patrick.net
An Antidote to Corporate Media
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DS,
everything is great about Oz except for the water problem. I was down in your neck of woods a month ago, and the drought was so severe that all the major cities were put on a water alert level of 4 (max 5). I read somewhere that you guys need to start drinking recycled water pretty soon. I tried some of your recycled water, all I have to say is, god bless the Ozzies who have to live with this thing day in day out.
Since you guys have so much energy and such an extensive coastline, why don't you just build more desalination plants? Recycled water sounds like the last resort for a landlocked country which you are not.
They could be recycling more, and using less. However, things like swimming pools then become a luxury and a cardinal sin. The stormwater design of the coastal cities, where the rain tends to fall, has been to get it out to sea as quckly as possible, like the European model, rather than try to harvest the rainwater. City populations have increased, and the rainfall patterns have retreated to the coast away from catchment areas. Major cities are on Level 3-4 generally, some other areas are Level 5.
They have to look at desalination, however most of the power to the plants would be from coal-fired power stations, so there is an environmental dilemma of sorts -- do you produce more CO2 to solve the water problem? The other option is to start building nuclear, but there has been a longstanding tradition in Oz to never construct a nuclear plant. (Selling uranium to other countries is fine, however...) There could be a nuclear future there though... The desal plant was put forward in Sydney as the best choice, then taken off the table because it was unpopular for those reasons. Now Melbourne is deciding. I think they just built one in Perth for about $400M...
As they point out, they need "a 'security through diversity' strategy. This approach comprises seven key platforms - water trading with irrigators, water recycling, enhanced catchment management, demand management, new groundwater, new surface water and the construction of the new desalination plant."
There's a page of links to 'environmental' stories I just stumbled upon while discovering that desal plans are back on the table. Buried amongst the links are references to desal, drought, etc. There's an amazing technique using 2 satellites and the gravity of water which measures global water levels:
Something about world poverty, Warren and Bill, and top US earners from Peter Singer of Princeton:
Lastly and equally worstly, on rent control, etc, something from NY Times about selling Stuyvesant Town and Peter Cooper Village and taking off all rent controls. Long article. On topic, is this how development and housing allocation should be conducted?
The two complexes were designed to provide budget accommodation for middle-class tenants. Around three-quarters of the apartments have regulated rents at a third to half of market rates, though the caps are expected to be progressively removed.
The sale of what had traditionally served as an affordable, middle-class oasis for firefighters, civil servants and nurses hit a nerve in a city exhausted by skyrocketing real estate prices that had sent the cost of an "average" condominium well beyond $US1 million. Tenants, housing advocates and much of the rest of the public feared the new owners would remould the complexes in a way that would put them beyond the financial reach of many New Yorkers - a process already under way in most of Manhattan and a good portion of Brooklyn.
For all of the deal's accolades, it also illuminates the financial leaps of faith that real estate buyers are increasingly taking. Once, buyers priced properties based on existing cash flow. Real estate executives say that calculus would have generated a $US3.5 billion price for the complexes that Tishman Speyer bought. But buyers are now looking to the future, building models of anticipated cash flow when determining how much to bid. The Stuyvesant Town deal, with its $US5.4 billion price tag, reflects the new math, and analysts and rival bidders say the hefty price means that the deal will not show a profit for as many as six years.
Tishman Speyer declined to discuss financial terms of the transaction. But in the view of most real estate executives, the apartments in Stuyvesant Town and Peter Cooper Village will emerge from price caps imposed by rent regulation laws at an increasing rate. When that occurs, the executives say, rents and profits will then rise steadily. If that doesn't happen, however, the deal could turn out to be a very costly minefield.
A moment of silence please for the man whose invention may sustain FBs for many months to come -
Paul,
Mr. Ando will be missed by FB's everywhere. For a goof search youtube for: "Real Financial Heros". You'll laugh your @ss off!
Different Sean Says:
> Lastly and equally worstly, on rent control, etc,
> something from NY Times about selling Stuyvesant
> Town and Peter Cooper Village and taking off all rent
> controls. Long article.
Can you quote where the long article says they will be “taking off all rent controls�
Rent control in NY (like here in SF) is not going away any time soon. You may have read that the sentence “But in the view of most real estate executives, the apartments in Stuyvesant Town and Peter Cooper Village will emerge from price caps imposed by rent regulation laws at an increasing rate.†means that they are getting rid of rent control but all it really means is that since rent control keeps rents so low huge numbers of people will stay in the apartments for their entire lives. Since a lot of young working class people moved in to the apartments in the 1940’s and 50’s are at (or past) the magic number that the Met Life actuaries calculate every year statistically there will be high turnover in the next few years but “rent controls†will still be in place (for most tenants) and will keep restricting the increase in rents for (most of) the new residents. I had a long discussion with a friend from Carmel Partners before his firm bought the Parkmerced here in SF (the sister property to Stuyvesant) back in 1989 (from the “Queen of Meanâ€) for just over $300mm. Sitting at his desk in front of the Argus screen I could not see any reasonable way for them to make any money at that price (over the years I’ve spent a lot of time on a much smaller scale putting SF rent control deals in to Argus for my Dad). It turns out that I was right and Carmel didn’t get much cash flow from the (old begging for capx) property (less than they would have got from a CD) but they ended up selling right around the top of the market (at the end of 2005) for over $600mm to a JP Morgan Investment fund.
