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"World’s Richest Restaurateur" Sees An Imminent Crash In America's "Crazy" Real-Estate Market
When it comes to the fair value of assets, especially cash-flow generating real estate, few are as qualified to opine as the man dubbed “World’s Richest Restaurateur”, billionaire Tilman Fertitta, chairman of Landry's Restaurants which counts among its properties such brand names as Morton’s, Rainforest Cafe, Bubba Gump Shrimp Co., McCormick & Schmick’s, Saltgrass Steak House, Claim Jumper, Chart House, The Oceanaire, Mastro’s Restaurants, Vic & Anthony’s Steakhouse and many more.
Which is why his dire warning about the state of the "crazy" US real estate market, which he believes set for an imminent crash, are likely worth keeping in mind as all the panglossian permabulls see nothing but a 4th dead housing cat rebound ahead. That, and his take on inflation: "There is huge inflation going on right now."
From his interview on Bloomberg TV yesterday:
Fertitta: You are seeing crazy numbers from real estate. You are seeing it New York probably more than anywhere else; you are seeing it in Texas; you are seeing it in California. History always repeats itself, but I think it's going to repeat a little sooner this time. You see it coming.
Q. You smell a crash in the real estate market?
Fertitta: Absolutely I do. I can see it in Houston right now.
Q. It's going to be 1986 all over again?
Fertitta: Absolutely. It didn't come back in Texas until 1996, it took 10 years for it to happen in Texas.
For all those who see nothing but blue skies from falling crude prices, here is Fertitta's contrarian view: "Oil needs to hit $50/barrell for it to cause a total crash."
Oops.
Finally, for the deflation truthers, here is what Fertitta had to say about inflation:
Ben Bernanke was at Rich Handler's house and he says "there' no inflation." Well go buy something, whether at the grocery store, the drug store, the broom and mop store, and there is inflation everywhere. I have so many types of businesses so I buy everything from labor, to mops, to food, to shrimp, to stake and everything is more expensive. We are raising prices: that's why right now you pay more for an airline ticket, you pay more for a hotel room, you pay more for a pot of coffee. There is huge inflation going on right now.
Somehow we doubt he will appear on CNBC any time soon.
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'Chesseburga, cheeseburga, hamburga, chesseburga!'
Chesseburga, cheeseburga, hamburga, chesseburga, sawdusta!
An American, not US subject.
Seems worse than 1980's to me. Back then you could make a fortune off of the collapse. Now the risk of saving cash in banks awaiting a crisis is huge and they are going to demonize and criminalize metals. If this was the 80's we would all be preparing to be rich.
In the 80s when the price collapsed the properties went up for sale, especially the S&L properties.
Now when the price collapses, the banks hold the inventory off the market to artificially inflate the prices. And do so collectively. In the real world this would be grounds for antitrust action and market rigging charges, but in the bizarro world of today's banking regulatory system, it's encouraged because it makes the economy look far healthier than it really is.
"...and they are going to demonize and criminalize metals. "
First they take your steel and lead. Then they take your gold and silver.
An American, not US subject.
"They can come for my guillotine. It will save me the effort in bringing them to it."
"Back then you could make a fortune off of the collapse."
And then what came of that "fortune?"
I think that it's starting to materialize that the measure of "fortune" is pretty subjective.
What matters, what has always mattered (though overshadowed by tricks of the snake-oil-salesman [TBTB fortified with the powers of Bernays reasonings]), is PHYSICAL. And the value of physical depends on how the physical is used.
Rather than clubs, we use "wealth" to arbitrate our force over others. When the paper world runs its course we shall find ourselves utilizing more dense paper products: bats/clubs. At some point we'll discover that bright, shiny things will tend to attract those with rocks and clubs (or has that not always been the case?) The trick will be in determining when to shift from the shiny to the blunt...
A Wendy's double stack cost $1.49 last summer. It now costs $1.99. That's just one of many examples. Yep - there's absolutely no inflation.
He's dead on regarding grocery/resturant prices. One of our favorite spots, on Long Island, The St. James,a resturant-bar, is a monument to Bernankeism. Half the food, double the price from eight years.
ago. It's astonishing .
went out to dinner with the wife the other night. just two of us. two meals, a salad, a desert, a glass of wine each... $107, without tip. It's a nice restaraunt, but we're talking about a 4 oz filet, and a piece of swordfish, not much bigger than the fillet. I guess that's why we only go out about twice a year.
"we're talking about a 4 oz filet, and a piece of swordfish, not much bigger than the fillet."
Well, when most folks around you look as though they've eaten the entire cow it should be no surprise that we're now reverting back to the mean.
