- When Dementia Replaces Meritocracy – An End and a Beginning
In my experience, everyone gets dinged by life. Sometimes those dings are like a minor dent in your vehicle and others are the equivalent of totaling it. In the last week, BlackRock has had two significant dings but if you are not watching BlackRock you may have missed them.
- Premier Xi removed all of his opponents and was confirmed to a third term as Premier of China with more power than anyone since Chairman Mao. In his acceptance speech Xi clearly stated his intentions to return China to pure Marxism and eliminate capitalism. Not only was this a blow to the dreams of the “Globalists” but also the value of the stock of Chinese companies publicly traded in the west plunged in value. As a big investor in
Chinese companies, BlackRock’s Balance Sheet probably took a massive hit. - Prior to Xi’s speech, BlackRock reported its 3rd quarter results. Its net income was 0.5% of the net income reported for the 2nd quarter of this year. The 99.5% reduction in net income may have been BlackRock writing off some of the value of its private equity assets but beyond that the report I read was muddled. That could be intentional. BlackRock is used to having the ground shake when one of their top officers walks somewhere. This shaking could be due to some other forces.
You may recall my previous blog where we explored the importance of private equity companies like BlackRock to the funding of capitalistic activities since banks have been reduced to utilities as a result of the Dodd Frank Bill. Hence the rumbling you hear could be the result of companies, both private and public, finding out that their source of capital has been severely damaged requiring a cutback in Blackrock’s ability to provide additional capital.
China’s Lehman Bros was China Evergrande. My prediction is BlackRock is America’s Lehman Bros for this recession. Bull markets do not start while The Fed is increasing interest rates. That means the current stock market rally may well be the one that will wipe out the investors that are optimists. Ouch!
I am not giving stock market advice because I am not qualified to do so. My concern is the land market which is impacted by the economy which is impacted by financial markets. In my career, I have read a lot of deeds recorded during the Great Depression that transferred land for the market value of the standing timber. Think about that statement.
I just watched a video of an interview of Mervyn King, former Chairman of the Bank of England. In the interview he stated his opinion that around the world legislative bodies have lost control of the fiscal affairs of their governments and the central banks have lost control of the monetary situation. The short-term result is severe inflation.
What he did not say is that central banks only have the tool of higher interest rates to force a reduction in demand via a recession. If we had leaders who had successful real-world business
experience, they would reduce taxes and reduce government regulation to increase the production of goods (Supply Side Economics). That combined with higher interest rates would eliminate inflation without a severe recession.
Instead, the current group in leadership positions at best are intelligent, educated, idiots. Many are literally mentally ill. Hence The Fed is in this game by itself and their tool (interest rates) is the equivalent of using a sledgehammer to kill a fly. It will get killed but there will be a lot of collateral damage. This economic situation could easily become a global Depression.
The USA recession/depression will last until a new administration is elected (2024), put in place (2025), if it is filled with folks who actually know what they are doing, something called meritocracy. Hopefully the new administration will then “Drain the Swamp”. Combined with Re-Shoring and technology advances would launch decades of economic growth to be enjoyed by all Americans.
Currently China is in recession. Xi turning China back to pure Marxism means he is not the only “leader” ignoring the track record of Marxism – economic failure. Forget China competing with the USA economically. In a decade or so, they will be a Venezuela type basket case with 1.4 billion starving mouths. Marxism is the economic equivalent of cancer.
Europe is in recession, and the USA is in one that will get much worse. That spells a global recession with the tendency towards a Global Depression. However you want to spell that result, is will be UGLY.
The land market this week gave more indications that residential development land values are declining due to less demand. The rural land market remains in a balance of supply being below normal and demand bring the same level, so prices are stable. The industrial land market is active as is retail and multifamily. However, most land market segments will see values soften because of increased interest rates, the collapse in liquidity, and economic turmoil.
I am confident that long-term land values will increase. And the cost of housing will continue to soar as environmental and land use regulations continue to strangle development. Pray no dinosaurs are found alive, so they are not put on the Endangered Species list.
On a personal note, this month marks my 50th anniversary of becoming a Virginia Real Estate licensee. One year ago, I decided that 50 years was enough. While I had always joked that my retirement plan was for the undertaker to come to my office, three years ago one of my good friends had that experience while I was enjoying a wonderful weekend with my family. I also decided that I want to go out at the top of a land market cycle. Those two goals merge this month.
Since making the decision to retire from brokerage, my Lord and Savior has blessed Grant Massie Land Company with a fantastic year – our best in almost 25 years. I consider that to be strong confirmation of a bittersweet decision.
November 1, 2022, will find:
- Jeff Huff, ALC as the owner of Huff Land and Forestry with Bill Grant, ALC as his Associate Broker. Our techies have worked hard to get the | GMLC technology converted so you can contact them at their current email addresses and telephone numbers (Jeff 804-754-1207 and jhuff@grantmassie.com) and (Bill 754-3476 and wgrant@grantmassie.com). I encourage you to contact them for your land brokerage needs.
- I will be focused on land education and consulting, not brokerage, at Massie Land Network. My telephone number will remain 804-754-3474 but my email address is Ned@MassieLandNetwork.com
Our freedom is completely based on honest elections. An acquaintance who does business with unions, warned me that Biden would be elected because of massive vote fraud. So, I watched the data from the 2020 election. The fraud was massive. My Lord also caused me to have various conversations with experts who confirmed my fears. My only real question is how many of our elections since 2000 have been honest because of digital machines and mail in ballots.
King George stated that he lost the American Revolution because of the Black Robed Regiment, the American protestant preachers. As Thomas Paine wrote during the Revolution “All that is necessary for the triumph of evil is that good men do nothing” which is based on the 9th Commandment. Here we are reliving 2 Kings and pastors are MIA.
Unfortunately, the report yesterday that Pennsylvania sent out hundreds of thousands of ballots to illegal voters confirms that once again the vote fraud game will be played this year. Other states have already admitted to similar activities. I love it when the Democrats do such things and blame the Republicans for vote fraud. As I keep saying “Consistency is a virtue.”
Hence, “Let’s Go Brandon”.
Fortunately, God is real, Jesus was resurrected, the Holy Spirit is active, and God is in control, but He expects us to be his hands and voice. Please allow me to repeat last week’s Bible passage because it is so applicable.
“Beloved, never avenge yourselves, but leave room for the wrath of God; for it is written, “Vengeance is mine, I will repay, says the Lord.”
(Romans 12:19) New Revised Standard Version, Oxford University Press)
Stay healthy,
Ned
October 26, 2022
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