InvestWithAlex.com 

Subscribe Today
My Account

Category: Uncategorized

Posted on

The Real Reason Why Car Dealers Are Terrified Of Tesla

No More Oil Changes. For most car dealers, their servicing centers are their cash cows. And nothing brings cars in like a regular oil change. It’s not a secret that once they are changing your oil they are likely to find 20 other things that “require your immediate attention and repair or your tires will fall off and you will die in a fiery crash”. Now, Tesla is trying to change all of that. With their battery pack technology, your car will not need an oil change or for the most part other servicing. In fact, Tesla offers service download where they would download your car information and let the software fix it. 

Isn’t technology great?

Not according to Coalition of Automotive Retailers which is fighting Tesla and it’s direct sales model in every state that it can.  

tesla-investwithalex

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

The Real Reason Why Car Dealers Are Terrified Of Tesla  Google

 

Car Dealers Are Terrified of Tesla’s Plan to Eliminate Oil Changes

Car dealers fear Tesla. In states across the country, powerful car dealer associations have lobbied to ensure the electric car maker and its direct-sales model are kept out. This movement claimed another victory this week when New Jersey banned Tesla stores in the state.

On the surface, the fear is hard to fathom. In New Jersey, for instance, sales of Tesla’s $70,000 Model S reportedly number in the hundreds. But if you dig a little deeper, it becomes obvious why dealers are worried. They don’t just fear Tesla’s cars. They fear Tesla’s plan to create a world where you never have to bring your car into the shop again.

The first and most striking way Tesla kills the dealer service department cash cow is downloads. As part of its sales pitch, Tesla says you should think of its Model S sedan as “an app on four wheels.” That may sound like vacuous Silicon Valley marketing copy, but the company isn’t just being metaphorical. Software is at the heart of what keeps Teslas running. These internet-connected cars are designed to self-diagnose their problems. The vehicles can also download software fixes or updates — even new features — much like an iPhone when Apple puts out a new version of iOS. When fixes happen over the air, there’s no need for a shop in the first place.

It’s hard to charge for an oil change when there’s no oil to be changed.

The ability to repair a car via software is especially important when the vehicle itself consists of so much new technology that traditional mechanics don’t know how to fix. The flip side is that without an internal combustion engine, there’s not as much to fix. I’ve written before that a Tesla without its outer shell looks like acell phone on wheels. It’s basically just a big battery. That means no spark plugs, no air filters, no fuel pumps, no timing belts. In short, Teslas don’t have any of the parts that force you to take your car in for “regularly scheduled maintenance” — services that can cost dearly at the dealer. But it’s hard to charge for an oil change when there’s no oil to be changed.

To be fair, Tesla isn’t doing away entirely with bringing your car in. The company recommends an inspection once a year or every 12,500 miles. Its service plans start at $600 per year* or less if you buy multiple years at once. The plans include replacement of standard parts like brake pads and windshield wipers. The company will monitor your car remotely and tell you when there are problems, such as faulty batteries. In theory, there are pitfalls in an arrangement where the company that makes your car is the only one that can fix it. But Tesla would seem to alleviate that concern with its flat-rate plans, rather than fee-for-service gouging for every fix. What’s more, the company says your warranty is still valid regardless of whether you get your car serviced at all.

Yes, these all sound like grand promises. And for all we know, Tesla won’t be able to deliver on them in the end. But Consumer Reports’ decision to name the Model S the country’s best overall car suggests otherwise.

Even the fact that Tesla is making these promises at all must strike horror in the hearts of dealers. Once presented with the possibility that most of the costly headaches of owning a car aren’t necessary, car buyers might start asking dealers why they don’t change, too. The answer, of course, is that all those headaches are exactly what keep us coming back to the shop and putting more money in their pockets.

At Tesla’s most recent annual meeting, one shareholder asked founder and CEO Elon Musk about whether challenges to the company from traditional auto dealers hurt the company’s business outlook. Musk argued that consumer desire for a better way of buying and owning cars would win out. He said the traditional franchise model that dominates auto-selling in the U.S. wouldn’t work for Tesla for several reasons, including its reliance on maintenance to make money. “Our philosophy with respect to service is not to make a profit on service,” Musk said. “I think it’s terrible to make a profit on service.”

The shareholders applauded — the same shareholders that have sent Tesla’s stock price up nearly 650 percent over the past year. Yes, for now, Tesla only makes luxury cars, and its approach to service might seem like a luxury. But if it starts making cars regular people can afford, that applause for car dealers could be the sound of money spiraling down the drain.

Posted on

Is China Ready To Start It’s Mass Migration To “Empty Cities”?

China’s communist leadership has long maintained that they are building infrastructure and “empty cities” to allow more than 700 Million Chinese now living in the rural areas to migrate to urban centers. It’s quite an ambitious plan, where close to 100 Million people (equivalent to about 33% of the US population) are expected to make the move by 2020.  

Will it work? 

I believe the plan itself will work as more and more Chinese will chose urban living and higher wages. However, this move will do nothing to bypass China’s economic and credit issues. With massive credit, shadow banking and real estate bubbles, China won’t be able to escape massive defaults and their subsequent impact on the Chinese economy.  Plus, there are numerous questions of exactly how these rural Chinese supposed to afford to live in widely overpriced cities. Either way, it would be interesting to see how this experiment works out. 

mass migration investwithalex

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

Is China Ready To Start It’s Mass Migration To “Empty Cities”  Google

China announces plans to expand cities, railways to support economic growth, raise incomes

BEIJING (AP) — China has announced plans to expand its cities and improve public services to support economic growth by allowing millions more rural residents to migrate to urban jobs.

The Cabinet plan issued Sunday calls for raising the share of China’s population of almost 1.4 billion people living in cities to 60 percent from 53.7 percent now, a shift of about 90 million people.

The ruling Communist Party sees allowing people to migrate into cities for higher-paid jobs as a pillar of more sustainable growth based on domestic consumption instead of trade and investment.

China’s evolution from a mostly rural society began with market-oriented economic reform in the 1980s. Cities such as Beijing and Shanghai have grown to become among the world’s largest but migrants are hampered by a household registration system that binds them to their hometowns. That limits access to schools, health care and pensions even for those who live in cities for years.

Sunday’s announcement of the “National New Type Urbanization Plan” for 2014-2020 gave no financial or other details. But plans announced earlier call for improving housing for 100 million people who live in dilapidated shantytowns.

