Wells Fargo to pay $3.7B over consumer law violations
By KEN SWEET
1 hour ago
WASHINGTON (AP) — Consumer banking giant Wells Fargo agreed to pay $3.7 billion to settle charges that it harmed customers by charging illegal fees and interest on auto loans and mortgages, as well as incorrectly applying overdraft fees against savings and checking accounts.
Wells was ordered to repay $2 billion to consumers by the Consumer Financial Protection Bureau, which also enacted a $1.7 billion penalty against the San Francisco bank Tuesday. It's the largest fine ever leveled against a bank by the CFPB and the largest yet against Wells, which has spent years trying to rehabilitate its image after a series of scandals tied to its sales practices.
Regulators made it clear, however, that they believe Wells Fargo has further to go on that front.
“Put simply: Wells Fargo is a corporate recidivist that puts one out of three Americans at risk for potential harm,” said CFPB Director Rohit Chopra, in a call with reporters.
The bank's pattern of behavior has made it necessary for regulators to take additional actions against Wells Fargo that go beyond the $3.7 billion in fines and penalties, Chopra said.
The violations impacted more than 16 million customers, the bureau said. In addition to improperly charging auto loan customers with fees and interest, the bank wrongfully repossessed vehicles in some cases. The bank also improperly denied thousands of mortgage loan modifications for homeowners.
Wells Fargo has been sanctioned repeatedly by U.S. regulators for violations of consumer protection laws going back to 2016, when employees were found to have opened millions of accounts illegally in order to meet unrealistic sales goals. Since then, executives have repeatedly said Wells is cleaning up its act, only for the bank to be found in violation of other parts of consumer protection law, including in its auto and mortgage lending businesses.
Wells paid a $1 billion penalty in 2018 for widespread consumer law violations, the largest against a bank for such violations at the time.
The bank had signaled to its investors that it anticipated additional fines and penalties from regulators and aside $2 billion in the third quarter for that reason.
Wells remains under a Federal Reserve order forbidding the bank from growing any larger until the Fed deems that its problems are resolved. That order, originally enacted in 2018, was expected to last only a year or two.
CEO Charles Scharf said in a prepared statement Tuesday that the agreement with the CFPB is part of an effort to "transform operating practices at Wells Fargo and to put these issues behind us.”
While Wells Fargo tried to frame the agreement with the CFPB as a resolution of established bad behavior, CFPB officials said some of the violations cited in Tuesday's order took place this year.
“This should not been seen as Wells Fargo has moved past its problems,” Chopra said.
CEOs need to go to jail when they do shit like this.
Thanks Brandon, really appreciate it! Particularly rich is that Barry spoke at a conference at the Milkin Institute in Beverly Hills.
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
Thanks Brandon, really appreciate it! Particularly rich is that Barry spoke at a conference at the Milkin Institute in Beverly Hills.
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
I've had this conversation with people who didn't believe me that corporations were creating the uptick in housing pricing. This article is a pretty damn good example of it.
Thanks Brandon, really appreciate it! Particularly rich is that Barry spoke at a conference at the Milkin Institute in Beverly Hills.
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
I've had this conversation with people who didn't believe me that corporations were creating the uptick in housing pricing. This article is a pretty damn good example of it.
It's not the corporations, they are just freely raising the rents to what the market will bear. Fairly and freely the wonders of capitalism at work! I'm sure the shareholders are very happy and that's all that matters.
Thanks Brandon, really appreciate it! Particularly rich is that Barry spoke at a conference at the Milkin Institute in Beverly Hills.
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
I've had this conversation with people who didn't believe me that corporations were creating the uptick in housing pricing. This article is a pretty damn good example of it.
It's not the corporations, they are just freely raising the rents to what the market will bear. Fairly and freely the wonders of capitalism at work! I'm sure the shareholders are very happy and that's all that matters.
Freely? Yeah sure. People have to live places just like people have to buy food. You can keep raising them and people aren't "freely" paying that. It hurts them in the pockets.
Raising rent 35% is fucking greed... Same reason I haven't bought a new car, prices are too damn high. I'll wait. And yes their shareholders are happy, so are oil shareholders.
So weird watching liberals celebrate TsLA stock going down and conservatives celebrate “woke” Disney going down. What a weird world we live in. Yea take that Elon! Take that Disney! The only people getting hurt are shareholders.
I sold Tesla around 1100 before the split, and thought I sold too early. Sure glad I got out. I always considered it a “bubble” stock.
Thanks Brandon, really appreciate it! Particularly rich is that Barry spoke at a conference at the Milkin Institute in Beverly Hills.
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
I've had this conversation with people who didn't believe me that corporations were creating the uptick in housing pricing. This article is a pretty damn good example of it.
It's not the corporations, they are just freely raising the rents to what the market will bear. Fairly and freely the wonders of capitalism at work! I'm sure the shareholders are very happy and that's all that matters.
Freely? Yeah sure. People have to live places just like people have to buy food. You can keep raising them and people aren't "freely" paying that. It hurts them in the pockets.
Raising rent 35% is fucking greed... Same reason I haven't bought a new car, prices are too damn high. I'll wait. And yes their shareholders are happy, so are oil shareholders.
Thanks Brandon, really appreciate it! Particularly rich is that Barry spoke at a conference at the Milkin Institute in Beverly Hills.
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
I've had this conversation with people who didn't believe me that corporations were creating the uptick in housing pricing. This article is a pretty damn good example of it.
It's not the corporations, they are just freely raising the rents to what the market will bear. Fairly and freely the wonders of capitalism at work! I'm sure the shareholders are very happy and that's all that matters.
Freely? Yeah sure. People have to live places just like people have to buy food. You can keep raising them and people aren't "freely" paying that. It hurts them in the pockets.
Raising rent 35% is fucking greed... Same reason I haven't bought a new car, prices are too damn high. I'll wait. And yes their shareholders are happy, so are oil shareholders.
that was sarcasm bud
Oh thank God. I thought you were on my side.
Thanks Brandon, really appreciate it! Particularly rich is that Barry spoke at a conference at the Milkin Institute in Beverly Hills.
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
I've had this conversation with people who didn't believe me that corporations were creating the uptick in housing pricing. This article is a pretty damn good example of it.
