economics

Inflation and Rent

Biden made an ass of himself on the inflation topic on Tuesday. It turns out that inflation is running at over 8% for the sixth consecutive month, and that is just the understated official rate. The Fed is reportedly considering a full point increase in interest rates next week, the highest in 40 years.

It’s that time of year again. Time to begin looking at market adjustments for our rentals. We have decided that we are not going to rent out one of our rental properties any longer. We are going to sell it in a few months when the current lease runs out.

The second property is more profitable, and we are looking at adjustments. The market isn’t as tight as it was last year, with inventory of available rentals being a bit more than it was. Prices even stabilized a bit. The market can’t keep rising at 25% per year forever, I guess. Still, we held last year’s increase a bit because we didn’t want to get too pushy.

Because of Florida’s insurance issues, our insurance costs went up. Our taxes went up. Our other expenses are also rising.

That means the house we are currently renting out at $1,825 is far below market and is going to see a rent increase. Zillow rentals claims that the house can rent for $2,550, but that seems too high. The current market is running between $1.15 and $1.28 a square foot for comparable rentals, meaning that I could likely rent it out for $2,175 to $2,425.

Now I am not the kind of landlord who will screw over a good tenant. In three years, he has only been late on rent once. Still, fiscal and market conditions are what they are, so I think we are looking at setting rent at about $2,000 per month. I do need to eventually put new countertops into the place, and if the tenants insist upon that, then the rent will have to be increased closer to market, perhaps to $2,100.

In the meantime, everything you buy will continue to get more expensive.

By Divemedic, ago

Workforce Participation

Much ado is being made of the fact that unemployment claims are at a two month low. Biden will most assuredly make a big deal out of it. That number means little. What matters is the labor force participation rate. For July, that stands at 62.1 percent.

Back at the turn of the millennium, 66 percent of Americans were working. That number dropped during Obama’s Presidency, all the way to 62.8 percent by December of 2016.

Then Trump took over. By February of 2020, it had regained a quarter of what was lost and rebounded to 63.4. The left couldn’t have that, so enter the COVID shutdown. Now Biden is rejoicing as the labor force participation rate hovers at a level that is even less than Obama’s low.

By Divemedic, ago

Energy Prices Still Climbing

Natural gas prices were $2.50 per million BTUs when Joe Biden took office. Today, natural gas hit $10 per million BTUs. In Europe, it’s even worse- an incredible $79 per million BTUs, mostly because wind power in Europe is significantly underproducing.

If there is any economic indicator that has improved since Biden took office, I can’t find it.

By Divemedic, ago

Oil Reserves Update

Just less than a month ago, I warned that the strategic oil reserve was being destroyed by the Biden administration in a bid to force down gasoline and energy prices ahead of the midterm elections, and that the Biden family was personally profiting from the sale of our national reserves. The reserve is now down to 460,000 barrels.

Oil is selling at $100 per barrel as I type this, and gas prices are averaging $3.89 per gallon.

Just a week ago, Goldman Sachs was forecasting oil prices of $130 per barrel and gas prices of more than $5 per gallon by year’s end. These are the levels “at which we need to see sustained prices to eventually solve the market deficit,” said the company spokesman. Translated: prices for everything will be so high that demand will begin to drop off.

Except that isn’t where Sachs is stopping with their forecast. They are now forecasting that oil prices will continue to drop through the election, with a gradual rise to $125 per barrel by next summer. I wonder how accurate that will be, since 2020 saw them forecasting 2022’s oil prices to be $55 a barrel.

By Divemedic, ago

My parents were wrong

The Six Flags CEO is having to explain the decision to raise prices and eliminate discounts at the company’s parks, in light of the emerging fact that attendance is down by 22% since the decision was made. He said in a statement that the price increase was a result of the company’s problems with what he referred to as “rowdy teenagers.”