“Domestic demand is the fundamental impetus for China’s development, and the greatest potential for expanding domestic demand lies in urbanization,” the report said, according to the official Xinhua News Agency.

The ruling party has promised in its latest five-year development blueprint to make the economy more productive by giving entrepreneurs and market forces a bigger role and overhauling banking and other industries.

The urbanization plan says railways will reach cities with more than 200,000 residents by 2020 and those with more than 500,000 people will be linked by high-speed rail, according to Xinhua.

It promises to pursue a “human-centered and environmentally friendly path,” according to Xinhua.

“A scientific and reasonable urban development model should be adopted, with green production and consumption becoming the mainstream in urban economic activities,” it said. “China should strive to push for harmonious and pleasant living conditions.”

Longer-term, authorities expect 300 million people from the countryside to become city dwellers by 2030, the equivalent of migration by the entire U.S. population.

The latest plan promises to give permanent urban status to 100 million rural migrants, according to Xinhua.

A study by Tsinghua University in Beijing found only 27.6 percent of China’s people have urban status with full claims to education, health and other public services, while hundreds of millions of city dwellers with rural status have limited benefits.

Posted on

Shocking Secret Revealed: Will Zillow.com Accelerate Upcoming Real Estate Collapse?

What was unimaginable just two decades ago is now a reality. The amount of local real estate data one can get with a click of their mouse is mind boggling. While this can be “net positive” when the real estate market is going up, it can quickly turn into a major nightmare when the real estate market is heading down (as we anticipate it to do over the next few years). An incredibly popular real estate website Zillow.com traffic growth rate just went parabolic, now bringing in over 70 Million unique visitors in January of 2014. 

Is that good or bad? 

Well, it’s not dissimilar to speculating in penny stocks and hitting refresh button on your browser every few seconds (back in the day). People are starting to watch their local real estate markets very carefully. This is a speculative mentality. While it does wonders on the way up, a lot of people will rush to sell when they see their comps going negative. I am afraid they will find very few (if any) buyers on the other side. Perhaps collapsing the real estate prices much faster than anyone anticipates. We just have to wait and see. 

zillow-traffic-investwithalex

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

Shocking Secret Revealed: Will Zillow.com Accelerate Upcoming Real Estate Collapse? Google

 

From our friends at Doctorhousingbubble.com 

You can’t stop the internet when it comes to real estate data.  Zillow is a great example of technology revolutionizing the way people view real estate.  Some of you are old enough to remember when the closely guarded MLS was only accessible by your local real estate agent.  Unless you were ready to do some digging, finding out what a home sold for took a bit of time.  It was also hard to view a list of available homes for sale.  That is no longer the case.  When Zillow initially came out the housing bubble was still raging.  My initial thought was that access to information would only serve to create bigger booms and deeper busts.  Keep in mind that the entire housing system is still built upon the appraisal system.  Basically each home is only as good as the last few sales.  When a market is booming and people are now able to see the boom in real time the temptation to buy can ramp up.  When the boom bursts as it did in 2008, you can also see how quickly things will reverse.  Things are already slowing down and sales are dropping dramatically in some areas.  Does access to data liberate us from the old model of buying and selling real estate?

The real estate information revolution

I love digging around in the housing data.  Real estate by far is going to be the biggest purchase most Americans will ever make.  In the past, this big buying decision was usually entrusted to those in the industry.  It made sense if the only folks with access to the MLS were real estate agents.  They held all the cards.  Most people had no idea what homes were for sale until an agent drove them around to view target properties.  Now, open houses are posted online and many people arrive agent free.

People are still irrational and that is why markets boom and bust.  People had access to great information before the tech meltdown in the early 2000s.  Zillow was around in 2006 yet the housing market had its first ever nationwide meltdown starting late in 2007 when data started becoming readily available to all.  The housing market has become a speculative asset class that captures the attention of the masses.  Entire mythologies are built around real estate.  Confirmation bias is extreme in the industry even though we have witnessed 7,000,000 foreclosures since this crisis hit.

The appetite for real estate information is insatiable:

zillow traffic

Zillow put out this chart showing the visitors to their site.  Back in 2009 Zillow was getting about 5 million unique visitors per month.  Today that number is up to 70 million.  This is a massive number of people going to a site dedicated to real estate data.

It is important to understand what is going on behind the numbers.  Appraisals are largely based on a “sales comparison approach” where recent sales are used as a basis for current pricing.  This is great in a market with a high number of transactions and relatively stable price changes but what happens whensales dwindle or inventory flat out disappears?  We are seeing some of this occur where some zip codes are reaching new peaks on low sales volume.

Redfin also provides some good data and we can see that sales are taking a hit in the West Coast:

year over year sales

Year-over-year sales in the West Coast are down 13.4 percent versus 5.9 percent nationwide.  In California sales are leading the way in this year-over-year decline:

california market

Sales in the state are down 13.7 percent year-over-year and the median home price is up 21.3 percent although this trend has stalled out for the last couple of months.  Affordability in California is horrible.  Only one out of three families can actually afford the median priced home.  The last post was interesting and we see many young professional families with six figure incomes struggling to purchase homes in high priced areas.  What is fascinating is that many of these high income households are pausing to buy because they are running the numbers.  Numbers that many times are pulled from these new venues of data.

Why are these seemingly intelligent high earners balking at buying when the trend is obviously showing higher prices?  I believe one of the larger ironies of having access to data is that it makes people more prone to manias and panics.  The late night mantras of “real estate never goes down” or the simple minded retorts of “buying makes sense at any time” are largely lost on a tech savvy audience that can crunch the numbers and understands opportunity costs and can run the numbers on a simple Excel sheet.  The days of fooling a large number of people with hollow mantras is largely gone.  We can see what is going on simply by typing in a few numbers.  However, it is naïve to think that greed, the fuel that sets manias ablaze is also gone.

There is a bigger complexity to the system.  Can the Fed really control interest rates for a very long time?  Do baby boomers have adequate retirement funds to keep them going into deep old age?  With sales slowing down and prices stalling out, will speculators pullback and spook the data hungry mob into changing their tune?  The news cycle feeds off of the quick headline so you have to wonder what will happen when the housing market inevitably slows down as it is.  Going back to the late 1990s, we have yet to see a stable market for more than a few years.  Boom and bust has been the new theme:

case shiller

Boom and bust seems to be a new trait of the housing market.  Access to information only seems to feed the beast or starve the giant.  The fact that so many in their 20s and 30s with healthy incomes that put them in the top 10 percent of households are hesitating to buy tells you something.  These people want a home but are targeting markets flooded by investors, speculators, and people simply willing to mortgage their lives for a poorly built property.  There are 7,000,000 reasons why people should run the numbers carefully and think deeply about making a giant purchase.

