Archive for the ‘Austin’ Category

Reminder: Texas Early Voting Starts Today

Monday, October 24th, 2022

Early voting for the Texas general election starts today.

Williamson County early voting locations can be found here.

Travis County early voting locations can be found here.

Might be a good time to locate your voter registration card.

Also, if you live in Round Rock ISD, be sure to read this.

The War Against Wokeness In Round Rock ISD

Wednesday, October 19th, 2022

Round Rock used to be a refugee from the leftwing madness controlling Austin. But as Austin grew, Austin leftism expanded out into the suburbs, and Williamson County got a lot more purple.

While parents weren’t looking, social justice and critical race theory snuck into Round Rock ISD.

A discussion of so-called “antiracism” is causing a stir in one of Texas’ most hotly contested school board races.

In 2020, incumbent Round Rock ISD school board vice president Tiffany Harrison moderated a taxpayer-financed book discussion. “How to Be an Antiracist” by Henry Rogers (who writes under the nom de plume Ibram Kendi) was the work under consideration.

The discussion focused on “collective guilt” where “no one is exempt” from the work of “antiracism.” From the speaker’s perspective, this is the natural conclusion when “everything in our world is racialized.”

The ultimate, destructive end to this ideology comes when you “push at all the nodes [of society] and pull them apart.”

This is the school board that when two parents spoke out against mask mandates, the left-wing majority had them arrested. This is the school district where parents had to sue the board for violation of the Texas Open Meetings Act. This is the school district that had a Texas Education Agency monitor installed over complaints against the board. And this is the board that thinks it’s a swell idea to force girls to shower with biological males.

Two current board members, Danielle Weston and Mary Bone, are conservative reformers. The other five (Tiffanie Harrison, Amber Feller, Amy Weir, Kevin R. Johnson, Sr., and Cory Vessa) are leftwing social justice advocates.

A conservative slate of candidates has stood up to run against the social justice warrior board members of RRISD. Calling themselves One Family Round Rock, they are:

  • John Keagy for Place 1. He’s running against left incumbent Kevin Johnson Sr., hard lefty candidate Estevan Jesus “Chuy” Zarate (who has a lot of signs out next to The Usual Suspects that actually mentions “Equity,” the codeword for hard left Social Justice), and Apple software engineer Yuriy Semchyshyn, running as a critic of the board. (Note: Because this is a special election, it appears below the other races on the ballot.)
  • Orlando Salinas for Place 3. He’s running against lefty incumbent Amber Feller and far lefty Maryam Zafar.
  • Jill Farris for Place 4. She’s running against incumbent lefty Cory Vessa, hard lefty Alicia Markum (whose website mentions “equity”) and board critic Linda Avila.
  • Christie Slape for Place 5. She’s running against incumbent lefty Amy Weir, RRISD Assistant Principal Stefan Bryant (for whom I cannot find a campaign website) and Joshua Billingsley (who says he’s dropped out and is supporting Weir).
  • Don Zimmerman for Place 6. He’s running against incumbent social justice warrior queen bee Tiffanie Harrison.
  • Note that there’s no runoff for RRISD elections, so whoever manages to earn a plurality in a 3- or 4-candidate race wins.

    All campaign on a variety of issues, including parental rights, opposing lockdowns, an emphasis on academic fundamentals, conducting a “forensic audit,” and opposition to the deeply suspicious hiring of superintendent Hafedh Azaiez despite several red flags. But all are also united in opposing wokeness, critical race theory, and transexual madness in Round Rock classrooms.

    I had a chance to talk with most of the slate at a campaign event a few weeks ago. All agreed that Tiffanie Harrison was the biggest source of woke militancy on the board. Zimmerman, her opponent and the highest profile politician of all those running, calls Harrison “the tip of the spear” for wokeness in RRISD.

    Zimmerman is the one most outspoken about campaigning against social justice, with signs proclaiming “ABCs and 1-2-3s, NOT CRTs and LGBTs.”

    He and several others indicated that woke principals were the ones sneaking CRT, Black Lives Matter, and gay agenda materials into the classroom. “No one seems to be responsible for it. It just shows up.”

    We know from San Francisco and elsewhere that woke social justice and transgenderism is deeply unpopular, and when parents speak up against it, they frequently win.

