Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-65610 Sun, 08 Aug 2021 13:18:42 GMT Was The Great Pandemic Migration To Miami Overhyped? http://implode-explode.com/viewnews/2021-08-08_WasTheGreatPandemicMigrationToMiamiOverhyped.html The Miami metro netted a loss of 42,100 people in 2020, 11% more net move-outs than in 2019, the CBRE analysis found. 

More New Yorkers did move to Florida than normal. The post office data logged 25,843 moves to Miami/Fort Lauderdale from the New York/Jersey City area in 2020. The year prior, when there was no pandemic, there'd been 20,794 similar moves.

Willett said the bump in NY-to-Miami movers represented "a meaningful increase, not just a small increase, but when you look at the grand scheme of migration into and out of South Florida, the flows from places like New York are still a very small portion of the moves to begin with."

... By far, young single urbanites made the most moves, while a demographic "GenXUrban" -- with kids, cars and mortgage payments -- made the fewest.

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iehi-feed-65609 Mon, 02 Aug 2021 21:06:27 GMT An unemployment cliff is coming. More than 7.5 million may fall off http://implode-explode.com/viewnews/2021-08-02_AnunemploymentcliffiscomingMorethan75millionmayfalloff.html "This is so many more people than have ever been cut off from something like this," Stettner said of the looming cliff relative to past cutoffs.

Of course, the economy has recovered more quickly than in past recessions. It's now larger than it was before the pandemic, according to Commerce Department data released Thursday.

Hiring is also up over the past few months. The economy added 850,000 new jobs in June, after 583,000 in May and 269,000 in April. However, the U.S. has yet to recover almost 7 million lost jobs versus pre-pandemic levels.

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Twenty-six states ended their participation in federal unemployment programs over June and July, to try to encourage recipients to return to work -- effectively moving up the benefits cliff for residents by about two to three months.

With the $300 supplement, almost half of jobless workers (48%) make as much or more money on unemployment benefits than their lost paychecks, according to a recent paper published by the JPMorgan Chase & Co. Institute.

The extra funds had a small impact on job-finding among workers, but didn't significantly hold back the job market, according to economists Fiona Greig, Daniel Sullivan, Peter Ganong, Pascal Noel and Joseph Vavra, who authored the analysis.

And though it's still early, evidence so far doesn't suggest the state policies immediately pushed people back into the workforce.

If you believe the economy is larger now than before the COVID recession, I have a bridge to sell you (and when I do, we'll count that transaction towards economic growth as well!)

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iehi-feed-65608 Sun, 01 Aug 2021 15:59:08 GMT Soaring Post-COVID Home Prices and the Fed http://implode-explode.com/viewnews/2021-08-01_SoaringPostCOVIDHomePricesandtheFed.html So what can the Fed do about any of this? Officials, including Mr. Bullard, have suggested that it might make sense for the Fed to slow its monthly purchases of Treasury debt and mortgage-backed securities soon, and quickly, to avoid giving housing an unneeded boost by keeping mortgages so cheap.

Discussions about how and when the Fed will taper off its buying are ongoing, but most economists expect bond-buying to slow late this year or early next. That should nudge mortgage rates higher and slow the booming market a little.

But borrowing costs are likely to remain low by historical standards for years to come. Longer-term interest rates have fallen even as the Fed considers dialing back bond purchases, because investors have grown more glum about the global growth outlook. And the Fed is unlikely to lift its policy interest rate -- its more powerful tool -- away from rock bottom anytime soon.

Ideally, officials would like to see the economy return to full employment before lifting rates, and most don't expect that moment to arrive until 2023. They're unlikely to speed up the plan just to cool off housing. Fed officials have for decades maintained that bubbles are difficult to spot in real time and that monetary policy is the wrong tool to pop them.

For now, your local housing market boom is probably going to be left to its own devices -- meaning that while first time home buyers may end up paying more, they will also have an easier time financing it.

And they'll have an easier time ending up underwater whenever this boom reverses...

