On occasion, I get emails from a commercial banker friend who lives in California. Today he provides anecdotes from a business banker’s perspective.chair
It’s been a while since my last email. Here are some views from this business banker’s chair.
I had lunch with a financial planner today, and he said the new tax plan coming from DC would eliminate tax-deductibility of state taxes. While Federal tax rates might go down a little, the net impact would be higher total taxes via higher total federal taxes due to the loss of writing off state taxes. At least, that is the view for those of us in high state income tax states like CA. He already had clients exiting the state.
The gentleman I had lunch with today is a lifelong financial planner, mostly on the insurance side. He stated that the insurance industry today is in worse shape than that of the banking industry during the prior recession, and yet we hear very little about it. If so, we both agreed that the world isn’t ready for an insurance industry meltdown anything like that of the Banking industry during the last recession.
I provide financing to a lot of subcontractors (the trades). While visibility 9-12 months looking forward has looked good for the past few years, I finally have a client (a framing contractor for the major home builders) that has said something to the contrary. He stated that some of his major home builders are starting to see some issues in selling inventory in CA. Without going into specifics, he also stated that he senses something is changing in their world.
I’ve seen a spike in the number of unqualified (financially and expertise) in people who want to get into flipping homes. It’s becoming vogue amongst those who lack the qualification to do it at a time when the values in the San Francisco Greater Bay Area have never been higher. Somehow, 2007 peak real estate values were crazy, but the value today that are higher than 2007 are justifiable/sustainable. That’s a classic late cycle red flag.
During the last 3-4 years, I’ve seen more people who seek to finance new restaurants than any time in the past 20 years. This industry seems frothy. With rising rental costs for space and higher minimum wages for staff, I’m seeing pressure on the cost structure of existing operators squeeze them, while people are rushing to build out a new restaurant.
Finally, for the past 12-18 months, I’ve been flooded with new loan requests. I haven’t been this busy with new loan requests since the last cycle Top. Again, this seems like another last cycle red flag.
Hope all is well
I had a friend tell me one time: “Mish if you ever get the urge to start a restaurant, please call me. I will talk you out of it. Some succeed, but most lose their investment or struggle for years barely surviving.”
Everyone thinks they are different. But they aren’t. After a run up in property values, rising minimum wages, and increased competition, this is the worst time in the last 10 years.
Mike “Mish” Shedlock
Yes, the old saying goes “If you want to make a small fortune, start with a large fortune and open a restaurant.”
And you get to work 80+ hour weeks in the process.
those of us in lower income tax states (mostly red states) are not unhappy that we will no longer be financing the federal obligations, life styles and prosperity of those in higher income tax states (mostly blue states).
You are joking right. More like red states welfare and blue states subsidizing their welfare. Go look at data versus quoting your ignorance.
Rob Crampton said:
I though it was well documented that $ flow Blue to red?
Rob Crampton said:
It makes sense for a GOP tax deal to hit Blue states more, Blue states have more State tax. The careful aiming of the pork is the one political skill that is most important.
This is a surgical tax on Dem supporters.
Federal Welfare flows to the blue men in the red states. Former slave states and inner cities have more blue welfare cases.
Carl R said:
One needs to be careful in looking at correlations because it’s easy to presume causation in one direction, when the causation may be in the reverse direction. In this case, do high tax rates and liberal politics lead to high GDP? Or, does high GDP lead to high tax rates and liberal politics? The answer is important. Suppose you took a low GDP state like Mississippi, and cranked up the taxes, and adopted liberal solutions like California has. Would GDP shoot up to California levels, or would the state die? I suspect that the relationship is the reverse. The more prosperous a state is, the more liberal they become, and the result is higher taxes. I believe that other things affect which states are prosperous and which are not far more than taxes.
The single best case in point I can give is a direct comparison between Vermont and New Hampshire. The states are very similar in many ways, demographics, size, location, geography, but one state has long been very liberal, while the other has long been conservative. For example, last I looked Vermont was #1 in spending per capita on schools, while New Hampshire was about #47. Vermont was high in taxes, while New Hampshire has always been low. What’s the net result? In high school, the students in both states get about the same scores on college test exams, last I looked, so the high school spending in Vermont seems to accomplish little. Per the site you linked to, New Hampshire has a higher GPD and a lower dependency on the Federal Government. My conclusion is that when you use different policies on similar people, the low tax rate conservative solution produces better results. Interestingly, this case also makes a point that I made above. As they have become more prosperous, New Hampshire is becoming more liberal, showing that the correct interpretation is Prosperity=>liberalism, and not liberalism=>prosperity.