    Note that the Round Rock Board of Trustees is meeting tomorrow, Thursday, October 20, at 5:30 PM at the Round Rock High School 100 lecture hall (300 North Lake Creek Dr., Round Rock, TX 78681). (Open Board Meeting rules.)

    Early voting for the Texas general election starts Monday, October 24. Williamson County early voting locations can be found here, while Travis County early voting locations can be found here.

    LinkSwarm for September 30, 2022

    Friday, September 30th, 2022

    More Democrats convicted for committing voting fraud, Russian forces are driven out of Lyman, and the Eurocrats freak out of Italy’s voters daring to disobey their wishes. Plus advice on what not to invest in.
    
    

  • Biden CDC Awarded Millions To Soros-Funded Activist Group Suing DeSantis.”

    In February, 2021, the Biden administration-run Centers for Disease Control (CDC) awarded a Soros-backed pro-migrant nonprofit $7.5 million under the guise of pandemic-related support for “LATINX ESSENTIAL WORKERS AS HEALTH PROMOTERS,” and aimed “to reduce the spread of COVID-19 and mitigate impacts among Latinx and Latin American immigrants,” according to an analysis by the Daily Caller.

    The group, Alianza Americas, is currently suing Florida Gov. Ron DeSantis (R) and other Florida officials over migrant flights to Martha’s Vineyard earlier this month.

    The group has also received nearly $1.4 million from George Soros’ Open Society Network.

    Alianza Americas is “focused on improving the quality of life of all people in the U.S.-Mexico-Central America migration corridor.” The membership-based group, which Soros’ Open Society Foundations network (OSF) sent almost $1.4 million to between 2016 and 2020, was awarded a $7.5 million CDC grant in February 2021, according to a grant listing reviewed by the Daily Caller News Foundation. -Daily Caller

    The CDC funds were distributed under a program called “Protecting and Improving Health Globally: Building and Strengthening Public Health Impact, Systems, Capacity and Security.”

    Add this to the many, many things Republicans should investigate if they gain a congressional majority.
    

  • More of that voting fraud that doesn’t exist:

    Former U.S. Rep. Michael “Ozzie” Myers, a Pennsylvania Democrat, pleaded guilty to conspiracy to deprive voters of civil rights, bribery, obstruction of justice, falsification of voting records, conspiring to illegally vote in a federal election, and orchestrating schemes to fraudulently stuff ballot boxes for specific Democrat candidates in Pennsylvania elections held from 2014 to 2018. Myers was sentenced Tuesday by U.S. District Judge Paul S. Diamond to 30 months in prison, three years supervised release, and ordered to pay $100,000 in fines, with $10,000 of that due immediately, according to a statement from U.S. Attorney Jacqueline C. Romero.

    (Previously.) (Hat tip: Sarah Hoyt at Instapundit.)

  • Russian forces appear to be abandoning Lyman, which is cut off and surrounded.

  • “A right-wing alliance led by Giorgia Meloni’s Brothers of Italy party” won Italy’s election and will form a new majority government.
  • Naturally, the Eurocratic elite are far from thrilled that Italians exercised unapproved voting preferences. “EU Commission President Threatens Italy On Eve Of Election, Says Brussels Has ‘Tools’ If Wrong Parties Win.”
  • Funny how they mention that some fascists were involved in founding Meloni’s party, but never mention how the Partito Democratico, the leftist and second largest party in Italy, were formerly commies.
  • Voters Widely Favor GOP Candidate in Competitive House Districts.”
  • And there’s reason to believe they’re actually doing better than that.
  • “Ninth Circuit Strikes Down California Plan to Close Prisons for Illegal Aliens.” One of President Trump’s many accomplishments was flipping the Ninth Circuit from a loony leftist laboratory to a court that actually followed the Constitution. (Hat tip: Ace of Spades HQ.)
  • “This Ohio School District Is Promoting an ‘LGBTQ+ Resource Guide’ With Instructions on Sex Work, Abortions. Hilliard City School District guide also encourages students to transition gender without parental consent.” All this encouraged by the National Education Association, which evidently thinks it is perfectly fine to literally instruct your children on how to be whores. (Hat tip: Sarah Hoyt at Instapundit.)
  • A double-dose of Glenn Greenwald:

  • Tranny turns out to be traitor.
  • Michael Avenatti Ordered to Pay Restitution to Stormy Daniels in Fraud Lawsuit.” There’s not a violin small enough.
  • Google’s Manifest V3 for Chrome is trying to kill ad- and tracking-blockers. Another good reason to use another browser.
  • Important investing tip: A single deli in rural New Jersey is not, in fact, worth $100 million. Which explains the fraud charges.
  • Speaking of bad investments, remember how growing hemp was going to make farmers rich? Yeah, not so much.
  • Since I post a lot of Peter Zeihan videos, I thought it only fair that I post this critique of Zeihan by Yaron Brook. He opines that, while Zeihan has important things to say about geography and demographics, he ignores the central role of ideas in shaping the world.
  • NFT trading volume has collapsed 97% since the January peak. I need an NFT of Nelson saying “Ha ha!”
  • Pro tip: Don’t leave your illegally modified automatic weapons in your Uber. (Hat tip: Dwight.)
  • Skillz:

  • LinkSwarm for September 23, 2022

    Friday, September 23rd, 2022

    California is (still) broke, Stacey Abrams is (still) not very bright, Joe Biden tried to deal gas to the commies, and the FBI can’t be bothered to investigate such trivia as “sex crimes involving children.” It’s the Friday LinkSwarm!

    

  • Remember how the State of Texas came in with record revenues and a $27 billion surplus? Well, the flip side is California, which just saw 11% personal income tax revenue drop. Funny how chasing away productive taxpayers through punitive taxation and insane over-regulation isn’t a recipe for success…
  • In a related story, U-Haul in California literally ran out of trucks leaving the state.
  • “Joe Biden Was Deeply Involved With Selling U.S. Natural Gas to the ChiComs, New Docs and Whistleblowers Reveal.”

    Republicans on the House Oversight and Reform Committee have obtained bombshell documents proving that Joe Biden was deeply involved in the family business of selling American natural gas to the Chinese–while he was planning to run for President. According to multiple whistleblowers, the Biden family made promises to those who worked with them in 2017 and onward that they would “reap the rewards in a future Biden administration.” These explosive revelations “pose national security concerns,” Oversight Republicans proclaimed Tuesday night.

    The Biden clan enriched itself by selling the natural resources to a Chinese firm closely affiliated with the Chinese Communist Party (CCP)—just a few years before the cost of gas in the United States hit record highs, the Oversight Republicans stated.

    In a letter to United States Treasury Secretary Janet Yellen, Rep. James Comer (R-Ky.), the ranking Republican on the Oversight Committee, alleged that according to whistleblowers, Joe Biden was heavily involved in this treachery.

    “This comes to light at a time when the cost of natural gas is at a 14-year high and Americans struggle to pay their energy bills,” Comer wrote in the letter to Yellen. “The President has not only misled the American public about his past foreign business transactions, but he also failed to disclose that he played a critical role in arranging a business deal to sell American natural resources to the Chinese while planning to run for President.”

    Comer sent a letter to Yellen in July complaining that the Treasury Department was restricting access to over 150 Suspicious Activity reports (SARs) on Hunter Biden, amid explosive revelations that came out from Biden’s “laptop from Hell,” and iPhone.

    On Sept. 2, 2022, the Treasury Department stated in a letter to Committee Republicans, that the SARs may be provided “upon a written request stating the particular information desired, the criminal, tax or regulatory purpose for which the information is sought, and the official need for the information.”

    In response, Comer said that “based on the documents provided in this letter, we request all SARs from Biden family transactions, including those involving President Biden, related to transactions with Chinese entities. We are concerned that the President may have compromised national security in his dealings with the country most adverse to U.S. interests—China. These SARs will inform our analysis of this matter.”

    Comer said Oversight Republicans have obtained a “presentation” emailed to Hunter Biden’s firm Hudson West III LLC (Hudson West) on December 13, 2017. The document, translated from Mandarin Chinese, is titled, “Overview of the U.S. Natural Gas Industry Chain, and is concerned with selling American natural resources to China.”

    “Jiaqi Bao, who created the presentation, was previously an employee of the CCP, and worked for Hunter Biden’s corporate entity Hudson West,” the letter states.

    Comer provided Yellen with two maps that were part of a presentation emailed to Hunter Biden. The maps include sophisticated analysis written in Chinese, and show the United States carved up based on natural gas reserves “with particular emphasis on Pennsylvania, Louisiana, Texas, Oklahoma, and Wyoming.”

