Damascus has fallen. After thirteen years of brutal civil war, Bashar al-Assad—who once vowed to die in Syria—has fled to Moscow, leaving behind a nation in tatters. But Syria’s next chapter may be even darker than its last.As I wrote last year, the recent civil war in Syria, begun in 2011, was primarily a sectarian battle, always simmering but brought to a boil by the wider upheavals in the Arab world at the time and specific igniting events in Syria itself.The sectarian context in Syria involved the rule of a minority Shi’a-Alawite family—the Assad clan—over a Sunni majority. The reasonably large (10-15 percent of the population prior to the civil war) Christian minority made for an Alawite-Christian alliance of sorts against the Sunnis. The nature of this alliance, at least nominally,

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

With much consternation, capital markets participants are watching US treasury bond yields go up while Jerome Powell and the Fed continue to lower the Fed Funds Rate in an effort to spur another round of easy money.The Fed Funds rate is a short-term interest rate used for interbank borrowing. US treasury bonds are medium-long term securities that represent the sovereign debt of the US government, so the yield on those bonds represents the US government’s cost of borrowing. While there is no law that binds the two, lower rates from the Fed generally translate into lower treasury yields.Explanations for the divergence have been proffered, talking heads have opined, and conclusions abound with regard to the meaning behind the movement. Given the mixed signals, difficult questions related to

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Commercial real estate continues to suffer despite the Federal Reserve’s attempt at ameliorating the capital markets with a 50-basis point rate cut in September.The pain is especially apparent in the so-called “CRE-CLO” bond market.

Arguments advanced to support a political position often fail to withstand the slightest scrutiny. Rather, they are meant to make an impression on the impressionable—those who lack the context required to make an evaluation—and draw large numbers of the uninformed to one side of a political debate. Such is the case with libertarian economist Bryan Caplan’s recent article in favor of unrestricted immigration, wherein he uses the United Arab Emirates as a supposed template for open borders policy.As an Arabic speaker and former resident of the UAE—I lived and worked there for five years, managing a large portfolio of hotel investments owned by the sovereign wealth fund of Dubai—I have a particular context that Caplan does not, having only passed through on his way to India.With that context,

Central to any good investor’s decision-making process is determining the degree to which the target of investment is “robust to the downside.” Can the investment maintain its value—or even continue to provide sufficient return on capital—in the event of a pullback in the broader economy or a specific sector?Warren Buffett has aptly referred to this feature as “margin of safety.” While critical to rational decision-makers, margin of safety seems quaint in today’s era of speculation and central bank front-running. Rather, in place of acquiring expertise and performing rational due diligence, speculators in capital markets rely on perpetually loose monetary policy and periodic bailouts.Markets worldwide, but particularly in the US, now exhibit a profound lack of robustness. Central banks—the

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

In a recent interview with Bill Maher, Nancy Pelosi discussed a recently proposed California law—Assembly Bill 1840—that aimed to provide taxpayer funds to first-time homebuyers regardless of immigration status. In defense of the proposed law, which was ultimately vetoed by California Governor Gavin Newsom, Pelosi stated that she wanted to help illegal immigrants achieve the “American Dream.”Setting aside the insanity of compelling California taxpayers to fund home loans for illegal immigrants, homeownership is not the American Dream. Politicians propagate this myth, with the help of their crony partners in the banking and housing industries, because it gives government a handy excuse to further entrench itself in a $40 trillion industry, always accruing more power in the process. How the

In a recent interview with Bill Maher, Nancy Pelosi discussed a recently proposed California law—Assembly Bill 1840—that aimed to provide taxpayer funds to first-time homebuyers regardless of immigration status. In defense of the proposed law, which was ultimately vetoed by California Governor Gavin Newsom, Pelosi stated that she wanted to help illegal immigrants achieve the “American Dream.”Setting aside the insanity of compelling California taxpayers to fund home loans for illegal immigrants, homeownership is not the American Dream. Politicians propagate this myth, with the help of their crony partners in the banking and housing industries, because it gives government a handy excuse to further entrench itself in a $40 trillion industry, always accruing more power in the process. How the

In recent weeks, both candidate Donald Trump and President Biden—via his staff—have expressed support for the idea of a US sovereign wealth fund (“SWF”). An SWF is simply an investment fund run by a national government. Ostensibly, the goals of such a venture are twofold—to increase the wealth of America and its citizens, and to spur innovation in “critical” areas like infrastructure, technology, and medicine.An American SWF is bound to fail on at least these two counts, as the idea of investing funds stolen from Americans in order to increase their prosperity is incoherent, and the federal government is incapable of innovation or excellence in any productive matter.Structural IncompatibilityI was employed by an SWF in the Persian Gulf for several years, overseeing their hotel investment

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Political analysis is often pointless, given the utter dishonesty with which politicians spew nonsense, especially during an election year. Despite that, I want to zero in specifically on the housing proposals made recently by Kamala Harris—the left’s latest political avatar and presidential candidate.In building the narrative of her candidacy, Kamala has made a slew of recent remarks about things like price gouging, the housing shortage, and apartment rents. According to her, she has a plan to address those issues. What follows is a high-level analysis of her proposed solutions, such as they are currently.Friedman’s Boiling KettleImagine you’re in your kitchen. You have water in a kettle on the stove, on high heat. The water begins a rapid boil, threatening to blow the lid off the kettle.