Eric C. Bauer said:
Be careful in applying gereralities to VT and NH. NH has twice the population of VT. There is no economy of scale in school costs, so federal mandates along with declining student enrollment and a strong teacher’s union boost our per cap costs out of sight. Also until the 70’s, democrats were unheard of. Then the JFK clans decided to invade and take over a small electorate.
You might want to take a look at how federal dollars per capita disproportionately flow to red states….
The moron politicians here in California apparently never studied physics. Once the democrats “transportation tax” is implemented in November there is going to be a massive slow down in spending as the price of gasoline and diesel translate into retail price increases. Any increase in taxes will not be helpful.
having drivers pay the full cost of road maintence is a good thing.
Phil R said:
Does that include electric car drivers who don’t think they should pay extra because they’re “saving the world?”
They think that dirty internal combustion engine cars should pay gas taxes because they’re dirty, but they shouldn’t have to pay anything extra, even though an electric car does just as much damage to the roads as a regular car, because virtue signalling.
Rob Crampton said:
Road maintenance should be paid by road damage caused,
damage ~ axle weight ^3rd or 4th power. semi should pay 30x a civic min.
No, it’s a common good. Roads should be owned by the State. Otherwise if private, even local government owned, they would have to all be toll roads.
Roads should be privatized and “tolls” would be paid electronically similar to Speedpass.
Users would pay and road businesses would have to please their customers, the complete opposite of government roads. Crappy as can be here in spite of high taxes.
Common theft is more appropriate than common good, a term adored by government lovers.
indeed – your proposal is so self evident it’s a wonder it hasn’t been implemented.
at the very least the interstates should be fully privatized
No again, Roads used to be private up until a couple of centuries ago. And they were invariably rutted mud tracks. So your argument against state roads falls down. Also only the state can deal with land ownership the roads would be built on. But it really should be the Federal governments responsibility financially. The states can administer them, but the tax base is too low for states to do it properly. The Fed has no such problems.
It’s well documented that money supposedly dedicated to roads was use during for general purposes for many years (see HJTA.org as one source). The current huge tax increase is a ripoff.
sorry but user fees such as gas taxes do not even cover maintence of streets, roads, highways, and interstates.
Property taxes pays for local streets and arterials.
mass motoring is lavishly subsidized
In CA there is money, lots of money, that is supposed to go to roads but doesn’t. Maybe what you say is true for other states.
California is a corrupt state, at many levels. News stories from California indicate that the gasoline tax is an “easy” way to raise money for financing the corrupt (bloated payouts) pension system and cover legislative deficits. A piddling amount is for road maintenance. At 52 cents per gallon, up from 40 cents, this is the highest USA state gasoline tax. This is in addition to federal gas taxes. State taxes and fees have no where to go but up. Less jobs, higher prices, and a shrinking economy are almost guaranteed.
Sacramento legislators want to raise traffic citations prices, too, to add more revenue. Red light tickets set to go to $495, with penalties if not paid within two weeks. California is already impounding cars from people behind in paying traffic tickets. Lower income people (whom Marxists claim to help) are losing vehicles and jobs as a result. Scores of local newspaper articles on this.
good – the fewer hulking death machines on the roads, the fewer homicidial maniacs behind the wheel.
gas taxes should be raised to $6/gallon
Let’s start with your state.
So the insurance industry in on the ropes, wonder why. Investing is a crap shoot, wonder why. Home building in California is about to collapse, wonder why. Unqualified individuals are trying to make the fabulous money flipping houses, wonder why. Everyone wants to open a restaurant, wonder why. And so it goes. “I see stupid people, everywhere. Only they don’t know that they’re stupid.” Wonder why.
When the Fed decided to kill interest rates because the head thought it would spark the economy with an overhang of debt like a year long bender headache, I wonder why instant prosperity didn’t happen. Like it or not, we are a consumer driven economy. Yes, I know, we need to invest in manufacturing and high tech and all sorts of capital improvements. But when the consumer is more or less taped out across the board, building the next world’s greatest widget doesn’t matter. for several decades the economy has been encourages, even throttled into immediate consumption based on future earnings, read living beyond our means, read becoming debt slaves, and we don’t understand why we are not all millionaires or billionaires.
