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The Problems are the Path

The Problems are the Path: California Legislature Takes Aim at Landlords

  From the beginning of the Pandemic to the present there has been numerous laws passed by Cities, Counties and the State of California to address the ills that landlords have placed on renters.   Most notably: Under Civil Code Section 1941.1 et seq . and the Health and Safety Code Section 17920.3 et seq. require landlords and property managers maintain rental units in a condition that is habitable.   Failure to do so is a breach of warranty of habitability.   I believe this law started the law suits and Town and Community awareness of issues that were being created by Landlords negligence. The influx of laws accelerated with the Pandemic.   Landlords were banned from evicting renters during the pandemic and renters did their best to find reason to not pay rent.   When the bans ceased evictions sky-rocketed.   In California renters had the benefit of Civil Code Section 1941.1 et seq. and the Health and Safety Code Section 17920.3 et seq. This State law along with the support of Renter

The Problems are the Path: Investors are Almost Alway Wrong on the FED

Investors, home buyers, and agents are convinced the FED will lower rates later this year. However, their record is not that great! Whether the investor is a Wall Street Titan, a Commercial Real Estate Investor or Speculator or an individual investor in stocks and bonds or real estate, they have been caught offside in both directions while making their decisions on the Path of Interest Rates over the past years. Let's take the commercial bets on office buildings.  No one expected a major shift in employees working from home as a result of the Pandemic. The shift created massive vacancies in office buildings across the United States and major world centers.  Office building owners felt it wise to take additional loans on properties before the pandemic, planning to refinance at lower rates in the future.  It did not work out well for them.  The FED raised rates to combat inflation and vacancies created a fall in income that put properties at risk.  Offices were not the only victims o

The Problems are the Path: History Repeats in Interest Rates

REMEMBER!  Lenders and owners are Diametrically Opposed!  This Adversarial Relationship stems from GREED, an entrepreneurial trait which brings both parties together. From the 1960's forward, Legislatures and Judiciary parts of our government have worked to protect lenders from the abuses that created an uneven playing field that favored lenders. (Residential) The most important legislation came from California in the "Anti-deficiency legislation of the 1930's. Rising inflation during the 1960's produced a severe real estate recession in 1965-67.  This occurred while the economy improved due to employment from the war effort of Viet Nam.  1963-64 Boom Led To The Savings and Loan Crisis.   Lenders viewed excess money on deposit as wheat to be harvested.  Money was lent quickly and deals where chased aggressively.  Brokers were in control, rates were below 7% and deals were taken on without regard to risk as inflation was low.  The result was excess Real Estate inventory

The Problems are the Path: FED calls interests rates Wednesday January 31

On Wednesday the FED will tell what the tendency is for lowering interest rates.  If you readers just rely on CNBC, Bloomberg or some Social Media Site, I suggest you get on the St. Louis Federal Reserve Bank's mailing list.   Add to the Wall Street Journal and the U.S.  Census Department.  With those three sources you will not find yourself being jerked around by Media promotions and investment banks and advisors promoting their positions.   The Wall Street Journal had a list of the four new members of the Federal Reserve Voting Panel.  All four say too soon to cut rates.  The Federal Reserve so indicted the same.  The U.S.  Census reports showed slight declines in inflation with nothing near 2% annual rates.  The Census also stated POSITIVE growth in the US Economy.  All quite good for high interest rates.  It would appear to me why cut rates if the economy is doing so well?  The next issue the FED Governors must be looking at are housing prices and rents.  The Gen Z cannot affor

The Problems are the Path: Much Ado About Nothing Part II

 The best description for the end of 2023 was a "Melt Up" in Wall Street terms.  Analysts were fighting amongst themselves as to who can predict the number of FED Interest Rates reductions.  Let's face it analysts are just selling themselves and the their predictions are soon lost, unless they are right.  It is always easy to point elsewhere when the prediction doesn't go according to their estimates.  Or, just simply forget and never say much about it until there are proven wrong December 31, 2024.  By then, who will remember or even care? The Governors of the Federal Reserve System are now coming out and stating that they are not committed to rate cuts.  ( Fed's Bowman and Bostic caution against rate cuts too soon ). Especially when the rate cuts are from 1-7.  The historic possibility of 7 rate cuts do not forecast well for our economic situation.  Why would the FED flood the market with money.  There is over $7 trillion in the FED's Balance Sheet to create

the Problems are the Path: Notice of Default Opportunity in Multifamily Unit

  Startup bubble fueled by Fed’s cheap money policy finally burst in 2023 PUBLISHED THU, DEC 28 2023 9:00 AM  After years of record venture investments tied to low interest rates, cheap money has stopped flowing in startup land, leading to high-profile failures.WeWork and Bird declared bankruptcy in 2023, while pandemic plays like Hopin and Clubhouse faded into oblivion.“Prediction: 2024 is the year we finally bury the class of ’21 ZIRP ‘unicorns’ and start talking about a new crop of great companies,” Jeff Richards, a partner at venture firm GGV, wrote in a post on X. Easy Money created more risk than the inexperience entrepreneur.  The plan would to go back for more money when problems erupted.  Then came higher interest rates.  Failures, bankruptcies followed with empty offices and work from home.  Nothing new here! This year, it all unwound. With the Fed  lifting its benchmark rate  to the highest in 22 years and persistent inflation leading consumers to pull back and businesses to

The Problems are the Path: FED Speaks, "Much Ado About Nothing"

  "Much Ado About Nothing" is the title of a well-known play by William Shakespeare (1599).  The phrase was assimilated into the English language and used when someone is overreacting and makes a big deal or fuss over something unimportant.   The  Fed voted last week to hold rates steady once again, and its updated projections showed an expectation of three rate cuts in 2024.  That caused a rally in stocks and bonds, with the Dow Jones Industrial Average jumping to a   record high . “It’s not what you say, or what the chair says. It’s what did they hear, and what did they want to hear,” said Chicago Fed President Austan Goolsbee said on CNBC’s “Squawk Box.” “I was confused a bit — was the market just imputing, here’s what we want them to be saying?” “The market expectation of the number of rate cuts is greater than what the SEP projection is,” Goolsbee said. Three Rate Cuts, to me, means that the FED is opening a safety valve in the event of a crisis in which the FED must ste