 

Fri, 12/20/2013 - 11:24 | 4263757 Jumbotron
Jumbotron's picture

Accountability is the only thing holding up the artifice that we think is the American Dream.

The best way to collapse the system is to act just like our owners.    That is to say......charge it and never pay it back.

If you are a patriot and you love your country then you have a duty to get every government assistance program you can.....even if it means that you take a job with a payscale that allows you to get Earned Income Tax Credits....which is basically the new welfare.  Which means you are drawing money from the governement and not paying one red cent in tax into the system during the year.

Go on S.S.

Go on disability

Go on Section 8

Go on SNAP

Go on W.I.C.

Go on EITC

Grab it all.   And drain the swamp.  Then after you collapse it.....then go in and reform it.  But remember this......this probably will not work either.  There was a reason after all the Puritans and Pilgrims came over here in the first place.  They realized the fulitity of reforming the system from within.

The sad thing is.....there is no where left to go for freedom loving people.

Welcome to Prison Planet.......where Fascism is the New World Order.......and lawlessness (as defined by the lack of desire to uphold the law) is the new law of the land.

Fri, 12/20/2013 - 11:34 | 4263789 akarc
akarc's picture

"Then after you collapse it.....then go in and reform it."

And who will be the reformers and who will decide when it is time to stop taking the free shit and start reforming?

Demand the Kleptocrats be held accountable. However we first must hold ourselves accountable. Until we the people take responsibility for this mess we the people are fucked.

Fri, 12/20/2013 - 12:39 | 4264032 cynicalskeptic
cynicalskeptic's picture

'Collapse the system?!?!' - yeah, go ahead and you'll end up a guest in one of the many FEMA camps being set up to accommodate the unemployed and rebellious.

Fri, 12/20/2013 - 15:11 | 4264785 MachoMan
MachoMan's picture

Exactly...  perfectly succinct.  The protesters we'll see in the near future (and current) are solely asking for more handouts...  not an equal shake.  Wake me up when all anyone wants is an equal chance to compete.

Fri, 12/20/2013 - 20:37 | 4265710 Jumbotron
Jumbotron's picture

UUhhh......you probably miss the part of my sentence right after I said reform the system.....where I said this will probably not work either.

Fri, 12/20/2013 - 10:52 | 4263653 jcaz
jcaz's picture

LOL-  you haven't been keeping up with current events.....

Example for our kids?   Don't be chumps and tow the company line- question authority, and defy herd mentality....

Contract law was never alive, dude- it was designed that way.....

Fri, 12/20/2013 - 11:50 | 4263862 madcows
madcows's picture

I used to agree with you.  But, morality is dead.  I forget the article, but something like 75% of bankers said they feel the need to be less than scrupulous in their business.  now, I ask you, if 75% of the lenders are duplicitous in their actions, and the God damned government is not only complicit in it, but has actually backstopped it with the citizen's money, then we the people have every fucking right to fight back, and I have no problem with someone who chooses to not pay their mortgage bill.  It is one of their last abilities to stand against the corruption.

Fri, 12/20/2013 - 13:52 | 4264388 akarc
akarc's picture

And if Joe blow can get away with being corrupt then I should be able to get away with being corrupt. And there in lies the irony. Instead of fighting them we become like them? Thus begins the slippery slope that brought us to where we are. Can't beat em, join em right? 

Fri, 12/20/2013 - 15:20 | 4264850 ajax
ajax's picture

 

 

Madcows is correct: in a word the USA is utterly SQUALID. I repeat: SQUALID.

Fri, 12/20/2013 - 12:54 | 4264091 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

A lawless government has no right to expect the citizens to obey the law.

The first African American President of the United States of American thinks he above the law.

Now it is my turn.

Fri, 12/20/2013 - 11:44 | 4263835 FreeNewEnergy
FreeNewEnergy's picture

Better rental plan (mine).

Buy home with cash from HUD in 1999. Live there 10 years until father dies (2009), inherit his home, move in, rent out home that is F&C, stop paying property taxes on both. Stop mortgage payments on inherited home.

Bank forecloses on inherited home in 2010. Pays taxes. Keeps paying taxes. Sue bank for fraud in 2013. Begin settlement talks. Currently bank is offering $5000 for me to move out; I countered with $12,000. Waiting for their response.

Will move out with cash in hand, no debt, keep rental property until city or county forecloses (never), rake in $$$.

Moving to 3 1/2 acres of raw land, may purchase more adjacent land with money skinned from Bank of America. I will become trailer park trash farmer on my own trailer park of one.

#WINNING

BofA #LOSING

Fuck A Banker today. It's fun!