It is fascinating to see the number of people being vocal about buying in high priced areas today.  This was similar to the rhetoric we saw in 2006 and 2007.  Some have sound arguments and others are merely using their own confirmation bias as a way to extrapolate their very unique circumstances onto the future.  People seem to crave a social affirmation when buying.  Those that are successful usually feel pressure from family, friends, or even their own internal dialogue that buying is simply the next best thing to do.  Once they buy, the entire narrative usually develops on how marvelous of a decision it was.  Some even mistake luck with market timing acumen.  The rental parity argument makes sense with smaller down payments but when we are talking $100,000, $200,000, or even $300,000 for a down payment, this argument falls flat.  An all-cash investor doesn’t have to worry about rental parity from day one.  Make the down payment large enough and you are likely to arrive at rental parity no matter what.  There are bigger things at play.  How many can actually save this much?  What about the lost opportunity cost in say the stock market?  Can someone actually carry this nut 30 years forward?  It is interesting to note the volume of e-mails I have gotten in the last couple of years of people asking for confirmation about a buying decision.  My response?  Go ahead and buy if you feel you absolutely need to!  I’m not the one that will carry a $4,000, $5,000, or even $6,000 monthly nut deep into the future.

What is also interesting is the big trend in people opting to rent versus buy.  Many have no choice but many that have the ability to buy are opting not to.  Some would rather lease a nicer home versus stretching to buy in an overheated market that is creating a halo effect on neighboring cities.

Access to data is great but I think this coupled with the instant media analysis only accentuates the boom and bust cycle of real estate.  There is a strong possibility that this year, prices will go negative year-over-year in some areas especially if the slowdown in sales continues.  Then the feedback loop will reverse.  We have not had a normal real estate market for more than 20 years so why do some think that after this incredible investor induced boom that somehow, we will calmly reach a new permanently high plateau?  The biggest argument for higher prices is basically the “because the past had lower prices” group and the “real estate always goes up in good areas” group that largely uses anecdotal stories as a method of ignoring the growing strain on local incomes.  I can get behind this rally in home prices if good jobs were plentiful and incomes were moving up in sync with real estate values instead of being driven up byinvestor speculation and Fed market manipulation.  It is good to see that those in their 20s and 30s with solid household incomes are actually crunching the numbers instead of mindlessly waddling into a massive housing purchase by following some old tired mantra.  Remember kids, it used to be true that “real estate never faced a nationwide price decline” until it did only a few years ago.

Posted on

The Extent Of China’s Credit Bubble

The chart below speaks for itself and the extent of Chinese Credit Default time bomb. Please note, this chart doesn’t include China’s so called “Shadow Banking” assets which are estimated to be at an additional $6-10 Trillion. In short, China makes US Credit Infusion by the FED look like child’s play. When China finally blows sky high, it’s defaults will be as massive at the credit expansion below. 

China Bank Assets InvestWithAlex

 

The Extent Of China’s Credit Bubble

Posted on

Why Putin Doesn’t Care About The Russian Stock Market -or- Russia’s Rich

In another propaganda piece by the Western Media, the WSJ reports (see report below) that Russia’s rich are freaking out. They have already lost billions in the Russia’s stock market collapse and might face margin calls if things continue to deteriorate. Further, if sanctions are implemented, the Oligarchs stand to lose countless billions more. Nice try WSJ, but you don’t get.

Putin, doesn’t give a flying fuck about Russia’s stock market or Russia’s rich at this juncture. He is in full control. I have been saying this since this whole thing started, but no one gets it. Putin is committed to go to war. Against Ukraine, the US or NATO. Whoever decides to intervene into Ukraine will be in a war with Russia. Immediately. There is no way that Putin or Russia will let Ukraine fall into NATO hands. I am not sure why our administration doesn’t understand that.   

western media attack on russia investwithalex

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

Why Putin Doesn’t Care About The Russian Stock Market -or- Russia’s Rich  Google

Russian Richest Face Margin Calls With Billions at Stake 

“Russian businessmen are very scared,” the 54-year-old former billionaire, who served in the Soviet embassy in London during the Cold War and owns Russia’s National Reserve Corp., said by phone. “There are risks to the Russian economy. There could be margin calls, reserves might be drawn down, exchange rates may fall and prices will rise. This worries me.”

Billionaires in Russia and Ukraine risk further losses as market volatility and the threat of Iran-style economic sanctions intensify following Russia’s incursion into Crimea. Since Feb. 28, the day unidentified soldiers took control of Simferopol Airport in southern Ukraine, Russia’s 19 richest people have lost $18.3 billion, according to the Bloomberg Billionaires Index, a daily ranking of the world’s 300 richest wealthiest people. 

“The instability caused by the situation in Crimea could be a problem for the oligarchs,” Yulia Bushueva, who helps manage $500 million at Arbat Capital in Moscow, said in a telephone interview. “If a billionaire pledged their stakes in publicly traded companies as collateral for a line of credit, they could face margin calls and have to re-negotiate with banks.”

The U.S. and the European Union are threatening sanctions against Russia if it doesn’t back down from annexing the Black Sea province, which is holding a referendum in two days to join Ukraine’s former Soviet-era master.

‘Negative Consequences’

“All sides now understand each other’s positioning and understand the constraints each other face,” Michael O’Sullivan, chief investment officer of Credit Suisse Private Banking, said in a telephone interview. “It’s now clear as well that an escalation would have negative consequences on pretty much all the players.”

How the Crisis Began, Where It’s Heading

The European Union last week froze the assets of 18 Ukrainians, including “hundreds of millions of euros” in the Netherlands controlled by former President Viktor Yanukovych and his son, Oleksandr, Dutch Finance Minister Jeroen Dijsselbloem said March 6 on the television show Pauw & Witteman.

Dmitry Firtash, a 48-year-old Ukrainian billionaire who made his fortune importing Russian natural gas, was arrested in Vienna Wednesday by an organized-crime unit of the Austrian police on a warrant issued by the U.S. Federal Bureau of Investigation, according to a statement by the country’s Interior Ministry.

Outside Russia

He is alleged to have paid bribes and formed a criminal organization, according to the warrant, issued after an FBI investigation that began in 2006, the ministry said.

