US Head Of SoftBank’s Vision Fund Leaving After Expressing Concerns About “Issues”

US Head Of SoftBank’s Vision Fund Leaving After Expressing Concerns About “Issues”

Back in October, in the aftermath of the historic WeWork fiasco, we asked if the company’s new majority owned and anchor investor SoftBank is the bubble era’s (that would be now, for those unclear) short of the century.

While that thesis has yet to play out especially since the post-WeWork period was marked by another major reflation of asset bubbles courtesy of the Fed’s QE4 and the return of the ECB’s own QE, it appears that one by one the rats are starting to leave the sinking ship.

According to the FT, the US head of SoftBank’s $100bn Vision Fund is leaving after expressing concerns about “issues” at the technology conglomerate, which as regular readers know all too well, has suffered a string of setbacks over the last year, not only its catastrophic investment in WeWork, but disappointing returns on both Uber and OyO.

Michael Ronen, who as luck would have it is a former Goldman banker who joined SoftBank in 2017, told the Financial Times he had been “negotiating the terms of my anticipated departure” for several weeks. Ronen was the managing partner of its US investment office and in charge of the Vision Fund’s US investments, “leading its bets on transportation and logistics start-ups such as Getaround, GM Cruise and Nuro. According to the FT, Deep Nishar, a former LinkedIn and Google executive, and Colin Fan, a former Deutsche Bank executive and close associate of SBIA chief Rajeev Misra, are likely to take on Mr Ronen’s responsibilities in the Americas.

Michael Ronen, a SoftBank managing partner, was in charge of Vision Fund’s US investments.

Ronen departure comes as SoftBank has failed to raise any outside investment for the company’s second Vision Fund, the FT notes.

He is not the only one expressing doubts about the fate of what until recently was the world’s most generous investor in startups: SoftBank is also in discussions about Ron Fisher’s future at the company, according to FT sources. Fisher, who is not a former Goldman banker, is SoftBank’s vice chairman and one of Masa Son’s “longest-serving lieutenants and was a leading advocate of SoftBank’s outsized bet on WeWork.”

Fisher joined in 1995, making him one of Son’s closest advisers, and while Son signed off on SoftBank’s $10bn-plus investments in WeWork, it was Mr Fisher who sat on the board of the co-working office-space provider and who worked closest with management on its strategy and growth plans.

So after WeWork took a multi-billion writedown on WeWork in Q4, one can see why he may be concerned about his future there, even though a SoftBank spokesperson told the FT, Fisher was “a valued member of the SoftBank family” and was “not going anywhere.”

Yet while Ronen and Fisher’s future is nebulous at best, a far bigger question is what happens to the man at the top: after a series of catastrophic investments shook confidence in the Vision Fund, founder Masayoshi Son has struggled to raise any outside capital for its sequel fund.

As a reminder, last July Son unveiled a roster of investors including Apple, Microsoft and the National Bank of Kazakhstan for the fund, which he said committed a total of $108bn, even without any funding from the first Vision Fund’s largest outside backers, Saudi Arabia and Abu Dhabi. However, none of the would-be investors have yet to firm up their non-binding commitments in the second Vision Fund, even though SoftBank has provided around $5bn in backing for the second Vision Fund to begin making investments, a lot of it “extracted” from the company’s own “volunteer” employees.

Ironically, even Saudi Arabia which for years was considered the world’s dumbest money, appears to have learned its lesson about “investing” with Masa Son: after contributing $60BN to the first Vision Fund, the Gulf investors “have become worried about the perception of pouring money into SoftBank funds following several high-profile flops from the first Vision Fund”, the FT cited people familiar with the discussions.

For its part, since the pulled WeWork IPO, SoftBank has scrambled to show the world it is a disciplined investor, announcingd new management at WeWork, and pressuring other companies it has backed to cut their losses and increase their profits. Alas, the investing world has not been impressed, and SoftBank’s share price tumbled 25% since last April when it hit its highest level since the early 2000s before a string of high-profile SoftBank-backed companies had embarrassing stock market debuts, including Uber and Slack.

Luckily for Masa Son, much of its poor performance has continued to be masked by stock price gains at China’s ecommerce giant, Alibaba, which has seen its shares climb sharply and reached a market value of $600bn. SoftBank, in its best investment ever, purchased and still owns a 25% stake in Alibaba.


