Linking ≠ endorsement. Enjoy and share:
- Carlyle Jumps Into Niche Space - WSJ.com
Carlyle Group LP, a private-equity firm that has interests in everything from an oil refinery to a vitamin maker, is adding trailer parks to its portfolio.
The Washington-based company has struck a deal to acquire two Florida communities for a total of $30.8 million. The sellers are two entities managed by Shamrock Holdings LLC, a Paradise Valley, Ariz., owner and operator of communities, said owner Patrick O'Malley. The deal is expected to close this month.
Do you think they've made astute purchases?
- Is China consuming more than we think? | | MacroBusiness
Most readers will be familiar with the work of Michael Pettis who has boldly led global perceptions of Chinese growth away from Panglossian views to worries over imbalances. The nub of concern is that the investment portion of GDP growth is unsustainably large at 49% and is driven by a debt bubble that risks implosion at some point. The solution, of course, is to rebalance towards consumption driven growth to make ongoing development sustainable, even if it is at a slower race.
Now David Piling at the FT asks what if the statistics are, in fact, wrong?
I will note in passing that it doesn't matter how fast cars sales are growing if investment components are growing even faster, which has been the case. He's [David Piling is] making the wrong comparison.
Anyway, I can't really judge the argument beyond that except to say that the slowing of the output dividend from each new yuan of debt is also very indicative of over-investment that has lost touch with commercial rates of return. Hence lousy stock performance for industrials.
Aside from that, I'm not sure why the Chinese authorities would themselves be so keen on rebalancing if there were no need.
- Corelogic's shadow inventory reporting is misleading - OC Housing News
Corelogic is a data company spun off from First American Title a few years ago. Their business is to sell information and analysis; therefore, their credibility is paramount. It's been argued this makes them nearly infallible. Today, I will argue otherwise.
Corelogic has established themselves as the authority on shadow inventory. They publish a periodic report that is widely covered by the mainstream media. Their methodology is sound, and their data is accurate. However, as with any study the devil is in the details. There is one small detail that makes their reporting on shadow inventory very misleading.
According to DS News, "Properties that are not yet delinquent but may become delinquent in the future are not included in CoreLogic's estimate of the current shadow inventory."
This is a critical point because the lender can-kicking I have been going on about for the last 18 months is all about managing the reported shadow inventory numbers. When a lender modifies a seriously delinquent loan, that loan is no longer counted in shadow inventory. If the modification were actually a permanent cure and the loan were to perform until the owner sold in a non-distressed sale, then Corelogic's measure of shadow inventory would be a good measure of the problem. Unfortunately, loan modifications are not a permanent fix. The redefault rates are very high, in excess of 50% on many vintages. These redefaults are ignored by Corelogic as if they don't matter. They do.
He has a point, but will it crash the market or simply drag out the recovery? We think it will drag it out this cycle.
- Smart Strategy: A Developer's Condo Conversion Roadmap - Multifamily Executive Magazine
We agree. Smart move:
Taking a conservative financing approach certainly helped him weather the storm. But the true saving grace was Reynolds' patented strategy of leasing the units before selling them.
- How Will Retiring Boomers Affect The Real Estate Market?
If someone asked you where the next housing bust was going to come from, what would you say? Would you point to the first signs of a newly resurgent and potentially overheated housing market? Would you worry whether banks are going to loosen their purse strings again and start taking on risky mortgages? You would probably come up with something like this, or another equally plausible idea. However, what you probably wouldn't do is to point at the baby boom generation — which has been the conventional bedrock of the American economy for as long as anyone can remember, despite briefly letting their hair down in the 1960s.
Life expectancies will increase. People will remain fitter longer. They'll work longer, especially if the economy does anything remotely like what it has done recently. Tastes will change as younger people age. New construction on the type of housing being vacated by Baby Boomers can slow so that absorption of that exiting housing stock won't be as large a problem.
There a many ifs involved.
It certainly is an important issue though.