Fri, 12/20/2013 - 10:22 | 4263561 Budd aka Sidewinder
Budd aka Sidewinder's picture

And we feeling pretty good about those ratings?  Huh?  Huh?

Fool me once shame on you...Fool me twice........We...We....won't get fooled again

Not even 4% interest on a security with a 95% chance of defaulting?????

Fri, 12/20/2013 - 10:33 | 4263590 tarsubil
tarsubil's picture

Yeah, how much are the credit default swaps selling for? I trust the Aaa will never fail so I'll pay 5 bps.

Fri, 12/20/2013 - 10:23 | 4263565 Platinum
Platinum's picture

I hope a bunch of people decide to take them up on the homes, then use them for "home businesses"
of the agricultural kind. When the spot gets hot, they should just abandon the homes trashed from top to bottom. I'd replicate the Stock Market ticker in mustard on the walls.

Or, if you're lazy, just rent them out to Section 8 families.

 

Fri, 12/20/2013 - 11:42 | 4263837 Osmium
Osmium's picture

If someone had a growing operation in a rented house, and the house was raided, wouldn't the house be seized?

Sounds like a great way to discourage Hedge funds from buying houses.

Fri, 12/20/2013 - 11:50 | 4263864 Platinum
Platinum's picture

Good ideas run in the family. You might be dense, but you're not dumb.

Fri, 12/20/2013 - 10:52 | 4263570 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

The FED has to inflate the housing bubble somehow. You know bubbles they don't see coming...

It is called 'self securitized' loans on garbage collateral through the shadow banking system to entities like Blackstone.

http://www.zerohedge.com/news/2013-11-15/unspoken-toxic-secret-heart-sha...

This is how fascism works people. They use a third party corporation in this case a hedge fund to buy all the cows you used to own then sell you the milk afterwards. Be interesting to know if Blackstone owns any shares in the FED like the TBTF banks do since we know they operate for the good of the shareholders and not for the Nation and us little folk.

 

Fri, 12/20/2013 - 10:27 | 4263571 youngman
youngman's picture

The move to Government housing is on its way......you will have to be a part of the inner circle to get a home...like Old Russia....its not what you want..but who you know....I wonder if you can have Guns and ammo in these rentals....or is that a no no in the contract????

Fri, 12/20/2013 - 10:43 | 4263629 jay28elle
jay28elle's picture

"The move to Government housing..."   Control the masses - only liberal, progressive utopian ideals (dreams) allowed: no guns, no Christianity, no gender identification, no super-size colas, etc.  

Fri, 12/20/2013 - 10:49 | 4263649 akarc
akarc's picture

Me thinks the the article was referencing CORPORATE HOUSING, e.g. slave quarters, sugar cane housing, welcome to being bit on the ass once again. 

Fri, 12/20/2013 - 11:24 | 4263663 Jumbotron
Jumbotron's picture

The move to government housing is not just a progressive dream.  It is the reality of a capitalist system that is sliding into feudalism.

Remember......there is no socialism nor capitalism in this country.

We have fascism.......the combination of crony capitalism and government.   Liberals and Progressives in cahoots with Crony Capitalists hell bent on profits at all cost.  Which is why you see Global Wage Arbitrage to find cheap slave labor and the move to robotics and automation.......which creates a hue and cry from the public about injustice which is answered and satisfied by the Progressives.

Welcome to Prison Planet.......where the New World Order is Fascism.

Fri, 12/20/2013 - 10:27 | 4263578 gamera9
gamera9's picture

Pottersville,but then again think about all the decadence that ensued. Starbucks selling Pot, free Wifi w/Porno. Not to menion the healhcare and free food. Just enough to keep the masses from revolting. Then Mr.Schwarzman going through the draft cards to see who will fight out war with China. Life imitating art?

Fri, 12/20/2013 - 10:46 | 4263640 chunga
chunga's picture

If one does, exactly as instructed by Mr. Potter, they'll get to live in a nicer neighborhood.

Like an "ALT-A" RBS tranche for example. It sounds so cozy.

Fri, 12/20/2013 - 10:35 | 4263593 Scoobywan
Scoobywan's picture

$200,000 houses have high rents normally

They are assuming around 1350/month in rent from those properties on average. That is way cheaper than mortgage + prop taxes on a 200,000 house.

Must be nice to have access to all that free money to buy chunks of houses at firesale prices, be able to rent them cheaper than us normal folk could buy them, and still make money.

Renters disproportionately treat thier dweillings like shit, and that will eat into their profits.