Tyler Durden

Tue, 02/04/2020 – 15:00

via ZeroHedge News https://ift.tt/2RYMAGT Tyler Durden

Liberal White Women Are Hiring Saira Rao to Tell Them They’re Racist. The Cost? $2,500 Per Dinner.

Dear liberal white women: Do you enjoy pasta carbonara, getting together with friends, and learning about your complicity in racism? If so, you’re in luck. Professional social justice activists Saira Rao and Regina Jackson are willing to come to your home, eat your food, and interrogate you and your gal pals to the point of tears.

And get this: The cost is a mere $2,500.

Sadly, I’m not making this up. Amazingly, white women are paying. According to a must-be-read-to-be-believed article in The Guardian, Rao and Jackson—who are Indian American and black, respectively—have already attended 15 “Race to Dinner” events in which they demand that attendees confess their racism and admit they are part of the problem.

“If you did this in a conference room, they’d leave,” Rao said. “But wealthy white women have been taught never to leave the dinner table.”

For someone who stylizes herself as an anti-racism activist, Rao engages in constant racial stereotyping. Her Twitter feed reads like satire in the vein of Titania McGrath, a self-aware parody account (at least from what I can recall of it before she blocked me). For Rao, everything and everyone is racist—especially white women, whom she does not like one bit. Some highlights:

To be absolutely clear, the Race to Dinner events do not feature actual racists. They are attended by well-meaning people who have somehow allowed themselves to become convinced that their souls are impure. Consider the testimony of one dinner host:

“I want to hire people of color. Not because I want to be … a white savior. I have explored my need for validation … I’m working through that … Yeah. Um … I’m struggling,” she stutters, before finally giving up.

Another attendee, Morgan Richards, “admits she recently did nothing when someone patronizingly commended her for adopting her two black children, as though she had saved them.” This is very problematic:

“What I went through to be a mother, I didn’t care if they were black,” [Morgan Richards] says, opening a window for Rao to challenge her: “So, you admit it is stooping low to adopt a black child?” And Richards accepts that the undertone of her statement is racist.

One more:

Erika Righter raises her tattooed forearm to her face, in despair of all of the racism she’s witnessed as a social worker, then laments how a white friend always ends phone calls with “Love you long time.”

“And what is your racism, Erika?” Rao interrupts, refusing to let her off the hook. The mood becomes tense. Another woman adds: “I don’t know you, Erika. But you strike me as being really in your head. Everything I’m hearing is from the neck up.”

Righter, a single mother, retreats before defending herself: “I haven’t read all the books. I’m new to this.”

Rao and Jackson have certainly come up with an interesting gimmick for their grift, though there’s nothing novel about trying to convince people they are wicked and sinful—in need of a kind of absolution that only the grifter can provide (for a cost). Indeed, intersectional activism occasionally feels akin to a religion, to the extent that it emphasizes the internal brokenness of human beings and the fallen state of the world.

It’s tempting, then, to observe Rao and Jackson and thus write-off the entire concept of progressive activism on race. But in truth, they are such ridiculous caricatures that probably the most appropriate response is simply to pity the gullible people whom they’ve swindled.

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Derrick

Oil derricks, it turns out, are named (indirectly) after someone named Derrick—not an oil man, though, but a hangman: According to the Oxford English Dictionary, the word (which originally referred to hangmen and gallows) comes from

Derrick, the surname of a noted hangman at Tyburn c1600. 

I did not know that.

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There’s Nothing Special About Iowa. Time To Let Other States Vote First.

Surely we can do better than this.

Last night’s Iowa caucuses were a total disaster. Candidates spent millions of dollars, volunteers canvassed for months, and the media spilled untold amounts of ink, pixels, and TV time building up to the first nominating contest in the 2020 Democratic primary—but it was all for naught, as the Iowa Democratic Party totally fumbled the one event that puts the state on the political map. Someone will eventually be declared the winner, but it will hardly matter by then. Campaigns have moved on to New Hampshire, and the news cycle will quickly move on to tonight’s State of the Union address and the next primary contests. Any bounce (or lack thereof) coming out of Iowa has been rendered meaningless.

Already, the mess is prompting calls for the Democratic Party to abandon the caucus format in Iowa, or to replace Iowa as the first state to vote, or both. (For more on all that, read Reason Features Editor Peter Suderman’s obituary for the Iowa caucuses here.)

But that prompts an obvious follow-up question. If Iowa doesn’t go first, which state (or states) should?

