One of the last havens of small business - rental property - to be crushed by Wall St
01-30-2014, 04:49 AM
This is one of those grim stories that shows how fucked most of us are in the USA now.
So the big banks and hedgies are buying up a lot of small properties in your neighborhoods. The plan is to bundle the properties and rent them out. The rentals will be done by hired management companies who will be kept on strict margins to maximize yield, so minimal maintenance. Obviously Section 8 will be given preference over the working person, because it's a government guaranteed check. If you are a neighbor or the police, good luck at finding anyone responsible to respond to your complaints about the nuisance of disorder at that property - the "owner" will be a Cayman Islands company.
Second nightmare is that the rent yield on these bundles of properties will be securitized in a similar way subprime mortgage yields were - CDOs, Collateralized Debt Obligations. Then the CDOs will be sold in a highly-leveraged way, banks and other investors will borrow from the Fed and other banks for almost free to buy tons of the the CDOs. Along with credit-default swaps, which will also be sold in a highly-leveraged way. It will be another house of cards which will all come crashing down when Taniqua Johnson at 23 Maple St. in Cincinnati loses her school bus driver job and can't pay her rent, causing a domino effect.
Third nightmare is that if Wall Street sells these CDOs to the "Muppets" these hedgies will bid up the price of small properties around the world to create more of these CDOs and less people will be able to: (1) buy their own home and (2) have a small business by owning and renting out a couple of small properties. Another ladder up for the middle class will be destroyed, and we will be living in a truly literal rentier society.
You can be sure that if it all collapses, it will be blamed on Taniqua Johnson not paying her rent, too, just like the last financial crisis was blamed on the ghetto.
Wall Street's frightening plan to become America's landlord
So the big banks and hedgies are buying up a lot of small properties in your neighborhoods. The plan is to bundle the properties and rent them out. The rentals will be done by hired management companies who will be kept on strict margins to maximize yield, so minimal maintenance. Obviously Section 8 will be given preference over the working person, because it's a government guaranteed check. If you are a neighbor or the police, good luck at finding anyone responsible to respond to your complaints about the nuisance of disorder at that property - the "owner" will be a Cayman Islands company.
Second nightmare is that the rent yield on these bundles of properties will be securitized in a similar way subprime mortgage yields were - CDOs, Collateralized Debt Obligations. Then the CDOs will be sold in a highly-leveraged way, banks and other investors will borrow from the Fed and other banks for almost free to buy tons of the the CDOs. Along with credit-default swaps, which will also be sold in a highly-leveraged way. It will be another house of cards which will all come crashing down when Taniqua Johnson at 23 Maple St. in Cincinnati loses her school bus driver job and can't pay her rent, causing a domino effect.
Third nightmare is that if Wall Street sells these CDOs to the "Muppets" these hedgies will bid up the price of small properties around the world to create more of these CDOs and less people will be able to: (1) buy their own home and (2) have a small business by owning and renting out a couple of small properties. Another ladder up for the middle class will be destroyed, and we will be living in a truly literal rentier society.
You can be sure that if it all collapses, it will be blamed on Taniqua Johnson not paying her rent, too, just like the last financial crisis was blamed on the ghetto.
Wall Street's frightening plan to become America's landlord