It's not the corporations, they are just freely raising the rents to what the market will bear. Fairly and freely the wonders of capitalism at work! I'm sure the shareholders are very happy and that's all that matters.
Freely? Yeah sure. People have to live places just like people have to buy food. You can keep raising them and people aren't "freely" paying that. It hurts them in the pockets.
Raising rent 35% is fucking greed... Same reason I haven't bought a new car, prices are too damn high. I'll wait. And yes their shareholders are happy, so are oil shareholders.
that was sarcasm bud
Oh thank God. I thought you were on my side.
Yes I am
I wonder why this weird thing with the replies is happening.
Thanks Brandon, really appreciate it! Particularly rich is that Barry spoke at a conference at the Milkin Institute in Beverly Hills.
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
I've had this conversation with people who didn't believe me that corporations were creating the uptick in housing pricing. This article is a pretty damn good example of it.
It's not the corporations, they are just freely raising the rents to what the market will bear. Fairly and freely the wonders of capitalism at work! I'm sure the shareholders are very happy and that's all that matters.
Freely? Yeah sure. People have to live places just like people have to buy food. You can keep raising them and people aren't "freely" paying that. It hurts them in the pockets.
Raising rent 35% is fucking greed... Same reason I haven't bought a new car, prices are too damn high. I'll wait. And yes their shareholders are happy, so are oil shareholders.
that was sarcasm bud
Oh thank God. I thought you were on my side.
Yes I am
I wonder why this weird thing with the replies is happening.
I just noticed that too...
TSLA down another 14% today (as of now). At some point they will be worth buying.
Talking w my cousin about them we like it at $75.
Rivian is at $17. Thats a damn steal.
I was thinking of buying some more Rivian. Not that I have that much. I bought 150 shares when it was around $40. I really like their electric trucks, so I think they'll be able to sell them and keep growing the business. At $17 I feel I should load up some more.
Another decent CPI report....met expectations. Inflation down 3rd month in a row. Would've been nice to exceed expectations like previous couple months, but still moving in the right direction.
Wholesale inflation in US slowed further in December to 6.2%
By CHRISTOPHER RUGABER
22 mins ago
WASHINGTON (AP) — Wholesale prices in the United States rose 6.2% in December from a year earlier, a sixth straight monthly slowdown and a hopeful sign that inflation pressures will continue to cool.
The latest year-over-year figure was down from 7.3% in November and from a recent peak of 11.7% in March. On a monthly basis, the government said Wednesday that its producer price index, which measures costs before they reach consumers, dropped 0.5% from November to December.
The producer price data can provide an early sign of where consumer inflation might be headed. The data reflects the prices that are charged by manufacturers, farmers and wholesalers, and it flows into an inflation gauge that the Federal Reserve closely tracks: The personal consumption expenditures price index.
The monthly drop in wholesale prices was led by gas prices, which sank 13.4% from November to December. Gas prices averaged $3.36 a gallon Wednesday, according to AAA, down from a peak of $5 a gallon in mid-June.
Food prices dropped by a sharp 1.2%, led by fruits, vegetables and chicken. One exception was egg prices. Driven up in part by a wave of avian flu, egg prices soared 25% just from November to December.
Excluding volatile energy and food costs, so-called core producer prices rose only 0.1% from November to December. Measured year over year, prices increased 5.5% in December, compared with 6.2% in November.
Producer prices in the nation's vast service sector — everything from restaurants and hotels to airlines and entertainment venues — ticked up just 0.1% from November to December, the smallest such increase since last April. The Fed has been monitoring this area of the economy in particular as it assesses its progress in combating high inflation.
But rising evidence shows that inflation across the economy is easing after having reached a four-decade peak last summer. At the consumer level, inflation also cooled in December for a sixth straight month to 6.5% compared with a year earlier, from 7.1% in November.
Over the past year, the Fed has rapidly raised its key interest rate in an aggressive drive to cool borrowing and spending and tame inflation, which began surging more than a year and a half ago.
The Fed’s rate hikes have, in turn, led to higher borrowing costs for consumers and businesses. The average mortgage rate is still nearly twice its level a year ago, though it has dipped in recent weeks. Loan costs for auto purchases, credit cards and a range of business borrowing are up sharply, too.
Even as overall inflation gradually slows, costs continue to surge in some pockets of the economy. Particularly in the service sector, wage growth is still contributing to broader inflation pressures.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Wholesale inflation in US slowed further in December to 6.2%
By CHRISTOPHER RUGABER
22 mins ago
WASHINGTON (AP) — Wholesale prices in the United States rose 6.2% in December from a year earlier, a sixth straight monthly slowdown and a hopeful sign that inflation pressures will continue to cool.
The latest year-over-year figure was down from 7.3% in November and from a recent peak of 11.7% in March. On a monthly basis, the government said Wednesday that its producer price index, which measures costs before they reach consumers, dropped 0.5% from November to December.
The producer price data can provide an early sign of where consumer inflation might be headed. The data reflects the prices that are charged by manufacturers, farmers and wholesalers, and it flows into an inflation gauge that the Federal Reserve closely tracks: The personal consumption expenditures price index.
The monthly drop in wholesale prices was led by gas prices, which sank 13.4% from November to December. Gas prices averaged $3.36 a gallon Wednesday, according to AAA, down from a peak of $5 a gallon in mid-June.
Food prices dropped by a sharp 1.2%, led by fruits, vegetables and chicken. One exception was egg prices. Driven up in part by a wave of avian flu, egg prices soared 25% just from November to December.
Excluding volatile energy and food costs, so-called core producer prices rose only 0.1% from November to December. Measured year over year, prices increased 5.5% in December, compared with 6.2% in November.
Producer prices in the nation's vast service sector — everything from restaurants and hotels to airlines and entertainment venues — ticked up just 0.1% from November to December, the smallest such increase since last April. The Fed has been monitoring this area of the economy in particular as it assesses its progress in combating high inflation.
But rising evidence shows that inflation across the economy is easing after having reached a four-decade peak last summer. At the consumer level, inflation also cooled in December for a sixth straight month to 6.5% compared with a year earlier, from 7.1% in November.
Over the past year, the Fed has rapidly raised its key interest rate in an aggressive drive to cool borrowing and spending and tame inflation, which began surging more than a year and a half ago.