One Russian billionaire, who asked not to be identified because of the sensitivity of the situation, said he was concerned about the effect potential sanctions might have on business. He said he’d consider buying assets outside of Russia if sanctions were imposed.

Dmitry Peskov, a Kremlin spokesman, said in a March 11 telephone interview that “there were no consultations” with Russian businessmen and that they “have not expressed any concern” over the situation.

According to a March 13 report in the Wall Street Journal, a spokesman for President Vladimir Putin acknowledged that business leaders in Russia have been in “constant contact,” and that Putin had not met with any of them. The report said a recent meeting between the country’s industrialists and high-ranking government officials turned “tense” when the subject of sanctions came up.

Broken Sanctions

Doing business under sanctions might not be all bad for Russian entrepreneurs, according to South African billionaire Natie Kirsh.

“There are opportunities that come out of sanctions,” the 82-year-old, who started building his $5.9 billion retail and real estate empire during apartheid, said by phone from Johannesburg. “Sanctions can be broken. It always depends on the extent of the sanctions and how they take.”

F.W. de Klerk, South Africa’s last president during the apartheid era, said the country and businessmen were able to work around the sanctions levied by the U.S. beginning in 1986.

“The sanctions delayed change in South Africa because it made us look for ways to evade them,” de Klerk, 77, said in a telephone interview from Cape Town. “We worked with the business community to find ways to keep companies going. In the end, not many factories shut down, they just changed ownership.”

Ukraine’s Richest

Kirsh said the Cold War could reemerge out of Russia’s incursion in Ukraine, and energy suppliers outside of Russia will benefit if sanctions are levied.

“It’s a different story with Putin,” Kirsh said. “South Africa doesn’t supply 30 percent of Europe’soil and gas. There will be some people outside of Russia that will see a huge benefit. Some people who supply oil and gas for Russia will not believe how busy they will be.”

Rinat Akhmetov, Ukraine’s richest person, has lost more than $550 million since Feb. 28. The 47-year-old billionaire, who owns Donetsk, Ukraine-based conglomerate System Capital Management Group, expanded his business with help from Yanukovych. Akhmetov’s DTEK Holdings BV was the only bidder in two of five auctions of state-owned energy assets, which were organized by the former president’s government.

‘Maintain Relations’

The billionaire no longer supports his longtime ally and has committed to rebuilding the government of Ukraine, according to a March 10 report in London’s Telegraph newspaper. Elena Dovzhenko, a spokeswoman for Ahkmetov, said the billionaire wasn’t immediately available to comment.

“He understands that the previous state of things is over,” Ihor Burakovsky, head of the Board of the Institute for Economic Research and Policy Consulting in Kiev, said by phone. “He will try to maintain relations with all the significant players in the country.”

Ahkmetov on March 9 met with Vitali Klitschko, leader of Ukraine’s UDAR party and a potential candidate for Ukraine’s presidency, to discuss the situation, according to a statement from UDAR.

“The use of force and lawless actions from outside are unacceptable,” the billionaire said in a separate statement on March 2. “I state with all due responsibility that SCM Group, which today employs 300,000 people and represents Ukraine from west to east and from north to south, will do everything possible to maintain the integrity of our country.”

State Assets

The 19 Russian billionaires on the Bloomberg ranking have businesses, homes and bank accounts scattered around the globe valued at more than $208 billion. Some of that wealth was accumulated through government ties that enabled them to acquire former state assets during privatization in the 1990s, transactions Putin called “unfair” in 2012. They have since moved control of the assets out of Russia and into the West.

Alisher Usmanov, the country’s richest person, controls his most valuable asset, Metalloinvest Holding Co., Russia’s largest iron ore producer, through three subsidiaries, one of which is located in Cyprus, an EU member nation. The 60-year-old also owns a Victorian mansion in London that he bought in 2008 for $70 million, according to a May 18, 2008, Sunday Times newspaper report.

He’s lost $1.5 billion since the crisis began, according to the Bloomberg ranking.

“We are concerned with the possible sanctions against Russia but don’t see any dramatic repercussions for our business,” Ivan Streshinsky, CEO at USM Advisors LLC, which manages Usmanov’s assets, including stakes in Megafon OAO and Mail.Ru Group Ltd., said in an interview at Bloomberg’s offices in Moscow today.

Greater Compliance

“Mail.Ru and Megafon revenue is coming from Russia and people won’t stop making calls and using the Internet,” he said. “Metalloinvest may face closure in European and American markets, but it can re-direct sales to China and other markets.”

Transferring ownership abroad may prove problematic if sanctions are imposed. The U.S. Securities and Exchange Commission and other regulatory authorities may tell U.S.-based banks to exhibit greater compliance with the existing Foreign Corrupt Practices Act, Standard Bank (STAN) Group Ltd. said in a March 11 report.

The report also said the U.S. might investigate Russia’s compliance with the Financial Actions Task Force on Money Laundering and Terrorism Financing in an effort to push the country onto a black list, a move that would prevent global banks from dealing with Russian lenders.

‘Nuclear Blow’

The third escalation would be actual asset freezes, which perhaps would be “the nuclear blow, as it would risk countermeasures from the Russian authorities,” according to the Standard Bank report.

“Currently, there is no clear link between events taking place in Ukraine and any steps that might be available to freeze assets of wealthy Russian citizens overseas,” Marta Khomyak, a partner of London-based PCB Litigation, said in a telephone interview. “However, given the pace of events and the underlying political tensions, I would not rule out attempts being made to attack various Russian interests overseas.”

Sanctions related to the Crimea crisis so far have been levied on individuals the EU said were responsible for the “misappropriation of state funds” and “human rights violations,” according to the regulation passed by the Council of the European Union on March 5. President Obama echoed the language in a briefing with journalists at the White House the next day.

Lisin’s Steel

“Russians who are making bank transactions and opening new accounts will now be confronted with increased suspicion,” Valery Tutykhin, an attorney with John Tiner & Partners, a Geneva-basedlaw firm that specializes in wealth management, said in an e-mail.

The crisis also threatens to derail the relationship between the West and the Russian businesses the billionaires control. Among the companies potentially affected is OAO Novolipetsk Steel (NLMK), the country’s most-valuable steelmaker, which is controlled by Vladimir Lisin, Russia’s 13th-richest person. The company derived 21 percent of its $12.1 billion in 2012 revenue from Europe, according to data compiled by Bloomberg. Sergey Babichenko, a spokesman for NLMK, declined to comment.

