Kafka

Young in Spirit; Old in Soul

[Bill Ackman @BillAckman]

Imagine your family worked for a generation to save enough money to buy a brownstone occupied with rent stabilized tenants on the Upper West Side. The family financed the purchase with a mortgage from a bank based on the premise that rents and cash flow would at least keep pace with inflation so you could pay interest and principal on the mortgage and hopefully have some cash flow left as a return on your investment.

While you had rent stabilized tenants, you were led to believe that the NYC Rent Guidelines Board would be required to adjudicate rental increases each year by taking a measure of the inflation of costs to own and operate a building and setting rental increases appropriately.

You believed the RGB would do its job as the board is comprised of two representatives each for landlords and tenants and five independent representatives that represent the general public.

Now, a new mayor @NYCMayor Mamdani is elected on the promise of freezing rents. There are about two million rent stabilized renters that benefit if rents are frozen so by promising frozen rents the new candidate for mayor buys votes and wins the election.

The new mayor achieves his objective by stacking the RGB with directors who do not follow their obligations and simply vote for a rent freeze as a preordained conclusion as evidenced by the statements of an RGB director who resigned in protest for this very reason.

Meanwhile, inflation in NYC is rampant in utilities, real estate taxes, insurance, repairs and maintenance, etc. and now your rents are frozen. Real estate is a high operating leverage business which means that frozen rents and inflating expenses will cause property cash flows to plummet and your after debt service cash flow to go negative.

I expect therefore there will be hundreds if not thousands of small NYC property owners who are now or will shortly be underwater on their mortgages, and without any cash flow to maintain their assets.

If you remember the images of the South Bronx burning in the mid 1970s, you can viscerally understand what is happening to small NYC real estate owners.

While the rent freeze appears to be short-term good news (long term it will lead to poorly maintained apartments) for 2 million NYC renters, it is bad news for the 2 million or more renters in the 1 million market rate apartments in the City because a landlord-hostile market is not likely to add meaningfully more supply and market rents will likely continue to escalate at a high rate.

All of this seems quite unfair and wrong unless I missing something?

Why am I wrong?

For disclosure: I do not own any NYC rental apartments.

[Wall Street Mav @WallStreetMav]

The USA seems to be subsidizing about 25% of the economies of Central American countries like Honduras.

They send 10% to 15% of their citizens to the USA to work illegals, then wire transfer their earnings back to their home country and it is 25% of their countries GDP.

They are driving up apartment rent prices in the USA and forcing down wages for American citizens, plus they get free healthcare and other federal benefits via scams in blue states. They they send their earnings back to their home countries instead of spending it in the USA economy.

This is a lousy deal from every angle for American citizens.

[Coddled Affluent Professional @feelsdesperate]

Academics do not answer to a ‘higher power.’ They’re people who do stuff for money and if you want to understand why they’re doing what they’re doing you should look at who pays them.

[Kafka @MischaKafka]

@FischerKing64 Love this

[Kafka @MischaKafka]

@FischerKing64 Incredible

[FischerKing @FischerKing64]

This is why the immigration arguments rooted in ‘we don’t have enough domestic talent’ are so off base and insulting.

We don’t even know how much talent we have because we don’t look for it. In fact, by eliminating advanced programs and dumbing down or eliminating standardized testing - we actually prevent anyone from finding potential talent. We hobble our own people because we are afraid of revealing group disparities and then blame them for the need to import foreign ‘talent.’ It’s deeply sick.

[Wall Street Mav @WallStreetMav]

Europeans don't have children because they can't afford to raise them.

Muslims in Europe have lots of children because European give them subsidies that are luxurious relative to where they came from.

Europeans are being taxed to pay for Muslims outbreeding them.

[Coddled Affluent Professional @feelsdesperate]

‘Noah Smith’ and ‘Ezra Klein’ and ‘Matt Yglesias’ are a compelling argument AGAINST the idea that liberalism can stand up to leftism.

Richard Hanania is compelling evidence AGAINST high IQ ‘Elite Human Capital’ libertarianism.

A lot of internet figures are most effective as negations of what it is they’re proposing.

[Thomas Sowell Quotes @ThomasSowell]

Hillary Clinton: “So I think we gotta have tough conditions. Tell people that come out of shadows, if they’ve committed a crime, deport them no questions asked, they’re gone!”

[Coddled Affluent Professional @feelsdesperate]

If you’re talented academically and want to maximize your ability you should have to have rich parents who are able to send you to a private school like Mamdani’s parents did.

Mamdani went to Bank Street which now costs $70k a year.

[Coddled Affluent Professional @feelsdesperate]

It is kind of interesting how hysteria about Jews cannot be contained and is passing through every contingent left and right in American politics. It can’t be resisted - it morphs slightly but everyone reaches for it sooner or later.

[Eyal Yakoby @EYakoby]

A pile of human bones and skulls at Majdanek concentration camp near Lublin, Poland, in 1944.