The Fed’s rate hikes have, in turn, led to higher borrowing costs for consumers and businesses. The average mortgage rate is still nearly twice its level a year ago, though it has dipped in recent weeks. Loan costs for auto purchases, credit cards and a range of business borrowing are up sharply, too.
Even as overall inflation gradually slows, costs continue to surge in some pockets of the economy. Particularly in the service sector, wage growth is still contributing to broader inflation pressures.
Damn you Brandon! Why didn’t you get those chickens masks, vaccines and make them socially distance? Now Denny’s is too damn expensive!! Damn you Brandon!!!!!
Microsoft just announced 10k job cuts. The recession is coming, economy is turning. This is all good news, in my mind. It also means we likely are at/near the market bottom. I would think this year the market should be up overall.
Microsoft just announced 10k job cuts. The recession is coming, economy is turning. This is all good news, in my mind. It also means we likely are at/near the market bottom. I would think this year the market should be up overall.
All the bigs announced that. Amazon, FB, Google.
There is going to be a swooping in and cutting the fat.
Senators grill Ticketmaster after Taylor Swift fiasco
By DEE-ANN DURBIN
47 mins ago
Senators grilled Ticketmaster Tuesday, questioning whether the company’s dominance in the ticketing industry led to its spectacular breakdown last year during a sale of Taylor Swift concert tickets.
Republicans and Democrats on the Senate Judiciary Committee also debated possible action, including making tickets non-transferable to cut down on scalping and requiring more transparency in ticket fees. Some suggested it may also be necessary to split Ticketmaster and Beverly Hills, California-based concert promoter Live Nation, which merged in 2010.
“The fact of the matter is, Live Nation/Ticketmaster is the 800-pound gorilla here," said U.S. Sen. Richard Blumenthal, a Connecticut Democrat. “This whole concert ticket system is a mess, a monopolistic mess.”
Ticketmaster is the world’s largest ticket seller, processing 500 million tickets each year in more than 30 countries. Around 70% of tickets for major concert venues in the U.S. are sold through Ticketmaster, according to data in a federal lawsuit filed by consumers last year.
In mid-November, Ticketmaster’s site crashed during a presale event for Swift’s upcoming stadium tour. The company said its site was overwhelmed by both fans and attacks from bots, which were posing as consumers in order to scoop up tickets and sell them on secondary sites. Thousands of people lost tickets after waiting for hours in an online queue.
Live Nation’s President and Chief Financial Officer Joe Berchtold apologized to fans and to Swift on Tuesday, and said the company knows it must do better. Berchtold said Ticketmaster has spent $1 billion over the last decade trying to improve its security and stop bots.
“We need to do better and will do better," he said.
But lawmakers were skeptical. Republican Sen. Marsha Blackburn of Tennessee said plenty of others, including banks and power companies, are also frequent targets of bots but don't suffer service meltdowns.
“They have figured it out but you guys haven’t? This is unbelievable," she said. “We’ve got a lot of people who are very unhappy with the way this has been approached.”
Senators also took aim at Ticketmaster's fees. U.S. Sen. Amy Klobuchar, a Minnesota Democrat, recalled piling into a friend’s car in high school to go to concerts by Led Zeppelin, The Cars and Aerosmith. These days, she said, ticket prices have gotten so high that shows are too expensive for many fans. Klobuchar said ticket fees now average 27% of the ticket cost and can climb as high as 75%.
Berchtold insisted that Ticketmaster doesn’t set prices or service fees for tickets or decide how many tickets will go on sale. Service fees are set by venues, he said. Live Nation only owns around 5% of U.S. venues, he said.
But competitors, like Seat Geek CEO Jack Groetzinger, said even if Live Nation doesn't own a venue, it prevents competition by signing multi-year contracts with arenas and concert halls to provide ticketing services. If those venues don't agree to use Ticketmaster, Live Nation may withhold acts. That makes it tough for competitors to disrupt the market.
“The only way to restore competition is to break up Ticketmaster and Live Nation," Groetzinger said.
Clyde Lawrence, a singer-songwriter with the New York-based pop group Lawrence, said it also hurts artists when Live Nation owns or has contracts with venues, because bands have little ability to negotiate a deal or choose a different ticket seller.
Lawrence shared a hypothetical example: Ticketmaster charges $30 per ticket, but then adds fees that bump the price to $42. Just $12 per ticket goes to the band after accounting for fees they must pay to Live Nation, including — in at least one case — $250 for a stack of 10 towels in the dressing room.
Lawrence wants caps on fees, more transparency in what venue fees are used for as well as fairer distribution of profits. Live Nation takes a cut of the band's merchandise sales at a concert, for example, but doesn't share a cut of food and beverage sales.
Berchtold said the ticketing industry would like lawmakers to focus on the problem of ticket scalping — which he said has grown into a massive $5 billion industry — and prohibit fraudulent practices, such as resellers offering tickets that haven’t officially gone on sale yet. He also agreed that the industry should be more transparent about fees.
Sen. John Kennedy, a Louisiana Republican, suggested legislation that would make tickets non-transferable, thus preventing resales. He also suggested that major artists such as Swift or Bruce Springsteen should demand fee caps.
“Not every kid can afford $500 to go see Taylor Swift," Kennedy said.
Berchtold said Ticketmaster would support making tickets non-transferable, even though the company does business in the ticket resale market. But others, including Republican Sen. Thom Tillis of North Carolina, said making tickets non-transferable would interfere with people's right to resell them.
The Justice Department allowed Live Nation and Ticketmaster to merge in 2010 as long as Live Nation agreed not to retaliate against concert venues for using other ticket companies for 10 years.
In 2019, the department investigated and found that Live Nation had “repeatedly" violated that agreement. It extended the prohibition on retaliating against concert venues to 2025.
Sen. Mike Lee, a Utah Republican, said Tuesday that the Justice Department is again investigating Live Nation after the Swift ticket fiasco. At this point, he said, Congress should be asking if the department was right to allow the merger to go ahead in the first place.
“It’s very important that we maintain fair, free, open and even fierce competition," Lee said. “It increases quality and it reduces price. We want those things to happen.””
