Visualizing The Global Rush To Build Skyscrapers

As the creator of today’s visualization, Alberto Lucas López, points out, “the world’s tallest buildings have acted as barometers”.

Another way of putting it? Our biggest architectural accomplishments are highly visible symbols of what society values most, and those values have changed over time.

Today, the paramount belief system in many parts of the world is in capitalism, and there is no more potent marker of the economic might than fantastically tall commercial skyscrapers.

Today’s visualization is an effective way to take in the mind-bending scale of the newest generation of megatall buildings. It’s headlined by Jeddah Tower, a skyscraper currently under construction in Saudi Arabia that will smash the one kilometer mark when it’s completed in 2019.

Courtesy of: Visual Capitalist

CITIES ARE GROWING UP

In general, only very large cities have the resources to build and support extremely tall buildings.

With the explosion of urbanization around the world and developing economies asserting themselves in high profile ways, the stage is set for a global skyscraper boom.

In the last two years, 39 skyscrapers taller than 300m have been constructed, with five of the them eclipsing the height of the Empire State Building.

Global skyscraper construction has increased a whopping 402% since 2000.

HIGH-RISE HOT SPOTS

China

Nearly every sizeable Chinese city has skyscrapers under construction, and the numbers are staggering. Since 2012, China has added 38 skyscrapers over 300m (~1,000 ft) in height, and there are another 16 skyscrapers on the way in 2018.

In particular, the Pearl River Delta megaregion, which is anchored by Hong Kong, Shenzhen, and Guangzhou, has seen an astonishing commercial construction boom. Today, 20 of the 100 tallest buildings on earth are located in just this one urban megaregion of China.

China’s Top 10 Tallest Buildings

In total, 46 of the world’s 100 tallest skyscrapers are now located in China, and that number is sure to increase in coming years.

United Arab Emirates

Construction has been relentless in UAE for decades, and much of that development has been vertically-oriented. Today, Dubai is home to nearly 1,000 high-rise buildings, and there are 13 projects currently under construction that will hit or exceed the 300m mark.

UAE’s Top 10 Tallest Buildings

Russia

While the skylines of many European cities are conspicuously low-rise, an exception to that rule is in Moscow’s International Business Centre, where four 300m+ towers have been completed since 2012.

Russia’s Top 10 Tallest Buildings

WHAT ABOUT THE UNITED STATES?

In the early 20th century, the United States was the undisputed champion of skyscraper construction, but that has tapered off dramatically. In fact, only six commercial towers over 300m have been constructed in the last 20 years.

The exception may be the city that started it all: New York. There are currently 30 skyscrapers under construction in NYC, fueled in part by a red-hot luxury real estate market.

America’s Top 10 Tallest Buildings (Under Construction)

Philadelphia and San Francisco will soon have new additions to their skylines as Comcast and Saleforce complete their flagship construction projects. If current construction numbers are any indication, America’s love affair with the skyscraper may be reignited in urban centers across the country.

No Peace In Our Times: The Inevitability Of War

Via GEFIRA,

“While people are saying, peace and safety, destruction will come on them suddenly, as labor pains on a pregnant woman, and they will not escape.”

Are you, man or woman of Christian and European heritage, aware of this prophecy or do you prefer to live in a fancy world of happy-clappy wishful thinking that the brotherhood of men is about to put an end to human conflict once and for all? Though Christmastide is a time of merrymaking, it may also be a period of reflection. The Birth that we celebrate on Christmas Day was perceived by some as such a threat as to justify the Massacre of the Innocents. Peace and good will were closely intertwined with discord and hostility. Do you think we are living in better times? Do you think we are living in Fukuyama’s end of history?

