Hard by the Vistula 12/6/22

[WTF]

Thank you for the opening Doc, very nice read.

I did not expect this rally to go as far as it has and my original projection off the Oct low for this rally was a top at around 3,900.  Now that is a support line for this decline, could this be a bounce area?

The CoinGuy had this rally nailed... Wanted to give him credit for his work.  From his posts, it was clear he had some ongoing health issues.  I am wishing him good health and hope he returns to the board at some point.

[DrStool]

Federal Tax Revenues Are Slowing

[TurdButter]

33 minutes ago, DrStool said:

Federal Tax Revenues Are Slowing

Could this be in part due to the holiday? Many folks had 2-3 more days off, and a decent proportion likely didn't get paid for them-no withholding. Wouldn't matter y/y but m/m effect? Or is that figured in?

[Jimi]

This seems so-o-o-o California.

Once upon a time, in December 1997, 34 acres of bucolic terrain in Northern California transacted for the princely sum of $100,000. Since this is wine country, I would guess it was those buyers (and not the seller) who then put in place a 10-acre vineyard.

in April 2017, the property was relisted... for $685,000. After some price changes, delisting & relisting, it finally transacted in November 2017 for $590,000.

That is when one might guess the next-generation farmers got to work... soon after the November 2016 statewide legalization of recreational pot.

January 2021 rolls around, and... well, pot farming probably hasn't been the lucrative fun adventure one might have hoped. Or, perhaps it was, but one's interests move on. But what is now on offer isn't only 10-acres of zin or chardonnay or whatever. It is a pot farm. Asking price then was $1.5 million, and after some hemming/hawing/listing/delisting, a transaction ensues for $1.4 million in May 2021.

Which brings us to today... by way of July 2022. After only 14 months of apparent ownership, the property hits the market anew, with an asking price of *gasp* $2.1 million... which constitutes a remarkable gain from the lowly $100,000 1997 transaction.  Did someone erect a palace?

It would appear not, because the current listing is for [checks notes]... a 1bd/1ba 273 sqft... let's call it "efficiency"(?)

But you do get this:

Quote

Currently Fully licensed cultivation farm with local County and State approval; A Type-2 minor licensed with 10,000 sq. ft. canopy. Seller's have already applied and signed for mixed-light of 22,000 sq ft. County approval will be around winter and State approval around Spring. 

Alas, even California real estate will not support a $2.1 million remote efficiency, despite 34 acres & a small vineyard & small pot farm.

So, we see a series of systematic price cuts since July 2022 which endeavor better to reflect something approaching "financial reality"... to $1.5 million, where current asking stands.

Of course, in May 2021, when the place transacted for $1.4 million, the 30-year mortgage stood near 3.12%, rather than the 7.00% today.  So, that $100,000 gain seller is seeking to eke out for an 18-month holding period faces some real headwinds.

Photo #8 provides an angle of part of the vineyard. I know next to nothing about viticulture, but I think I would maybe want fewer weeds among my valuable crop? Or, perhaps that's how vineyards go dormant in winter? Or, perhaps there was only so much water available from the on-site pond, and one endeavor ruled out over the other?

Compare it to the loving care exhibited in Photo #10.  Looks to be about a 20 x 24 layout constituting 480 plants.

Call me skeptical: price-cuts on this one aren't over, even if "seller financing available."

https://www.redfin.com/CA/Kelseyville/10095-Kelsey-Creek-Dr-95451/home/45650945

 

[SiP]

12 hours ago, DrStool said:

I loved the discussion yesterday about the good and bad of living in various places in Europe vs. N. America. I want to talk a little more about my sense of connection to Warsaw. I'm deeply attached to that city. It both haunts and fascinates me.

I love Poland and most of its people, but I find its right wing government and its supporters troubling and scary. When I lived there, I saw that there was still freedom of speech on the streets, but I also so the trappings of an incipient police state, waiting in the wings to exert its will over the bulk of the population that would oppose it. On the national independence day, I witnessed an enormous, heavily armed, militarized police force stationed throughout the downtown. Expecting what, I don't know.  

The Germans bombed Warsaw to the ground when they were retreating from the Russians in 1945. They were pretty pissed off for, first, the Jews of the Warsaw Ghetto Uprising, and then a few months later the Poles, rising up against the Nazi pigs and killing a bunch of them. So in a fit of retaliation they leveled Warsaw on their way out. After the war, Eisenhower, who had seen his share of destruction, said that he had never witnessed such devastation.

Today we see a similar pique of destructive, murderous madness being used against Ukraine by the Russians. But I digress. 

At the War's end, Warsaw was left essentially a blank canvas, except that in some sections, the rubble was so high that it could not be removed. So where they couldn't clear it, the Russians and their Polish Communist collaborators built right on top of the rubble, mostly in a neighborhood called Muranow. It actually turned into a pretty nice urban neighborhood.