    “The emails that accompany the transmitted maps reveal a plan to sell natural gas reserves to China via the same corporate entity branded on the presentation-Hudson West III LLC (Hudson West)–set up by Hunter Biden with officials from the Chinese company CEFC, at the time, one of the largest oil companies in China,” the letter stated.

    (Hat tip: Sarah Hoyt (and her shocked face) at Instapundit.)

  • Kurt Schlichter on New York State Attorney Letitia James filing a civil lawsuit against Donald Trump.

  • FBI investigations of child sex abuse claims are no longer a priority with all these conservatives and Trump supporters they need to prosecute for WrongThink…
  • Speaking of enabling perverts: “Sex fiend gets ‘sweet’ deal from [Soror-backed] Manhattan DA Bragg on teen rape charge — then attacks 5 others.” (Hat tip: Stephen Green at Instapundit.)
  • Another groomer teacher. “Teacher charged with 24 sex crimes after posting TikToks of students, school says.” (Hat tip: Instapundit.)
  • Russian Vehicles Flock To Georgian Border Following Partial Military Mobilization.” Don’t be sad! Die for Vlad!
  • Ukrainians capture a Russian T-90M, the most modern tank they’ve actually fielded. (The T-14 Armata is still MIA in the Russo-Ukrainian War…)
  • Meant to mention this last week: Republican J.D. Vance Now Leading Democrat Tim Ryan in Ohio U.S. Senate Race.
  • “Majority of Likely Voters Support Migrant Busing.” Suck it, Martha’s Vineyard.
  • US Bank CEOs: If China invades Taiwan, they can kiss their access to U.S. banks goodbye.
  • Stacey “Not Very Bright” Abrams claims that six-week old fetal heartbeats are “Manufactured’ to Help Men Control Women.”
  • New treatment sends Lupus patients into remission.

    (Hat tip: Instapundit.)

  • RIP APD Officer Anthony “Tony” Martin.
  • Commies being commies, the Soviet Union tried to reorder the calendar. Just like the French Revolution, it didn’t work.
  • “Migrants Decline Newsom’s Offer Of Asylum In CA Since They Just Came From A Collapsing Communist Hellhole With No Electricity.”
  • Holy Crap, Tesla’s Texas Gigafactory is Huge

    Saturday, September 10th, 2022

    This may fall into the “old news is so exciting” category for many of you. I knew that Tesla was building it’s Gigafactory east of Austin, and that it was large, but since I almost never travel to that part of town, until this video popped up in my YouTube feed, I had no idea how large.

    Wikipedia, the source of all vaguely accurate knowledge, lists the footprint as 10 million square feet, making it the second largest building in the world, next to only Boeing’s aircraft assembly plant.

    Also astonishing is just how quickly it was put up. Musk threatened to move Tesla to Texas back on May 9, 2020, officially announced it July of 2020, and the construction crew raised the first pillar in December of 2020. If they had tried to do this in California, I bet they’d still be wrangling over environmental impact statements and paperwork.

    Earlier this year they held a “Cyber Rodeo” to celebrate starting manufacturing in the building, even though parts of it are still under construction. (Much like the Detroit Arsenal Tank Factory started production during World War II before the building was finished.) And Tesla plans to hire 20,000 people for the site.

    They’re not stopping there. They’re already building another 500,000 square foot building on the site.

    In California, even an industry as near and dear to the hearts of environmentalists as electric cars finds the tax and regulatory too hostile to expand their business.

    Low taxes and low regulation are the way to keep your state prosperous. But that path doesn’t offer Democrats enough rent-seeking and graft…

    LinkSwarm for September 9, 2022

    Friday, September 9th, 2022

    Ukraine is carving out big gains in Kharkiv, Texas is in the money, Biden taps Clinton’s bagman to divy up the graft manage climate change funds, more groomers unmasked, and some big changes in the UK. Plus a bit about tanks. It’s the Friday LinkSwarm!
    

  • Ukraine’s counteroffensive in Kharkiv has been extremely successful.
    • Ukrainian successes on the Kharkiv City-Izyum line are creating fissures within the Russian information space and eroding confidence in Russian command to a degree not seen since a failed Russian river crossing in mid-May.
    • Ukrainian forces in the Kharkiv Oblast counteroffensives advanced to within 20 kilometers of Russia’s key logistical node in Kupyansk on September 8.
    • Ukrainian forces will likely capture Kupyansk in the next 72 hours, severely degrading but not completely severing Russian ground lines of communication (GLOCs) to Izyum.
    • Ukrainian forces are continuing to target Russian GLOCs, command-and-control points, and ammunition depots in Kherson Oblast.