War has persisted throughout history ever since the dawn of mankind. That’s probably the best indicator that it will persist for all eternity. Why should it cease? War for the purposes of this text is not merely the outright hostilities, the firing guns and resounding battle cries. It is a constant strife that is being played out on a day-to-day basis which now and again erupts into its dramatic form of the opposing armies acting on the theatre of war. Why do we broaden the definition of war? If only because casualties – and we mean loss of lives – are not necessarily the highest during the time of the roaring guns. Those sustained during the periods of peace may be just as high or even higher. Case in point: the Yeltsin era in Russia lasting for roughly ten years. Within that decade, life expectancy plummeted from 70 down to 60, which means that the country’s loss of lives amounted to the magnitude comparable to that during any war, which is millions. This loss of life was brought about by social and economic reforms i.e. steps taken supposedly to make the living standards better and these were demanded or suggested or advised by the powers outside Russia. The result? Closed down factories, laid off employees, poverty and the attendant disease and demise of many. Were these not regular hostilities?

War has persisted throughout history in one form or another, though we are only made aware of it acutely when we can smell gunpowder, see ruined buildings and maimed bodies. Yet war is the pith and core of existence. We live by it, we draw from it, and, on a more positive note, it tests our character. The Iliad, Beowulf, Chanson de Roland, Das Nibelungenlied, Jerusalem Delivered, El Cid, the Battle of Kosovo epic circle, and, and, and, to mention only European literary monuments, they are all about adversity, combat, heroic deeds or cowardly misconduct. Why haven’t our poets and bards composed works of goodness, peace and harmony? Being ones of us, they knew the human psyche and they knew that we wouldn’t feel attracted to stories of goodness and love and charity; they knew that if we had paradise on earth, peaceful coexistence and tolerance of everything, we would have nothing to write about or, to put it in modern terms, nothing to make films about.

Think about it. All literary and religious stuff is about conflict, serious and bitter conflict. Our play and entertainment are all about conflict. Look at the popularity of computer war games, at the popularity of sports which are but epitomes of battles and rivalries; look at the popularity of crime stories, at the popularity of – mind you – Star Wars movie series, as if world wars did not fully satisfy our militant fantasizing! We are hardwired for experiencing conflict in one way or another, much though nowadays we are trying to convince ourselves that the opposite is true. Medieval Christian chroniclers, who most often were Christian priests, i.e. preachers of love and charity, rebuked princes for idly staying at home rather than leading their warriors and knights on conquests. Islam was no better in this respect. The first two or so centuries from its inception were characterized by militant conquests: there were no apostles of Good News but rather mounted warriors wielding curved swords. It is only now that we are squeamish about armed conflicts and frown upon crusades or the conquest of the Americas. And yet we do it in a hypocritical way: we have removed words like war, military campaign or intervention from our polite vocabulary and we call these phenomena spreading or saving democracy, preventing humanitarian disasters, defending prosecuted minorities and what not. Nonetheless, by whatever name a rose is known, it is still a rose.

War runs in our blood. We are biologically designed for conflict, for struggle, for overcoming adversity. No globalization, no unification of nations, no removal of class, religious, racial, economic differences will ever do away with war. Conflict in general and war in particular is a result of (i) biology which manifests itself in (ii) economy and (iii) ideology.

(i) The otherwise scientifically-minded Western Man knows it very well as he firmly believes in the evolutionary mechanism i.e. the differentiation of species and struggle for existence. The animal world – and we are part of it, just an extension – is all about fight for survival, competing for females, guarding one’s breeding and hunting grounds. Genetically related individuals (individuals related by blood, as men of old would have said) form in-groups (families, clans, tribes, nations), where loyalty to its members has a top survival value. Heroic literature exploits the motif of loyalty and its moral counterpart, which is treason, to the full. That is how the biological mechanism of in-group loyalty and out-group exclusion has sublimated into ideas, and these have found reflection in works of art and, broadly, ideology, and in all this which is generally referred to as culture. Nations are a biological phenomenon. Ethnicity, not only race, can be determined by looking into genes! No wonder then that ethnic differences are the main fault lines along which conflicts arise. True, different human groups may from time to time exist as neighbours, never really merging with each other, but inevitably their coexistence must end in an eruption of hostilities.

A note here. Some say humans behave according to the dictates of the culture they live in or are born into, hence a change of cultural surroundings will result in the change of the individual’s behaviour, as if man were a piece of malleable stuff to be shaped at will. Wrong. Culture in its broadest sense is the sublimation of biology, not the other way round. Man creates culture; culture does not create man. Islam practised by white Europeans would look entirely different than Islam practised by Arabs and, similarly, Christianity practised by Arabs would not resemble that practised by Europeans.