F grade seems pretty risky for 4%

I'll stick to my matress investement plan

Scoobs

Fri, 12/20/2013 - 10:44 | 4263630 akarc
akarc's picture

Have managed rentals before. It will be like really hard to unwind that trade.

Fri, 12/20/2013 - 11:00 | 4263688 TheBird
TheBird's picture

"That is way cheaper than mortgage + prop taxes on a 200,000 house."

That is probably not true. 190K 30yr loan at 5% with 0.5% PMI is $1020/mo. 2% property tax puts it break even to the 1350.

Fri, 12/20/2013 - 11:09 | 4263718 tarsubil
tarsubil's picture

This is a great example of how malinvestment through free money destroys wealth.

Failure of previous blood sucking wealth destruction scheme -> Free money (Bail out) -> Buy houses on the cheap -> Rent out for profit -> Tenants destroy properties (Destruction of wealth) -> Scheme implodes and trillions in derivatives go poof -> Bail out -> On to next blood sucking scheme.

Fri, 12/20/2013 - 12:40 | 4264042 laomei
laomei's picture

Uninsured F bonds for 4%? Really? That's it?  This entire hilarious scheme for all of 5% return?  I'm getting 6% just at the bank right now for basic investment products, and it's insured.  Plus I benefit from 2~3% currency appreciation per year.  Talk about fucking scraping the bottom of the barrel.

Fri, 12/20/2013 - 10:36 | 4263597 Singelguy
Singelguy's picture

Hmmmm, a 5.1% net return before before taxes, bond payment and debt service? What happens to that return when a) real wages continue to decline, and b) when interest rates return to historical norms? I suspect Blackstone will securitize and unload before that happens.

Fri, 12/20/2013 - 11:09 | 4263729 Professor Fate
Professor Fate's picture

Wait until the new Mrs. Fed Potato Head loses control of interest rates and Treasuries hit 7%+.  Blackstone will want to bail big on that 5% return.  They )or who ever owns the RBS will take the hit of a lifetime on rentals.  All baked into the cake. 

Fate the Magnificent
"Push the Button, Max"

Fri, 12/20/2013 - 10:34 | 4263598 lynnybee
lynnybee's picture

AND THAT'S THE PLAN, PEOPLE !!   the whole thing is a scam of gigantic proportions.   i'm amazed how gdamn ignorant the average person is !   hell ....... i'm the average person, all you have to do is get on the net & start reading.   WHAT'S IT GONNA TAKE TO DRAG THESE S.O.B. TREASONOUS POLITICIANS OUT OF WASHINGTON & GET RID OF THE FEDERAL RESERVE BANK. !  i'm spent on this story, i've become a mental wreck at the things i know.   & none of my friends believe me.   & they all have 401k's.   WALL ST. IS CONFISCATING EVERYTHING IN SIGHT.   there will be tears, people will be impoverished, it's an economic swindle, a take down, & it started in 1913.   get the hell out of the system, swap out your worthless pieces of paper for metal & make yourself as small as can be in order to survive.

Fri, 12/20/2013 - 10:41 | 4263619 akarc
akarc's picture

"make yourself as small as can be in order to survive."

Unfortunately that just may b e the only option left.

Fri, 12/20/2013 - 14:31 | 4264617 DoneThis2Long
DoneThis2Long's picture

fuck ... I stopped talking about it ... sick of being looked at as if off my rocker!

Sick n tired of hearing "so what can you do about it" and that is from those who at least accept the premise, nevermind the dickheads who just don't see it, period!!!

In many other countries they raise hell if public transportation goes up 15-20%, yet we had the whole nation stollen from us, not to mention of our children's futures along with our retirements wrecked and what is the price they pay ....? Fucking Reid wants another 6 years to finish us off, etc etc etc.

Fri, 12/20/2013 - 10:35 | 4263606 yogibear
yogibear's picture

The Obama supporters will be evicted. Not what they expected.

Fri, 12/20/2013 - 10:40 | 4263615 akarc
akarc's picture

And you still believe it has anything to do with politics.  Only as in rape where power and control is the issue. And I not sure but I'm thinking the rapee' is never asked who they fucking voted for! So, no pun intended, but we are fucked!

Fri, 12/20/2013 - 10:54 | 4263668 youngman
youngman's picture

Never..they will be subsidized....like I said Government housing...

Fri, 12/20/2013 - 10:38 | 4263611 bidaskspread
bidaskspread's picture

I think these things are called REITS. Similar that new fantastic "gold" i-phone  

Fri, 12/20/2013 - 10:44 | 4263631 azengrcat
azengrcat's picture

WOW WOW WOW terrible coupon lol!  Made to sell to Simple Jack pension adminstators.