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Senators grill Ticketmaster after Taylor Swift fiasco
By DEE-ANN DURBIN
47 mins ago
Senators grilled Ticketmaster Tuesday, questioning whether the company’s dominance in the ticketing industry led to its spectacular breakdown last year during a sale of Taylor Swift concert tickets.
Republicans and Democrats on the Senate Judiciary Committee also debated possible action, including making tickets non-transferable to cut down on scalping and requiring more transparency in ticket fees. Some suggested it may also be necessary to split Ticketmaster and Beverly Hills, California-based concert promoter Live Nation, which merged in 2010.
“The fact of the matter is, Live Nation/Ticketmaster is the 800-pound gorilla here," said U.S. Sen. Richard Blumenthal, a Connecticut Democrat. “This whole concert ticket system is a mess, a monopolistic mess.”
Ticketmaster is the world’s largest ticket seller, processing 500 million tickets each year in more than 30 countries. Around 70% of tickets for major concert venues in the U.S. are sold through Ticketmaster, according to data in a federal lawsuit filed by consumers last year.
In mid-November, Ticketmaster’s site crashed during a presale event for Swift’s upcoming stadium tour. The company said its site was overwhelmed by both fans and attacks from bots, which were posing as consumers in order to scoop up tickets and sell them on secondary sites. Thousands of people lost tickets after waiting for hours in an online queue.
Live Nation’s President and Chief Financial Officer Joe Berchtold apologized to fans and to Swift on Tuesday, and said the company knows it must do better. Berchtold said Ticketmaster has spent $1 billion over the last decade trying to improve its security and stop bots.
“We need to do better and will do better," he said.
But lawmakers were skeptical. Republican Sen. Marsha Blackburn of Tennessee said plenty of others, including banks and power companies, are also frequent targets of bots but don't suffer service meltdowns.
“They have figured it out but you guys haven’t? This is unbelievable," she said. “We’ve got a lot of people who are very unhappy with the way this has been approached.”
Senators also took aim at Ticketmaster's fees. U.S. Sen. Amy Klobuchar, a Minnesota Democrat, recalled piling into a friend’s car in high school to go to concerts by Led Zeppelin, The Cars and Aerosmith. These days, she said, ticket prices have gotten so high that shows are too expensive for many fans. Klobuchar said ticket fees now average 27% of the ticket cost and can climb as high as 75%.
Berchtold insisted that Ticketmaster doesn’t set prices or service fees for tickets or decide how many tickets will go on sale. Service fees are set by venues, he said. Live Nation only owns around 5% of U.S. venues, he said.
But competitors, like Seat Geek CEO Jack Groetzinger, said even if Live Nation doesn't own a venue, it prevents competition by signing multi-year contracts with arenas and concert halls to provide ticketing services. If those venues don't agree to use Ticketmaster, Live Nation may withhold acts. That makes it tough for competitors to disrupt the market.
“The only way to restore competition is to break up Ticketmaster and Live Nation," Groetzinger said.
Clyde Lawrence, a singer-songwriter with the New York-based pop group Lawrence, said it also hurts artists when Live Nation owns or has contracts with venues, because bands have little ability to negotiate a deal or choose a different ticket seller.
Lawrence shared a hypothetical example: Ticketmaster charges $30 per ticket, but then adds fees that bump the price to $42. Just $12 per ticket goes to the band after accounting for fees they must pay to Live Nation, including — in at least one case — $250 for a stack of 10 towels in the dressing room.
Lawrence wants caps on fees, more transparency in what venue fees are used for as well as fairer distribution of profits. Live Nation takes a cut of the band's merchandise sales at a concert, for example, but doesn't share a cut of food and beverage sales.
Berchtold said the ticketing industry would like lawmakers to focus on the problem of ticket scalping — which he said has grown into a massive $5 billion industry — and prohibit fraudulent practices, such as resellers offering tickets that haven’t officially gone on sale yet. He also agreed that the industry should be more transparent about fees.
Sen. John Kennedy, a Louisiana Republican, suggested legislation that would make tickets non-transferable, thus preventing resales. He also suggested that major artists such as Swift or Bruce Springsteen should demand fee caps.
“Not every kid can afford $500 to go see Taylor Swift," Kennedy said.
Berchtold said Ticketmaster would support making tickets non-transferable, even though the company does business in the ticket resale market. But others, including Republican Sen. Thom Tillis of North Carolina, said making tickets non-transferable would interfere with people's right to resell them.
The Justice Department allowed Live Nation and Ticketmaster to merge in 2010 as long as Live Nation agreed not to retaliate against concert venues for using other ticket companies for 10 years.
In 2019, the department investigated and found that Live Nation had “repeatedly" violated that agreement. It extended the prohibition on retaliating against concert venues to 2025.
Sen. Mike Lee, a Utah Republican, said Tuesday that the Justice Department is again investigating Live Nation after the Swift ticket fiasco. At this point, he said, Congress should be asking if the department was right to allow the merger to go ahead in the first place.
“It’s very important that we maintain fair, free, open and even fierce competition," Lee said. “It increases quality and it reduces price. We want those things to happen.””
How Live Nation and TM were allowed to merge is a travesty in the first place.
US economy likely slowed but still posted solid growth in Q4
By PAUL WISEMAN
40 mins ago
WASHINGTON (AP) — The U.S. economy likely rolled out of 2022 with momentum, registering decent growth in the face of painful inflation, high interest rates and rising concern that a recession may be months away.
Economists have estimated that the gross domestic product — the broadest measure of economic output — grew at a 2.3% annual pace from October through December, according to a survey of forecasters by the data firm FactSet.
The Commerce Department will issue its first of three estimates of fourth-quarter GDP growth at 8:30 a.m. Eastern time Thursday.
Despite a likely second straight quarter of expansion, the economy is widely expected to slow and then slide into a recession sometime in the coming months as increasingly high interest rates, engineered by the Federal Reserve, take a toll. The Fed's rate hikes have inflated borrowing costs for consumers and businesses, from mortgages to auto loans to corporate credit.
The housing market, which is especially vulnerable to higher loan rates, has been badly bruised: Sales of existing homes have dropped for 11 straight months. Investment in housing plunged at a 27% annual rate from July through September.
