Blog Archives

Main Street Small Business on the Precipice

As a generality, the average employee (including financial pundits) has no real experience or understanding of what it takes to start and operate a small business in the U.S. Government employees in the agencies that oversee and enforce regulations on small businesses also generally lack any experience in the businesses they regulate.

A third generality is the endlessly promoted ethos of entrepreneurism cultivates the illusion that there is an essentially endless supply of entrepreneurs who are itching to start businesses and throw everything they have into the risky gamble.

All we ever hear when a restaurant owner is interviewed is how much they love their business, their work, their customers, their neighborhood, etc. etc. Sadly, enthusiasm isn’t enough to pay the rent when belt-tightening reduces sales while costs notch ever higher.

The story plays out the same everywhere; the only variation is the relative scale of the costs that are squeezing small businesses and the limits on how much they can raise prices:


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How the China Boom Unravels: One Person at a Time

The dashing of youthful expectations of open-ended wealth and security for everyone with a college degree is highly combustible when combined with a popping real estate bubble and systemic corruption.

Those enamored of China’s ability to build empty apartments, empty malls and empty train stations are missing the big story, which is China’s boom is unraveling one person and one trade at a time. While the production of new subway systems and empty cities is definitely impressive, those focusing on capital projects are missing the erosion of faith in the China Boom story and the erosion of the foundations of the Boom Story: foreign direct investment, shadow banking, the real estate bubble and a central planning-dominated economy.

Central planning, booms and bubbles unravel in the same way: one person and one transaction at a time. The China Boom Story is falling apart not as a result of large-scale geopolitical crises but from the decisions of individuals.


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Chinese Homebuilders Expand in America as U.S. Auto Loans Hit Record Levels

Late last week I published a post titled, Your Wall Street Slumlord Arrives in Europe – Goldman and Other Financial Firms Launch “Buy to Rent” in Spain, in which I highlighted the fact that U.S. financial oligarchs had recently turned their sights toward Spanish real estate after feasting on the American market for several years and driving home prices to unaffordable levels for much of the native population.

Interestingly, today I came across an article in the Wall Street Journalthat noted Chinese homebuilders are beginning to make a more aggressive push into the U.S. market. One of the main reasons for this phenomenon appears to be…

Read more here.

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The Carlyle Group’s Latest Investment…Trailer Parks

Submitted by Michael Krieger of Liberty Blitzkrieg

Earlier this month, I highlighted the fact that the Carlyle Group was the latest in a series of “smart money” private equity firms to decide it was time to exit the suddenly extremely crowded “buy-to rent” residential real estate trade.  Well it appears Carlyle has already started to make its move into a different, low-end real estate market.  As the Wall Street Journal reported on Tuesday:  “Carlyle Jumps Into Niche Space – Private-Equity Firm Adds Trailer Parks to Its Diverse Portfolio.”  In case you can’t figure out what appears to be the key logic behind the shift in focus, try this line on for size…

Read the rest here.

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