“In the event of a European and U.S. ban on exports of the metal, NLMK’s position would be weakest among Russian steelmakers, because it ships steel slabs to its own mills in Europe,” Kirill Chuyko, head of equity research at BCS Financial Group said. “We see such actions as unlikely for the time being.”

Amicable End

With its stock market falling and interest rates rising, Russia has suffered most of the financial pain the crisis has inflicted.

“To the extent that they can, the businessmen in Moscow will be making their sentiments and voices heard,” said Credit Suisse (CSGN)’s O’Sullivan. “I’m not sure the Kremlin will listen to them.”

Billionaire Naguib Sawiris, Egypt’s second-richest person, who’s done business with North Korea, Russia and Pakistan through his telecommunications companies, said he’s concerned about potential sanctions.

“Putin has proven that toward the end of any crisis, he always goes back to reason and finds compromises,” Sawiris, 59, said in a March 14 e-mail. “Therefore, I bet this crisis will end amicably.”

Posted on

What Happens When Blackstone Starts Dumping Real Estate At Market?

BubbleBurst investwithalex

In another sign that the “Dead Cat Bounce” for the Real Estate market is now over, Blackstone Group has announced that it’s real estate acquisition pace has slowed 70% from last years pace due to higher prices. In fact, this is the trend seen across the industry. Investors, hedge funds, institutions are all slowing down their real estate acquisitions to the tune of 70-90%.  

“The institutional wave has passed,” Gray, who oversees almost $80 billion in property investments, said in a telephone interview. “It’s at a much lower level than it was 12 or 24 months ago.”

What happens next?

Easy. The real estate market might hover here for some time. Not too long thought. As soon the Bear Market of 2014-2017 hits and the US falls back into a severe recession, you will see housing going down once again. Once investors realize where we are in the real estate cyclical composition (dead cat bounce and not expansion) you will see the likes of Blackstone trying to get rid of their properties as fast as possible. With investors heading for the doors, mass volume of real estate should hit the market. Collapsing existing values just as fast, if not faster, than their initial ascend between 2010-2014. 

Good luck selling your 43,000 rental properties Blackstone. 

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

What Happens When Blackstone Starts Dumping Real Estate At Market?  Google

 

 

 

Blackstone Group LP (BX) is slowing its purchases of houses to rent amid soaring prices after a buying binge made it the biggest U.S. single-family home landlord.

Blackstone’s acquisition pace has declined 70 percent from its peak last year, when the private equity firm was spending more than $100 million a week on properties, said Jonathan Gray, global head of real estate for the New York-based firm. After investing $8 billion since April 2012 to buy 43,000 homes in 14 cities, the company has narrowed most of its purchasing to Seattle, Atlanta, Miami, Orlando and Tampa.

“The institutional wave has passed,” Gray, who oversees almost $80 billion in property investments, said in a telephone interview. “It’s at a much lower level than it was 12 or 24 months ago.”

Private-equity firms, hedge funds, real estate investment trusts and other institutional investors have spent more than $20 billion to buy as many as 200,000 rental homes in the last two years. They snapped up properties after prices fell as much as 35 percent from the 2006 peak and rental demand rose from the almost 5 millionowners who went through foreclosure since 2008. PresidentBarack Obama credited the investors for helping put a floor under the plunging housing market and consumer advocates such as the National Community Reinvestment Coalition later blamed them for soaring prices in some cities.


Photographer: Victor J. Blue/Bloomberg

Blackstone Group LP Global head of real estate Jonathan Gray said, “The institutional… Read More

Foreclosures Fall

American Homes 4 Rent and Colony American Homes, the second- and third-largest single-family landlords, also have been scaling back as bargains dry up. Home prices have risen 24 percent since a post-bubble low in March 2012, which was about when corporate buyers started their buying spree, according to the S&P/Case-Shiller index. The rate of U.S. foreclosure startsfell to its lowest level in eight years in the fourth quarter as higher prices allowed more delinquent homeowners to sell without taking a loss, according to the Mortgage Bankers Association.

Jade Rahmani, an analyst for Keefe, Bruyette & Woods Inc., said large investors are focusing on fewer locations as they gain experience and prices go up.

“Home prices have increased, which narrows the acquisition opportunity,” Rahmani said. “In addition, these companies have done this for a certain amount of time and there are lessons learned.”

While institutional purchases nationwide fell to a 22-month low in January, corporate investors were more active in the Atlanta region, buying 25 percent of homes sold, according to data firm RealtyTrac. That helped drive up Atlanta prices 37 percent since the March 2012 trough.

Outbidding Homebuyers

Last week, a group of 80 tenant and neighborhood advocacy organizations, including the National Community Reinvestment Coalition and the National Consumer Law Center, asked federal regulators “to address first-time homebuyers being outbid, tenants being displaced, and neighborhoods undergoing dramatic changes as private equity and investor cash continues flooding into local housing markets.”

Gray, 44, said the influence of corporate investors on home prices has been exaggerated. They represent at most 10 percent of the 2 million homes bought by investors in the last two years, according to Rahmani, the analyst.

“There’s a narrative out there that institutional buyers are driving the market,” Gray said. “But the reality is that institutional buyers are in a relatively limited number of markets, their buying is tapering and yet home prices continue to go up at a pretty strong clip nationally — even in markets where institutional buyers haven’t purchased a single home.”

American Homes

At the height of its activity, Blackstone’s Invitation Homes LP made purchases that may have comprised as much as 6 percent of sales for several months in one or more of its 14 markets, Gray said. This may have had a short-term impact on prices, he added.

“We definitely helped alleviate excess distressed housing stock,” he said. “We weren’t 5 or 6 percent for a sustainable period of time in any market.”

After collecting more than 21,000 homes in 42 markets, American Homes 4 Rent (AMH) has slowed its buying in some locations, chief executive officer David Singelyn said at a March 5 investor conference in Florida. The benefit of being in 22 states is that the Agoura Hills, California-based company has the ability to move within many locations and “buy as the opportunities ebb and flow,” Singelyn said.

Colony Financial Inc. (CLNY), a REIT that invests in Colony American Homes, slowed its funding for acquisitions last year to focus on improving operations, CEO Richard Saltzman said in a November conference call. Colony Financial has been gradually allocating less to the landlord business and capped its investment at $550 million for the quarter ending Dec. 31, Saltzman said last month.

Slowing Purchases

Colony American, which owns 16,000 homes, declined to comment, according to Owen Blicksilver, an outside spokesman for the Scottsdale, Arizona-based landlord. American Homes 4 Rent Chief Financial Officer Peter Nelson didn’t reply to a phone message seeking comment.