The two most common answers to this question—either that the first state to vote should be demographically representative of the country as a whole, or that we should move to a national primary that does not elevate any state above the rest—are both wrong. In each case, those changes would merely replace the problems caused by the Iowa caucuses with a different set of biases. Iowa (and New Hampshire) ought to be replaced as the “first-in-the-nation” caucuses and primaries, it’s true, but both major parties should take this opportunity to implement a system that voters can trust to be fair to all candidates.

To understand why replacing Iowa with another state won’t work, you have to understand the arguments against having Iowa vote first. These aren’t new, even though they will get renewed attention after Monday’s mess. In a nutshell, the argument goes like this: Iowa is too white and too rural to be an accurate microcosm of the country as a whole, and letting it go first every four years is unfair to candidates whose appeal might be greater in states that more accurately reflect America. The demographics are indeed striking. Iowa’s population is 90 percent white, while the country as a whole is 61 percent white.

Julian Castro, the former mayor of San Antonio, has pinned at least some of the blame for his failed presidential campaign on the demographics of Iowa (and New Hampshire, the first primary state, which is also 90 percent white). “We can’t as a Democratic Party, continually and justifiably complain about Republicans who suppress the vote of people of color, and then turn around and start our nominating contest in two states, that even though they take their role seriously, hardly have any people of color,” Castro said in November.

But that identity-based critique must grapple with the fact that Barack Obama in 2008 scored a surprise upset over Hillary Clinton in Iowa—a victory that propelled Obama to the nomination and the presidency. Ironically, Clinton may have been better off in 2008 if the first state to vote was a more diverse, traditionally “blue state” where the Democratic Party establishment held more sway.

The problem, then, isn’t that Iowa unfairly penalizes certain candidates. It’s that giving any state the power to vote first creates a set of biases that affect the rest of the race.

That’s not solved by letting another state jump to the front of the line. Sure, California has the most registered Democrats. Illinois is the state that, demographically, best matches the Democratic Party’s national profile. Ohio is the swingiest swing state and a longtime political barometer. But having a big state—like California or Ohio—go first would grant a huge home field advantage to certain candidates. And would anyone in their right mind trust Chicago Democrats to handle the crucial first primary without controversy?

So why not try the opposite approach? If no single state should go first, make all of them vote at the same time. The idea to hold a “national primary” has been around for more than a century, and it probably never made more sense than it does now—since candidates can take advantage of technology to be in many places at once.

A national primary, however, comes with its own set of biases—ones that would boost wealthy candidates, like former New York City Mayor Michael Bloomberg. One of the major benefits of the current, state-by-state format is that it tests would-be presidential campaigns in a variety of ways—you have to win with small-scale retail politics in Iowa and New Hampshire, sell a national message on Super Tuesday, and identify where and when to invest resources without wasting them on states that can’t be won. Campaigns that navigate that gauntlet successfully are, in theory, the best poised to win a general election. A national primary might elevate campaigns that can saturate the airwaves from coast-to-coast, but would make other campaign infrastructure less important.

There’s probably no perfect way to structure a primary election, but the best ideas strike a balance between giving one or two states too much influence while still forcing winning candidates to navigate a geographically and demographically diverse process.

As recently as 2008, the Republican National Committee was considering exactly such a plan. Known as the “Delaware Plan,” this reform was floated at the 2000 and 2008 national conventions. It would have sorted the states by population into four groups. The smallest states, by population, would share a single primary election day, followed by a second election for the next largest states, and so on.

Letting the least populated states vote first would preserve the traditional retail politics of Iowa and New Hampshire, but would create a playing field that stretches from Maine to Alaska. Only candidates who survived those early tests would be able to compete for the big prizes in the final round of the process, when states like California and Texas would have their say. A variation on the Delaware Plan, known as the Ohio Plan, would also have small states voting in the first cluster, but would mix the subsequent clusters so the largest states by population didn’t always have to wait to go last.

There are still some explicit biases in letting some states go first every time, and—as proposed to the RNC in 2008, at least—the Delaware Plan would preserve Iowa’s and New Hampshire’s first-in-the-nation status.

Still, that’s a step in the right direction. Clustering states into a series of primaries so that, for example, 10 states vote at a time in five sets of elections with each election separated by a month, would prevent any one outcome (or any one major screw-up) from defining the first step in the nominating process. It would also create a more dynamic competition by forcing campaigns to make strategic choices—instead of spending months focused on Iowa and New Hampshire, candidates would have to put their chips in a variety of places for the first round of voting.