(ii) In their daily struggle for survival human groups compete for the scarcity of resources and land. This economic competition is yet another powerful source of conflict and, eventually, war. Economy, i.e. the struggle to survive on a daily basis, brings into conflict also the interests of the members of the in-group. Some are employers, others are employees: some make a living from capital, others from labour. There arises a clash between the haves and the have-nots, ending up in violent revolutions. The dispossessed or simply less affluent members of society attempt to rid the well-to-do of their property, the latter defend themselves. A dream of a peaceful coexistence dictated creating a classless society where everybody’s income had to be levelled. That led to civil wars and ultimate impoverishment of whole nations, from Cuba to North Korea. The French revolutionaries, once they launched guillotining people, including their co-revolutionists, just could not stop doing it. Much the same was true of the Russian Bolsheviks: on one hand they started murdering themselves (Comrade Stalin had Comrade Trotsky killed in the far-flung Mexico where the latter had spent years in exile) and purging the party ranks, on the other they starved their own people, peasants and workers, on whose behalf they began the revolution in the first place. The “achievements” of the medieval notorious inquisition pale in comparison to the millions butchered, tortured and imprisoned in concentration camps in Soviet Russia. Think of it: all that was done for the happiness of future generations of a classless and nationless society.

(iii) Ideology, as said above, is the expression of biological instincts. If it takes the form of a religion, it becomes a weapon by means of which a nation’s dominance, conquest, or privileged position is most powerfully explained by the will of a god or gods. To a believer this religious reality is stronger than the physical one. Consider Muslim suicidal attacks or Christian executions of physicians in front of American abortionist clinics. The survival value of a religion may raise one race above others to the status of a chosen people with all attendant consequences; it may create social strata like a caste system in India which, as it has a blessing from a godhead, it is unthinkable to change; it can fossilize the relationship of dominance and subservience. The Western Man tends to disregard religions as superstition so much that he does not accept the facts that believers of whatever faith are ready to sacrifice their life for a cause.

Some of the systems have been advanced for the sole purpose of blessing the whole of humanity with a pretense of introducing an age of eternal peace and brotherhood. Recall the French and Bolshevik revolutions, globalism or economic and political unions of all types. They are all doomed to fail as they run counter to biological reality, which is constant differentiation and the resulting strife. A new ideology (religion) must first overcome the resistance of the followers of the old one(s), and then or even while ousting the old beliefs, it itself splits into new sub-movements of the first original one. Consider Christianity with its many denominations and the socialist or communist movements, Christianity’s archenemy, which ended up with as many heresies. The movement of whatever kind begins with conflict with ideological out-groups and ends up as a house divided against itself. And then, again, the biologically-conditioned in-group loyalty and out-group exclusion prevail: Catholic, Muslim or communist nations are very often bitter enemies. The shared faith or ideology lose to blood ties.

Is there a solution to wars? Everlasting peace? None, really.

Consider uniting the peoples of the earth in one “nation” (globalization) in the hope of achieving everlasting peace. Quite apart from the feasibility of such an idea and the fact that there will be resistance to it, one nation is no guarantee of a life without conflicts. After all, all homogeneous nations have experienced civil wars. Just one example. The English people were torn by the War of the Roses, then the Cromwellian revolution, then a part of the nation settled down in North America and rebelled against their brothers on the old continent only to wage a fratricidal war of secession among themselves. Much the same story can be told about all other nations around the globe. So, if a nation’s life is rife with conflict, how much more the life of an artificial one, like the Soviet or European Union?