Political analysis is often pointless, given the utter dishonesty with which politicians spew nonsense, especially during an election year. Despite that, I want to zero in specifically on the housing proposals made recently by Kamala Harris—the left’s latest political avatar and presidential candidate.In building the narrative of her candidacy, Kamala has made a slew of recent remarks about things like price gouging, the housing shortage, and apartment rents. According to her, she has a plan to address those issues. What follows is a high-level analysis of her proposed solutions, such as they are currently.Friedman’s Boiling KettleImagine you’re in your kitchen. You have water in a kettle on the stove, on high heat. The water begins a rapid boil, threatening to blow the lid off the kettle.

In our bureaucratically-managed economy, financial prosperity increasingly depends on how close one can position himself to the dissemination of newly-created money. Understanding this critically means identifying the link between this “prosperity” and newly-created money. Since creating money from nothing can’t possibly be productive, or enhance wealth in any real way, there is no direct link to prosperity. The connection must be indirect, and indeed it is.The federal government’s persistent deficit and the Federal Reserve’s inflation policy necessitate continuous money creation. This new money enters the economy unevenly, benefiting early recipients who can spend or invest at current prices. As this money flows into specific sectors or assets, prices rise. Those with early access gain

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

From roughly 2020 to 2022, “syndicators” took over the apartment investment market. During that time, this group of dimwitted rent seekers used bridge loans to finance their apartment acquisitions. At 85% leverage, the bridge loans left only a sliver of equity to raise, for which these syndicators used third parties or online platforms built for anonymous fundraising from average Americans with cash to burn and no place to earn a yield in the zero interest rate environment of the time.To the extent there was a business case underlying these acquisitions, it involved two sets of assumptions. First, that heavy renovations on apartments, financed by additional bridge loan money, would lead to immediate and massive increases in rent. Second, that benchmark interest rates would stay at or near

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Recently, the Biden administration introduced plans to limit increases in apartment rents to 5% annually. Far from a straightforward cap, this plan contains various nuances, which I will explain below. Nevertheless, the basic fraud on display here is twofold.First, the state continues to ignore private property rights while manipulating markets with price controls – an attempt to commandeer the market’s fundamental role of price discovery and place it in the hands of bureaucrats.Second, and more to the point, the current regime is trying a desperate political maneuver in an election year – one that will ultimately harm the target audience, but sound the right progressive notes in the meantime.Brief BackgroundOne of the primary benefits of owning rental property is its relative tax

In modern America, an obsessive fixation on “safety” has given rise to a culture of fear, paralyzing action and warping decision-making across all levels of society. The conditioning begins early, with children trained to be fearful rather than competent in facing challenges or unfamiliar situations. In their formative years, children are inundated with rules and guidelines, ostensibly designed to maintain safety. But this only stunts their adventurous spirit, undercuts the development of real confidence, and provides an excuse to avoid the uncertain striving necessary for growth.Corporations and commercial establishments claim “safety is the highest priority” while failing to understand what that statement entails when taken to its logical extreme. If safety is indeed the highest

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Recently, Freddie Mac, a government-sponsored enterprise, sought approval from its oversight agency, the Federal Housing Finance Agency (FHFA), to purchase and guarantee second mortgages in the United States.While the business case for this proposal is deficient (for an excellent perspective on that, see the article by R. Christopher Whalen), I will discuss the economic and political premises behind this move and its possible consequences.What Does It Mean to “Nationalize Second Mortgages”?Understanding the single-family mortgage market in the US means realizing that there is no market in the real sense of that term. A whopping 70 percent of home mortgages in the US are owned or guaranteed by Freddie Mac and Fannie Mae, the two government-sponsored enterprises created by Congress to

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Mainstream financial news today is replete with stories about “distress” in the commercial real estate market. But what is the precise nature of this distress, and what implications does it have for those outside of the respective industry or asset class? More importantly, what set of factors contributed to the distress, and what does that say about its potential alleviation?Broadly, “distress” in the commercial real estate context refers to the inability of a property, or portfolio of properties, to make required payments on the underlying loan (to “service debt,” in industry terms). There is also physical distress—lack of physical upkeep, accumulation of deferred maintenance, etc.—but the inability to service debt is what’s generally referred to as distress in the financial media. I’ll

Scott Galloway, a professor in marketing from New York University and a frequent guest on networks like the execrable CNBC, gave a recent TED talk titled How the US Is Destroying Young People’s Future.