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iehi-feed-65606 Sat, 17 Jul 2021 16:11:21 GMT Going back to the office or permanent remote: the future of WFH http://implode-explode.com/viewnews/2021-07-17_GoingbacktotheofficeorpermanentremotethefutureofWFH.html iehi-feed-65604 Sat, 03 Jul 2021 19:12:30 GMT Even Where Pandemic Jobless Benefits Were Cut, Jobs Are Still Hard to Fill http://implode-explode.com/viewnews/2021-07-03_EvenWherePandemicJoblessBenefitsWereCutJobsAreStillHardtoFill.html In recent decades, a declining share of the country's income and its productivity gains has gone to workers. And for adults without a four-year college degree, the options are especially bleak. From 1974 to 2018, for example, real wages for men with only a high school diploma declined by 7 percent. For those without that diploma, wages fell by 18 percent.

For most of the last 40 years, less than full employment has tended to give employers the advantage. As it becomes harder to find qualified candidates, though, employers are often slow to adjust expectations.

Among job seekers interviewed at job fairs and employment agencies in the St. Louis area the week after the benefit cutoff, higher pay and better conditions were cited as their primary motivations. Of 40 people interviewed, only one -- a longtime manager who had recently been laid off -- had been receiving unemployment benefits. (The maximum weekly benefit in Missouri is $320.)

In St. Louis, the Element Hotel held a job fair to hire servers, bartenders and front-desk receptionists. Housekeepers were especially in demand. Janessa Corpuz, the general manager, had come in on a Sunday with her teenage daughter to do laundry because of the shortage.

The hotel, which is on a major bus line, raised its starting wage to $13.50 an hour, the second increase in two months. It also offers benefits and a $50-a-month transportation allowance. The number of applicants shot up -- to 40 from a handful the previous month -- after the second wage increase.

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Justin Johnson, too, already had a job when he showed up at an Express Employment Professionals office. He was working at a pet feed company, earning $14 an hour to shovel piles of mud or oats. But that week temperatures topped 90 degrees every day and were heading past 100.

"The supervisor pushed people too hard," Mr. Johnson said. He had to bring his own water, and if it was a slow day, he got sent home early, without pay for the lost hours.

He accepted an offer to begin work the next day at a bottle packaging plant, earning $16.50.

Amy Barber Terschluse, the owner of three Express franchises in St. Louis, handles mostly manufacturing, distribution and administrative jobs. Wages, hours and a short commute are what matter most to job seekers, she said, and few would work for less than $14 an hour.

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In St. Louis, a single person needs to earn $14 an hour to cover basic expenses at a minimum standard, according to M.I.T.'s living-wage calculator. Add a child, and the needed wage rises just above $30. Two adults working with two children would each have to earn roughly $21 an hour.

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iehi-feed-65603 Fri, 02 Jul 2021 23:13:41 GMT Manhattan Residential Real Estate Finally Bounces Back - But Not Quite "Normal" http://implode-explode.com/viewnews/2021-07-02_ManhattanResidentialRealEstateFinallyBouncesBackButNotQuiteNorma.html Buyers over the last few months gravitated toward co-ops, a housing type that had seemed to lose some favor in recent years. Co-ops accounted for 49 percent of all deals, versus 37 percent for existing condos, according to Corcoran. And in the frenzy of the post-pandemic market, downtown seems to have benefited at the expense of uptown, according to Compass, which reported that neighborhoods like Chelsea, SoHo and the East Village accounted for 31 percent of all deals.

For Elizabeth Stribling-Kivlan, a senior managing director at Compass, one of the spring's most heartening developments was improvement in the financial district, a neighborhood that became a veritable ghost town during the pandemic with the emptying out of office buildings. Median prices there soared 33 percent in a year, the largest increase of any neighborhood, she said.

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Prices [generally], though, may have a ways to go. The price per square foot for resale apartments, which is a useful indicator because it controls for the apartment size, Mr. Miller said, actually declined this spring over a year ago, to $1,408 from $1,461, or 3.6 percent.

"Prices are still not at parity with a year ago," he said. The overall discount that buyers are paying on list prices is at 6.4 percent, which is better than 2020 but still higher than the decade average of 4.9 percent. "There still is a Covid discount out there," Mr. Miller said, "but it's easing."

