Ghosts of the Alexandria Hotel

“Suppose one of you wants to build a tower.  Won’t you first sit down and estimate the cost to see if you have enough money to complete it?  For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.’”

– Luke 14:28-30

Seize the Towers

The highlight of the 2024 Grammys last month was the duet by Tracy Chapman and Luke Combs of Chapman’s 1988 hit “Fast Car.”  The performers teamed up to deliver several minutes of musical magic.

The otherwise hollow affair was held at the posh Arena – formerly known as the Staples Center – in downtown Los Angeles.  This is one of the few places in LA that will pull the rich and famous away from their protected westside enclaves in Malibu Colony and Beverly Hills.

The exterior view from the arena’s Star Plaza entrance delivers a fabulous, Los Angeles-style aesthetic.  One that simultaneously pleases and lacerates the eye.

Beyond the foreground statues of famous LA athletes sits the Oceanwide Plaza development.  This trio of incomplete luxury towers was abandoned in 2019.  That was when the developer, Oceanwide Holdings ran out of money. Continue reading

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Day of Reckoning

“Time is money says the proverb, but turn it around and you get a precious truth.  Money is time.”

– George Gissing

Divine Disorder

Time, like money, offers a unique marker.  Something to count and compare.  Something to use for measuring progress – and failure.

What is your annual income?  How many hotdogs did Joey Chestnut eat in 10 minutes on July 4, 2021?  What is the year-to-date return of bitcoin?  What is the max MPH of a 1969 Ford Mustang at sea level?

In fact, the tick tock of time all seems so systematic, arranged, and orderly.  Almost a direct proof of deism.  Sixty seconds make a minute, 60 minutes make an hour, 24 hours make a day, and one day equals one complete rotation of the planet earth.

Roughly every 30 days the moon orbits the earth – which is one month.  Then every 12 months the earth orbits the sun – which is one year.

So far so good, right? Continue reading

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Wall Street Clustery

In the buildup to this week’s Consumer Price Index (CPI) report we came across an article on MarketWatch.  The author, Jeffry Bartash, closed his remarks with a brief contrast of the CPI with the Federal Reserve’s preferred price gauge, the Personal Consumption Expenditures (PCE) index.

According to Bartash, the PCE index gives less weight to housing than the CPI.  Housing costs are the most significant monthly expense for many people.  For whatever reason, the PCE index developers at the Commerce Department don’t think this is an important factor for understanding price changes.

Maybe this is why the Fed prefers the PCE index over CPI.  Another likely reason is that the PCE index also considers shifts in consumer behavior as a result of higher prices.  As elaborated by Bartash:

“A grocery shopper, for example, might buy ground beef instead of ribeye to save money.  Or a shopper in a hardware store might buy a cheaper imported tool instead of a more costly American-made one.”

These supposed shifts in consumer behavior may help fabricate the PCE index more to the Fed’s liking.  In reality, they make for poor assumptions as to what consumers actually do. Continue reading

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Tang Ping in the Year of the Dragon

“Never give a sword to a man who can’t dance.” – Confucius

Intervention from Beijing

Have Chinese stocks, supported by fresh government intervention, reached their bottom?

This week, from Monday through Thursday, the Shanghai Composite Index is up 5.52 percent.  Similarly, over this time, Hong Kong’s Hang Seng Index is up 3.53 percent.

Still, these indexes have a lot of ground to make up.  The Shanghai Composite Index is down 22.61 percent since September 2021.  Meanwhile, the Hang Seng Index is down over 50 percent in the last six years.

Chinese stocks have lost a combined $7 trillion since 2021.  The poor stock market performance has become an embarrassment for President Xi Jinping.

Several years ago, he was relishing in his nifty slogan: “The East is rising, the West is declining.”  Now, he’s compelling regulators to devise a rescue.

In late-January, Beijing announced several interventions to, hopefully, stimulate the Chinese economy and revive the stock market.  This week, on February 5, bank reserve ratio requirements were cut by 50 basis points.  This is expected to free up about one trillion yuan ($139.04) worth of long term funds. Continue reading

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