American Residential Properties Inc., a landlord with 6,000 homes, slowed acquisitions by almost half in its latest quarter ending Dec. 31. It invested $104 million in 633 homes compared with $204 million on 1,251 homes in the previous quarter, the Scottsdale, Arizona-based company said in a statement.

“We intend to maintain the pace of our acquisition activity at roughly the same rate we had in the fourth quarter,” CEO Stephen Schmitz said in an earnings conference call yesterday.

Ramping Up

Some corporate rental companies are still focused on growth.

“We’ve been ramping up acquisitions,” David Miller, CEO of Silver Bay Realty Trust, which owned 5,642 homes as of Dec. 31, said in a conference call with investors last week.

“Looking ahead, we plan to acquire in Florida and Texas while opportunistically adding properties to our Atlanta market and perhaps other markets as well.”

While their acquisitions slow, Blackstone and Colony are extending their reach into the rental business by offering financing to smaller landlords. Last month, Blackstone’s B2R Finance LP originated its first loan for $5.7 million and Colony formed a joint-venture with plans to originate $1 billion in landlord financing this year.

Both companies plan to package the loans as mortgage-backed securities, similar to Blackstone’s $479 million bond issue in October, the first securitization of single-family rental properties.

Long Haul

That’s concerning to U.S. Representative Mark Takano, a Democrat from California. This month he called for the Consumer Financial Protection Bureau, the Department of Housing and Urban Development, the Securities and Exchange Commission and the Treasury to report on the possible risks of “the recent increase of investor owned rental properties and the development of single-family rental-backed securities.”

Institutional investors are not going away even though their size will remain a modest part of the market, Gray said.

“We’re not selling the homes. We’re building a long-term business,” he said.

Posted on

China Warns West: We Stand With Russia, Stop Your Sanction Madness

If you’ve had any doubts who China aligns itself with, those doubts should now be gone. In no uncertain terms China warned the West to “Back Off” from any sanction threat against Russia. In fact, according to the Chinese any sanctions against Russia can spiral into a chain of events with unforeseeable consequences. I tend to agree. 

If you look at Russia at this juncture, Putin is in no mood to mess around. Should the West push forward with sanctions, the EU might find itself on a receiving end of Putin’s wrath. If sanctions go through two things will happen immediately. In defiance, Putin will immediately invade Ukraine (flipping the proverbial bird to the West) and possibly shutting down gas/commodity supplies to the West. Or he can demand payment for gas in gold. Whatever the case, this will send a massive economic shock wave throughout the EU and start the “Dangerous Spiral” China is talking about.  

Let’s see who blinks first.  

china russia love investwithalex

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

China Warns West: We Stand With Russia, Stop Your Sanction Madness   Google

China warns of dangerous Russia sanctions ‘spiral’

(Reuters) – China’s top envoy to Germany has warned the West against punishing Russia with sanctions for its intervention inUkraine, saying such measures could lead to a dangerous chain reaction that would be difficult to control.

In an interview with Reuters days before the European Union is threatening to impose its first sanctions on Russia since the Cold War, ambassador Shi Mingde issued the strongest warning against such measures by any top Chinese official to date.

“We don’t see any point in sanctions,” Shi said. “Sanctions could lead to retaliatory action, and that would trigger a spiral with unforeseeable consequences. We don’t want this.”

The interview was conducted on Wednesday, the same day that the EU agreed a framework for sanctions that would slap travel bans and asset freezes on people and companies accused by Brussels of violating the territorial integrity of Ukraine.

German Chancellor Angela Merkel, who has taken the lead in trying to mediate in the crisis, has said the measures, which mirror steps announced by the United States, will be imposed on Monday unless Russia accepts the idea of a “contact group” to resolve the crisis diplomatically.

Using her toughest rhetoric since the crisis began, she warned in a speech in parliament on Thursday that Russia risked “massive” political and economic damage if it did not change course in the coming days.

Russia’s Deputy Economy Minister Alexei Likhachev responded by promising “symmetrical” sanctions by Moscow.

But Shi urged patience, saying the door for talks should remain open even after a referendum on Sunday in which Ukraine’s southern region of Crimea could vote to secede and join Russia. Merkel and other western leaders have denounced the referendum as illegal and demanded that it be canceled.

“We still see a chance to avoid an escalation. The door to talks is still open. We should use this possibility, also after the referendum,” Shi said.

Chinese President Xi Jinping, who will visit Berlin and other European capitals later this month, held separate phone calls on the Ukraine crisis with Merkel and U.S. PresidentBarack Obama earlier this week.

But beyond urging restraint and dialogue, China has shown little public interest in becoming involved diplomatically, a stance that is in keeping with its low-key approach to many international crises.

Still, Ukraine presents Beijing with a dilemma. On the one hand it is a traditional ally of Moscow and has routinely sided with its northern neighbor in major international conflicts. On the other hand, the question of territorial integrity is a tricky issue for the Chinese because of Tibet and Taiwan.

If the West’s confrontation with Russia over Ukraine worsens in the coming weeks, Xi’s visit, the first by a Chinese president to Germany in eight years, risks being overshadowed by the crisis.

Before coming to Berlin, Xi is due to attend a nuclear security summit in the Netherlands which Obama, Merkel and dozens of other world leaders will attend. He is also due to visit Paris and Brussels.

Posted on

The Secret To Chinese Real Estate

Chinese Real Estate is in a league of its own. Unlike the US/Canada/UK/Australia where real estate is a function of simple overvaluation and speculation, China took real estate to a whole new level of ridiculousness. Massive developments, empty cities and massive empty shopping malls.  In fact, real estate speculation has became a nationwide pass time. Last time I was there I heard the same thing from many very well to do and very smart Chinese “Our government will not let real estate collapse or even decline and because of that our real estate market will continue it’s climb….forever.”  You can read my previous post here. 

Sure, whatever makes you sleep better at night. 

Now, the Chinese Communist party is delusional enough to believe they can control the real estate market (or any market) and let it slow down “Softly, Softly”. With the Chinese economy finally showing major cracks and with the US bear market just around the corner, I highly doubt that Chinese real estate sector can escape carnage. Oh, and don’t forget the following numbers for China

  • $21 Trillion Debt Mountain. Roughly the same size as the entire US Banking Sector. It took the US 220 years to get to that number, it took China just 5 years of explosive credit growth. 
  • $6 Trillion In Shadow Banking. Actually, no one knows how large this number is. I have read good data/reports putting this number at $10-15 Trillion range.  

