To The Moon

News and my thoughts from the last week (01Jul24)

• from X user Triple Net Investor: Commercial real estate values in Washington DC has plunged at an absolutely shocking pace... An affiliate of Society for Science just acquired 1776 Massachusetts Ave NW at auction w/ a bid of $10M This is a huge discount to the assessed value of $29M, and ~80% less than what it last traded for, $45M, back in 2012

• What would you invert to avoid the stupidity that we do? Sometimes, it is easier to identify what not to do than to identify what to do. It is like solving the problem backwards which can be easier than solving the problems forward. Thanks

  William Green & Mr Charlie Munger.

• Some of us focus on being smarter. Charlie Munger has advised us to reduce standard stupidity.

• Can CRE be one of the legs that gives way to a greater financial crisis in America?

• Average vacancy rates at logistics properties in east and north China are approaching 20 per cent, the highest in years, according to real estate consultancies. - Business Times

• SOME Wall Street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses. - Business Times

• Cost of borrowing is not included in the inflation rate but it should be. When Americans have to pay more for their mortgage, it diminishes their buying power by even more than an increase in the price of gas or groceries. - David Sacks

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*U.S. MAY NEW HOME SALES PLUNGE -11.3% M/M TO 619,000; EST. 636,000; PREV. 698,000 *LOWEST SINCE NOVEMBER 2023 - investing

• EXXON: STRIKES PREVENTS DELIVERY OF MATERIAL NEEDED BY REFINERY. WE MAY HAVE TO HALT GRAVENCHON REFINERY IF STRIKE CONTINUES.

• Container transit times for routes from China to Europe, Southeast Asia to Europe, and Southeast Asia to the US East Coast have been extended by a median of 10-14 days. G Captain

• Consultants seeking to escape the industry downturn are encountering strong competition for “transformation” and “strategy” roles at sought-after companies. - AFR

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The U.S. grid is not ready for all of this new demand, the report warns, and a slowdown in transmission investment could lead to overspending on generation.

• Russia has blamed the United States for a “barbaric” attack in Crimea that relied on US-provided missiles and killed at least four, including children, and wounded 151 others. What escalations would follow? - Al Jazeera

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86% of Americans are worried about inflation, and many of them still define inflation as being a rise in prices, rather than just high prices. But they tend to look at that rise over four years, not one. X user Unusual Whales

• Based on averages, it is possible for Fed’s Day to say that there is no evidence that stagflation or recession is in the future. If we zoom into the different demographics and socio-economic brackets, would this tell a different story?

• Creativity using AI can produce products of a certain quality. Creativity using AI that is a script of algorithm would be limited by the same algorithm. Creativity in itself is without limits.

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67 $SPX companies have issued negative EPS guidance for Q2 2024, which is above the 5-year average of 58 and above the 10-year average of 62 - FactSet

• Bond giant PIMCO sees another wave of bank failures coming as commercial mortgage trouble mounts - Business Insider

• More than a third of Americans earning at least $250,000 annually say they are living paycheck to paycheck, per Bloomberg.

• The company is never in control of the stock price but its efforts to grow and create value. The price and expectations are on the investors. If the fundamentals are good, holding is not a bad idea.

• The weapons are as good as the supply chain support and the manufacturing capacity. Given the military manufacturing capacity, supply chain complexity and span of land & ocean between the US and their proxy wars, it is hard to manage such war fronts.

• An agreement was signed on June 6 between China, Kyrgyzstan and Uzbekistan to build a new rail line that will connect all three countries. - Express UK

• The worst-performing junk bonds are concentrated in the media, telecom and cable industries, with debt from AMC Theaters and Paramount among this week's biggest laggards. - WSJ

• The end of ultra-easy money will likely be the death of many “zombie” firms - businesses whose annual earnings are lower than their interest bill. Japan had 251,000 of them at the end of November, accounting for roughly one in six companies - Reuters

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