We realized that we had discounted too much and we were filling the park with the wrong kinds of customers. So, we only got the discounter or we became a day care center for teenagers. It was a cheap day care center for teenagers during breaks and the summers. So we began raising prices to reduce the numbers of rowdy teenagers running around.

By rowdy teenagers, he means groups of feral black teens who had bought discount tickets before running amok in the parks and beating the shit out of customers who were paying full price. The Six Flag parks were becoming areas that families were learning to avoid.

The Six Flags America, located just outside of DC in Maryland, hosted a Halloween event called “Fright Night.” It was attended by large groups of blacks that began vandalizing cars in the parking lot and attacking other customers by using mob violence tactics who were executing planned ambushes of young white girls. The local cops claim that they were searching for the perpetrator, but it’s nearly a year later and no arrests have been made.

A similar story in Six Flags Great America just outside of Chicago. Out of control blacks attacked a family for asking them to control their foul language around small children. They wound up beating a 12 year old girl and her parents.

We can’t be seen as racist, because not all black people are like that, or something. So let’s call criminal behavior, vandalizing property, and beating the shit out of people as being “rowdy.” Let’s refer to black adolescents as “teens” so no one will know we are talking about a violent race of criminals. It sure isn’t Norwegians or Canadians that are terrorizing the paying customers here.

On average, the black race is broken to the point that wherever blacks congregate, crime, violence, and poverty are more likely than places where they are not found. The only place where this is not true is in Hollywood. The only places where blacks in large numbers are successful doctors, lawyers, and other professionals are make believe- television and movies. It isn’t that the US is racist, so don’t go there. Name an economically successful black country. The only one I can think of is Wakanda, also make believe.

So back to Six Flags. As a result of increased pricing, the company said it has lost about 2 million season ticket holders who did not renew their membership over the past year. As a result, total revenue for the quarter decreased by 5% to $24 million, fueled by the the lower attendance and $5 million reduction in sponsorship revenues.

Once people realize that the reign of people who are annoying them is over, the family customers will return with their money. Until then:

  • Stay out of cities. Especially ones with high concentrations of blacks.
  • Avoid large congregations of blacks.
  • If you are in a place where you find yourself suddenly surrounded by large numbers of blacks, get the fuck out of there.
The answer, of course, is “NAGGERS.”

We keep being told to ignore the evidence. Don’t believe what you see with your own eyes. My parents pounded that into me day after day. I learned the hard way that this isn’t true. I no longer trust cops, blacks, or eat my vegetables. That last one may be the only one of the three where my parents were correct. The great melting pot is a fantasy.

By Divemedic, ago

Orlando Rent Control

Rent control will be on the Orange County, Florida ballot in November. You can always count on Democrats to put “get out the leftie vote” items on the ballot. Things like legalizing weed, rent control, free shit.

The bill would restrict rent increases to the rate of inflation or 5%, whichever is less. While I don’t own any property in Orange county, this sort of socialist insanity is dangerous. Let me use my own rental as an example:

So I own a home that I rent out for $1850. That would cap any rent increase at $92.50 per month, or $1100 a year. As I posted last month, my property taxes are up 10%, my landscaping costs are up 15%, insurance costs up 21%, and interest (in dollars) on the mortgage is up 18% year over year. No one caps my expenses.

If this were to come to pass, I would have to be creative in making up the shortfall. Say, increase the rent by the maximum amount, then start adding fees like washer and dryer rental, landscaping fees, parking permit fees, etc. The lease would plainly say that they are not part of the rent, but are still required. I don’t know, I would have to see the final law and talk to my lawyer.

This won’t end well for landlords OR tenants. Socialist price controls never do.

By Divemedic, ago

Refuse to Do Business

Yesterday, I wrote that small businesses should refuse to do business with people who live in California, because they are exporting their police to enforce California law on other states. Now here comes New York, going after large businesses.

They are investigating whether Tyson foods violated New York anti gouging laws by charging higher prices for meat during the COVID lockdowns. Tyson is refusing to comply with the subpoena, claiming that they cannot be investigated in New York for the price of meat charged by them in Arkansas.