 

china empty cities

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

The Secret To Chinese Real Estate Google

China Premier Li Chooses ‘Softly, Softly’ Approach to Property Market

China’s property moguls probably sighed in collective relief when the curtain came down on the annual session of parliament Thursday and there was no announcement of any new measures to keep real-estate prices from spiraling higher.

While the annual event is known more for ceremony than substance, it does give the senior Communist Party officials—the ones who really run the show—a chance to make important pronouncements on policy matters.

The parliament session opened with much fanfare but it paid only minimal attention to the housing market, where prices have continued to march higher despite more than four years of government-control measures.

The last chance for an unpleasant market surprise was the premier’s news conference Thursday morning, which traditionally is the final event on the parliamentary program. Premier Li Keqiang was asked directly whether there were any new policy measures planned that might affect the property market. He trotted out a time-worn line about ending speculation and building more affordable homes.

He could have said a tax on property values – now being used on a trial basis in Shanghai and Chongqing – would one day be rolled out more widely. But he didn’t.

He could have threatened a host of other tightening measures if there are more price advances like the nearly 11% year-on-year gain in February, according to a major private-sector survey. But he didn’t. And he could have vowed to get tough with speculators who ignore government efforts to curb price rises. But he didn’t.

The premier’s quiet approach followed the remarks of Finance Minister Lou Jiwei, who told reporters during the parliament session that a hefty tax on profits from home sales—one that has encouraged some people to divorce just to avoid paying it—was “defective.”

The policy shyness probably reflects the fact that the property sector is a key source of economic growth, which is now showing signs of flagging. Beijing has set a target of about 7.5% growth this year, and Premier Li said Thursday he is confident growth will be in a “reasonable range.”

But a raft of economic data released Thursday suggests that growth at the start of the year was fairly lackluster. Industrial production, retail sales, fixed-asset investment data and even property construction figures were released later in the day, and all looked disappointing. New construction starts—measured in terms of area—were down 27% from a year ago.

“[Decision makers] recognize a key role investment plays in boosting growth,” said ANZ economist Liu Li-gang, noting the softer tones of the premier’s remarks.

Others agreed.

“The officials are signaling that they do not want to intervene in the property market, but this doesn’t come as a surprise. They have been doing that quietly for the past year,” said Rosealea Yao, an analyst at GaveKal Dragonomics.

While the premier’s rhetoric was “softly, softly,” it was loud enough to be heard on the stock market. Property stocks eked out a 0.6% gain Thursday on the Shanghai bourse and they were up 1.5% from March 5, when the parliament session began. Analysts said that reflected relief that no new property measures were in sight. The Shanghai bourse as a whole, by contrast, fell 2.5% over the parliament session.

Posted on

Yo Canada, Your Real Estate Is Way Overpriced. Crash Coming?

If you thought California real estate was expensive, take a look north of the border. The situation in Canada is equivalent to the hottest markets in the US, with one primary difference. Canadian real estate was a late bloomer and their speculative cycle didn’t really get going until after 2002. Since their real estate cycle was about 8 years behind, they were not impacted by the real estate collapse in the US. Further, when the next round of financing (by the FED) showed up in 2008, Canadian Real Estate simply continued to accelerate as if nothing had happened. 

Basically, Canadian real estate is where the US real estate was 8 years ago. The cycles confirm that as well. When this particular liquidity party ends (happening now) and the stock market shifts into the bear market of 2014-2017, I would fully expect Canadian real estate to collapse. It is never different. 

Garth Turner’s Blog “Greater Fool” is a great place to follow Canadian Real Estate if you wish. Click Here. 

Please see the full report below.  

crazy canadians investwithalex

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

Yo Canada, Your Real Estate Is Way Overpriced. Crash Coming?  Google

From Our Friends At Doctorhousingbubble.com

I really enjoy Canada.  A beautiful country with great cities and fantastic food.  Leave it to our neighbors to the north to show us how it is done for a real housing mania.  For the first time in history we have experienced coordinated global housing bubbles courtesy of central banks following very similar policies.  The addiction to debt isn’t only a U.S. born condition.  While the recent U.S. market is dominated by low supply and massive investor buying, Canada continues to see rising home prices even right through the global Great Recession.  The Canadians interestingly enough also face similar dilemmas between older and younger generations.  Many young professionals are fully priced out of the real estate market even when they are working at relatively good careers.  Many battle it out in the condo markets were even in this market prices are inflated.  Canada has an incredibly heavy reliance on real estate, more so than the United States and their household debt ratios make the U.S. look like a frugal uncle.  One fascinating story highlights a similar story to what many baby boomers here in the U.S. are facing with their offspring.  They face the reality that they are house rich but cash poor.

Canada’s inflated real estate market

Home prices in Canada are inflated.  Global cities like Vancouver and Toronto face massive investor buying that largely makes it tough for local families to buy.  Many pre-bubble buyers are caught in a golden castle but unable to unlock the money until they sell, a similar condition to many baby boomers here in California.

It is important to note that there was no correction in home values even during the Great Recession in Canada:

canada home prices

Canada home values have increased by close to 80 percent in the last decade.  For the U.S. over this same period of 1994 to 2004 home prices are up (adjusting for inflation) by a modest 10 percent even after the 2013 mania:

us home values

The housing market in Canada has been split in many areas between mass produced cheaper condos versus single family homes:

“(CBC) One market is facing too much supply, while another appears to be heating up,” the bank said. “The GTA housing market is a tale of several markets with divergent conditions.”

There are certainly changes in the wind but bubbles can go on for much longer than you think.  How are Canadians keeping this thing going?  For one, they are going into massive debt and putting the consumer hungry Americans to shame:

Debt-to-disposable income ratio

The above chart is very important.  The U.S. hit an apex in terms of how much household debt would tip an economy over.  Debt-to-personal income in the U.S. hit a peak of roughly 125 percent during 2007 at the height of the housing bubble.  You can see the correction that followed in the U.S. and many have felt on a personal level.  Yet Canadian’s continue to pile on debt beyond their actual incomes.  As of more recent data, they are closer to a 150 percent ratio.  Which leads us to those golden real estate handcuffs in Canada.  A great piece on the Great Fool blog highlights this generational divide:

“(Greater Fool) Cheryl and Paul are 57 and 60 and live in a Mississauga house they figure is worth $900,000. They’ve spent the last 14 years paying down the mortgage and have about $80,000 yet to go. She’s been at home since the last kid left the nest six years ago. He sells real estate, made $126,000 last year and has no pension. Between them they have$37,000 in TFSAs, $160,000 in RRSPs and about forty grand in a high-yield savings account.