And consumer spending, which fuels roughly 70% of the entire economy, is likely to soften in the months ahead, along with the still-robust job market. The resilience of the labor market has been a major surprise. Last year, employers added 4.5 million jobs, second only to the 6.7 million that were added in 2021 in government records going back to 1940. And last month's unemployment rate, 3.5%, matched a 53-year low.
But the good times for America's workers aren't likely to last. As higher rates make borrowing and spending increasingly expensive across the economy, many consumers will spend less and employers will likely hire less.
Last year, the Fed raised its benchmark rate seven times in unusually large increments to try to curb the spike in consumer prices. Yet another Fed rate hike, though a smaller one, is expected next week.
The central bank has been responding to an inflation rate that remains stubbornly high even though it has been gradually easing. Year-over-year inflation was raging at a 9.1% rate in June, the highest level in more than 40 years. It has since cooled — to 6.5% in December — but is still far above the Fed's 2% annual target.
Another threat to the economy this year is rooted in politics: House Republicans could refuse to raise the federal debt limit if the Biden administration rejects their demand for broad spending cuts. A failure to raise the borrowing cap would prevent the federal government from being able to pay all its obligations and could shatter its credit.
Moody's Analytics estimates that the resulting upheaval could wipe out nearly 6 million American jobs in a recession similar to the devastating one that was triggered by the 2007-2009 financial crisis.
At least the economy is likely beginning the year on firmer footing than it did at the start of 2022. Last year, the economy shrank at an annual pace of 1.6% from January through March and by a further 0.6% from April through June. Those two consecutive quarters of economic contraction raised fears that a recession might have begun.
But the economy regained strength over the summer, propelled by resilient consumer spending and higher exports. It expanded at an unexpectedly strong 3.2% annual pace from July through September.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
US economy slowed but still grew at 2.9% rate last quarter
By PAUL WISEMAN
2 hours ago
WASHINGTON (AP) — The U.S. economy expanded at a 2.9% annual pace from October through December, ending 2022 with momentum despite the pressure of high interest rates and widespread fears of a looming recession.
Thursday’s estimate from the Commerce Department showed that the nation’s gross domestic product — the broadest gauge of economic output — decelerated last quarter from the 3.2% annual growth rate it had posted from July through September. Most economists think the economy will slow further in the current quarter and slide into at least a mild recession by midyear.
The economy got a boost last quarter from resilient consumer spending and the restocking of supplies by businesses. Federal government spending also helped lift GDP. But with higher mortgage rates undercutting residential real estate, investment in housing plummeted at a 27% annual rate for a second straight quarter.
For all of 2022, GDP expanded 2.1% after growing 5.9% in 2021.
The economy’s expected slowdown in the months ahead is an intended consequence of the Federal Reserve’s aggressive series of rate increases. The Fed’s hikes are meant to reduce growth, cool spending and crush the worst inflation bout in four decades. Last year, the Fed raised its benchmark rate seven times. It is set to do so again next week, though this time by a smaller amount.
The resilience of the U.S. job market has been a major surprise. Last year, employers added 4.5 million jobs, second only to the 6.7 million that were added in 2021 in government records going back to 1940. And last month’s unemployment rate, 3.5%, matched a 53-year low.
But the good times for America’s workers aren’t likely to last. As higher rates make borrowing and spending increasingly expensive across the economy, many consumers will spend less and employers will likely hire less.
“Recent data suggest that the pace of expansion could slow sharply in (the current quarter) as the effects of restrictive monetary policy take hold," Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research report. “From the Fed’s perspective, a desired slowdown in the economy will be welcome news.”
Consumer spending, which fuels about 70% of the entire economy, rose at a sturdy 2.1% annual rate from October through December, down slightly from 2.3% in the previous quarter.
More recent numbers, including a 1.1% drop in retail sales last month, indicate that consumers have begun to pull back.
“That suggests higher rates were starting to take a bigger toll and sets the stage for weaker growth in the first quarter of this year,’’ said Andrew Hunter, senior U.S. economist at Capital Economics.
Economists at Bank of America expect growth to slow to a 1.5% annual rate in the January-March quarter and then to contract for the rest of the year — by a 0.5% rate in the second quarter, 2% in the third and 1.5% in the fourth.
The Fed has been responding to an inflation rate that remains stubbornly high even though it has been gradually easing. Year-over-year inflation was raging at a 9.1% rate in June, the highest level in more than 40 years. It has since cooled — to 6.5% in December — but is still far above the Fed’s 2% annual target.
“The U.S. economy isn’t falling off a cliff, but it is losing stamina and risks contracting early this year,'' said Sal Guatieri, senior economist at BMO Capital Economics. “That should limit the Fed to just two more small rate increases in coming months.''
One additional threat to the economy this year is rooted in politics: House Republicans could refuse to raise the federal debt limit if the Biden administration rejects their demand for broad spending cuts. A failure to raise the borrowing cap would prevent the federal government from being able to pay all its obligations and could shatter its credit.
Moody’s Analytics estimates that the resulting upheaval could wipe out nearly 6 million American jobs in a recession similar to the devastating one that was triggered by the 2007-2009 financial crisis.
At least the economy is likely beginning the year on firmer footing than it did at the start of 2022. Last year, the economy shrank at an annual pace of 1.6% from January through March and by a further 0.6% from April through June. Those two consecutive quarters of economic contraction raised fears that a recession might have begun.
But the economy regained strength over the summer, propelled by resilient consumer spending and higher exports.
____
AP Economics Writer Christopher Rugaber contributed to this report.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Comments
Libtardaplorable©. And proud of it.
Brilliantati©
Rising rents were a crisis for tenants. For Starwood, they were a gift.
The company has become one of the nation’s largest landlords in recent years and imposed some daunting rent hikes
For tenants across the country, the huge rent hikes of recent years have been a burden. For the private investment firms emerging as America’s landlords, they’ve been a bonanza.
Amid a flurry of sales over the past decade, when more than $1 trillion of apartment buildings changed hands, private investors and real estate trusts went on a binge: The proportion of apartments sold to them rose from 44 percent in 2011 to 70 percent in early 2022, according to data and research firm MSCI.
Many of those same firms imposed aggressive rent increases and rode the historic wave of rent hikes to big profits.
Few, however, stood to benefit more than Starwood Capital Group.