I remember there was a very popular play on Broadway in the early fifties called, “I can get it for you wholesale”. Beat the system should have been the title. Insurance works by taking your premiums, doing the math when it comes to risk, and investing your premiums minus the reserve expected to pay off claims and make a profit on the investment. An insurance company could always buy government bonds and still make an investment profit and hence a rate of return for the stockholder.
Hell, it now costs money to put savings from your paycheck into the bank savings unless you keep an excessively high balance and even then you earn far less that inflation. Want to invest in the stock market? Jesus H Christ, even that is a gambol, a crap shoot. How many corporations are mortgaged up to the hilt and how much of that is debt that will hear south at a moment’s notice? Well, how about price appreciation? Based on what, fake earnings or forward looking P/Es that may instantly drop if the economy heads south? Well, there’s one born every minute and there seems to be an excess of several hundred million minutes.
So tell me what’s new, this crap has been going on since 2009 and the song is wearing thin.
Well said, it’s been one gimmick after another.
I remember the magazines we used to get when I was a kid in the early fifties. Boy’s Life, Popular Mechanics, and a few others.The ads always drew me, so many ads that would shown how to get rich. Why, just selling Grit Magazine would get you the prized tricked out bicycle because all your friends and neighbors wanted to buy that publication. Buy an ex-army jeep for $25, land in Arizona for $1 an acre (in some places the price has not gone up), all the great deals just waiting….
I imagine a hundred years prior to that buffalo hunting was the best game in town. Funny thing is that so many of those ads are still around, just updated a little, you know. Mother Earth News still carries a lot of them, got to pay the bills in this internet world of commerce. Hell, I bet someone in England was selling shoreline property to the pilgrims in 1640 just before they got on the boat. Yeah, nothing new under the sun.
“So the insurance industry in on the ropes, wonder why. Investing is a crap shoot, wonder why. Home building in California is about to collapse, wonder why. Unqualified individuals are trying to make the fabulous money flipping houses, wonder why. Everyone wants to open a restaurant, wonder why. And so it goes. “I see stupid people, everywhere. Only they don’t know that they’re stupid.” Wonder why.”
Oh no – you’ve got it all wrong – according to Ray Dalio, this is a ‘beautiful deleveraging’.
If this is a beautiful deleveraging, I hope we don’t have an ugly one.
Unfortunately I am deft in one ear so I have to be careful who I listen to as in won’t go in one ear and out the other, it remains trapped. But I can literally turn a deaf ear to those clowns.
There is only one business with a greater failure rate than restaurants; women’s clothing stores. Most women who go into this business believe they are fashionistas, they know what the hot trends are, and they assume all their friends will drop by for a glass of wine and buy their latest inventory. They may have a glass of cheap wine, but they are doing most of their buying on Amazon. Bezos is King.
bezos hasn’t turned a profit in 100 quarters.
Bezos is the king of conmen.
Bezos copied the business plan of governments: get rich without making a profit.
I am just wondering what happens when Amazon finally can’t BS investors – does it collapse in a sudden scary rush of failure or does it slowly & painfully cling to life much like Sears has done for the past 15 years.
Blue states that voted Hillary are high tax. Demographic brain drain can only help Trump and the GOP. Pity the wealth and brains don’t add electoral votes, at least not efficiently.
In other news, Texas is again the best state for business.
Dennis Hudson said:
Regarding restaurants, I heard it said, for those who God hates, he give them a restaurant.
If you think you know what “stable” means and also buy into the Fed’s call for at least 2% inflation,
Then you deserve to lose all you have and die from an inability to get the healthcare you need.
Two Percent price inflation means that money loses half its value in about 35 years.
Yet the majority of the public in the U.S. buys into the lies that the Fed, politicians, and the financial media dish out.
Hardly anyone is willing to accept pain today (deflation and defaults) for their children having a chance to thrive.
Most of my fellow “Boomers” are among the most selfish people alive, yet they don’t know it.
A few of the next two generations know that the Feces must hit the Fan, yet have no idea of what to do other than “Hunker Down”.
There are things that need to be done:
Agricultural diversity so we can feed those who are about to lose theirs.
Clean Energy as all economic growth requires energy.
Turning all incumbents out of office as “cleaning the swamp” is a long-term process requiring decades.
“Two Percent price inflation means that money loses half its value in about 35 years.”
Actually, 38 years.
