Occupy Wall Street Protest Photos

Here's some photos that I've taken from the Occupy protests in downtown LA and Long Beach...

 

 

Occupy Wall Street: A For Effort

F for execution.  The Occupy Wall Street movement was born from a great message and a necessary protest; the top 1% of wealthy Americans have prospered at the expense of the remaining 99% during the course of the current economic slump that began in late 2007 as Countrywide sputtered out of control (few experts actually acknowledge that to be the true beginning of the financial crisis and instead point to Lehman.  Fact is, the recession started Q4 2007, long before the Lehman collapse).  So, the outrage-- I get it; I'm outraged at the disparity in wealth, too.



But the expression of this outrage is unfocused.  By occupying all of Wall Street, the movement is spreading its outrage from the 1% they are intending to target.  Instead, the protesters are yelling shame upon their own, people who are just working their own 9-5.  And while those employees may be just as frustrated with the fat-cats at the top, they're just happy to be getting a steady paycheck with 9%+ unemployment.  Is that so evil?

In truth, the Occupy Wall Street protesters are no more than a mob of angry bigots, when you really think about it.  They've painted every employee of a financial institution as an enemy-- a proverbial fat-cat, regardless of the income that financial professional may be making.  It's tantamount to stereotypical discrimination of any group.  But please don't take my identification of the situation to be a complaint, because I've always been of the philosophy that stereotypes are 1) Funny and ironic 2) YOUR responsibility to defy.

I'm a banker.  Let's see if I can defy the stereotype, then.  Let's see...thanks to student loans, I've got a negative net worth.  Don't own a home, don't live to excess, and I don't make money off of others' misfortune.  In fact, I work for a small, community-based commercial bank.  These banks have become so over-regulated that the "speculation" the media says occurs couldn't be more far from the truth.  In fact, it's impossible for a bank to "take a chance" on a business anymore, as Pink's hotdogs claims in the latest BofA commercial.  Without all 5 C's of credit firmly in place, regulators would criticize any bank-made loan, making "taking a chance" a career-ending decision.  Whew!  Glad then, that I can defy the stereotype that's being protested on Wall Street.



So, Wall Street protesters, want an A for execution?  Take a page from the book of the group of folks that set up shop outside the home of Wells Fargo's CFO, Timothy Sloan, in San Marino.  While his compensation is unavailable at Reuters, John Stumph (the CEO) has a package worth $18MM, so we can safely assume that Timmy's making a cool $5mil+.  I certainly don't condone the fact that the 'Refund California' protest actually bled onto this property, the idea was right.  Protest outside Tim Sloan's house.  Hound Jamie Diamond like the Paparazzi on Lindsay Lohan.  Denigrate Lloyd Blankfein and call him horrible names in front of his children outside of his home for all I care.  His children should know that their father is a horrible, lying, greedy SOB that should have been in jail for the past 3 and the next 300 years.

But the IT guy making $65K?  The operations manager making $90K?  Even the senior credit administrator making nearly $200K?  Leave them alone!  They're integral cogs that would actually make the financial system work if the C level executives of the behemoth, political-monster institutions would stop counting their own net worth and realize that they are thoroughly pissing everyone off with their selfish greed.

The Occupy Wall Street message is great, but the actions aren't matching the message, and this is my recommendation to rectify that divergence.

REITS, Landlords, Real Estate "Sell-Side" Still out of Touch

The real estate market has been in a tailspin since the end of 2007.  You would think that 4 years of turmoil would bring back some sort of normalcy to market forces, and certainly would indicate favor for the real estate "buy-side" transaction, be it either a potential buyer or tenant.  But oh, how out-of touch and in denial those folks are!  Either from using the house like an ATM, buying the "dream home" at the height of the market, listening to the idiotic Realtor commercials telling people that these past 3 years have been the "best time to buy," or investing in an over-leveraged REIT or commercial property venture and expecting a nearly 10% return when rents have only fallen in the last 3 years.

Let's take Long Beach for example.  It's been the latest area of real estate analysis for me personally, as this is where I'm looking to relocate.  Forget the fact that both my wife and I have degrees in higher education (the wife even has a doctorate) and that it is a complete head-scratcher as to why a married couple making a comfortable six figure household income can't afford to buy an SFR with a yard.  Not something huge even, just a 3x2 of maybe 1,400-1,600sqft in a neighborhood that I'm not going to get shot at. 

Instead, let's focus on the obvious.  Even though HOA fees for condos are absolutely absurd in most desirable areas of Southern California, prices are almost in the ballpark of what would equate to a reasonable housing payment (I say housing to include P&I, taxes, insurance, and HOA fees), meaning approximately $2,000 for a 2-3 bedroom with at least 2 bathrooms and at least 1,200sqft.  As the price of a condo will be affected in direct proportion to the HOA fees, let's explore as to why they are so damn ridiculous these days.