The commies were big on building gigantic, drab apartment blocks, block after block, after block, but with big parks in between.

In the modern capitalist system these apartment blocks have been turned into co-ops and condos, still ugly on the outside, but many folks have renovated those apartments into hip modern urban spaces. And the ground floors have all been converted to commercial space. So today, Warsaw has the density of a big city, with all the energy that brings.

In fact, parts of Warsaw could be mistaken for Queens or Brooklyn or the Lower East Side. Depending on how you feel about cities that's a good thing. About the only crime you need to worry about is public drunkenness. Muggings and murders are almost unheard of. 

And then there are the parks. From the vantage point of my apartment high above the city, Warsaw looked more like a giant park, with urban strips running like veins and arteries and clusters through the greenery. So even with all its urban density, I could always escape to some quiet greenery a few steps from my apartment. This was true in most areas of the city that I visited. 

The communists rebuilt the old sections of town, hard by the Vistula River, with a faithful vision of Warsaw's glorious past as the Paris of Eastern Europe. Amazingly, they did a good job. I guess that love of place and the pride of history can sometimes shine through even the grayest, most repressive, bureaucratic regimes.

But the rest of the city was planned by the Russians and their partners in crime primarily for the purpose of moving large numbers of tanks and troops across town fast, to send a message to any would-be freedom lovers that the regime would crush you. 

That grid of enormous, wide boulevards went mostly underused until the 1990s when the capitalists took over. For some odd reason, Poles fell in love with American culture, particularly, car culture. Outside of the old center, Warsaw became a city devoted to the automobile, not pedestrians, as most European cities are. So once you get outside of the districts in the center of town down by the river, you're in a traffic choked wasteland of urban sprawl, lined with giant shopping centers, parking lots and soulless glass office buildings. It's not much different than Atlanta or Houston, only with colder, nastier weather. 

I lived in Warsaw for 7 months. I have a deep emotional attachment to the place. 1000 years of my ancestry was there in that region and that city.  The DNA that built me came from there.

At its peak in the 1920s, the Jewish population was 42% of the city. It was the center of the Jewish world. If you are looking for it, you can still see the earmarks of that culture noted around the city in mostly quiet ways. Otherwise you might not notice it. The tragedy of the end of that legacy can still be felt to this day, particularly when you stumble upon the signs of remembrance in places like Plac Grzybowski and the Bridge of Sighs, or the Polin Museum, or the Jewish Historical Institute, or the old synagogue rebuilt and still functioning in a quiet park between Ulica Świętokrzyska and Ulica Grzybowska. I felt the attachment to the place before I went, while I was there, and to this day. 

And did I mention the food?  Polish cuisine goes without saying, but regardless of the genre of cuisine, I found the restaurants in Warsaw, and in Poland in general to be among the best in Europe. Really. Definitely better than France (French cuisine is overrated 😄). 

Now, so why are we here...???

Oh. Right. The stock market. 

Just please note. Despite yesterday's seemingly endless carnage, which saved the shredded bear case to live another day at least, the short term uptrend has yet to be broken. So beware before you short this mutha. Yeah, nibble if they approach 4040, get long if they clear it, and don't stay short if they don't get below 3984, or at least are poised to, at the end of the day. 

I don't know about you, but this market makes me prefer talk about geography, history, and ancestry. 

Meanwhile, speaking of yields, I don't know much about these things, but does this chart look bottomish to you? 

For moron the markets, see:

• Bears Last Custard Stand December 4, 2022
• Bears Beware, Money Managers Are Finally Spending their RRP Slush Fund November 30,2022
• Swing Trade Screen Picks – Read My Lips, No New Longs (A Few More Shorts) November 28, 2022
• Major Inflection Point Here to Determine Whether Bull or Bear November 28, 2022
• Gold and Miners, Pullback Looks OK November 23, 2022
• Fed Policy Will Stay Bearish Until It’s Too Late November 20, 2022
• The Repeal of Rule Number One, Don’t Fight the Fed November 14, 2022
• Bond Market Rally is Technically Valid but Belies the Facts November 12, 2022
• Bad News for the Markets – Not Just Withholding Boomed in October November 3, 2022
• Surge in Withholding Tax Collections in October Indicates Faster Jobs Growth November 2, 2022
• Bear Market Isn’t the Mirror of a Bull October 31, 2022

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Good take on Warsaw Doc. I agree with what you just wrote.

[DrStool]

12 hours ago, TurdButter said:

Could this be in part due to the holiday? Many folks had 2-3 more days off, and a decent proportion likely didn't get paid for them-no withholding. Wouldn't matter y/y but m/m effect? Or is that figured in?

Year to year analysis comparing annual growth rate month to month. With a chart of course. Seeing is believing.