    

  • Texas Tax Haul Soars By Record 26% in 2022 Fiscal Year.”

    On Thursday, the state comptroller reported that the Lone Star State’s tax revenue rocketed by 25.6% to a total of $75.21 billion.

    It’s only the fifth time since 1988 that revenue grew by a double-digit percentage — and it’s double the next largest increase over that 34-year span.

    “Revenues continue to outpace even our most recent forecast as All Funds tax collections closed the fiscal year $841 million above the projection in our Certification Revenue Estimate,” said state Comptroller Glenn Hegar in an official release.

    That’s a stark contrast to California, which saw July revenue come in 12% below forecast.

    Texas has been a major beneficiary of migration from California: Over the last census cycle, 34% of new Texans arrived from California alone. Meanwhile, New York saw personal income tax collection fall 3.2% from April 1 through July.

  • Biden Brings in Professional Bagman John Podesta to Divvy Up the $316 Billion in Climate Change Money to DNC Donors Ahead of Midterm Election.”

    Joe Biden has hired John Podesta to be the new Clean Energy Czar, citing his experience in progressive causes….

    Bottom line, John Podesta is being now being hired to divvy up the $316 billion in Green New Deal money recently authorized by congress. That is what Podesta specializes in, the distribution of taxpayer money to DNC allied groups and networks in advance of the 2022 midterms. Podesta, Hillary’s fixer, is a bagman, nothing more.

  • Worse, one of the many bag clients he’s adept at channeling money into Democratic pockets for is China.

    President Joe Biden on Friday tapped John Podesta to oversee $370 billion in climate spending, a move that has China hawks on Capitol Hill concerned over Podesta’s encouragement of Chinese investment in American infrastructure and praise for the top U.S. adversary on climate change.

    Podesta has called for Chinese investment in American infrastructure, arguing in 2013 that there are “great opportunities for Chinese firms to directly invest in this nation, to build American infrastructure, to create American jobs, and generate steady and handsome returns.” He added, “There’s also the ability for Chinese firms to invest here and learn best practices, and take those home to the tremendous and growing middle class market in China.”

    Instead, in the intervening decade, the Chinese government has committed widespread economic espionage—one 2017 estimate found that China steals up to $600 billion in trade secrets a year. Engineers in China, meanwhile, use popular social media platform TikTok to access nonpublic data from U.S. users.

    Podesta has also praised China’s efforts to combat climate change, arguing in 2015 that the Chinese “are beginning to do a fair amount.” China, which is the world’s top carbon emitter, went on to dramatically accelerate its coal consumption, which reached a record high in 2020.

    That record has China hawks on the Hill concerned that America’s top adversary has a new—and powerful—ally in the White House. Podesta’s role will see the liberal consultant implement $370 billion in spending toward alternative energy, a sector that China dominates when it comes to raw materials. As such, alternative energy companies receiving the Podesta-steered funding could turn to China to secure supplies. The new Biden aide will likely take no issue with that dynamic, given that he has argued the United States and China should “align” on a green economy. Sens. Marsha Blackburn (R., Tenn.) and Ted Cruz (R., Texas) argued that the move reflects the White House’s soft-on-China stance.

    (Hat tip: Mark Tapscott at Instapundit.)

  • Russia halts natural gas to EU, saying it won’t resume until sanctions are lifted.
  • Related: “European energy trading risks collapse over $1.5 trillion in margin calls.” Seems like there’s a lot of news about margin calls this week…
  • More European fun: Greece and Turkey are slouching toward war with each other.
  • “Teachers’ Union Boss Admits Teachers Have Become ‘Social Justice Warriors.'” Randi Weingarten is the gift that keeps giving. (Hat tip: Stephen Green at Instapundit.)
  • California Gov. Newsom Reaped $10.6 Million In Campaign Cash From 979 State Vendors Who Pocketed $6.2 Billion.”
  • Democratic County Administrator Robert Telles charged in the death of journalist Jeff German, “an investigative reporter with the Las Vegas Review-Journal who had spent the last few months exposing misdeeds and turmoil in the official’s office.” For all Sundown Joe’s dark mutterings about “UltraMAGA,” it seems like Democrats are the ones doing all the killing…
  • “Special Master Order Reveals Biden’s Direct Involvement In Trump Raid.”
  • “More North Texas Teachers Charged with Sexual Assault of Students.”