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iehi-feed-65602 Fri, 02 Jul 2021 13:41:37 GMT Office Vacancies Soar in New York, a Dire Sign for the City's Recovery http://implode-explode.com/viewnews/2021-07-02_OfficeVacanciesSoarinNewYorkaDireSignfortheCitysRecovery.html Across Manhattan, home to the two largest business districts in the country, 18.7 percent of all office space is available for lease, a jump from more than 15 percent at the end of 2020 and more than double the rate from before the pandemic, according to Newmark, a real estate services company... Some neighborhoods are faring worse, such as Downtown Manhattan, where 21 percent of offices have no tenants, Newmark said.

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There are signs that the situation in New York could get worse. A third of leases at large Manhattan buildings will expire over the next three years, according to CBRE, a commercial real estate services company, and companies have made clear they will need significantly less space.

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About 14 million square feet of office space is under construction in New York City, which is equal to about double the size of Orlando, Fla.

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iehi-feed-65601 Fri, 25 Jun 2021 20:52:48 GMT He Thought He Could Outfox the Gig Economy. He Was Wrong | WIRED http://implode-explode.com/viewnews/2021-06-25_HeThoughtHeCouldOutfoxtheGigEconomyHeWasWrongWIRED.html iehi-feed-65597 Tue, 11 May 2021 23:15:13 GMT ‘No one wants to work anymore': the truth behind this unemployment benefits myth http://implode-explode.com/viewnews/2021-05-11_Noonewantstoworkanymorethetruthbehindthisunemploymentbenefitsmyt.html The University of Pennsylvania economist Ioana Marinescu said: "In the absence of the benefits there would probably be a little bit more applications and hiring would be a little bit easier, but the main drive of the recent change in sentiment is that hiring is accelerating."

Job openings rose to a two-year high in February, according to the US Labor Department's job openings and labor turnover survey published last month. And in March, employers added nearly 1 million new jobs, with many economists expecting similar or better gains in the April jobs report on Friday.

If job openings accelerate faster than people apply for work, there will be pain for business owners. The pandemic has added some quirks to this economic reality.

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The University of Massachusetts Amherst economist Arindrajit Dube said the fiscal stimulus, including unemployment benefits, could lead to a once in a generation or two generations increase in wages and reduced unemployment rates.

The last time this type of wage growth happened was in the late 1990s when the labor market tightened, with many employers chasing fewer workers.

"You had a tight enough labor market which led to broad-based wage growth of the sort we hadn't really seen since maybe the 70s," Dube said. "And that was unusual and yes, employers had a hard time filling vacancies and they had to raise wages a lot and that's OK."

God forbid wages ever go up, and the low end of the job market doesn't resemble legal slavery...

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iehi-feed-65595 Wed, 28 Apr 2021 22:15:30 GMT Ground Lease On Times Square Hotel Once Valued at $126M Sells For $4M http://implode-explode.com/viewnews/2021-04-28_GroundLeaseOnTimesSquareHotelOnceValuedat126MSellsFor4M.html After years of sliding valuations and multiple auctions, the Gallivant Times Square Hotel has sold for a fraction of its previous value.

Special servicer LNR Partners sold the ground lease of the 334-room hotel at 234 West 48th St. to an LLC controlled by Mehran Kohansieh for $4M, according to records filed with the city last week.

Kohansieh also goes by Mike Kohan and owns Kohan Retail Investment Group. He told Bisnow that the company, which owns aging malls around the country, plans to keep the property as a hotel and "revitalize" it. LNR Partners acquired the ground lease for $9.5M after foreclosing on its previous owner, Investcorp.

The sale, announced with limited details by brokerage JLL last month, concludes years of mounting debt and several rebrands. CMBS tracking firm Trepp's remittance data suggests the liquidation proceeds for LNR were $2.5M. That sum "was completely eaten away by expenses," Trepp wrote in a report Tuesday, which noted the hotel was appraised at $126M at securitization in 2006.

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iehi-feed-65594 Mon, 26 Apr 2021 13:45:42 GMT Stow Your Outrage About a Capital Gains Tax Hike http://implode-explode.com/viewnews/2021-04-26_StowYourOutrageAboutaCapitalGainsTaxHike.html ... there have been three recent, real-world opportunities to observe the impact of a capital gains tax hike -- in 1987, 1988 and 2013. In each case, equities (with the exception of momentum stocks) stumbled before the hikes were enacted but outperformed afterward.