“How we doing?” Cheryl asked, hopefully. I paused to collect my thoughts. “Oh,” she said. “That bad?”

Of course she knew the answer. The Boomer couple has just over $1 million in net worth, but 80% of it’s in one asset. Paul has no pension. Worse, as a commissioned salesguy, he has no business to sell. And he’s just as good as his last deal – which means any housing correction will not only sideswipe his income, but also his family’s net worth. It’s double jeopardy. And then there’s the nature of their liquid investments – the bulk of which sits in high-cost mutual funds inside an RRSP, meaning the money’s fully taxable.”

This is an interesting situation very similar to our struggle for housing for younger professionals today in many high priced metro areas.  The couple in the story above is massively house rich.  80 percent of their net worth is tied up in housing.  Their retirement accounts are paltry assuming they will be living off this amount for 15, 20, or even 30 years.  The house does not throw off any income.  The only way to unlock the money is to sell.  A home equity loan essentially means resetting the clock on additional debt.  Downsizing or moving to a cheaper area is the only way to leverage that massive gain in housing.  But how many people actually move?  In the U.S. we pointed out that most people are home bodies that would rather eat cat food in their million dollar home versus selling and using the money to live a decent retirement.

Canada’s economy is too focused on residential investment:

US vs Canada resi investment

Canada has been investing too much into real estate going back to 2002.  You can see the correction for the U.S. but is there something else going on here?  The article highlights a reality that many even in the U.S. will face when they are house rich and cash poor:

“But it’s a house. No dividends or interest. Just property taxes, maintenance, insurance and eight hundred grand of locked-in equity which must be released, or these folks are going to run out of money before they run out of time.

This brings us to Jason. Their kid. He’s 28. A member of Gen Y which, at 27% of the population is almost as big as the Boomers (32%). Jason rents in Toronto, makes $52,000 as a IT guy, rides a bicycle and the TTC, likes being urban, has no debt and puts money monthly into a TFSA with $18,000 in it. That makes him typical, too.”

This story is all too familiar to people in high priced Southern California.  The vast majority of people in SoCal that bought pre-bubble have locked in some solid games.  Yet how do you unlock those?  Heck, the advice is to stretch to the limit (meaning forego the retirement accounts or other alternatives) and double-down on housing.  We have seen the resurgence of adjustable rate mortgages (ARMs) to stretch the budget even further.  So all the money goes into this one asset.  But then what?  The truth is most will want to move up with that equity they build up (the average hold time in housing is seven years across the U.S.).  So many simply kept resetting the clock up on the property ladder.  Age doesn’t care about your new 2,000 square foot house with granite countertops and if you have a mortgage, you’ll need to continue generating income to pay the bills.

The story above also highlights the story of one of their “kids” at 28 that has a job in IT and makes $52,000 a year.  How in the world is an $800,000 home even feasible for their son?  Even a $400,000 condo would be a stretch.  Should he save for a down payment?  If he starts now he might be able to buy in his forties.  But then a home will cost $1.2 million according to some analysts based on future projections (simply using the current trajectory in Canadian home values).

The young in Canada seem to be facing similar predicaments to those in the United States:

“Incredibly, almost 45% of all young people between 20 and 29 live at home. The jobless rate for the cohort is about 14%. Student debt averages $37,000 after a four-year degree. Underemployment is endemic.

And this is the big hope for so many Boomers – that the ‘next generation’ will pony up and bail them out? Good luck with that.”

Living at home and massive student debt!  A story near and dear to our hearts.  As much as some Canadians would like to believe they are different from their neighbors to the south we are very much alike in our addiction to debt.  We also apparently have a large portion of youth living at home.  I can imagine this is more pronounced in high priced areas.  Just look at the L.A. region in SoCal versus Vancouver in terms of prices:

home prices los angeles

Going back to 2004 home prices in L.A. adjusting for inflation are up 30 percent.  A pretty big jump considering household incomes have not gone up in tandem.  But just look at Vancouver:

vancouver

Home prices are up 110 percent during this similar period!  Vancouver makes SoCal look like an affordable paradise.  It is interesting to know that Canadians are basically facing similar demographic challenges and have a massive amount of young people living at home.  They beat us in hockey and they certainly beat us in going into massive debt.

Posted on

Does The US Want A War With Russia?

Sure looks that way. That is exactly what I was afraid of when I wrote Ukraine Wants The US To Get Into A War With Russia. 

“According to the Web site of the Atlantic Council, Dempsey said that “he’s been talking to his military counterparts in Russia, but he’s also sending a clear message to Ukraine and members of NATO that the U.S. military will respond militarily if necessary.”

Are these people in our administration morons? The US is 6,000 miles away from Ukraine and it should have no stake in what’s going on there. Yet, the US Administration is going out of its way threatening direct military intervention into Ukraine. WTF? If that happens, it will mean an immediate war with Russia.

Now, you might be a patriotic chest beating American (as I am) expecting a fast victory, but a war with Russia is a completely different animal. Russia is not Iraq or Afghanistan.  Any conflict in that region might very quickly escalate into a nuclear war. Luckily for you, we are not there yet. 

Anyway, is the American Idol on tonight? 

head up ass investwithalex

Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!


Click here to subscribe to my mailing list

 

Does The US Want A War With Russia?  Google

Chairman of the Joint Chiefs of Staff of the United States General Martin Dempsey has claimed that in the case of an escalation of unrest in Crimea, the U.S. Army is ready to back up Ukraine and its allies in Europe with military actions. 

According to the Web site of the Atlantic Council, Dempsey said that “he’s been talking to his military counterparts in Russia, but he’s also sending a clear message to Ukraine and members of NATO that the U.S. military will respond militarily if necessary.”

“We’re trying to tell [Russia] not to escalate this thing further into Eastern Ukraine, and allow the conditions to be set for some kind of resolution in Crimea. We do have treaty obligations with our NATO allies. And I have assured them that if that treaty obligation is triggered [in Europe], we would respond,” Dempsey said.

According to the General, the incursion of Russian troops into the Crimea creates risks for all the countries of Europe and NATO allies.

“If Russia is allowed to do this, which is to say move into a sovereign country under the guise of protecting ethnic Russians in Ukraine, it exposes Eastern Europe to some significant risk, because there are ethnic enclaves all over Eastern Europe and the Balkans,” Dempsey said.