    A now-former elementary school teacher previously charged with sexual abuse of a 7-year-old student was arrested again and charged with sexually assaulting a second victim.

    Victor Moreno, 28, was charged in July with continuous sexual abuse of a child, a first-degree felony, and an improper relationship between a student and educator, a second-degree felony.

    The accused pedophile’s victim was a second-grade girl in Irving Independent School District, where Moreno was a teacher at the time of the alleged assaults during the 2020-2021 school year.

    Snip.

    Meanwhile, a teacher’s aide in Mesquite Independent School District was arrested Tuesday after being accused of engaging in inappropriate relationships with students.

    Bryan Garcia, 22, was charged with two counts of sexual assault of a child and one count of indecency with a child.

  • “American Library Association Removes Webpage Promoting ‘Secret’ LGBT Messaging In Libraries.”
  • Chechen leader Ramzan Kadyrov says he might call it quits.
  • Chilean voters reject Social Justice constitution. Good.
  • “Germany: Green Politician Resigns After Inventing Nazi Death-Threats Against Himself.”
  • Queen Elizabeth II dead at age 96. As an American, I hold no truck with royalty, but she always struck me as a classy broad. (Hat tip: Stephen Green at Instapundit.)
  • “Stacey Abrams Announces That With A Heavy Heart She Will Succeed Elizabeth II As Queen.”
  • Clinton nonprofit funneled $75,000 to ‘defund the police’ group.” This is my shocked face. (Hat tip: Ace of Spades HQ.)
  • Higher Ed’s New Woke Loyalty Oaths: A ballooning number of hiring and tenure decisions require candidates to express written fealty to political doctrines.” And you can bet those doctrines have nothing to do with constitutionally limited government based on universal rights…
  • Russia seems a lot more interested in selling T-14 Armata tanks abroad than in sending them to Ukraine.

  • Indeed, they’re talking about restarting old production lines to start manufacturing older BMP-2s. “The costs and challenges of bringing more modern designs into production are now surely aggravated by Western sanctions cutting access to many basic electrical components, requiring pricey and time-consuming workarounds.”
  • This is like a scene from a porn movie, only a lot creepier. “Las Vegas landlord requires tenant to sign sex contract in order to lease home.”
  • “Libs of TikTok returns to Twitter, threatens lawsuit if removed permanently.
  • The Supreme Court is going to bitchslap Eric Adams halfway to Albany: “Mayor Adams vows door-to-door checks on gun permits.”
  • Fat Leonard is on the lam.
  • “Employees Shocked as Lesbian Vegan Doughnut Shop Goes Out of Business.” The landlord hadn’t been paid for months, and the owners bounced paychecks to employees.
  • Take this, low prices! (Hat tip: Dwight.)
  • “No turkey, however bloated and stupid, could ever be big enough to convey the mesmerising awfulness of Amazon’s billion dollar Tolkien epic.” (Hat tip: Ed Driscoll at Instapundit.)
  • Amazon is so confident that actual viewers will hate it that they put a three day waiting period on reviews. In any case, here the one-star reviews they allowed to slip through. Makes you wonder what other reviews they’re manipulating… (Hat tip: Stephen Green at Instapundit.
  • Kim Kardashian Is Starting Her Own Private Equity Company.” Why not? But I’m betting being a genius at self-promotion doesn’t equate to being a genius at investing, especially since she’s starting in the middle of a fierce, widespread downturn…
  • Easiest way to win Dad of the Year? Pick your son up from school in a tank. Looks like a Scorpion light tank, most likely the FV107 Scimitar reconnaissance variant.
  • “FBI Drops Investigation After Discovering Trump’s Top Secret Nuclear Documents Were Just Print-Outs Of Hillary Clinton Emails.”
  • Then: Commercial Investors Are Sucking Up All American Housing! Now: They’re Losing Their Shirts!

    Thursday, September 8th, 2022

    If you can remember all the way back to pre-Flu Manchu 2020, housing prices were soaring and there were a raft of articles decrying how commercial investors were snapping up housing as fast as they possibly could, pricing ordinary Americans out of the market.

    Now, some two years later, it’s evident that a lot of those commercial investors kept buying right up through the peak of the market, and are now proceeding to lose their shirts on those deals thanks to the Biden Recession.