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the fruits of the market's boom have been narrowly enjoyed. The wealthiest 1% of Americans reported about 75% of all long-term capital gains in 2019, according to the Tax Policy Center, with the wealthiest 0.1% -- the cohort with annual incomes above $3.8 million -- hauling in more than half of all capital gains.

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iehi-feed-65593 Thu, 22 Apr 2021 22:34:14 GMT Biden prepares to announce string of tax rises for richest Americans http://implode-explode.com/viewnews/2021-04-22_BidenpreparestoannouncestringoftaxrisesforrichestAmericans.html The tax increases would [end the preferential treatment of capital gains income for those making over $1 million per year, and] reverse some of the tax cuts passed in 2017 by former president Donald Trump and are expected to track Biden's campaign proposals, which targeted individuals earning more than $400,000 per year.

Among them are an increase in the top income tax rate from 37 per cent to 39.6 per cent and the application of ordinary income tax rates to capital gains and dividend payments for Americans earning more than $1m a year.

Coupled with a surtax on investment income for the wealthy introduced at the time of Barack Obama's health reform, this would bring the total capital gains tax rate for the richest Americans to 43.4 per cent.

The rates proposed by Biden would hit private equity and hedge fund managers by effectively eliminating the preferential tax treatment of their profits -- or "carried interest". At the moment, carried interest is taxed at the lower capital gains rate rather than ordinary income, but Biden would equalise their tax treatment. 

The president has also been considering taxing unrealised capital gains passed on to heirs at death, and increasing payroll taxes on the wealthiest Americans.

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As he pushes ahead with the new tax-and-spend proposal for childcare and education, Biden is struggling to gain momentum on Capitol Hill for his infrastructure plan.

Senate Republicans proposed their own $568bn plan on Thursday -- far below the levels of spending sought by the White House. The Republican offer is heavily weighted towards traditional infrastructure projects, with $299bn devoted to roads and bridges, $65bn to broadband, $61bn to public transit systems and $44bn to airports.

By contrast, the White House plan seeks broader investments in research and development, manufacturing subsidies and retooling buildings, while devoting much more federal funding towards tackling climate change -- a priority for many Democrats.

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iehi-feed-65592 Mon, 19 Apr 2021 00:53:50 GMT Homeless encampment outside of the Fed forces Powell to reckon with uneven recovery http://implode-explode.com/viewnews/2021-04-18_HomelessencampmentoutsideoftheFedforcesPowelltoreckonwithunevenr.html The Fed has several tools to protect the economy, and Powell deployed them with full force last year. But that kind of intervention aids some parts of the economy more than others.

Slashing interest rates and backstopping corporate debt, for example, helped direct money into the financial system. Some of the biggest beneficiaries were wealthier Americans who hold investments. As a stark sign of how the rich got richer in the past 12 months, the number of billionaires on Forbes's 35th-annual ranking grew by nearly a third, swelling by 660.

Claudia Sahm, a former Fed economist and now a senior fellow at the Jain Family Institute, said the inequality stems from the limitations of the Fed's monetary policy tool kit. Low interest rates or asset purchases influence the macroeconomy as a whole. In the Fed's efforts to quicken the recovery, Sahm said that "some of the problems they're trying to solve, they make a little bit worse."

"It's not intentional," she added. "They don't like [Tesla's] Elon [Musk] more than the worker at Walmart. But the reality is that their tools make him better off more quickly than the worker."

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The Fed uses a wide dashboard of metrics to monitor the labor market. And recently, pressure has grown to drill down beyond the aggregate unemployment rate, which was 6 percent in March. Economists note that the overall figure doesn't account for major disparities in the jobless rate between White, Black, Hispanic and Asian workers.