A private investment firm led by Florida billionaire Barry Sternlicht, Starwood has been one of the most active acquirers of apartments, and a model for the industry. Over the past seven years, it has amassed a portfolio of more than 115,000 apartments, which by some rankings stands as the nation’s largest such collection.
Private firms rarely disclose specific information about rent hikes, but according to leases reviewed by The Washington Post, prices at some Starwood complexes increased by 30 percent or more.
At Starwood’s Wellington Green in Palm Beach County, Fla., the company raised some rents by as much as 52 percent in 2022; at the Griffin Apartments in Scottsdale, Ariz., it increased them by 35 percent. At the Cove at Boynton Beach, it boosted rents on some units by as much as 93 percent in 2022.
At some Starwood apartment complexes intended for low-income tenants and built with government subsidies, the company increased rents by 10 percent. Though the rents on such units are limited by Department of Housing and Urban Development guidelines, the company began charging higher rent soon after the government lifted the limits, even for tenants who were mid-lease.
“Tenants seem capable and willing to pay these rent increases,” Sternlicht said in early 2022 in a call with investors. “I think this is the strongest real estate market I’ve seen in 30 years, 35 years.”
While Starwood says its prices merely reflect market forces and its own rising costs, the growing role of private investors among the nation’s apartment landlords coincides with a historic wave of rent hikes.
In 2021, rent increases were more than double what they had been any previous year, according to the Yardi Matrix Multifamily National Report, with asking rents jumping by 10 percent or more in 26 major metropolitan areas. The increases continued through at least October 2022, when rents were rising about 8 percent annually.
“When they said my rent was going up, I was like, ‘What in the world?’” said Sakeema Rainner, 29, who with her four children rented a government-subsidized West Palm Beach apartment where she said the rent jumped about 10 percent. “They just don’t care.”
Starwood provided some figures to The Post showing that the company raised rents at an average rate of 17 percent in its top 10 markets from January to September 2022. By comparison, overall rents rose in those same markets at a rate of about 12 percent over that period, according to numbers from CoStar, the data firm, shared by Starwood.
The company raised rents more slowly than competitors in 2021, however, according to the figures it provided: It boosted rents by 6 percent while competitors in those markets raised rates by 12 percent.
In a statement, the company said that it has a legal responsibility to reward its investors and that it is “contending with record increases in operating expenses and interest on our mortgages.”
“Starwood is one of the world’s premier real estate investors and owner of apartment properties,” the company said in its statement. “Our reputation is extremely important to us both as an investor and a landlord, and it is something we take very seriously. We would not have been able to grow and maintain our portfolio at this size if we acted differently than any other landlord in this space.”
Tenants
Contrary to Sternlicht’s assessment that tenants are “capable and willing” to pay more, those at several Florida apartment complexes owned by Starwood affiliates said they are struggling to pay the higher rates.
Continues…..
https://www.washingtonpost.com/business/2023/01/02/starwood-rents-apartments-private-investors/
Libtardaplorable©. And proud of it.
Brilliantati©
There are no kings inside the gates of eden
Raising rent 35% is fucking greed... Same reason I haven't bought a new car, prices are too damn high. I'll wait. And yes their shareholders are happy, so are oil shareholders.
Rivian is at $17. Thats a damn steal.
I sold Tesla around 1100 before the split, and thought I sold too early. Sure glad I got out. I always considered it a “bubble” stock.
Raising rent 35% is fucking greed... Same reason I haven't bought a new car, prices are too damn high. I'll wait. And yes their shareholders are happy, so are oil shareholders.
that was sarcasm bud
There are no kings inside the gates of eden
that was sarcasm bud Oh thank God. I thought you were on my side.
Yes I am
I wonder why this weird thing with the replies is happening.
There are no kings inside the gates of eden
Yes I am
I wonder why this weird thing with the replies is happening. I just noticed that too...
Oh @Sea @kat
I was thinking of buying some more Rivian. Not that I have that much. I bought 150 shares when it was around $40. I really like their electric trucks, so I think they'll be able to sell them and keep growing the business. At $17 I feel I should load up some more.
WASHINGTON (AP) — Wholesale prices in the United States rose 6.2% in December from a year earlier, a sixth straight monthly slowdown and a hopeful sign that inflation pressures will continue to cool.
The latest year-over-year figure was down from 7.3% in November and from a recent peak of 11.7% in March. On a monthly basis, the government said Wednesday that its producer price index, which measures costs before they reach consumers, dropped 0.5% from November to December.
The producer price data can provide an early sign of where consumer inflation might be headed. The data reflects the prices that are charged by manufacturers, farmers and wholesalers, and it flows into an inflation gauge that the Federal Reserve closely tracks: The personal consumption expenditures price index.
The monthly drop in wholesale prices was led by gas prices, which sank 13.4% from November to December. Gas prices averaged $3.36 a gallon Wednesday, according to AAA, down from a peak of $5 a gallon in mid-June.
Food prices dropped by a sharp 1.2%, led by fruits, vegetables and chicken. One exception was egg prices. Driven up in part by a wave of avian flu, egg prices soared 25% just from November to December.
INFLATION
Party City, amid rising prices, seeks bankruptcy protection
December retail sales fall 1.1% after slipping in November
Wall St. futures inch up ahead of wholesale, retail reports
UK inflation eases for a 2nd month, falling to 10.5%
Excluding volatile energy and food costs, so-called core producer prices rose only 0.1% from November to December. Measured year over year, prices increased 5.5% in December, compared with 6.2% in November.
Producer prices in the nation's vast service sector — everything from restaurants and hotels to airlines and entertainment venues — ticked up just 0.1% from November to December, the smallest such increase since last April. The Fed has been monitoring this area of the economy in particular as it assesses its progress in combating high inflation.
But rising evidence shows that inflation across the economy is easing after having reached a four-decade peak last summer. At the consumer level, inflation also cooled in December for a sixth straight month to 6.5% compared with a year earlier, from 7.1% in November.
An acceleration in workers' wages has been slowing, too, which could further help control inflation. In December, average wage growth in the United States was up 4.6% from 12 months earlier, compared with a recent peak of 5.6% in March.
Over the past year, the Fed has rapidly raised its key interest rate in an aggressive drive to cool borrowing and spending and tame inflation, which began surging more than a year and a half ago.