The process could be made even more fair if the clusters of states are chosen by lottery. That was the basis of a bipartisan idea pitched by Debbie Dingell, the wife of late Michigan congressman John Dingell (D), and Saul Anuzis, then-chairman of the Michigan GOP.

Under the Anuzis-Dingell Plan, the 50 states would be sorted into six geographic regions. A lottery would be held to determine which states would vote on each of five primary election dates, each separated by a month. Each date would include 10 states—with at least one state, and no more than four states, from each of the six geographic regions.

It’s complicated, sure, but no more complicated than the current process. It would provide a different, randomized map for each primary season—forcing campaigns to adapt their opening messages for an audience that’s bigger than a mere 240,000 voters in Iowa cycle after cycle.

The only real drawback to a major reform like one of these is that it would have to be imposed from the top down. The DNC or RNC would have to do some serious arm-twisting to get states like Iowa, New Hampshire, and South Carolina to agree to a system in which they lose their primo spots—and one in which they might end up being among the final states to vote. It would require overriding the state parties to a degree that might make the national committees (and should make libertarian-minded people) a little uncomfortable.

And these reforms would do nothing to fix the real problem at the heart of America’s presidential election system: that the winner is given too much power—an outcome that raises the stakes of any procedural tinkering far higher than they should be.

It’s unlikely that there’s any flawless presidential primary system. Still, last night’s debacle in Iowa should stoke a real conversation about creating a more sensible and fair nominating process before 2024.

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Derrick

Oil derricks, it turns out, are named (indirectly) after someone named Derrick—not an oil man, though, but a hangman: According to the Oxford English Dictionary, the word (which originally referred to hangmen and gallows) comes from

Derrick, the surname of a noted hangman at Tyburn c1600. 

I did not know that.

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via IFTTT

There’s Nothing Special About Iowa. Time To Let Other States Vote First.

Surely we can do better than this.

Last night’s Iowa caucuses were a total disaster. Candidates spent millions of dollars, volunteers canvassed for months, and the media spilled untold amounts of ink, pixels, and TV time building up to the first nominating contest in the 2020 Democratic primary—but it was all for naught, as the Iowa Democratic Party totally fumbled the one event that puts the state on the political map. Someone will eventually be declared the winner, but it will hardly matter by then. Campaigns have moved on to New Hampshire, and the news cycle will quickly move on to tonight’s State of the Union address and the next primary contests. Any bounce (or lack thereof) coming out of Iowa has been rendered meaningless.

Already, the mess is prompting calls for the Democratic Party to abandon the caucus format in Iowa, or to replace Iowa as the first state to vote, or both. (For more on all that, read Reason Features Editor Peter Suderman’s obituary for the Iowa caucuses here.)

But that prompts an obvious follow-up question. If Iowa doesn’t go first, which state (or states) should?

The two most common answers to this question—either that the first state to vote should be demographically representative of the country as a whole, or that we should move to a national primary that does not elevate any state above the rest—are both wrong. In each case, those changes would merely replace the problems caused by the Iowa caucuses with a different set of biases. Iowa (and New Hampshire) ought to be replaced as the “first-in-the-nation” caucuses and primaries, it’s true, but both major parties should take this opportunity to implement a system that voters can trust to be fair to all candidates.

To understand why replacing Iowa with another state won’t work, you have to understand the arguments against having Iowa vote first. These aren’t new, even though they will get renewed attention after Monday’s mess. In a nutshell, the argument goes like this: Iowa is too white and too rural to be an accurate microcosm of the country as a whole, and letting it go first every four years is unfair to candidates whose appeal might be greater in states that more accurately reflect America. The demographics are indeed striking. Iowa’s population is 90 percent white, while the country as a whole is 61 percent white.

Julian Castro, the former mayor of San Antonio, has pinned at least some of the blame for his failed presidential campaign on the demographics of Iowa (and New Hampshire, the first primary state, which is also 90 percent white). “We can’t as a Democratic Party, continually and justifiably complain about Republicans who suppress the vote of people of color, and then turn around and start our nominating contest in two states, that even though they take their role seriously, hardly have any people of color,” Castro said in November.

But that identity-based critique must grapple with the fact that Barack Obama in 2008 scored a surprise upset over Hillary Clinton in Iowa—a victory that propelled Obama to the nomination and the presidency. Ironically, Clinton may have been better off in 2008 if the first state to vote was a more diverse, traditionally “blue state” where the Democratic Party establishment held more sway.