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iehi-feed-65591 Wed, 14 Apr 2021 20:35:32 GMT Janet Yellen, Bitcoin And Crypto Fearmongers Get Pushback From Former CIA Director http://implode-explode.com/viewnews/2021-04-14_JanetYellenBitcoinAndCryptoFearmongersGetPushbackFromFormerCIADi.html iehi-feed-65590 Tue, 06 Apr 2021 04:24:03 GMT How Index Funds May Hurt the Economy http://implode-explode.com/viewnews/2021-04-06_HowIndexFundsMayHurttheEconomy.html Although many financial institutions offer index funds to their clients, the Big Three control 80 or 90 percent of the market. The Harvard Law professor John Coates has argued that in the near future, just 12 management professionals--meaning a dozen people, not a dozen management committees or firms, mind you--will likely have "practical power over the majority of U.S. public companies

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The market clout of the indexers raises other questions too. The actual owners of the stocks--not the index-fund managers but the people putting money into index funds--have little say over the companies they own. Vanguard, Fidelity, and State Street, not Mom and Dad, vote in shareholder elections. As John Coates, the Harvard professor, notes: "For the most valuable public company in the world, three individuals can in principle swing the vote of 17 percent of its shares. Generally, a significant fraction of shareholders do not vote, even if in contested battles. As a result, the 17 percent actually represents more like 25 percent or more of the likely votes in contested votes. That share of the vote will generally be pivotal." In fact, the Big Three cast roughly 25 percent of the votes in S&P 500 companies.

Another worry is that these firms are too passive rather than too powerful. They are committed to being as lean and hands-off as possible, in order to reduce their fees. They do not tend to get involved in shareholder actions or small-bore corporate management, perhaps in part because any one company doing well against its peers is not of interest to the indexers, who want more assets under management and higher corporate profits.

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The effect on the real economy might look a lot like that of rising corporate concentration. And the two phenomena might be catalyzing one another, as index investing increases the number of mergers and makes them more lucrative.

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Just last month, Senator Elizabeth Warren grilled Treasury Secretary Janet Yellen on whether BlackRock, with its $9 trillion in assets under management, is too big to fail. The Federal Trade Commission is contemplating whether the big index-fund families pose antitrust concerns. Government watchdogs have raised alarm bells about the revolving door, as the Biden administration continues to draw officials from the Big Three. In an interview with The Wall Street Journal, the chief executive officer of State Street said he thought it was "almost inevitable, when you see this kind of concentration, that it probably will make sense to do something about it."

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iehi-feed-65587 Mon, 29 Mar 2021 22:45:47 GMT Remote Work Is Here to Stay. Manhattan May Never Be the Same. http://implode-explode.com/viewnews/2021-03-29_RemoteWorkIsHeretoStayManhattanMayNeverBetheSame.html ``"Going back to the office with 100 percent of the people 100 percent of the time, I think there is zero chance of that," Daniel Pinto, JPMorgan's co-president and chief operating officer, said in an interview in February on CNBC. "As for everyone working from home all the time, there is also zero chance of that.''

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The loss of workers has caused the market value of commercial properties that include office buildings to plunge nearly 16 percent during the pandemic, triggering a sharp decline in tax revenue that pays for essential city services, from schools to sanitation.

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New York is set to receive significant federal assistance from the $1.9 trillion federal stimulus package: $5.95 billion in direct aid and another $4 billion for schools, a City Hall spokeswoman said. While that addresses immediate needs, the city still faces an estimated $5 billion budget deficit next year and similar deficits in the following years, and a changing work culture could hobble New York's recovery.

The amount of office space in Manhattan on the market has risen in recent months to 101 million square feet, roughly 37 percent higher than a year ago and more than all the combined downtown office space in Los Angeles, Atlanta and Dallas. "This trend has shown little signs of slowing down," said Victor Rodriguez, director of analytics at CoStar, a real estate company.

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Only 15 percent of workers have returned to offices in New York City and the surrounding suburbs, up slightly from 10 percent last summer, according to Kastle Systems, a security company that analyzes employee access-card swipes in more than 2,500 office buildings nationwide. Only San Francisco has a lower rate.

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At least one industry, however, is charging in the opposite direction. Led by some of the world's largest companies, the technology sector has expanded its footprint in New York during the pandemic. Facebook has added 1 million square feet of Manhattan office space, and Apple added two floors in a Midtown Manhattan building.