What matters is not how MUCH you eat but what's IN what you eat, the nutritional/energy content. The folks in Haiti were likely putting away some might big slices of mud pie, all the while wasting away...
I contend the primary reason that we are not seeing even more inflation is because we as a society we are pouring a large percentage of our wealth into intangible products or goods. This includes currencies. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply.
The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas.
It is important to remember that debts can go unpaid and promises be left unfilled. If this happens where does it leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years. More in the article below.
http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....
So what tangibles are you trading paper for?
Land, seeds, lead, cast iron, hand crank tools, storable food, etc
Do tell.
Quit making this all so complicated!
Our game of Growth Ponzi doesn't play real well, in the long-term, with living on a finite planet.
My wife is from the Philippines. Cry me a river! You fucking want to understand what "mean" means? In statistics we're talking historical norm of ALL mankind over its history. "Economics," "legal actions," "debts," all words... things that we've used to tell our story in support of our game of Growth Ponzi. Human deception...
I've been predicting a housing crash ... oops, sorry, I mean "correction" since 2008 which was merely a partial correction. My old house is still 300% over the 2004 value. And I thought back in 2004 it was overvalued even at that price!
No one could have predicted the twisting, the manipluations, the Fraud and corruption that went into propping up these artifical values. We still have the Fraud, the corruption and the ZIRP. When the real housing crash occurs and prices revert to the mean, it will be a Doozie -- house and raw land plunging 40% to 80% down is what my CFA predicts !
I mean compared to then and now, most of it is foreign money today.
Of course all that money coming in isn't laundered or anything but you know, driving around with $1k is suspicious enough to confiscate.
Driving around with 1k is only suspiscious if you are "just" a US citizen. oreign nationals have their own laws, and are therfore not suspicious...
"No one could have predicted the twisting, the manipluations, the Fraud and corruption that went into propping up these artifical values."
Really?
Who could have known that there would be such high fraud based on a fraudulent currency (full fiat- 1971)?
History tells us how these things go. Those in power will do ANYTHING to stay in power. Power corrupts. Surprised? Really? Not me...
"house and raw land plunging 40% to 80% down is what my CFA predicts !"
And what sets the floor at just 40% to 80% down? I'm kind of thinking that there's insufficient buyers (from abroad- certainly there aren't locals [existing debt loads, on top of declining wages and jobs])) to keep it at even this level. Keep in mind that most houses (the "raw land" part is a bit different) require substantial energy to maintain and operate. A better metric is that of sales price to annual income.
"Price" is an incomplete metric (one dimensional). Consider:
http://www.realestatedecline.com/homepricehistory.htm
and couple it with:
http://www.deptofnumbers.com/affordability/us/
Affordability is in decline while home prices, adjusted for inflation, are pretty much in line with historical numbers. The "affordabillity" part also has the components of wages/income and existing debt, of which wages/income have been in decline and debt is still high (seems there's claims of it being in decline, but I'm not so convinced).
I'd have to state that any figuring on a floor is totally dependent on there being something to come along and kick an economic up-tick. Where might that growth component come from? Once again, keep in mind that any surge in growth requires some sort of new capital influx: the influx that's been pushed is money-printing, which is only about stealing from the future, nothing organic at all. With all the debt loads out there I'm just not seeing where any organic growth can spring from.
Further, it's not a matter of IF we could blow through any floor, but rather WHEN. Eventually (such as when the next glacial period hits) housing prices will go to zero (on a long enough timeline the survival rate for anything becomes zero).
So, what's your timeframe here? That's the only variable that's really in play... (timing, always timing)
Oh stop Whining. We're living in a freakin utopia!
With the GMO nightmare everywhere, we never eat out anymore. Why take the risk? Almost impossible to find a non-GMO restaurant so we just put the money saved from eating out into higher quality ingredients at home.
What Bernanke meant when he said there's no inflation is that online porn is still free if you know where to find it.
Love the stupid BBG bitch when the guy is talking about inflation everywhere. Shes is like really. I did not notice. Muppet.
Subways don't even have sub of the days in NYC anymore.
$6 for half a sandwich, bag of air (chips) and soda.
The dollar slice pizza joints are starting to sell slices for $1.50 now.
With Grover and Elmo to tell us what to do on CNBC, who needs this guy?!!
Specifics and dates or you are just another palm reading Charlatan.
Inflation - yes It see it. But how does that reconcile with strong dollar and $75 oil (and dropping)?
Strange times, who can make sense of it?