The problem, then, isn’t that Iowa unfairly penalizes certain candidates. It’s that giving any state the power to vote first creates a set of biases that affect the rest of the race.

That’s not solved by letting another state jump to the front of the line. Sure, California has the most registered Democrats. Illinois is the state that, demographically, best matches the Democratic Party’s national profile. Ohio is the swingiest swing state and a longtime political barometer. But having a big state—like California or Ohio—go first would grant a huge home field advantage to certain candidates. And would anyone in their right mind trust Chicago Democrats to handle the crucial first primary without controversy?

So why not try the opposite approach? If no single state should go first, make all of them vote at the same time. The idea to hold a “national primary” has been around for more than a century, and it probably never made more sense than it does now—since candidates can take advantage of technology to be in many places at once.

A national primary, however, comes with its own set of biases—ones that would boost wealthy candidates, like former New York City Mayor Michael Bloomberg. One of the major benefits of the current, state-by-state format is that it tests would-be presidential campaigns in a variety of ways—you have to win with small-scale retail politics in Iowa and New Hampshire, sell a national message on Super Tuesday, and identify where and when to invest resources without wasting them on states that can’t be won. Campaigns that navigate that gauntlet successfully are, in theory, the best poised to win a general election. A national primary might elevate campaigns that can saturate the airwaves from coast-to-coast, but would make other campaign infrastructure less important.

There’s probably no perfect way to structure a primary election, but the best ideas strike a balance between giving one or two states too much influence while still forcing winning candidates to navigate a geographically and demographically diverse process.

As recently as 2008, the Republican National Committee was considering exactly such a plan. Known as the “Delaware Plan,” this reform was floated at the 2000 and 2008 national conventions. It would have sorted the states by population into four groups. The smallest states, by population, would share a single primary election day, followed by a second election for the next largest states, and so on.

Letting the least populated states vote first would preserve the traditional retail politics of Iowa and New Hampshire, but would create a playing field that stretches from Maine to Alaska. Only candidates who survived those early tests would be able to compete for the big prizes in the final round of the process, when states like California and Texas would have their say. A variation on the Delaware Plan, known as the Ohio Plan, would also have small states voting in the first cluster, but would mix the subsequent clusters so the largest states by population didn’t always have to wait to go last.

There are still some explicit biases in letting some states go first every time, and—as proposed to the RNC in 2008, at least—the Delaware Plan would preserve Iowa’s and New Hampshire’s first-in-the-nation status.

Still, that’s a step in the right direction. Clustering states into a series of primaries so that, for example, 10 states vote at a time in five sets of elections with each election separated by a month, would prevent any one outcome (or any one major screw-up) from defining the first step in the nominating process. It would also create a more dynamic competition by forcing campaigns to make strategic choices—instead of spending months focused on Iowa and New Hampshire, candidates would have to put their chips in a variety of places for the first round of voting.

The process could be made even more fair if the clusters of states are chosen by lottery. That was the basis of a bipartisan idea pitched by Debbie Dingell, the wife of late Michigan congressman John Dingell (D), and Saul Anuzis, then-chairman of the Michigan GOP.

Under the Anuzis-Dingell Plan, the 50 states would be sorted into six geographic regions. A lottery would be held to determine which states would vote on each of five primary election dates, each separated by a month. Each date would include 10 states—with at least one state, and no more than four states, from each of the six geographic regions.

It’s complicated, sure, but no more complicated than the current process. It would provide a different, randomized map for each primary season—forcing campaigns to adapt their opening messages for an audience that’s bigger than a mere 240,000 voters in Iowa cycle after cycle.

The only real drawback to a major reform like one of these is that it would have to be imposed from the top down. The DNC or RNC would have to do some serious arm-twisting to get states like Iowa, New Hampshire, and South Carolina to agree to a system in which they lose their primo spots—and one in which they might end up being among the final states to vote. It would require overriding the state parties to a degree that might make the national committees (and should make libertarian-minded people) a little uncomfortable.

And these reforms would do nothing to fix the real problem at the heart of America’s presidential election system: that the winner is given too much power—an outcome that raises the stakes of any procedural tinkering far higher than they should be.

It’s unlikely that there’s any flawless presidential primary system. Still, last night’s debacle in Iowa should stoke a real conversation about creating a more sensible and fair nominating process before 2024.

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Bernie-Backed Ballot Initiative Would Expand California’s Brand New Rent Controls

Last year, California became the second state in the union to pass statewide rent control. But that wasn’t enough for some activists, who’ve succeeded in putting a new, more expansive rent control initiative on the ballot this year.