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iehi-feed-65585 Fri, 26 Mar 2021 20:53:42 GMT The Government Just Admitted It Doesn't Really Try to Collect Rich People's Taxes http://implode-explode.com/viewnews/2021-03-26_TheGovernmentJustAdmittedItDoesntReallyTrytoCollectRichPeoplesTa.html iehi-feed-65582 Fri, 19 Mar 2021 19:33:53 GMT Do rising used car prices mean inflation is coming? http://implode-explode.com/viewnews/2021-03-19_Dorisingusedcarpricesmeaninflationiscoming.html Since the pandemic began, used cars and trucks have seen the fastest price growth of almost any category of consumer goods, according data from the Bureau of Economic Analysis. The only categories that rival them are major household appliances and "flowers, seeds and potted plants," both of which have seen prices rise more than 10 percent between February of 2020 and this January.

So far, the sharp increases in these pandemic-popular segments have been offset by even sharper declines in the cost of categories most affected by covid 19-related travel restrictions, such as international airfare (down 28 percent from February of last year to this January) and spectator sports (down 18 percent).

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Powell and other economists also say it's not useful to compare inflation dynamics of the past with today's. The economy has changed so much since the 1970s and 1980s, they say, with globalization, technology and other forces combining to slow price growth.

A more globalized economy made it harder for businesses to raise wages or prices, since competitors and consumers could easily find a cheaper place to make a good or deliver a service. More advanced technology only quickened that shift.

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For years now, inflation has fallen short of the Fed's 2 percent target, even as the unemployment rate ticked lower and lower after the Great Recession. That reality spurred the Fed to reevaluate the connection between a tight labor market and rising prices. Economists had long believed that, as the labor market tightened and employers raised wages to compete for scarce workers, prices would rise as businesses passed high labor costs onto consumers. But such a relationship largely failed to materialize during the most recent expansion -- the longest in U.S. history.

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iehi-feed-65578 Fri, 05 Mar 2021 19:52:28 GMT NYC's Financial District faces office glut as tenant exits loom http://implode-explode.com/viewnews/2021-03-05_NYCsFinancialDistrictfacesofficeglutastenantexitsloom.html New York's Financial District is suffering as a glut of office space builds with the pandemic keeping workers home. JPMorgan Chase & Co. is the latest high-profile tenant to look for an exit from the neighborhood, a historic part of lower Manhattan that is home to the New York Stock Exchange and Federal Reserve.

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"The sublet spaces currently on offer at deeply discounted rates is a veritable flood of biblical proportions, with more likely to come online soon," said Ruth Colp-Haber, chief executive officer of brokerage Wharton Property Advisors.

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"What's happening in this market and in other downturns in the real estate market is flight to quality," Engelhardt said. "Tenants in this market, especially post-pandemic, are looking for healthier, newer, inspired spaces to encourage their staff to return to the office."

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iehi-feed-65577 Thu, 04 Mar 2021 20:16:19 GMT SPAC Froth Turns on Itself With Stocks Plunging 20% in Two Weeks - Bloomberg http://implode-explode.com/viewnews/2021-03-04_SPACFrothTurnsonItselfWithStocksPlunging20inTwoWeeksBloomberg.html It may turn out that five new special

purpose acquisition companies per day was too many. SPAC mania is showing signs of hitting a stock-market saturation point, with an index tracking blank-check flyers suddenly down about 20% from its peak. The craze is being clipped as quickly as it whipped up, with sentiment souring on growth stocks amid a runup in interest rates and rotation into beaten-down names. Before the selloff, SPACs had almost doubled since October.

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The IPOX SPAC Index, which tracks the performance of a broad group of special purpose acquisition companies, has fallen toward a bear market, down about 20% since a mid-February peak. It's on track for its second-worst week ever relative to the S&P 500. Meanwhile, the Defiance Next Gen SPAC Derived ETF (ticker SPAK), is also down about 20% from its February top, with the fund on pace for its worst week of outflows on record. While it isn't crazy that SPACs became popular given their structure and relatively loose listing requirements, according to Marketfield Asset Management's Michael Shaoul and Timothy Brackett, any frenzy of this magnitude tends to result in "a long and expensive period of regret."

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