Less than 35 years – with productivity gains it should be buying more ‘all else being equal’. Anyway, it must be selective as all the cash I get my hands on has the exact same number on it when I spend it. Must be some other people somewhere getting tricked and losing more than half, probably for being stupid or something.
No 35 years is right if you take 2% inflation compounded yearly, it comes out to 35.003 years, so pretty much 35 years to loose half your value.
“… the new tax plan coming from DC would eliminate tax-deductibility of state taxes …”
One tax subsidises another?
I thought there is a law or rule against double taxation. Isn’t paying tax on money already spent to pay another tax double taxation?
Sorry, no. Each entity might only tax once but all the federal, state and multiple local will want their cuts.
Carl R said:
First, there is no rule against double taxation. For example, they tax companies, then the company pays a dividend, and then tax you when you get the dividend. That is double taxation, and they do it.
Second, that isn’t double taxation. If you pay10% of your income as state tax, and 35% as Federal tax, if the state tax isn’t deductible, the taxes are additive, and you pay 45% total tax. If the state tax is deductible, you 10% plus 35% of 90%, or 41.5% total. Note that if the Federal tax was 38.9%, and the state tax was deductible, you’d be right back at paying the same 45% total.
There is nothing magical about allowing certain state taxes to be deductible. The fact that property taxes and income taxes are deductible are just ways to encourage states to tax via those methods, rather than other taxes like sales tax.
Here in upscale area of Bay Area, the housing bubble is back. Unlike last year this time when a house would sit on the market for a couple of weeks or longer, the homes are gone as soon as they appear. Most of the time, we don’t even see the buyers. I suspect the Chinese politburo members are busy getting their “hard-earned” money out.
There are also more homes coming on the market. One just has to drive around to see the boards that are now beginning to clutter up the street corners. One can also observe that people are suddenly fixing up homes, probably to sell them.
Very similar to what’s going on here in Bellevue WA 98004. Homes are selling fast and very frequently. Realtors are Chinese too.
Bob Sharpe said:
It’s going on in Des Moines Iowa, too, and it’s not the Chinese or Indians here. It’s corn-fed middle Americans who fear (irrationally) being priced out of the market. Very few people have the discipline to wait when there’s something they want and the realtor tells them it’s going to be worse tomorrow. Those who have patience and discipline will be rewarded. All the signs of a buying frenzy about to burn out are there…
Probably Indian “landlord families” pac-manning them up. Heads, they gain some appreciation. Tails, they hop on a plane to India and leave the whole mess to be foreclosed upon.
Its a big problem in Canada’s major cities, just as it is in the SFBay area. Especially in the SFBay area where there’s lots of Indians on H-1B visas to rent them to.
“Chinese” participation is quite minimal.
That’s what I’ve seen, too. Way more Indians than Chinese. All-cash bids. I’m not in the business so my viewpoint is anecdotal but yeah, what you said resonates.
why is a influx of outside cash bad ?
Not saying it’s necessarily bad but it’s not organic buyers. It distorts our local market, and if you’re superstitious there may be bad karma from tainted money.
Americans can’t live in cash.
Is this related to the Indian government (and China to a lesser degree) shutting down cash transactions? Bad money escaping to real estate seems to be the last legal means to launder money in the US. May be seen as safer than entrusting it to banks and governments.
Of course this makes impossible the American dream, or the future birthright, of an entire generation. Not good. When the future is stolen, as Paul Thomas Anderson wrote: “There will be blood”.
No, nothing to do with the Indian or Chinese governments at all. Indian nationals, when they arrive in Canada or the USA as immigrants, traditionally don’t have great employment prospects. So the traditional “thing” to do for survival has been to buy a bunch of real estate, with as much financing as possible, and go to work as landlords. Entire extended families living under one roof, while their credit is used to purchase multiple housing units which they then maintain and rent out for cashflow.
The result is that we have “landlord families” that own 20, 30, sometimes even 50 or more units, heavily on credit, that they’ve accumulated over the years
This has worked great for the past 20-30 years of falling interest rates and rising house prices. Lots of kids sent to dental schools. Lots of expensive cars in the driveways, and family trips back to the homeland. Extravagant weddings all around. But as asset prices fall and interest rates rise, it will all fall apart. At least in Vancouver and Toronto Canada, last time RE prices fell in the 1990s, immigration, particularly from India fell dramatically as so many of the landlord families had to ex-patriate themselves to avoid the usual consequences of defaulting on mountains of debt.