Fri, 12/20/2013 - 10:45 | 4263634 grunk
grunk's picture

Too many expenses (maintenance, legal, property taxes) for single units to be profitable from afar.

You become a target for local governments.

Fri, 12/20/2013 - 10:49 | 4263652 I Am Not a Copp...
I Am Not a Copper Top's picture

Can't imagine the number of pages a lease from these motherfucker would have.  Better go to the light blue column on the abacus for that calculation. 

Fri, 12/20/2013 - 10:50 | 4263656 starman
starman's picture

Lbee, The average person is not ignorant they are just fucking dumb!
If most people would realize they not much different from the Pharaos slaves things might change. Unfortunately this could take another decade or millennia.

Fri, 12/20/2013 - 10:53 | 4263661 Incubus
Incubus's picture

The American Dream in 2020s:

 

Work part time at your McJob.

Come home to your room in your Mchouse that you're splitting the rent 5 ways with other "tenants."

Pay your bills.

Eat your McMeal.

Shoot yourself in the face.

 

Fri, 12/20/2013 - 10:58 | 4263687 Ghordius
Ghordius's picture

you forgot to stick a "support free global trade" somewhere

Fri, 12/20/2013 - 11:10 | 4263725 akarc
akarc's picture

THe ultimate U>S> drone. A population that will be williing to go to war because life at home sucks worse.

Fri, 12/20/2013 - 14:20 | 4264569 DoneThis2Long
DoneThis2Long's picture

Shoot yourself in the face.

you need a gun for that! by 2020, will we still be allowed to have/buy/rent/look or talk about one?

now making the sign of one will land you in hot water...

Fri, 12/20/2013 - 10:56 | 4263675 eddiebe
eddiebe's picture

Wall street and the banksters will take everything. If they don't have it already. Nothing will stop them short of armed resistance, why would it? They wrote and are writing the laws, the politicians are in their pocket, the police and military are at their disposal. 

 Remember what happened when the whole oppose- wallstreet  was going on? The protesters were derided mostly and then just brutally kicked our of their park.

Try even sleeping somewhere without getting harassed and rousted ( Ironically it is allowed at Walmart parking-lots.)

Land of the free indeed. I am totally disgusted and see little hope for 'we the people' without seeing blood running in the street. Fucking lame, all of us!

Fri, 12/20/2013 - 11:09 | 4263721 akarc
akarc's picture

"Fucking lame, all of us!"

AMEN! We the people, have brought this on ourselves,

Fri, 12/20/2013 - 14:15 | 4264543 DoneThis2Long
DoneThis2Long's picture

AMEN! We the people, have brought this on ourselves,

and worse yet, we are not doing anything 'bout it, but pick belly lint & bitch.

Fri, 12/20/2013 - 11:12 | 4263732 Hubbs
Hubbs's picture

Unfortunately, I think this is the regression line we pions face from hereon.  The police , DHS, NSA need these jobs, and so will only be to happy to do their masters' bidding.

Fri, 12/20/2013 - 14:14 | 4264523 DoneThis2Long
DoneThis2Long's picture

+100

why the mofos are hell bent on gun control.

The response to the Duck Dynasty thogh, has a great lesson in it, for those willing to implement it! Enough is the fuck enough, and stop playing the fucking game. "Make push back" & keep the pressure on.

Fri, 12/20/2013 - 11:06 | 4263686 Max Cynical
Max Cynical's picture

I see from the graphic that Blackstone will be skimming 46% of all payments before any money flows through to investors...guaranteed they have 20% in there for themselves.

Chasing a 5% return on SFR's isn't enough considering housing is now falling off a cliff in most of the markets Blackstone has chosen to invest.

Fri, 12/20/2013 - 11:12 | 4263728 grid-b-gone
grid-b-gone's picture

Now let's see if private equity can use their growing leverage to get bulk tax breaks at the local level.

"Hey, town X, give us a property tax break or we're dumping our portfolio of homes in your area."

"And by the way, until we get the break, don't expect any pristine upkeep. We'll take the break in the form of reduced maintenance cost until we get the tax break. So, we're getting the money either way. You, town leaders, decide if you want it in the form of decreased tax revenue, or a reduced character and livability of your town. By the way, we're thinking of going all Section 8 in this zip code."

Town leaders. "OK, we'll give you a bulk rental tax break."

Town leaders a few months later, "The rate on single-family, private residences is being increased to cover the property tax revenue shortfall."

Private residence owner, "I'm considering moving to a rental. The numbers seem to make sense for us."

Private Equity, "Another win-win."  