First and foremost, HOA fees are elevated to unreasonable levels due to the sheer cost of the projects that they undertook during the housing bubble that bred so much greed.  Land prices became inflated, and prices for construction materials were elevated.  Add $ to the new condo project, and a higher $ amount to reach the % threshold promised to investors.  On top of that, many of the REITS and commercial property ventures assumed that by adding "luxury amenities" that they could see a premium to their return.  Granite countertops, overdone common areas, in-house fitness centers and poolside amenities were used to justify even more exorbitant prices.  There were two things wrong with this strategy; the overdone common areas have gotten extremely little to no use, rendering their value questionable, and many former 'luxury' items such as granite countertops are no longer scarce enough to warrant price premiums.  Add to that the fact tha the REITS funded the properties with as high of a leverage as possible (typically 70% LTV) and have historically been complete failures when it comes to projecting upkeep costs to maintain as reserves, and it's not hard to see why REITS like Archstone are still trying to charge $2,000/month for a plain vanilla 2x2.

Not that the land-lease REITS are any better.  For instance, HOA fees along Ocean Blvd. are all $700/month+.  I suppose I can understand that amount for the residents on the top few floors with ocean views, but for the rest, the residents are paying for the land owners' poor investment decisions.  Still, even though HOA dues are $600/month at the Promenade, prices for 3x3 condos in the building have come down close enough that a total housing payment would be about $2,200.  Note to Archstone: I belive that your claim of 94% occupancy to be a bold-faced lie, solely based on the prior calculation alone.  And there are a few other 2 and 3 bedroom places available in Bluff Heights and Belmont Heights that are also in the $300,000's....and this is near the beach, people!  So, prices are slowly coming back to reality-- enough for someone like me, who's sick of paying rent, to take notice.

But the sellers....oh, the sellers.  Let's take one of the Promenade units for example.  It originally sold in Feb 2008 for 285K.  Perfectly reasonable.  It sold in May 2008 for 505K (I'd like to meet that idiot and laugh).  It has since been listed in early 2011 and been slightly reduced on a regular basis ever since.  Now, I'd be happy to pay more than 285K for this place, but one absolutely cannot ignore that original sale price and can almost be certain that the value will dip very close to that original price before the real estate market truly hits bottom.  That's right; no matter how much white noise you've heard on the news or read on the internets, the housing market has not yet bottomed.  In fact, it will not reach bottom until interest rates have been rising for a good 3-6 months and investors can properly assess Cap rates on multi-family and SFR markets. 

So in summation, sellers be ready to make some more concessions, because as the prices fall on condos, that will permeate to SFR's and then to multi-family rentals.  Take your hit now and let the buyer dictate at which point they are ready to assume the further market losses.  Today's market value won't be tomorrow's, so don't think the ball is in your court just becasue you hold the asset.

Reaching Sustained Readership

Badass!  The Spot has been enjoying a sustained mass of readership, even though I've been pretty bad about updating voer the past month.  Our base readership is 7 views per day, which isn't huge, but I'm doing this for S's and G's, not the CREAM.  That said, this is October-- breast cancer awareness month.  Get ready for my scathing post on this "should be, but isn't" benevolvent cause.  Additionally, Dexter is filming in the parking lot across from work, the wife and I are fed up with stupid Glendale, and I begin delving into the happenings in and around the LBC.  This much for October, I can promise!  Keep the feed rolling...

Expo II Breaks Ground

This morning I watched the story on KTLA like a little kid.  Finally, they were breaking ground on the second phase of the Expo line, which will extend from Culver City to Santa Monica.  Obviously, there is still some opposition by the NIMBY crowd in Cheviot Hills, arguing there will be heavier traffic in the neighborhood, and this could delay the scheduled 2015 opening, but you've got to be excited by progress, right!?!



Then I heard something troubling-- that the Expo Line phase 1 would not open until the beginning of next year! Now, I know there have been plenty of bumps in the road that have caused delays, but I had to check this one out.  As it turns out, there are two pieces of the phase 1 project, and the first piece will open late this year (as we had previously been informed), and the final portion including a bridge over Jefferson will be opening in the beginning of 2012.  Mystery solved.

If you'd like to read the entire LA Times article on the subject, you can find that HERE.

And here's their map of the project....

Glendale Discourages Tennis

My wife and I registered for (and of course, got) tennis rackets, something we thought would be fun to do together.  On our mini-moon to Vacation Island, we enjoyed our time on the court, despite the swarm of bees that came cruising through.  And it was clear we would need to play more, because I owed her for the swift ass-kicking she gave me.

Growing up in Moorpark, I was used to shooting hoops right by the tennis courts at the parks.  I didn't play tennis, but knew that I always could go play a game if I had a racquet on me.  In fact, there was a summer that a bunch of us would head over and mess around on the tennis courts after basketball practice.  Point being, at the public city parks, the courts were always open.

However, upon searching for a place to brush up on my swing and avenge my loss, it was impossible to find a place in Glendale that did not charge court fees.  Being a basketball recreationist myself, court fees are something I just am not familiar with.  Furthermore, I couldn't make sense of why there were court fees to play tennis and not basketball at the Glendale parks.