On April 10th, the Bureau of Labor Statistics reported figures for the March Consumer Price Index (“CPI”). CPI purports to represent changes in the overall price level of the American economy – an obscenely vague abstraction in a country of 350 million people. Let’s pretend for a moment that it does that.In March, overall CPI grew at 3.5 percent from a year ago and so-called “core CPI,” which excludes food and energy items, increased by 3.8 percent from a year ago. Across the board, price inflation was higher than expected. Of more relevance, both measures increased by 0.4 percent from last month, representing a 4.9 percent annualized rate of price inflation.In response to the report, bond yields rose, stocks dropped, and analysts in the lobotomized financial press reacted in muted shock,

Bernie Sanders, Elizabeth Warren, and the Congressional Progressive Caucus recently sent an open letter to the chairman of the Federal Reserve, Jerome Powell, demanding lower interest rates.The letter is full of the economic illiteracy one would expect from progressives, especially those in Congress. For example, it misreads price inflation data and argues that the failure to lower interest rates endangers home affordability and increases income inequality. These assertions are false and easily disproven.Artificially low interest rates lead to more of the same economic sickness—malinvestment, bloated government and personal debt, and a never-ending cycle of boom and bust that enriches the political class while impoverishing the average American.Home AffordabilityCongressional progressives

Stoked by ultra-loose monetary policy from the Federal Reserve, capital markets have been in a persistent bubble for several years. Printing trillions of new dollars and maintaining a zero-interest rate policy (“ZIRP”) was marketed by politicians and bureaucrats as supportive of the “main street economy,” but those trillions were directed primarily towards speculation in capital markets. 

During the most recent commercial real estate bubble, two things happened in tandem. First, due to the Federal Reserve’s zero interest rate policy, savers were unable to invest their cash at a decent rate of return.

Socialist Antonio Gramsci’s “long march through the institutions” describes the slow and gradual intellectual capture of a society through its influential and powerful institutions, including the church, media, the arts, corporations, schools, and universities, eventually leading to full infiltration.
It takes little awareness to realize that these strategies have succeeded. In the United States, all of Gramsci’s institutions are now socialist in their politics and collectivist in their ethics.
To freedom-minded individuals, arguably the most critical of Gramsci’s institutions are the schools. The greater the extent that children can gain appropriate skills of reason and moral instruction in their formative years—avoiding collectivist indoctrination—the better equipped they will be to

Since government regulates nearly everything, it is not surprising that regulations often prohibit the sale and consumption of raw milk. Like many other regulations, these prohibitions reflect political favoritism, not health science.
Original Article: Government Prohibitions on Raw Milk Are Ignorant and Dangerous

The Federal Reserve’s inflation of the money supply and interest rate manipulation distort capital markets through, among other things, the creation of asset bubbles. As the cost of borrowing decreases and cheap money floods an economy, speculation in capital markets increases, leading to prices unmoored from fundamentals.
Underlying these asset bubbles is a certain investor psychology—one based on expectations, encouraged by Fed actions over the last thirty-five years—that the Fed will always step in with easy money when asset prices threaten to decline.
Overleveraged speculators caught out by rising interest rates and risky loans are experiencing significant distress. Meanwhile, the apartment market continues to demonstrate dangerously speculative behavior.
Higher Risk, Lower Return
A

“Salus populi suprema lex.” The health of the people is the supreme law.
As ruling ideals go, this is a good one. Unfortunately, the governing class in America decided long ago that raw milk—one of nature’s most perfectly nutritious substances—must be regulated and prohibited to the point of making it nearly impossible to obtain. In its place, they teamed with the dairy industry to promote pasteurized milk, a lifeless liquid so devoid of the natural beneficial compounds found in raw milk that it should more accurately be called a “milk-like substance.”
In spite of government restrictions, freedom-minded and health-conscious citizens would do well to find good, clean sources of raw milk, consume it often, and encourage others to do the same.
The Genesis of the Government’s War on Raw Milk

Thanks to Federal Reserve intervention, apartments and apartment buildings have turned into giant malinvestments. Once again, a federal entity intervenes in markets presumably to make them work better, but things end in a crisis.
Original Article: The Fed-Enabled Apartment Bubble Is Unraveling

The apartment investment industry has experienced severe malinvestment over the last several years, resulting in a massive bubble that has only recently begun to deflate with rising interest rates. A tidal wave of easy money—enabled by the Federal Reserve and four consecutive United States administrations, from George W. Bush to Joe Biden—drastically lowered the barriers to entry. As a result, even those with no investment acumen have raised and used other people’s money for complex, high-risk projects like buying, developing, and managing apartment buildings. Bridge loans, a natural outgrowth of enormous amounts of liquidity searching for yield in an environment with a zero-interest rate policy, have facilitated this process. The results should not be surprising, and to some they aren’t.

It has become popular, especially in certain fields and among certain crowds, to glorify failure. So-called entrepreneurs and social influencers often brag about their failures. Multinational corporations publish poems encouraging failure. Vapid mottos rejecting the fear of failure are ubiquitous on motivational posters and T-shirts.
These efforts are apparently meant to convey an enterprising spirit and a fearlessness about trying new things in an effort to push the boundaries of a particular field.
While there’s tremendous value in attempting to achieve something worthwhile despite the risk of failure, failure itself is never the goal. And “learning from our failures” is part of the process of success, not an end in itself. Rejecting the fear of failure is not only impossible but harmful