Consider uniting the peoples of the earth by imposing on them one religion, ideology, or a universal lack thereof or indifference (which nowadays goes by the name of tolerance) to all beliefs. Again, we know from history such an attempt is doomed to fail. Remember the initially universal Christianity: one did not have to wait long till it produced Arianism and other heresies, then it split into Orthodox and Western branches; the Western branch gave rise to a number of heresies and split into Catholics and Protestants, who in turn gave rise to numerous denominations thereof. Much the same held good for political ideologies (a form of lay religion) where the socialist or communist movement kept dividing itself into opposing and hostile factions, like national or international socialism, communism, Marxism, Leninism, Trotskyism, Maoism, Eurocommunism (Gramscians), liberation theology (social Christianity)… Russian Communists used military intervention to quell the aspirations of Czechoslovak communists; Comrade Tito was hated by Stalinists, and Chairman Mao was insulted by Stalin for a purpose. Any global ideology with all-encompassing tolerance is sure to follow that way. No doubt about it.

Man thought that religion would overcome national sentiment. Man thought lay ideologies would overcome national sentiment. Both failed miserably. Supposedly suppressed or eradicated national feelings all of a sudden revive as was the case at the outset of the First World War, when socialist parties previously renouncing nationalism turned out to be patriotic; when international soviet communism adopted national colouring during the Great Patriotic War and so on.

Consider uniting the peoples of the earth economically. That, too, will inevitably lead to differentiation in the level of affluence and the resulting tensions between the top and the bottom dogs, sparking social unrest, violent clashes and then revolutions. And we should not forget that also here we may have a hard time deciding whether we develop our global economy according to free market ideas of Austrian school, Keynesian economics, socialist welfare and, and, and…

Eternal peace is not only impossible but also undesirable. Eternal peace and brotherhood of men would mean stagnation, lack of development, death. Yes, there is life because there is death.

All these factors – biological, ideological and economic – are prime movers behind conflict and war. Nations or social classes, ideologies or economic interests, they all exist, keep splitting and competing with each other. When present-day democracies come to blows with regimes as they call them, they only prove that war is inevitable and do not even see that those ‘regimes’ fight against democracies with precisely the same amount of conviction of waging the righteous, if not holy, war.

The modern Western man may laugh at the medieval methods of suppressing dissent or at the fatwas issued by ayatollahs, thinking himself above such measures, but he is none wiser. He moves in the same biological treadmill of eternal – internal, ethnic, sectarian, political, religious, social and even marital! – strife. The enemy is called names – heretic, fascist, racist, imperialist, colonizer, dictator – is burnt at the stake, excluded from polite society, judged by a court or becomes anathema. His right to free speech is denied by the Index Librorum Prohibitorum or political correctness or you name it. War rather than brotherhood. To feel good we all need the bad guys somewhere around. To combat the bad guys gives us a purpose in life. To think of it, only very few of us realise that we ourselves are the bad guys (kafirs, infidels, aggressors) for those whom we regard as bad guys. In a noble attempt to impose our righteous ways on others we meet with resistance. Resistance means conflict and conflict ultimately results in war. That’s the eternal circle of life and death described in The Iliad, Beowulf, Chanson de Roland, Das Nibelungenlied, Jerusalem Delivered, El Cid, the Battle of Kosovo epic circle. We have not been born for a life in liberty, equality and brotherhood. These words only reflect sentimental fantasizing enshrined in the wishful thinking of human rights, but have nothing to do with reality.

To forestall Christian believers’ opposition to the observations described above, let us remind them of Christ’s words, which read: “You will hear of wars and rumors of wars, but see to it that you are not alarmed. Such things must happen.” If they are true believers, they had better repeat after the psalmist: “Praise be to the Lord, my Rock, who trains my hands for war, my fingers for battle.” The realist atheists and agnostics as scientifically-minded people should not stand in need of being convinced that war is part and parcel of our earthly existence.

"Granite Islands And Backsplashes": Even Doublewide Trailers Are No Longer "Affordable"

Since the early 1900s, millions of Americans have relied on trailers as a source of no-frills, affordable housing.  In fact, roughly 22 million Americans live in trailer parks today, but the industry is hardly the stable source of affordable housing that it used to be...a lesson that 73-year-old Judy Goff of Naples, Florida recently discovered the hard way after Hurricane Irma ripped through her park and destroyed her home, along with roughly 1.8 million others.

As Bloomberg points out, when Goff went to a local LeeCorp dealer lot to replace her $46,000, 1,200 square foot trailer with something of similar size and value, what she found instead was "manufactured homes" stuffed with high-end upgrades like granite counter-tops and vaulted ceilings that rendered them too expensive for her $23,000 per year of income.