    Take, for example, OpenDoor, the company that sends out those endless “We want to buy your home” letters. They promised investors they were going to use the Internet to revolutionize home-buying by flipping homes at scale and cut out the middle man. How well did they succeed?

    Now that they’ve had a while to run their system, the answer is: Not so well.

    Takeaways:

  • One thing I was unaware of: Commercial investors in residential real estate fund their purchases through variable interest rate debt.
  • OpenDoor’s outstanding debt balance “has ballooned from $271 million to $6.1 billion.”
  • Every point rise in interest rates costs OpenDoor $40 million more in interest rate payments.
  • “OpenDoor is truly a modern day house of cards. The company’s revenue grew from $1.8 billion in 2018 to over $8 billion in 2021. To grow they scaled, going from 18 markets to 44 markets in the U.S. In those four years, the company went from flipping 7,000 homes a year back in 2018 to now flipping 21, 000 homes most recently in 2021.”
  • “Despite OpenDoor’s top-line growth, the company has incurred loss after loss after loss, each bigger than the last, even in a strong rebound year in 2021. Where the company sold a record number of homes, OpenDoor incurred a record loss of over $600 million.”
  • Some math snipped. “OpenDoor would need to sell roughly sixty thousand homes a year just to break even with how much it costs the company to exist in its current burn rate. Every time the interest rate goes up a single point, OpenDoor needs to sell an additional 2,000 homes in order to offset that additional $40 million.”
  • The end of the video touches on how Zillow lost $881 million by trusting an algorithm that had them paying above-marker prices. We covered that briefly here some nine months ago. Here’s a video with more details:

    But it’s not just OpenDoor and Zillow. Here’s a video that explains why all the large-scale commercial buyers of residential real estate (including those buying to rent it out rather than flip) are screwed by rising interest rates:

    Takeaways:

  • The Fed “is now committing to not only continue increasing interest rates, they’re committing to keeping interest rates elevated for the foreseeable future.”
  • “These real estate investors are going to be losing money in the housing market on their investments, and that they are going to have to fire sale their portfolio as a result.”
  • “Over the last year, the investor profit or the cap rate in America is about 4.5%, which was pretty good in 2021, when interest rates were zero, but now that interest rates are projected to go to 3.8%, we can see that investors who buy real estate in America are basically getting very little premium over buying a short-term government bond.”
  • “As this investor demand continues to go down, home prices are also going to continue to go down in America, because in many markets investors were quarter of the demand, a third of the demand for homes over the last of couple years, and in some neighborhoods investors were 50—60% of the demand.”
  • “A lot of people think [commercial buyers pay] cash, but folks, it’s never cash, it’s always a bank in the background giving these hedge funds and private equity funds money to buy single-family homes.”
  • “They’ll give these hedge funds maybe 70—75% percent of the money to go do it, like a normal loan. The thing is, the loans that these Wall Street investors use to buy homes are often adjustable rate loans, where every time the fed hikes interest rates, the Wall Street investor has to pay more in debt service and interest on their existing portfolio.”
  • “We’re gonna get to a point soon over the next six months where these Wall Street investors are having to pay more to their bank and their warehouse lender than they’re going to receive in income and rent from their tenant. Like, literally, these Wall Street investors not only are going to see the value of their property going to go down, they’re going to begin losing money in terms of cash flow.”
  • So not only will investors have to sell, but frequently they won’t have any choice.

    Because their lender, their bank, is going to do something called a margin call. At a certain point, they’re gonna say “Hey Wall Street buyer who I’m giving money to, the value of the homes has gone down and now you can barely afford to pay interest. You’re gonna have to now just pay us off, or pay us down,” and when the bank does that margin call, these investors are then going to be forced to sell off their portfolio, because they’re going to need the cash, causing a massive, widespread dump of inventory onto the U.S. housing market.

  • He doesn’t mention Austin by name in this video, but he does in another pegging it as the #5 market most likely to see price drops. “This is a market in absolute freefall.” “In the span of just five months, the number of homes for sale in Austin has increased from 1460 and February to nearly 8 000 in July.” He thinks home prices could down by 40%. Naturally, as an Austin-area home-owner, I think that’s way too much, but I do expect significant retreats from the highs reached early this year.
  • He also thinks inflation is going to get worse (which is probably a good bet).
  • (In another video covering some of the same ground, he mentions BlackRock, one of the biggest boogeymen in public perceptions of buying residential real estate. Guess what? “BlackRock is not a big player in terms of owning, managing and buying real estate in the U.S.”)