The California Secretary of State’s office announced on Monday that the Rent Affordability Act had earned enough signatures to qualify for the November 2020 ballot. The measure is being sponsored by Housing Is A Human Right, a project of the AIDS Healthcare Foundation (AHF).

“Housing affordability and homelessness are the most pressing social justice and public health emergencies in our time,” AHF President Michael Weinstein said in a press release. “We’ll face a tough road ahead but are ready for the fight—and victory!—for all Californians and for housing affordability.”

This is round two for AHF, which was also the primary backer of the state’s last rent control ballot initiative in 2018, Prop 10.

That measure went down in flames, receiving only 40 percent of the vote. In the wake of its failure, the legislature passed a rent control law that capped rent increases at 5 percent plus inflation for buildings older than 15 years.

What that bill did not do was repeal the Costa-Hawkins Act, a state law that forbids local governments from imposing rent control on buildings constructed after 1995 and guarantees landlords the right to raise rents as much as they want on vacant units.

That was a major disappointment for tenant activists who wanted lawmakers to go farther. Weinstein himself criticized the rent control bill that passed as too weak, telling the Los Angeles Times, “it won’t stop the homeless crisis which is being caused by people losing their homes or being evicted…it won’t advantage working people and people on fixed incomes who need affordable housing.”

AHF’s initiative would thus largely eliminate Costa-Hawkins, allowing local governments to impose rent caps that are lower than the state’s existing ones. It would also limit the amount landlords could raise rents on vacant units to 15 percent over a three-year period.

In addition, the ballot initiative would expand rent control to single-family homes and condominiums that are owned by people with more than two housing units in their possession. Current law exempts single-family homes and condominiums, except for those owned by corporations or real estate investment trust funds.

The ballot initiative has been endorsed by Sen. Bernie Sanders (I–Vt.), who said it “will allow California cities to pass sensible limits on rent increases and protect families, seniors, and veterans from skyrocketing rents.”

Neither landlords nor labor unions are happy about the ballot initiative, however.

Both the California Apartment Association (CAA), a landlord trade group, and the State Building and Construction Trades Council, which represents construction trade unions, have issued strong condemnations of the measure.

The initiative would “block the path towards future investment in the construction of affordable housing units for the working class,” said Cesar Diaz of the Construction Trades Council.

Tom Bannon, who heads up the CAA, was even more blunt, saying in a press release that Weinstein is “abusing the statewide initiative process to impose extreme forms of rent control and satisfy his extreme form of NIMBYism.”

This sets the stage for another contentious, expensive campaign. AHF spent $21 million supporting Prop 10 in 2018. Opponents spent $72 million to counter the measure.

Critics contend that rent control limits the construction of new units and encourages the owners of existing ones to convert them to pricier, but unregulated, condos.

That’s less of a concern for Weinstein, AHF, and other left-wing activist groups, however. They see speculation, not supply constraints, as the cause of California’s housing problems.

Indeed, in the same press release announcing that the Rent Affordability Act qualified for the ballot, Weinstein also dissed the recently failed SB 50—which would have legalized four-unit homes statewide and mid-rise apartments near transit—as “deeply flawed.”

If recent history is any guide, this latest rent control ballot initiative will likely fail. Unfortunately, the fact that it exists at all speaks to the growing popularity of the worst idea in housing policy.

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Bernie-Backed Ballot Initiative Would Expand California’s Brand New Rent Controls

Last year, California became the second state in the union to pass statewide rent control. But that wasn’t enough for some activists, who’ve succeeded in putting a new, more expansive rent control initiative on the ballot this year.

The California Secretary of State’s office announced on Monday that the Rent Affordability Act had earned enough signatures to qualify for the November 2020 ballot. The measure is being sponsored by Housing Is A Human Right, a project of the AIDS Healthcare Foundation (AHF).

“Housing affordability and homelessness are the most pressing social justice and public health emergencies in our time,” AHF President Michael Weinstein said in a press release. “We’ll face a tough road ahead but are ready for the fight—and victory!—for all Californians and for housing affordability.”

This is round two for AHF, which was also the primary backer of the state’s last rent control ballot initiative in 2018, Prop 10.

That measure went down in flames, receiving only 40 percent of the vote. In the wake of its failure, the legislature passed a rent control law that capped rent increases at 5 percent plus inflation for buildings older than 15 years.