> The two complexes were designed to provide budget
> accommodation for middle-class tenants.
In America everything we do is for the “middle classâ€, but the truth is that 50 years ago those were nice apartments that only upper middle class whites (the article mentions that Met Life was strict on the white only policy when they said: “Negroes and whites do not mix.â€) could afford. My parents (who rented a nice clean older apartment in the Mission after they got married) still refer to the young couples that rented at Parkmerced in the early 60’s (paying TWICE as much as they were) as “rich kidsâ€â€¦ I hate to see anyone loose money (even idiots like Casey from I am facing foreclosure), but over the past year I have been blown away by the crazy pension fund deals (and the crazy financing that allows them to happen). This is not going to end well and I won’t be surprised if we will end up having rich real estate guy jr. begging the city of NY to bail him out in a few years…
CleansingSphere,
Very disturbing. Their "Just Pay" motto will bite both WFC and ORIX in a big way. What I found particularly offensive was their "double-recovery" tactic of writing off a defaulted loan as a total loss (for tax purposes) and then concealing any monies actually recovered from co-investors! That's where they really screwed up. Now the IRS is involved.
Oh and the part about sticking their investors with THEIR needless "Rambo" litigation expenses was simply golden. Fortunately I parted ways with MBS paper in 2004. After reading this I doubt seriously I'll ever revisit them again.
Actually, score 1 for Mt. View Renter! In his example it was crooked REIT managers but this is close enough. I now trust these guys about as far as I could throw them. Nice work CS!
"But hey, Top Ramen tastes a lot better when you eat it off a granite counter top"
I bet this video feels more like a documentary than comedy to many.
DinOR,
The financial heros are hillarious! I was thinking of part 3 when I read the Ando article. Thanks for pointing it out though. I didn't realize that 3 parts existed. Good times!
Paul
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Once upon a time in a neighborhood far far away developers made new zero plot line 3500 sqft. stucco homes for everyone to enjoy. These “homes†were valued beyond belief, for they were on the most hallowed ground in all-of-the-world, the San Francisco Bay Area. For a long while these magnificent edifices to all things boomer grew and grew in “valueâ€, this of course was expected from Mr. Boomer and his second (third?) trophy-wife. After all, the entire world has curried their favor thus far, why shouldn’t their “home†provide an endless source of income in the form of cash out refi’s and HELOCs?
This world existed in peaceful harmony with all creatures big and small for many many moons. While the estates were labeled “McMansion†by some, their comments were taken on face value as these sort of mudslingers are typically just jealous bitter renters. All was well in Boomerville until an evil presence was felt. Rumors of a dark evil propaganda monger began to spread, and there was much fear. Ford Expeditions were piling up on the showroom floor and the Botox clinics no longer had waiting lists. For a short while it was whispered that this evil one sustained himself on the bitter tears shed by over-extended boomers.
This dark evil Prince of Propaganda upped the ante when he broadcast his vile diatribe for all to hear on the world wide web. A new sort of lighting fast propaganda delivery vehicle was developed, the blog, this device which has brought so much sorrow upon the happy development by the calm tranquil bay has come to be known as “Patrick.netâ€.
Patrick was a hideous vile hate filled little man; with venom coursing through his veins he sat by his cheap pine table writing his callous disparaging words. The “home-owners†were justifiably enraged. How dare one without the daring do to sign his life away make such callous and darn right mean statements? The rumor mongers at Patrick.net brought up, over and over again, terms that they clearly manufactured from some unknown, unverified data source, things such as “true valuationâ€, “reversion to mean†etc, were mentioned ad infinitum, ad nauseum.
The “home-owners†had a secret weapon though, not only was the Sweet Baby Jeebus on their side, but also were a group of skilled wordsmiths uniquely qualified to respond to the hooligans at Patrick.net. These Master Pulitzers were of course besmirched by Patrick’s neo-fascist online militia. One of Patricks Brownshirt’s, a creature so loathsome he goes by the name “HARMâ€, went so far as to call the skilled these skilled wordsmiths, “trollsâ€.
It was indeed a sad day in Boomerville, one can smell the bitter tears and only envision how sweet they taste to the horrible Patrick, sitting by his cheap pine table, in his pathetic rental.
Surfer-X