    Like the fear of Japan buying everything in the late 1980s, fear that institutional investors will make owning a home impossible for ordinary Americans turned out to suffer from the same recency bias, assuming that what is going on right this minute will continue for the foreseeable future.

    Like assuming that the giant ants are unstoppable, or that Hispanics will always vote for Democrats, assuming that housing prices will always go up and that credit will always be cheap are categorical mistakes that the market will eventually punish you for making, and the companies that made it are now bleeding red ink.

    People who sold during the bubble made out like bandits, and people who bought during it got screwed, but what can’t go up forever won’t. Bubbles pop. Absent government distortions of the market*, supply and demand have a way of adjusting.

    Anyway, if you need to buy a house, nine months from now is probably going to be a great buyer’s market…

    *And yes, lots of cities and states try their damnedest to prevent new housing from being built. I’m looking at you, California.

    State of Texas Lowers Boom On Harris County Over Police Defunding

    Tuesday, August 23rd, 2022

    It looks like the Democrats running Harris County are finally going to face some consequences for defunding law enforcement.

    Texas Comptroller Glen Hegar has ruled that Harris County reduced funding for some law enforcement agencies and will be subject to sanctions under a new state law enacted last year.

    According to a letter addressed to Gov. Greg Abbott, Lt. Gov. Dan Patrick, House Speaker Dade Phelan (R-Beaumont), and Harris County Judge Lina Hidalgo, Hegar said that his ruling is in response to complaints filed by Constables Mark Herman (Pct. 4) and Ted Heap (Pct. 5) regarding funding changes last year and in a proposed budget for next year.

    One of the key allegations Hegar is investigating is the county’s move to take away more than $3 million in so-called “rollover funds” from constables’ offices. Last year, commissioners voted 3 to 2 along party lines to remove these funds from the eight elected constables as well as the district attorney’s office, based on a recommendation from County Administrator David Berry.

    Hegar notes that the proposed budget for Fiscal Year (FY) 2023 will reduce funding to the constables’ offices by over $12 million as compared to Short Fiscal Year 2022, which covers March through September of this year. Although the county appears to be revising the proposal, they are still poised to reduce overall funds for constables by $3 million.

    “The budgeting practices of Harris County may not provide the Constables Office with full authority to expend their allocated budget to meet public safety needs,” wrote Hegar.

    Signed by Abbott last year, the state’s “Back the Blue” legislation punishes cities or counties with populations of greater than 250,000 people if they reduce allocations for police, by either freezing property taxes or forcing cities to revisit any annexation done in the last 30 years.

    Thus, Hegar writes, if Harris County proceeds with the constable’s budget as proposed “without obtaining voter approval, the county may not adopt an ad valorem tax rate that exceeds the county’s no-new-revenue tax rate.”

    Snip.

    Last week, Hidalgo and County Commissioner Adrian Garcia (D-Pct. 2) held a press conference to tout increases in “public safety spending” that included non-traditional expenditures such as $1.5 million for public Wi-Fi, $8.4 million for new trails, and $50 million to address blight and add sidewalks and street lights.

    With the possible exception of streetlights, none of that makes anyone safer, but does provide nice conduits of graft to shovel to left-wing cronies via rigged bidding contracts (a Hidalgo specialty). We know from an in-depth dive into the Austin defund effort’s Reimagining Public Safety document that letting leftwing activists steal money from police funding to line their own pockets is one of the primary goals of the “defund the police” movement.

    The interesting thing about this ruling is that, compared to Austin’s defunding push, Harris County’s defunding efforts were relatively modest at-the-margins stuff. No showy reductions in headcount or refusals to let new cadet classes move forward, just a quick raid to hoover up some loose cash from the constables while no one was looking. That this was enough for Hegar to drop the hammer indicates that defunding the police is a dead letter in Texas.

    Does this mean the state government can nail Austin for their much more egregious defunding efforts? Probably not. The worst of that happened in 2020, while the law wasn’t passed until 2021. So unless the Austin City Council stupidly tries to stick their hand in the APD cookie jar again, I doubt they can be held to account for that under this law, unless they try the same trick again. On the other hand, time has proven again and again that there are few limits to Austin City Council stupidity…