The Fed’s rate hikes have, in turn, led to higher borrowing costs for consumers and businesses. The average mortgage rate is still nearly twice its level a year ago, though it has dipped in recent weeks. Loan costs for auto purchases, credit cards and a range of business borrowing are up sharply, too.
Even as overall inflation gradually slows, costs continue to surge in some pockets of the economy. Particularly in the service sector, wage growth is still contributing to broader inflation pressures.
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you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Libtardaplorable©. And proud of it.
Brilliantati©
There is going to be a swooping in and cutting the fat.
Senators grilled Ticketmaster Tuesday, questioning whether the company’s dominance in the ticketing industry led to its spectacular breakdown last year during a sale of Taylor Swift concert tickets.
Republicans and Democrats on the Senate Judiciary Committee also debated possible action, including making tickets non-transferable to cut down on scalping and requiring more transparency in ticket fees. Some suggested it may also be necessary to split Ticketmaster and Beverly Hills, California-based concert promoter Live Nation, which merged in 2010.
“The fact of the matter is, Live Nation/Ticketmaster is the 800-pound gorilla here," said U.S. Sen. Richard Blumenthal, a Connecticut Democrat. “This whole concert ticket system is a mess, a monopolistic mess.”
Ticketmaster is the world’s largest ticket seller, processing 500 million tickets each year in more than 30 countries. Around 70% of tickets for major concert venues in the U.S. are sold through Ticketmaster, according to data in a federal lawsuit filed by consumers last year.
In mid-November, Ticketmaster’s site crashed during a presale event for Swift’s upcoming stadium tour. The company said its site was overwhelmed by both fans and attacks from bots, which were posing as consumers in order to scoop up tickets and sell them on secondary sites. Thousands of people lost tickets after waiting for hours in an online queue.
Live Nation’s President and Chief Financial Officer Joe Berchtold apologized to fans and to Swift on Tuesday, and said the company knows it must do better. Berchtold said Ticketmaster has spent $1 billion over the last decade trying to improve its security and stop bots.
“We need to do better and will do better," he said.
But lawmakers were skeptical. Republican Sen. Marsha Blackburn of Tennessee said plenty of others, including banks and power companies, are also frequent targets of bots but don't suffer service meltdowns.
“They have figured it out but you guys haven’t? This is unbelievable," she said. “We’ve got a lot of people who are very unhappy with the way this has been approached.”
Senators also took aim at Ticketmaster's fees. U.S. Sen. Amy Klobuchar, a Minnesota Democrat, recalled piling into a friend’s car in high school to go to concerts by Led Zeppelin, The Cars and Aerosmith. These days, she said, ticket prices have gotten so high that shows are too expensive for many fans. Klobuchar said ticket fees now average 27% of the ticket cost and can climb as high as 75%.
Berchtold insisted that Ticketmaster doesn’t set prices or service fees for tickets or decide how many tickets will go on sale. Service fees are set by venues, he said. Live Nation only owns around 5% of U.S. venues, he said.
But competitors, like Seat Geek CEO Jack Groetzinger, said even if Live Nation doesn't own a venue, it prevents competition by signing multi-year contracts with arenas and concert halls to provide ticketing services. If those venues don't agree to use Ticketmaster, Live Nation may withhold acts. That makes it tough for competitors to disrupt the market.
“The only way to restore competition is to break up Ticketmaster and Live Nation," Groetzinger said.
Clyde Lawrence, a singer-songwriter with the New York-based pop group Lawrence, said it also hurts artists when Live Nation owns or has contracts with venues, because bands have little ability to negotiate a deal or choose a different ticket seller.
Lawrence shared a hypothetical example: Ticketmaster charges $30 per ticket, but then adds fees that bump the price to $42. Just $12 per ticket goes to the band after accounting for fees they must pay to Live Nation, including — in at least one case — $250 for a stack of 10 towels in the dressing room.
Lawrence wants caps on fees, more transparency in what venue fees are used for as well as fairer distribution of profits. Live Nation takes a cut of the band's merchandise sales at a concert, for example, but doesn't share a cut of food and beverage sales.
Berchtold said the ticketing industry would like lawmakers to focus on the problem of ticket scalping — which he said has grown into a massive $5 billion industry — and prohibit fraudulent practices, such as resellers offering tickets that haven’t officially gone on sale yet. He also agreed that the industry should be more transparent about fees.
Sen. John Kennedy, a Louisiana Republican, suggested legislation that would make tickets non-transferable, thus preventing resales. He also suggested that major artists such as Swift or Bruce Springsteen should demand fee caps.
“Not every kid can afford $500 to go see Taylor Swift," Kennedy said.
Berchtold said Ticketmaster would support making tickets non-transferable, even though the company does business in the ticket resale market. But others, including Republican Sen. Thom Tillis of North Carolina, said making tickets non-transferable would interfere with people's right to resell them.
The Justice Department allowed Live Nation and Ticketmaster to merge in 2010 as long as Live Nation agreed not to retaliate against concert venues for using other ticket companies for 10 years.
In 2019, the department investigated and found that Live Nation had “repeatedly" violated that agreement. It extended the prohibition on retaliating against concert venues to 2025.
Sen. Mike Lee, a Utah Republican, said Tuesday that the Justice Department is again investigating Live Nation after the Swift ticket fiasco. At this point, he said, Congress should be asking if the department was right to allow the merger to go ahead in the first place.
“It’s very important that we maintain fair, free, open and even fierce competition," Lee said. “It increases quality and it reduces price. We want those things to happen.””
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you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
I hope this is the work of the Swifties.
WASHINGTON (AP) — The U.S. economy likely rolled out of 2022 with momentum, registering decent growth in the face of painful inflation, high interest rates and rising concern that a recession may be months away.
Economists have estimated that the gross domestic product — the broadest measure of economic output — grew at a 2.3% annual pace from October through December, according to a survey of forecasters by the data firm FactSet.
The Commerce Department will issue its first of three estimates of fourth-quarter GDP growth at 8:30 a.m. Eastern time Thursday.
Despite a likely second straight quarter of expansion, the economy is widely expected to slow and then slide into a recession sometime in the coming months as increasingly high interest rates, engineered by the Federal Reserve, take a toll. The Fed's rate hikes have inflated borrowing costs for consumers and businesses, from mortgages to auto loans to corporate credit.