[Geiger Capital @Geiger_Capital]

"No matter how decent they are, the 11 million people who broke our laws should be held accountable."

[Blume Industries CEO Balding 大老板 @BaldingsWorld]

It's amazing the number of things Europeans learn if you give them a decade or two

[Lydia Moynihan @LydiaMoynihan]

We’ve given $22 trillion to NATO. We’ve bankrolled Europeans’ security while they’re living la dolce vita — taking the month of August off, paid parental leave, free healthcare…

As a taxpayer, I’m very happy focusing on ourselves and letting Europe pay for their own defense.

[Coddled Affluent Professional @feelsdesperate]

Dems could beat Trump on immigration.

They could just hand over convicted criminals and then Trump would be forced to start turning the screws on political allies in hospitality and agriculture and other industries and these operations would no longer be able to be justified to apprehend non-criminals alone.

But Dems are so beholden to fan service and ‘fighting Trump’ that they’re not able to do this and are willing to die on the hill of not turning over convicted criminals to maintain credibility.

[Bjorn Lomborg @BjornLomborg]

No, just no

Climate change does not make more cold extremes—it makes fewer cold extremes

The UN Climate Panel clearly says so, e.g. here, with lower cold extremes both in past and future (arrow down, red means "virtually certain")

https://t.co/h6WRffUw1C

[Will Alverson @WillAlverson]

The rhetoric from the US could be delivered better, yes

But man, the second we say we dont want to handle everyones defense, subsidize their drug prices, and pay unequal tariffs, all of our allies just jump into the arms of the CCP?

Message received I guess

[Blume Industries CEO Balding 大老板 @BaldingsWorld]

Let's go over some of the arguments and issues about this whole kerfuffle.

1. Nobody can tell me what an "alliance" actually is. I've literally seen supposedly in touch and educated Europeans say things like if NATO collapses Europe will re-arm and manage its own defense within 10 years. If you need 10 years to re-arm you aren't in a defense alliance you are a free rider outsourcing your defense requirements. I've seen criticism for Europeans that if only the US was determined we could have kicked Russia out of Ukraine as Europe only recently started providing any military support and still expects the US to handle everything. That's not an alliance, that is a free riding problem. Until anyone can seriously answer 1) what are the shared threats we agree upon and 2) how we will burden share responsibilities equitably there is no alliance it is free rider and service provider

2. If you are European stop telling me things like you take security seriously but doing nothing about it. You cannot have it both ways. Russia's economy is the size of Netherlands. You could easily help solve this situation but you choose not to invest the required resources. If you are not going to prioritize European why should the United States? For everyone who will post a graph of how much military aid Europe now provides to Ukraine, go back and check: how did you even get to that point? Hint it wasn't because Brussels bureaucrats enjoyed a peaceful coffee in the office cafe.

3. These issues have been 40 years in the making so this is really just the end point of something you have chosen not to do. Trump is pulling the rip cord but this is 40 years in the making. Every administration the entire time has been telling you the same thing. I'm not going to shed tears that someone is finally addressing the issue rather than letting it linger another 40 years.

4. Sovereign countries can have sovereign interests and sometimes those overlap and other times they don't. If you want to open yourself up to China that is your sovereign right but then do not expect to receive the benefits of US cooperation and alliance. Across all types of dimensions Europe is wildly more compromised than the United States on both Russia and China. The United States is not perfect and I am regularly critical of US activities where there are problems. However, Europe is wildly more compromised across a range of domains with regards to Russian and Chinese activities. If you want to benefit from US strategic cooperation you have to recognize the threats, agree on the threats with the United States, and do something about it. Right now most of Europe doesn't mean any of those criteria. Why should the United States cooperate with countries where we don't agree on the threats or see you wanting to address those threats in anyway? There are a couple of countries in Europe that are actively working to undermine progress by working more with China among notable problems.

I hope this gets sorted out but I am not going to shed tears if a Cold War institution collapses because the other members fail to recognize the new Cold War.

[Blume Industries CEO Balding 大老板 @BaldingsWorld]

I have this same conversation with Europeans regularly and even after I spell it out super simply they walk way just as baffled but I will try again:

1. Invest enormously in your military and defense. That will solve at least 75% of US dissatisfaction with Canada and Europe. There is no alliance there is the US military and people we let sit at the table. Get your military defense in order

2. Recognize the threats the world faces and collaborate with the US on those issues or values tell us should have mutual interest in dealing with. Neither European or Canadian behavior indicate they share a) common assessment of what the threats are b) willingness to do anything about the threats.

The amazing part of this is how simple it is for Europe and Canada to solve. It is seriously not hard. Spend actual money to buy actual planes that can drop things that go boom and then be willing to do something about the threats. If you can't do either of those the really is no purpose for an alliance and really don't demand anything negative of you