Friday, January 17, 2020

A Store Closing That Hurts

Mountain Gear in Spokane is closing.  If you needed technical gear, that was THE place to go.  Now it's gone.  Roskelley and I have had disagreements over a few things, notably the Oregon Episcopal School disaster on Mt. Hood, but we are of one mind here:  The world is about to be a lesser place.

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Thursday, November 07, 2019

New Bankruptcies

So Murray Energy has filed a Chapter 11.  A few points here.  First, anyone connected to the Crandall Canyon Mine Disaster knows that Robert Murray shouldn't be in bankruptcy court, he should be in prison.  That place was one, big, deliberate safety violation, and nine people died.  Second, for anyone who has a lick of sense, this ought to put the lie once and for all to Trump's promise to bring the coal industry back, which is no surprise at all to those of us who have spent the last four decades or so following how well Trump has kept his "promises".  Third, watch out for another big load dumped on taxpayers.  Perhaps the biggest reason corporations file Chapter 11 is to shed pension plans and foist them on the Pension Benefit Guarantee Corporation.  Ordinarily, PBGC can refuse to take over an underfunded pension, but that authority is overcome by a confirmed Chapter 11 plan.  So the PBGC ends up with yet another underfunded pension, and one of two things happens: 1) PBGC cuts benefits down to the funds available, leaving the pensioners impoverished and compelled to seek public assistance, or 2) PBGC gets a special bail-out from Congress.  Either way, the bankrupt company shifts its private debt onto the general public.

Also filing Chapter 11 is EP Energy, one of the biggest players in the Eagle Ford Shale (Full disclosure: I represented EP Energy in the III Exploration II, LP bankruptcy.).  I think it is apparent that everyone in the oil shale play is hurting and the hot money that has been propping it up is cooling.  So is this why gas prices just bumped up?  Doubt it.  EP filed a month ago, and it was already common knowledge then there was trouble in Oil Shale City, so all that should have been factored into prices some time ago.  No, I think it's far more likely, as I've commented before, that gas prices just jumped for no other reason than that they can.  Don't expect gas prices to be affected by anything that happens in that place called Reality.

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Monday, August 05, 2019

More Market Craziness

As I recently blogged, markets are not making sense.  One of the things I noted was gas prices, which are jumping back up a full month before Labor Day and without any change in the threat posturing in the Middle East.  Prices are going up because they just can.  I also commented about the crazy money going into multi-family housing.  This week I learned it's worse than I thought.  The cap rates on these projects are running as low as 4%.  There is much debate about what all goes into a cap rate, but for our purposes it is the annual rate of return an investor expects from an investment.  A high cap rate indicates a risky, volatile, short-term investment.  The investor needs a high rate of return to get its return and quickly flip the investment.  In contrast, a low cap rate indicates a safe, stable, long-term investment.  4% is low.  In fact to get lower, you have to go into the world of government and high-grade corporate bonds.  Serious buy-and-hold strategies with almost guaranteed returns.  Is multi-family construction that stable?  Not hardly.  Which means Mr. Market has a fire hose of money aimed at a sector that can't give adequate returns.  Just like the Dotcom Boom.  Just like mortgage-backed securities.  Just like oil shale and tar sands.  Which means we're just pumping up another bubble.  When people talk about markets, what they are really talking about is marks.  Don't be their next mark.

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Saturday, July 27, 2019

Enough Death...

...time for some simple destruction.  Last Saturday was a farewell open house at Brighton High School.  They're going to tear down Deep Space Brighton and replace it with, of course, another generic box.  In other words, they're tearing down yet another architecturally significant structure and replacing it with yet another pile of brick and glass that will slide right off your eyes and mind.  I got ripped on the local message board for this opinion, but I will hold to it: This is the sort of planning and design "thinking" that gave us the abomination that is the Abandoned Borg Cube we now have for a federal courthouse.  Keep it up, folks, and we'll end up with a structural environment that will make Soviet-era housing blocks look dynamic and exciting.


