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Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: Beobe who wrote (104)	5/11/2002 5:52:18 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 621

Well Bob, I justify bacon on the basis that it also has protein. But tasting good and smelling good and going well with the cholesterol in eggs is a bonus. There is now [here anyway] some bacon which is not filled with water and is cured in the old style, which means it doesn't just steam when cooked. Bacon, like eggs, is nothing like the good old days. Incidentally, the nitrite in cutting fluids was banned because it reacts with amines in people's stomachs to form highly carcinogenic nitrosamines. The amines are in various chemicals which can be accidentally inhaled or ingested. I suppose nitrite in bacon isn't banned because it's traditional and has existing use rights, like cigarettes. It would be difficult to get approval to introduce cigarettes as a product these days. Or lead sweeteners for wine. I keep bacon for special occasions now, such as if I get hold of good eggs, [figuring that it's the bad habits that kill people and the occasional fun isn't too risky]. Bacon, eggs, tomato, toast, marmalade, tea, fresh orange juice on a sunny summer morning out on the deck. Life is good at times. Mq PS: Has anyone spotted any deflation running around their neighbourhood? Are we scared yet? And I don't want any of that pretender-to-the-throne 'disinflation', which apparently means we have inflation but the inflation rate is reducing - which some say we should worry about since we don't have the real thing.

To: Beobe who wrote (104)	8/5/2002 1:22:36 AM
From: Jon Koplik	Respond to of 621

Free rents erode value of area apartments By John Rebchook, Rocky Mountain News August 2, 2002 rockymountainnews.com The value of apartments in the Denver area has dropped by an estimated $1.75 billion because of such concessions to renters as three months of free rent on a 12-month lease, a top apartment expert estimated on Thursday. And that's being conservative - the economic damage could be far worse, said Grubb & Ellis apartment broker Jeff Hawks, a keynote speaker at the 2002 Economic Conference. Gordon Von Stroh, a professor at the University of Denver's Daniels School of Business, hosted the conference on behalf of the Apartment Association of Metro Denver. About 150 people in the apartment business attended the conference at the DoubleTree Stapleton hotel. The carnage done to apartment value has exceeded anything experienced during the real estate depression of the mid-1980s and the early 1990s, Hawks said. The discounts also have made many apartment communities worth less than their underlying mortgages, have made it difficult for properties to be sold or refinanced at full value, and have eroded - or eliminated, in some cases - the economic return of the apartment developments, Hawks said. The only thing keeping apartment communities out of foreclosure are the lowest mortgage rates in 40 years, he said. Short-term floating rates can be found between 4 percent and 5 percent, he said. Hawks estimated that the typical apartment unit in the metro area would be worth $70,000, but the concessions have driven the value down by an average of 10 percent. And it could easily be twice that, said Mike Zoellner, a veteran apartment developer who is principal of Red Peak Properties. "And while the value of apartments are going down, our fixed-costs are rising," Zoellner said following the conference. "We're talking about billions and billions of dollars, as far as the impact." Hawks said apartment owners would have been better letting the overall vacancy rate rise to a record 15 percent, rather than attracting renters by giving them deals too good to pass up. Many in the industry hoped that recent concessions, the first in more than a decade, would be short-lived once new expensive units were leased. "Concessions are very easy to offer and very difficult to stop," Hawks said. "Who will have the guts to pull their incentives when a 12-month lease is up, when the guy next to you is still offering incentives?" He said many renters are moving into suburban apartments they never would have considered because they're getting such good deals. And when the deals are gone, they'll go, too, he predicted. The less-than-predictable cash flow means that pension company investors and real estate investment trusts won't buy apartments, he said. And it's not just harming new apartments. Tom Shephard, regional manager of First Pacific Investments Ltd., which owns older apartments, said he's been forced to drop rents or offer concessions to compete with the newer, luxury properties offering deep discounts. Hawks said he is working with one apartment owner that had been consistently delivering 18 percent returns to investors. That fell to 12 percent when the market softened and now is providing no return because of concessions. "The point I want to get across is that if all of the owners pulled the concessions tomorrow, it would be too late," Hawks said after the conference. "They've already created expectations for free rent among renters. It takes a long time for that to go away." Copyright 2002, Rocky Mountain News. All Rights Reserved.