Txs, Bennie, you broke the market mechanism, interest rates, for us to see which way this is all heading.
sschu
This tool hosted one of Bill Clinton's campaign appearances at his posh mansion in Houston's River Oaks back when all the 30-something bimbos thought Clinton was the man. Don't complain to me about inflation now, chump.
Stay home, fire up the commercial grade grill. Give yourself a 20% gratuity tip at end of meal.
You fucked it up for yourself. Restaurants telling me what to say, what to drink, where to smoke and ass banging me for poor service.
Fuck that, just eat at home. Can you hear that noise? It's the grill preheating.
there is no huge inflation in the 100000 dollar home. there is ridiculous inflation in the 1 mil+ range. these dimwits are paying 5-10 mil for what used to be 1-3 mil at the bottom and 3-5 during the last bubble. who fn cares if they crash?
Why America's economy is so weak and 1/2 of Chinese GDP is not even counted:
https://www.youtube.com/watch?v=Vth6k9otgR0
Look at this and then remember who Hillary Clinton thinks makes jobs. We are so far down the hole. Get out of US dollars. We cannot compete. Chinese GDP is way more than is reported.
Buy low and sell high. Don't do it the other way around.
Apple Motto
Buy high a get your ass chapped.
On a long enough timeline...
your booby dont know much economics...if there is inflation then real estate is one of the assets, along with stocks, that you want to be in...
your booby dont know much economics...if there is inflation then real estate is one of the assets, along with stocks, that you want to be in...
And next we will ask the guy behind the counter at Taco Bell about the precious metals market !
lol
I have a 1000 monkeys writing me a scenario to get rich quick ..... they keep saying to start a new religion, its easy money and you get to oppress the people... not bad, and i pay them in carrot sticks .... heh heh suckers
New RELGION : ... The demigod Putin has recieved the Mark .... and now we worship him as much as the media is pushing on us... bend a Knee, and allow him to take your dignity with a bitch slap... for he is filled with cabbage n vodka
so it be written, so let it be farted
Nail Gun Army
Two women are sharing a McDonald's tube stake. Classic!
Tilman is a mean and shrewd Mo Fo but Papa Fertita is a riot. Mellowed over the years I guess.
I fed him lots of Coors Lite back in the day
Just stating the obvious: Tilman Fertitta (whoever that is) is NOT a restauranteer. He/She is a banker toady financier. He/She can be nothing else given the holdings and their position.
I do not care what any banker toady financier says. Most of them lie to us every day. They have no credibility.
Think Zuckerberg. Is he a leader or a parasite?
I have a commercial grill to place his head on to reveal any new information .
Let's have a cook out. ;)
Life is like an expensive box of chocolates that keeps getting more expensive every year, Mr. Bubba Gump Shrimp Co. owner. Hyperinflation
kills cartel pricing from BIG box stores to Casinos n' Restaurants en masse.
Look at Atlantic City, McDonalds, Sears, and Walmart, before you take another bite of that shrimp that was purchased from the Fukishema Fish Company, kids. Hyperinflation is just a game that oligopolies play for fun
when stock markets are 100% overvalued because of QE Infinity and FEDtards that ate too many paint chips when they were kids.
NOTE: Inspectors in New York started checking the booze being sold in New York bars to find that many are selling rubbing alcohol as Whiskey.
One bar owner even had dirty water in a Whiskey bottle being sold as whiskey. The account is online Google if you care to check.
Listen.
Fuck this restaurant douche.
He has to pay for premium retail space. They have him over a barrel so he "HOPES" for a crash. Won't happen so wake the fuck up Zero's!
I notice cotton textiles have increased in price since last year or cotton content has dropped. Same with cashmere and merino wool.
my mother in law has an IQ of 90
HELP ME
There is surely a job in this current administration for her then.
SHLD is a REIT.
This 'douchebag' owns most/all of his real estate...along with 1/4 of Louisiana/Miss revenue generators, Galveston, and the Boardwalk in Kemah,TX.
Rainforest Cafes, Hotels and gaming are lucratuive. The restaurants are writeoffs
Inflation? What inflation? They told us all the hookers have been busy lowering their prices across the world.
Inflation for medical treatment after contracting STDs from the hookers
that lowered their prices and bought cheap made in China condoms especially made for the American markets, eh. Think outside the box!
We should have let the Japanese come here after Fukushima. Hell why not everyone else does. Another thing I wonder about. You know how women have sex toy parties like Avon does. Why has no firearms company done something like that . I mean women who are interested but not knowledgeable won't go gun shopping at red neck shoots and shit. So they have to be socially comfortable with gun buying or just hanging out with women who know all a out guns. Hell it could change the gun ban political landscape.