Wednesday, July 24, 2019

And Now Rutger Hauer... gone.  And all these memories will be washed away like tears in the rain.

Tuesday, July 23, 2019


...Chris Kraft has died.

Saturday, July 20, 2019

Apollo 11

And let's not overlook that today is the 50th anniversary of the first Moon landing.  I remember it well, sitting in the living room with the folks, Dad's folks, and my kid sister, staring at our black & white console TV, trying to decipher those fuzzy images (The ghostly images inspired the name of the Apollo 16 command module Casper.).  The exact time was 2156 CDT.  I'd long since given up my early dream of being an astronaut because everyone knew NASA didn't take guys with glasses (and thereby setting off on the course that eventually led to law; maybe I should have stayed with plumbing and electric) but I was still deeply interested.  We were watching Huntley and Brinkley because we always watched NBC News (Imagine short-attention-span theater news programs these days using Beethoven for their theme music.) unless I got it switched over to ABC because a I needed a Jules Bergman fix.

And now Neil Armstrong is seven years dead, Buzz Aldrin is 89, and Michael Collins will turn 89 later this year.  I went back through the astronaut lists, and most are gone.  John Glenn was the last of the Mercury astronauts when he died in 2016.  Gemini has survivors: In addition to Collins and Aldrin there are Jim McDivitt (90), Frank Borman (91), Jim Lovell (91), Tom Stafford (89 in September), and David Scott (87).  For Apollo: In addition to the Gemini survivors, there are Walt Cunningham (87), William Anders (86 later this year), Rusty Schweickart (84 later this year), Fred Haise (86 later this year), Alfred Worden (87), Ken Mattingly (83), Charles Duke (84 later this year), and Harrison Schmitt (84).  Keep on keeping on, guys.

This is a Market?

I commented recently about how the real estate market seems to be perpetually warped.  Investment money is supposed to pursue a return, preferably the best one available, but what we in fact have is money being frantically thrown at one bubble after another, twisting supply and demand into unrecognizable states and consequently twisting the market into something that isn't really a market, at least not one of any use, unless by "use" you mean "running serial con games."

Real estate is not unique in this.  Look at gas prices.  Historically, gas prices come down after Memorial Day.  This year, they've come down a ton.  And they've done so in the face of a major piece of news: tensions between the US and Iran that could shut down the Strait of Hormuz.  If markets were actually functioning, oil speculators would take this news and jump into the spot and futures markets with both feet, driving prices up Memorial Day be hanged.  But that isn't happening.  And even stranger, no one is commenting on this.  I'm left singing Led Zeppelin, "And it makes me wonder."

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Bankruptcy Attorneys

If you watch late-night infomercials and rely on other such sources, you might believe filing bankruptcy is a simple thing.  As with most things presented as simple on such programs, such as real estate investing, the only simple thing is the mind of anyone who buys the sales pitch.  It simply isn't that simple.

First, the Bankruptcy Code is complex.  It isn't just convoluted; at points it's internally contradictory because, well, Congress.  I think the BAPCPA, the big revision in 2005, was actually written by chimps pounding on typewriters with mislabeled keys.  Then there are the Bankruptcy Rules, which ostensibly implement the Code but frequently leave you going, ""Wait, what?"  Then there are the local rules, which change frequently and are notorious for the messes they leave behind.  And on top of it all, there is "local practice", the aggregated quirks of the judges, clerks, and trustees in each court.  Many of these were first crafted to deal with a particular problem and have since been conflated into a "one-size-fits-all" approach.  And in many of these situations, I'm left quoting Eleanor of Aquitaine in The Lion in Winter, "You're clever, but I wonder if you're right."

If you find yourself up against a financial wall, don't try digging through the wall yourself; it's likely to collapse on you.  Go to the professionals and get real advice.  It's worth it.

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