What that bill did not do was repeal the Costa-Hawkins Act, a state law that forbids local governments from imposing rent control on buildings constructed after 1995 and guarantees landlords the right to raise rents as much as they want on vacant units.

That was a major disappointment for tenant activists who wanted lawmakers to go farther. Weinstein himself criticized the rent control bill that passed as too weak, telling the Los Angeles Times, “it won’t stop the homeless crisis which is being caused by people losing their homes or being evicted…it won’t advantage working people and people on fixed incomes who need affordable housing.”

AHF’s initiative would thus largely eliminate Costa-Hawkins, allowing local governments to impose rent caps that are lower than the state’s existing ones. It would also limit the amount landlords could raise rents on vacant units to 15 percent over a three-year period.

In addition, the ballot initiative would expand rent control to single-family homes and condominiums that are owned by people with more than two housing units in their possession. Current law exempts single-family homes and condominiums, except for those owned by corporations or real estate investment trust funds.

The ballot initiative has been endorsed by Sen. Bernie Sanders (I–Vt.), who said it “will allow California cities to pass sensible limits on rent increases and protect families, seniors, and veterans from skyrocketing rents.”

Neither landlords nor labor unions are happy about the ballot initiative, however.

Both the California Apartment Association (CAA), a landlord trade group, and the State Building and Construction Trades Council, which represents construction trade unions, have issued strong condemnations of the measure.

The initiative would “block the path towards future investment in the construction of affordable housing units for the working class,” said Cesar Diaz of the Construction Trades Council.

Tom Bannon, who heads up the CAA, was even more blunt, saying in a press release that Weinstein is “abusing the statewide initiative process to impose extreme forms of rent control and satisfy his extreme form of NIMBYism.”

This sets the stage for another contentious, expensive campaign. AHF spent $21 million supporting Prop 10 in 2018. Opponents spent $72 million to counter the measure.

Critics contend that rent control limits the construction of new units and encourages the owners of existing ones to convert them to pricier, but unregulated, condos.

That’s less of a concern for Weinstein, AHF, and other left-wing activist groups, however. They see speculation, not supply constraints, as the cause of California’s housing problems.

Indeed, in the same press release announcing that the Rent Affordability Act qualified for the ballot, Weinstein also dissed the recently failed SB 50—which would have legalized four-unit homes statewide and mid-rise apartments near transit—as “deeply flawed.”

If recent history is any guide, this latest rent control ballot initiative will likely fail. Unfortunately, the fact that it exists at all speaks to the growing popularity of the worst idea in housing policy.

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China Unleashes The Bazookas And That’s Just The Start: Here’s What It WIll Do Next

China Unleashes The Bazookas And That’s Just The Start: Here’s What It WIll Do Next

Earlier this morning we pointed out that with the coronavirus pandemic showing no signs of slowing, and in fact claiming its second offshore death, after a surprisingly young, 39-year-old Hong Kong man passed away, US equity futures soared after the Shanghai Composite managed to stabilize and rebound from the worst drop since the bursting of China’s equity bubble as traders realized that Beijing will do as much as is needed, whether adding liquidity, fiscal or outright market support (as we discussed on Sunday) to support if not the real economy which is slowly grinding to a halt, then at least financial assets. And with China’s president Xi Jinping making a rare admission that Coronavirus epidemic is a threat to societal stability, the opportunity cost to intervene like never before is nil.

Which is why bulls today can thank the PBOC for the staggering market reversal that has sent stocks 1.5% higher (for now), and which will result in even more gains, because as China’s ability to stimulate its economy is now virtually nil, since China’s record debt load has now made it virtually impossible to push the country’s credit impulse higher…

… Beijing will instead throw the kitchen sink at risk assets and stimulating consumption and borrowing.

So what will China do next? First let’s take a look at what Beijing has already done, courtesy of Nomura:

  • The PBoC cut the OMO rate by 10bps
  • On Monday, the PBoC injected RBM 2.1T of short-term interbank liquidity, which against currently maturing loans, will see total liquidity in the banking system ~ RBM 900B higher than during the same period in 2019
  • On Tuesday, the PBoC injected a further RMB 400 billion in reverse repo liquidity, marking the largest single-day addition since January 2019.
  • The CSRC suspended securities lending from Monday until further notice, with some funds receiving so-called “window guidance” from regulators to avoid actively selling stocks
  • The CSRC told brokerages that their prop traders “aren’t allowed to be net sellers of equities this week” (Bloomberg)
  • The CSRC also said it would halt night sessions for futures trading and allow some share pledge contracts to be extended by as long as six months
  • The MoF announced an interest subsidy scheme for new loans ear-marked for medical supply companies fighting coronavirus
  • The MoF announced policies to extend loans to entrepreneurs and SMEs which have been hit-hard from the coronavirus, as well as potentially delay mortgage repayments or adjust credit policies to repay the loans for those individuals or entities who may have temporarily lost sources of income