I do not see tails as an outcome. Who would want to go back to India voluntarily ?
Its not that bad if you’ve stashed a bunch of cash there. Even for a few years until the mess back in USA/Canada has been taken care of. Wash, rinse, and repeat.
Guido, I think your observations are outdated. I think the SF Bay area bubble is about to burst or at least slowing significantly. Datapoint: Fremont inventory was 382 today, versus around 295 approximately the same date last year.
The reason is that the China funny-money is drying up quickly.
You assume that inventory build up is due to buyers not buying anymore. I am seeing more homes coming on the market and that could explain the inventory build up you mentioned. Number of buyers may not be going up as fast as sellers. I just hope everybody puts their home for sale as they did at the end of the bubble in 2007 (we need to start labeling the bubbles by the year and month in which they happen — too many happening even as I write this).
The information I gave is from the last 2 months, btw.
As for the link you mentioned, I’d take the news of limits on moving money offshore with a pinch of salt — China has always had these limits. HSBC et al have worked around these rules forever. If Chinese govt. was serious about the enforcement, we wouldn’t have had the bubble in the first place. As they say, rules are for the small guy.
Also, the link does not list San Francisco Bay Area as a place where the party is ending (may be I missed it).
I also suspect the rule of 2 million $ and above purchases triggering a laundering audit might play a role in this money buying the 1M – 2M properties.
Only problem is, Chinese participation in North American RE markets isn’t backed by any evidence of inflows.
Hearsay is valued here but not much in the way of statistics. And the comments are full of complete bullshit- rumors, unfounded theories, and bald-faced lies.
Welcome to neo neo conservatism.
Ron J said:
1+1 still equals 2, Phil. A cycle still has 360 degrees.
The year of Jubilee came every 50 years. The Kondratieff cycle runs 50 years. Nothing has changed since Biblical times, in terms of the laws of math and economic cycles.
It was the hearsay that alerted us to upcoming the auto bubble about 6 months ago. Statistics are just a validation post-facto. If the blog were regurgitating what the official said, we don’t need to read it — we just need to read CNBC/NYT/Reuters or listen to NPR.
Blogs need to differentiate themselves. Some do it as a forum for yapping about things that happen in the stratosphere such as the correctness of Comey using his left hand to eat his dinner.
The other kind are topics like this that are indicators.
Because of the hearsay, there is always a danger that the data point supplied is spurious. IMO, maintaining the quality of the hearsay is where a blogger comes in. Infowars is also a blog for all purposes, but how trust worthy is it?
“I had a friend tell me one time: ‘Mish if you ever get the urge to start a restaurant, please call me. I will talk you out of it.'”
Our Government, Destroyer of Jobs
August 12, 2015
Correspondent/entrepreneur Ray Z. was kind enough to share his experience of trying to open a bagel shop and create six jobs [in Nevada]
“Having boot-strapped two seven figure companies from the ground up over the past 25 years, I knew all of the permits needed in order to open a regular business.
“So, I quit. They beat me.
“It always amazes me when politicians use the sound bite of how they will ‘create jobs’. Well, I am an entrepreneur and have created thousands of jobs over the past 25 years. I have also be responsible for over 500 million in savings to my customers over that time period. This means that 500 million dollars of wealth that was saved, could be put into new technologies, new business ventures for into savings.
More permabear confirmation bias crap. 8 years of being wrong about everything and the broken clock permabears stick to being one trick pony’s, daily doom and gloom. Yet still no recession in sight after they have called for one every single year for 8 years now. What happened to Euro sovereign debt default contagion back in 2010? What happened to the China hard landing that has supposed to happen years ago? What happened to hyperinflation and gold going to 5,000? What happened to so many calling a real estate top in 2014? What happened to massive MUNI defaults back in 2010? What happened to the student loan bubble 3 year ago ready to explode? I could go on and on and on.
Ron J said:
“More permabear confirmation bias crap. 8 years of being wrong about everything”
How long has ZIRP lasted for? How long has FASB allowed banks to lie about the value of assets? In November 2014, the G20 changed the rules for depositors. Obviously, something big is coming. Nothing was fixed in 2009.
Papering over doesn’t change underlying mathematical facts.
I expected that. The exact same cliche response parroted back by every permabear and gold bug in their confirmation bias bubble. And I myself am a permabear so I like to pick on permabears.