Of course, and probably due to the fact that there are fees, there was nobody playing on the courts at Freemont park.  However, there actually were a few people playing at Glorietta park, though there were still court fees.

I'm having a real hard time swallowing this for more than a few reasons.  First, if they start with tennis, is basketball next?  Second, isn't that discrimination?  Third, isn't that discouraging people from exercising?  Fourth, isn't this a public park? Fifth, I live in this City; why aren't tax dollars covering this?  And finally, why are you charging and where is the money going?

C'mon, Glendale!  LA's got plenty of free courts, and so does Long Beach.  What gives?

Walking LA: Los Feliz

A couple of years ago for my birthday, my wife (then my girlfriend) got me a great book called Walking LA, by Erin Mahoney Harris.  It's a fantastic book of various walks through neighborhoods and points of interest in LA, and we've taken up the task of trying to complete all 38; we're about halfway there.

This past weekend we went on the Los Feliz walk, which takes you up into the hills and past Frank Lloyd Wright's Ennis-Brown House, then down to Barnsdall Art Park and Wright's Hollyhock House.  It's a great walk and one heck of a workout.  There's an abundance of stairs, both in the hills and at the park, and the whole walk is about 3.5 miles.  There's more factoids in the book-tour, but here's a few photos that I took along the route...

Destination: Pierpont Beach

A little slow to the draw, I know, but here we go.  We spent last weekend at Pierpont Beach in Ventura;  a nice getaway not too far from home.  The house we stayed at is available at HomeAway, and was a perfect location and layout for our family.  Of course the weather was a bit overcast most of our trip, as can happen in August in Oxnard and Ventura, but I still managed to get a bit of a tan.  The house was right off of the Pierpont bikepath, which runs from the north end of the marina at Marina Park to the north end of the Ventura County Fairgrounds.  I highly recommend this location for a local beach getaway; there's even a quaint little restaurant row on the west end of Seaward, and you have to go to Duke's burger shack.  Best of all, we went during the Fair, and there's a shuttle that leaves from the Ventura Marriott at the entrance to the neighborhood.  Here's a shot I got from the Ferris Wheel...

Getting out of Town...Sorta

Heading to the V-Town for a beach house vay-cay with the fam for what is debateably a staycation, given that it'll only take about a half tank of gas.  The VC fair is on, so I'll take the opportunity to post on other happenings in So Cal outside of LA city limits this weekend.  Keep the feed rolling!

Wild Market Ride

Yesterday was the first trading day since the S&P downgraded their rating of US debt, due to the fiscal policy instability in our country.  The instability stems from a complete inability to compromise on Capitol Hill.  The left side of the aisle points their fingers at the right side, saying it's going to take both spending cuts and revenue increases to fix the problem that the right side won't listen to, and the right side of the aisle is throwing their hands in the air claiming a mandate from the Taxpayer to fix rampant spending abuse in Washington, then folding their arms and playing chicken with default.  But ensuring true, longterm economic health is not an overnight fix, something both sides were looking for and stood firm on.  Even with an analytical error, S&P was right to downgrade US debt, because there is a major structural issue to address.

That is a large part of what caused yesterday's massive selloff, taking the stock market under 11,000 and closer to Bear Market territory.  The other major fundamental aspect to the economy that would let the air out of stocks is that it appears that QE has ended, and the debt deal hints that it wouldn't be prudent to inject any more liquidity into the markets, artificially inflating them.  Therefore, the market is now right-sizing to what it would be sans intervention.  Of course, today we had a pop-back in reaction to the Fed leaving rates low, but once that announcement gets fully digested, I think the market will interpret the statement as I did: You're on your own, now.

Today's Fed decision was to leave the target benchmark overnight interest rate between 0-0.25% until the middle of 2013.  The bond market naturally went nuts over the news, as a 2-year T-Bill essentially became an overnight note.  The stock market went schizophrenic, unable to decide whether all of the dire ajectives about the economy overshadowed the low-rate environment or not.  The little engine that could (open-market LIBOR rates), however, has continued to chug along as it has for the last month in an upward direction.

So, based on the fact that 1) LIBOR is on a slow but consistent rising trend, 2) There were 3 dissenting FOMC members to today's statement, all which would have preferred to keep rates low for a shorter duration 3) The Fed has never set a target date horizon for a consistent rate level, leading me to believe that the decision, while probably an analyzed and educated estimate, is more of an emotional appeal to appease the market and rates may not in fact remain this low until 2013 --  We're in the full-swing of a US Treasury bubble, or an inverse bubble for rates.  Market returns must out-pace inflation, and as mortgage rates get pushed under 4% again this week (just watch), investors will begin to again search out a predictable stream of income (i.e. dividend paying stocks, corporate bonds) that will provide a more reasonable investment return.  Comparative risk appetite may increase in the mid-term, which should cause a demand decrease in US Treasuries and the subsequent and ineviable rise in yeilds.  This is the slow and healthy process of the cyclical economy, and hopefully we're disciplined enough to accept this over a quick fix as we have in the past.