So looking ahead, what will China do? According to Nomura’s Chinese Econ Team, expect more policy and fiscal-easing measures to be announced in coming weeks, and of course an avalanche of more money:

  • Expect the PBoC to deliver a 50-100bp RRR cut and conduct more MLF operations and OMOs in coming weeks to inject both long- and short-term liquidity into the banking system (this would add RMB 800-1600BN)
  • Expect the 1Y MLF rate to be cut by 10bps in coming weeks, which should be reflected in the release of the Feb “Loan Prime Rate” (LPR) to be released Feb 20th
  • Expect to see waving, cutting or postponing tax and fee payments for the virus-affect regions, industries, companies and individuals for several months until the virus is fully contained
  • Rising likelihood of increasing unemployment and medical insurance benefits for individuals who have lost income or been infected with the virus
  • Expect authorities to grow bolder on fiscal deficits and increase the transfer of central government revenues to local governments in virus-affected regions, with Beijing raising the fiscal deficit target as well as raising the annual quota of net local government special bond issuance in 2020
  • Expect Beijing to introduce favorable tax policies to boost final demand, such as cutting the auto purchase tax to boost auto production and sales
  • Most critically, Nomura expects authorities to give local governments more flexibility in easing restrictions on the property sectors (e.g. price controls, caps on new home purchases and property developer financing), while also rolling-out more favorable urbanization policies to attract talent and migrant workers to large cities to beef up production and consumptions.

The biggest beneficiary of this arsenal of Chinese bazookas? As the chart below shows, it’s not Chinese stocks, which are barely up from a year ago. No, the biggest beneficiary is the one “barometer” which Donald Trump believes is all that matters to get him reelected in November: the S&P500.


Tyler Durden

Tue, 02/04/2020 – 14:20

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Clarmond: “Iowa Showed ‘American Democracy’ May Now Be Just Another Developing World Dictatorship”

Clarmond: “Iowa Showed ‘American Democracy’ May Now Be Just Another Developing World Dictatorship”

Authored by Chris Andrew at Clarmond Wealth

It strikes me that one of the first actions following our super-duper new free trade agreement with the USA would be to export over to them a large box of British pencils.

On the 24th June 2016, by approximately 6am, we had managed to count 33,577,342 votes in the UK Brexit Referendum. These votes were counted by hand and we all voted by putting a simple cross in a box, using a trusty pencil.

Now, the voting in the Iowa Caucus has been closed for over 16 hours and, as of now, there has been no result. In fact only 1.9% of the votes have been tallied and are being reported. To put this into context in the last Iowa Caucus in 2016 approximately 171,517 votes were cast. It is both staggering and worrying that the world’s most powerful democracy cannot count.

What has happened?

Well it does not take much digging. The Democratic party were using an ‘App’ to count the votes; you cannot make it up but the tech company creating the app is called SHADOW, a name generally given to a Bond villain. To add to this Bondness, SHADOW is owned by another group called ACRONYM, whose CEO is Tara McGowan, Obama’s digital strategist. Gerard Niemira, who worked on Hilary’s 2016 campaign is CEO of SHADOW and finally David Plouffe, Obama’s 2008 campaign manager, sits on the board of ACRONYM.  Additionally, the Buttigeg and Biden campaigns paid SHADOW for work done. Strange coincidences indeed.

This sleuthing took me all of 20 minutes when you asked me to see what the heck happened in the Iowa cornfields. There are two explanations: it is a conspiracy of the Washington Consensus cabal denying Bernie a clean win and essentially muddying the waters…or it is total and utter incompetence of bringing an untested, non-transparent technology into the democratic process.

Either we have a FUBAR (an American acronym…look it up!) of American democracy, which is now as brazen as any Developing world dictator wannabe. Or technology has made the population so dependent that they have forgotten how to organize and count. We can all make our own decision on this but my suggestion to PM Boris would be export our election expertise to America – along with some free pencils.


Tyler Durden

Tue, 02/04/2020 – 14:00

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