Last month, Judy Goff, a 73-year-old hardware store clerk whose double-wide in Naples, Fla., was blown to bits, pulled into a LeeCorp Homes Inc. sales lot and wandered through models with kitchen islands and vaulted ceilings. In the salesman’s office, she got the total price, including a carport, taxes, and removal of her destroyed trailer: $140,000. “I don’t have that kind of money,” said Goff as she stood amid the wreckage of her old home, whose walls and ceiling were stripped away, leaving her leather furniture and a lifetime of possessions to bake in the sun. “That was all I had.”

 

Goff—who just wants to replace the wrecked 1,200-square-foot trailer that she bought 17 years ago for $46,000, including the cost of land—says she feels boxed in. Her mobile-home community won’t allow single-wide homes or older used models as replacements. And every home must have a carport. She’s willing to give up such upgrades as the higher-end countertops, but that probably won’t be enough. Between her Social Security check and income from her job at Ace Hardware Corp., she earns only about $23,000 a year. “I just want a home that’s equal to what I had,” she says. “My home was a beauty.”

 

“I get that higher-end countertops and kitchen islands are where the better margins are, but that’s also going to put homes out of reach for a lot of buyers,” says Doug Ryan, director of affordable homeownership at the Washington nonprofit Prosperity Now. “The storm is revealing a whole lot of problems in the low-cost housing market.”

Meanwhile, as we note frequently, while the cost of manufactured homes has surged, the pay for the bottom fifth of American wage earners has been somewhat stagnant for nearly two decades now. Even after a modest uptick recently, the bottom 20% of households have seen their income fall 9% since 2000, in real terms.

But, as low-income households have found it increasingly difficult to rebuild after devastating hurricanes, the surge in manufacturing home pricing has been a boon for billionaire Warren Buffett who made a big financial bet on the largest manufactured housing builder, Clayton Homes, back in 2003.

The industry, led by Warren Buffett’s Clayton Homes Inc., is peddling such pricey interior-designer touches as breakfast bars and his-and-her bathroom sinks. These extras, plus manufacturers’ increased costs for labor and materials, have pushed average prices for new double-wides up more than 20 percent in five years, putting them out of reach for many of the newly homeless.

 

Phil Lee, the 74-year-old founder of LeeCorp, has been riding a wave of retiring baby boomers who want affordable luxury. Driving a reporter in his black BMW SUV through Bayside Estates in Fort Myers Beach, where many of the fanciest homes he sells are installed, Lee points out units with pitched roofs that look almost indistinguishable from conventional homes, facing canals with boats tied outside. Their owners, former dentists, doctors, executives, and others, spent upwards of $150,000 to buy aging units just to clear the way for something more luxurious. On a palm-lined street flanked by ranks of 1970s-era trailers, Lee sees profit. “There’s no end to replacing these homes,” he says. “You get a hurricane in there and it really accelerates things.”

 

Terms such as “mobile home” or “trailer” are now verboten in an industry striving to break free of its downscale origins. Buffett’s Clayton Homes, which produces almost half of all new manufactured housing in the U.S. and competes with such companies as Cavco Industries Inc. and Champion Home Builders Inc., still builds lower-priced units, but there’s barely a sign of them on its website, which is mostly devoted to high-price models. The 2,000-square-foot Bordeaux features a separate tub and shower, a computer station, and a mud room, with prices starting at $121,000 and ranging as high as $238,000, not including delivery and installation costs. Clayton declined to comment.

Of course, while mobile homes are becoming increasingly cost-prohibitive for low-income families in Florida and Texas, Silicon Valley"s future tech billionaires can"t seem to get enough of them.

Unreal. Housing so expensive in techland, RVs line the streets as people choose to live in them instead. pic.twitter.com/ACW5dZMz6N

— M. Caruso-Cabrera (@MCaruso_Cabrera) November 21, 2017

Nano-Cap Stock Of The Day - Why Is This China Construction Company Up 300% Today?