This has a logical outcome. If the state of New York wants to mess around and force companies to sell food at a loss, then companies will simply stop selling there. No matter how large the market, if profits aren’t there, then there is no reason to sell there. It’s like the old SNL skit.

The original skit ended with “People ask us how we can make money, when all we do is make change. The answer to that is simple: volume.” For some reason SNL removed that line from the bit. Maybe because people today wouldn’t get it.

New York doesn’t get it. No matter how many people who live there, if there is no profit, companies won’t do business there. That is the essence of the national split we see today. The cities can’t impose their will upon the rural areas without limit. There will be push back, and there lies the source of our national split.

We as a nation are headed for divorce. The people in the middle of the country will only be pushed so far. The cities will have to play nice, or they will found out just what cold, dark, and hungry are.

By Divemedic, ago

Lost Workforce

This is why the US won’t ever surpass China and other nations in manufacturing or most other fields ever again. How can any manager think that they can compete with a business with actual work ethics if all of their employees work a 24 hour workweek with unlimited paid time off working from home?

American workers have become lazy, unproductive losers that won’t get anything done, but demand high wages and lavish benefits.

You aren’t feeling okay today & need a mental health day? We gotchu. Out of PTO but need an extra day? Not an issue. Soon the boomers are outta here & it’s our turn to set the standard.

What are you going to do when all of the dead wood is costing you tons in expenses, killing your margins, and your Chinese competitor is producing your product at half the cost?

“Bring on the 4-day workweeks and 6-hour days,” one commenter said. “I currently do nothing half the day.”

To me, this isn’t an argument for giving you more time off, this is an argument for firing two employees and outsourcing their job to some Indian call center that will do twice the work at half the cost. We all know that, should you get a 24 hour workweek, you aren’t going to magically become more productive. Instead of your current 20 hours of work in a 40 hour workweek, you will be at work for 24 hours a week, being paid like you are there for 40 hours, but only producing about 8 hours of real work. That is a recipe for being replaced.

The US is doomed. We are headed for the new Dark Ages and the rise of the new Chinese dynasty.

Maybe we deserve it.

By Divemedic, ago

Back to the Carter Gas Lines

Today, the Biden administration announced that it is selling another 20 million barrels from the US oil reserve. It’s obvious at this point what the administration’s plan is- they are selling our nation’s future security in order to safeguard Democratic election chances by depleting our nation’s reserves of a vital war material.

When Biden took office, the US oil reserve was 638 million barrels. As of July 17, the US strategic oil reserve stood at 480 million barrels. In the 189 intervening days, there were 158 million barrels removed from the reserve, with more already earmarked to be removed and sold. Accounting for all promised sales, the reserve will be less than 340 million barrels by October 1. That means nearly than half of our oil reserves will have been sold by the administration in less than 9 months, and represents the lowest amount of oil in reserve since 1983.

The graph below, found at this location, outlines the depletion of our reserves, but keep in mind that this graph was created on June 17, which was before the most recent sales and releases that were authorized by the Whitehouse.

Keep in mind that Biden announced in March the release of 240 million barrels. This administration has no choice but to continue selling oil at this rate all the way through the election. What this means is that we will continue bleeding oil from the reserves at the rate of more than a million barrels a day.

It’s much worse than that, however. The SPR contains two kinds of crude: medium-sour, and light-sweet. Typically, US refiners prefer medium-sour crude, which can easily be processed into gasoline and other products. The light-sweet in the reserves has a much lower density, and is not as favored by refiners. So far, 85% of the oil removed from the SPR has been the medium-sour crude.

By October, the SPR will hold only 179 million barrels of medium-sour crude. Clearly, Biden is running out of firepower and out of time. By 2023, the US SPR will be virtually out of medium-sweet crude in the SPR.

Should that happen, you can expect gas shortages and when you can find gasoline, expect to see prices hit $10 a gallon or more.

By Divemedic, ago