The housing market, which is especially vulnerable to higher loan rates, has been badly bruised: Sales of existing homes have dropped for 11 straight months. Investment in housing plunged at a 27% annual rate from July through September.
And consumer spending, which fuels roughly 70% of the entire economy, is likely to soften in the months ahead, along with the still-robust job market. The resilience of the labor market has been a major surprise. Last year, employers added 4.5 million jobs, second only to the 6.7 million that were added in 2021 in government records going back to 1940. And last month's unemployment rate, 3.5%, matched a 53-year low.
INFLATION
UN forecasts fall in global economic growth to 1.9% in 2023
Asian shares mixed on hopes for avoiding recession
Asia shares trading mixed, China markets closed for holidays
Soaring egg prices prompt demands for price-gouging probe
But the good times for America's workers aren't likely to last. As higher rates make borrowing and spending increasingly expensive across the economy, many consumers will spend less and employers will likely hire less.
Last year, the Fed raised its benchmark rate seven times in unusually large increments to try to curb the spike in consumer prices. Yet another Fed rate hike, though a smaller one, is expected next week.
The central bank has been responding to an inflation rate that remains stubbornly high even though it has been gradually easing. Year-over-year inflation was raging at a 9.1% rate in June, the highest level in more than 40 years. It has since cooled — to 6.5% in December — but is still far above the Fed's 2% annual target.
Another threat to the economy this year is rooted in politics: House Republicans could refuse to raise the federal debt limit if the Biden administration rejects their demand for broad spending cuts. A failure to raise the borrowing cap would prevent the federal government from being able to pay all its obligations and could shatter its credit.
Moody's Analytics estimates that the resulting upheaval could wipe out nearly 6 million American jobs in a recession similar to the devastating one that was triggered by the 2007-2009 financial crisis.
At least the economy is likely beginning the year on firmer footing than it did at the start of 2022. Last year, the economy shrank at an annual pace of 1.6% from January through March and by a further 0.6% from April through June. Those two consecutive quarters of economic contraction raised fears that a recession might have begun.
But the economy regained strength over the summer, propelled by resilient consumer spending and higher exports. It expanded at an unexpectedly strong 3.2% annual pace from July through September.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
WASHINGTON (AP) — The U.S. economy expanded at a 2.9% annual pace from October through December, ending 2022 with momentum despite the pressure of high interest rates and widespread fears of a looming recession.
Thursday’s estimate from the Commerce Department showed that the nation’s gross domestic product — the broadest gauge of economic output — decelerated last quarter from the 3.2% annual growth rate it had posted from July through September. Most economists think the economy will slow further in the current quarter and slide into at least a mild recession by midyear.
The economy got a boost last quarter from resilient consumer spending and the restocking of supplies by businesses. Federal government spending also helped lift GDP. But with higher mortgage rates undercutting residential real estate, investment in housing plummeted at a 27% annual rate for a second straight quarter.
For all of 2022, GDP expanded 2.1% after growing 5.9% in 2021.
The economy’s expected slowdown in the months ahead is an intended consequence of the Federal Reserve’s aggressive series of rate increases. The Fed’s hikes are meant to reduce growth, cool spending and crush the worst inflation bout in four decades. Last year, the Fed raised its benchmark rate seven times. It is set to do so again next week, though this time by a smaller amount.
INFLATION
Wall Street edges higher after reports on economy, earnings
How will we know if the US economy is in a recession?
US home sellers get while the gettin's good
Fewer Americans file for jobless claims last week
The resilience of the U.S. job market has been a major surprise. Last year, employers added 4.5 million jobs, second only to the 6.7 million that were added in 2021 in government records going back to 1940. And last month’s unemployment rate, 3.5%, matched a 53-year low.
But the good times for America’s workers aren’t likely to last. As higher rates make borrowing and spending increasingly expensive across the economy, many consumers will spend less and employers will likely hire less.
“Recent data suggest that the pace of expansion could slow sharply in (the current quarter) as the effects of restrictive monetary policy take hold," Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research report. “From the Fed’s perspective, a desired slowdown in the economy will be welcome news.”
Consumer spending, which fuels about 70% of the entire economy, rose at a sturdy 2.1% annual rate from October through December, down slightly from 2.3% in the previous quarter.
More recent numbers, including a 1.1% drop in retail sales last month, indicate that consumers have begun to pull back.
“That suggests higher rates were starting to take a bigger toll and sets the stage for weaker growth in the first quarter of this year,’’ said Andrew Hunter, senior U.S. economist at Capital Economics.
Economists at Bank of America expect growth to slow to a 1.5% annual rate in the January-March quarter and then to contract for the rest of the year — by a 0.5% rate in the second quarter, 2% in the third and 1.5% in the fourth.
The Fed has been responding to an inflation rate that remains stubbornly high even though it has been gradually easing. Year-over-year inflation was raging at a 9.1% rate in June, the highest level in more than 40 years. It has since cooled — to 6.5% in December — but is still far above the Fed’s 2% annual target.
“The U.S. economy isn’t falling off a cliff, but it is losing stamina and risks contracting early this year,'' said Sal Guatieri, senior economist at BMO Capital Economics. “That should limit the Fed to just two more small rate increases in coming months.''
One additional threat to the economy this year is rooted in politics: House Republicans could refuse to raise the federal debt limit if the Biden administration rejects their demand for broad spending cuts. A failure to raise the borrowing cap would prevent the federal government from being able to pay all its obligations and could shatter its credit.
Moody’s Analytics estimates that the resulting upheaval could wipe out nearly 6 million American jobs in a recession similar to the devastating one that was triggered by the 2007-2009 financial crisis.
At least the economy is likely beginning the year on firmer footing than it did at the start of 2022. Last year, the economy shrank at an annual pace of 1.6% from January through March and by a further 0.6% from April through June. Those two consecutive quarters of economic contraction raised fears that a recession might have begun.
But the economy regained strength over the summer, propelled by resilient consumer spending and higher exports.
____
AP Economics Writer Christopher Rugaber contributed to this report.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
and affect not a wit 2022 4q numbers
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
It is impressive.