 

Fri, 12/20/2013 - 11:43 | 4263831 fallout11
fallout11's picture

Prescient post sir!

Fri, 12/20/2013 - 11:13 | 4263740 squid427
squid427's picture

America is gone. There is no hope. 1 year ago I would've been shocked and outraged at this. Now, par for the course.

Fri, 12/20/2013 - 11:18 | 4263741 Freewheelin Franklin
Freewheelin Franklin's picture

I had this idea 3 years ago, but I couldn't get financing. 

 

 

Fri, 12/20/2013 - 13:50 | 4264375 fallout11
fallout11's picture

No free zirp money for you, you are not too big to fail.

Fri, 12/20/2013 - 11:16 | 4263746 highwaytoserfdom
highwaytoserfdom's picture

Deutsche Bank, $11.8 billion TARP AIG.. So Peterson and Schwartzman are going to be Primary dealers? Wake up folks these were Mers,Fannie and Freddie homes. Is Blackstone attempting to be a primary dealer?

The only one that would buy these bonds are sovereigns..    It makes much better sense to buy Detroit.  Heck Detroit homes up 17% but then again they cannot get rid of 1 dollar homes.   Dollar seventeen?

Why anyone would pay the rent is beyond me....All the jobs out there were housing related (limited useful skills).   

Audit the FED and stop this nonsense... All the housing as an asset crowd (tax guys education ect) would buy the houses if they were cheap enough.

How can I get the FED help to short this mess (AKA J Paulson) ....  jeez talk about moral hazard.

Fri, 12/20/2013 - 13:12 | 4264176 Seer
Seer's picture

I agree with all except the notion that all these properties can really be moved, other than, perhaps, to the Chinese.

Fri, 12/20/2013 - 11:26 | 4263768 KickIce
KickIce's picture

"I believe that banking institutions are more dangerous to our liberties than standing armies . . . If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered . . . The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." -- Thomas Jefferson –

 

Note, source I have is Jefferson but some have disputed.

 

Fri, 12/20/2013 - 11:41 | 4263819 akarc
akarc's picture

“I sincerely believe that banking institutions are more dangerous to our liberties than standing armies. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.” 
-- Thomas Jefferson

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.” 
-- James Madison

“The inability of the colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the PRIME reason for the Revolutionary War.” 
-- Benjamin Franklin

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and the corporations which grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” 
-- Thomas Jefferson

“I wish it were possible to obtain a single amendment to our Constitution - taking from the federal government their power of borrowing.” 
-- Thomas Jefferson

Fri, 12/20/2013 - 13:54 | 4264398 DoneThis2Long
DoneThis2Long's picture

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and the corporations which grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” 
-- Thomas Jefferson

and here we eez!!

Fri, 12/20/2013 - 14:25 | 4264595 Seer
Seer's picture

Regarding the first "quote," as much it sounds like something Jefferson would have said there's no actual reference available suggesting that he in fact did say these words as presented.

Fri, 12/20/2013 - 11:28 | 4263769 deerhunter
deerhunter's picture

Property taxes on a home I bought in a NW chicago suburb in 1998 for 168K are 6 K a year.  Before I get out of bed I owe local government 16.50 for that day before I go brew my coffee.  Think of that for a minute.  Stop paying those taxes what happens?  In addition to that this house is worth less than I paid for it 15 years ago. Think of that for a moment.  So for fifteen years I have been paying for police,  fire,  sheriffs,  librarians,  city staff's pension funds.  Salaries for teachers and their pensions,  jailers,  park district employees salaries and pensions.  Oh,  don't forget city sales tax 6.5 percent.  Oh,  don't forget payroll tax,  SS Medicare taxes, another 28%.  From what I keep by the way I then pay mortgage and said property taxes.  Oh,  tolls,  yes,  the privelage of driving on tollways doubled here last year as well as the state income tax going from 3 to 5% and I believe business taxes were also increased.  So for fifteen years  I have paid for salaries and benefits of dozens if not hundreds of "civil servants" and their pensions.  Civil servants my ass.  And my ass hurts plenty these days.  They serve no one but themselves.  Look at what happened in Wisconsin when that state had the audacity to have teachers and fireman pay more for their health care and pension contributions.  Said civil servants were going to burn the Capital building down to the ground.  There are over 3 thousand public retirees in Illinois with pensions over 200 thousand a year. School district chiefs making over 400 thousand a year.  High school administrators making over  100 K a year.  Had enough?  The hell with "got milk",  how about "got taxed?"   Have you had enough?  I sure have,  rant off.

Fri, 12/20/2013 - 11:37 | 4263807 akarc
akarc's picture

Rant on and rant loudly

 

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