“something big” was apparently right around the corner in 2010, 2011, 2012, 2013, 2014, 2015, 2016….and now “something big” is “right around the corner” in 2017. That is where the term “broken clock” came from, a broken clock is right twice a day. Just keep predicting a collapse every year for the next decade every day, every month and every year and you might be right eventually. But a monkey can do that. Permabears make money from selling gold, driving traffic to their blogs with endless doom and gloom news, and selling newsletter subscriptions with endless doom and gloom. Its OK to read them, but don’t take it all as gospel.
Bears growlin’ in the forest, little red riding hood is no more, her new burka laying tattered in a politically correct manner.
(Note : All racial, ethnic or religious connotations perceived in the above statement are purely a product of own prejudice and are not necessarily shared by the author, who is as clueless as anyone else over why a burqa would be mentioned, let alone worn, nor has any real wish to find out )
Workforce automation and other deflationary activity. That’s why this stuff hasn’t yet come to pass. Everything else getting cheaper means the highly regulated institutionalized stuff like insurance, healthcare and housing can inflate away any gains that might be saved instead.
Most people aren’t noticing the technology gains made these days because we’re all fairly used to them. And software advancements are happing on the server side, basically invisible to the end user.
There will be an inflection point where these gains can no longer be absorbed, but it is nearly impossible to figure out, since tech advancements help the institutions too. As soon as we get a little bit ahead in the game, they figure out a new way to pull us back in.
Up thisaway in Seattle, the mayor is stepping down under a cloud of young boy buggery, while the city proposes a city income tax (in a state that has none) on those households earning more than $250,000 per year. The tax would take aim at so-called “unearned income,” such as interest and dividends.
A penny saved is a penny earned.
Ron J said:
“He stated that the insurance industry today is in worse shape than that of the banking industry during the prior recession, and yet we hear very little about it.”
Maybe that’s why we don’t hear about it. After all, the G20 changed the rules for those with bank deposit insurance. Banks certainly aren’t sending letters out to their depositors to inform them of it.
Metlife fought a systemic importance designation placed on them. What would people do if that insurance policy they have been paying for years, was suddenly worthless?
Obama left the job market and business market in a shambles. Regardless the stock market likely will flourish. Firstly the stock market protects against the immoral Federal Reserve debasing the currency and causing inflation. Secondly the repatriation of $2Trillion of overseas business profits will stimulate the stock market. Thirdly the Muslim European Union is not a rational investment. Fourthly the Euro will lose value as more and more nations leave the European Union.
Everyone thinks they are different. But they aren’t.
That is the quote of the decade. Applicable to just about everything and everyone. We all have been told that we’re special snowflakes, our feelings are unique and we’re individuals. We are, but only in that we’re quite similar. Somehow when the Bolsheviks assume power in 2020 (I thought it would happen last year with Sanders in honor of the 100th anniversary of Russian revolution), we all think that we’ll be the exceptions. We’ll be in power, or we’ll survive the purge (depending on your political leanings). But the reality is that the vast majority will just become the alcoholic standing in line for bread.
I recently learn that my property in the GTA (Greater Toronto Area) had gone up 6% in March this year……… LOL, what can I say.
Is that not a BIG RED flag or what????
It has been rising way above normal for a few years now and is just accelerating upwards, well why should I complain, after all I purchased the house back in the 1995, since then has grown over 5 times my initial purchase price,l with no debt outstanding on the property.
Most of the alleged ‘gains’ in the Toronto area are sales-mix change related, and do not apply to individual properties. There were a lot of luxury condo units built over the past few years which are disproportionately represented in the sales figures. Low end isn’t moving at all.
Toronto pretty much peaked in 2013 and has plateaued ever since.
Avery Buell said:
Mish, where can I get more information about your banker-friend’s observation about the danger within the insurance industry? This is the first warning like this I’ve heard and is very important to me. Thanks. Avery Buell SVP Morgan Stanley Hartford, CT
Sent from my iPad
I will email him to see if he wanst to contact you
The insurance industry is dead meat in an environment of rising long-term interest rates due to the reduction in the real present value of cashflows. This is very basic and easy to see. The entire FIRE sector suffers severe overcapacity which guarantees poor returns for a generation to come.
While an implied learning or reported observation was stated in the article, ZERO actual data was used in any industry. Therefore, I would truly like to see the actual numbers per referenced industry; As in number of loan apps. etc. etc. etc.