Yesterday, it was CHF Solutions - a $10 million market cap medical device-maker - that exploded 500% higher on no news, no catalyst, no event. Today it is the turn of China Advanced Construction...

China Advanced Construction Materials Group, Inc. produces construction materials for large-scale commercial, residential, and infrastructure developments. The Company is focused on ready-mix concrete materials.

The $14.8 million market cap company is now up 300% on 4 million shares traded...

 

CADC traded over $100 in Oct 2009...

 

Notably, the machines can"t get enough of CHF Solutions again today - up 20% back to yesterday"s highs...

Caveat fucking emptor!

Drone Footage Reveals A First Look Of Trump's Border Wall Prototypes

Over the past four weeks, workers have been toiling (mostly in intense 90+ degree heat) to put final touches on eight possible versions of President Donald Trump"s long-promised border wall, ahead of an October 26 deadline to finish the prototype border-wall designs located just a few dozen years from the border that divides San Diego from Tijuana. U.S. Customs and Border Protection awarded eight contracts to six companies to build the prototypes. Four are made of reinforced concrete, and another four incorporate additional construction materials. Construction began on Sept. 26, giving companies 30 days to finish, according to the Arizona Republic.

By Wednesday, five of the wall designs had already been completed and were fenced off with caution tape, but - as the following video shows - crews were still at work on others, installing vertical concrete panels on one design, using cranes and bulldozers to place them upright. Another two prototypes were in various stages of construction on the demonstration site, located about 2 miles east of San Diego"s Otay Mesa border crossing, in the foothills of the Otay Mountains. At roughly 30 feet, the designs dwarf the petite, primary fence that currently designates the international boundary — it"s made of rusted Vietnam War-era landing mats. They are also nearly twice the height of the secondary metal-mesh fence, which ends near where the prototypes are being built.

Their height, officials quoted by the AZ Republic said, is intended to make a statement to criminals and would-be unauthorized crossers: Stay away.

"The 30 feet is very impressive," said Mario Villareal, the division chief for the San Diego Sector Border Patrol. "What we"re trying to accomplish is by putting tactical infrastructure on the border, by having all-weather roads, by putting Border Patrol agents on the immediate border is the deterrence."

Of course, whether the border-wall prototypes "keep people away", is what matters, and will be closely scrutinized in the coming weeks. After they are done, CBP will move to the "test and evaluation" of each of the eight structures.

What do the prototypes look like?

One built by a Maryland company uses concrete at the base with the top two-thirds featuring blue metal panels. Another, built by an Alabama company, has a wide concrete base that gives way to a thinner frame halfway up the structure.  Also, only one of the completed designs incorporates see-through features that would allow Border Patrol agents to monitor activity on the other side of the border.

Initially, Trump called for a solid reinforced concrete design, and several of the finished prototypes seemed to fit that description. Under advisement from CBP, the administration later included "see-through features" in its call for submissions. A second design by the Alabama company features metal bars for the first half of the prototype, narrowly spaced and resembling the bollard-style fencing commonly used at the border in Arizona"s urban areas. But the top half has what appears to be solid concrete panels.

Quoted by the AZ Republic, Border Patrol Agent Theron Francisco said the ability to see across the border can be beneficial. It"s an option they don"t have now with landing-mat fencing in the area. "It"s good to be able to see through the south side. We can see them, they can see us," he said. "But in a way, it can be negative because we"re always being watched. They always can see us. It goes both ways." Meanwhile, the concrete design is made up of three long, concrete frames that gently slope upward from the U.S. side, but are completely vertical on the south side. The concrete is a light tan, nearly the same color as the dusty soil it stands on. 

The cost of eight contracts ranges from $320,000 to $480,000. CBP has already appropriated the funds to pay for them. However, funding for additional construction is still up in the air and remains the object of major political disagreement in Congress.

And until we find out if Trump"s wall will ever amount to anything more than a pipe dream, here is drone footage taken earlier today of the Border Wall prototypes.

Too Good For Too Long...

I"m writing this from my home in Sonoma County at the end of an intense week of witnessing firsthand the devastation caused by the many current fires burning in northern California. While it"s hard to focus on anything other than the moment-to-moment developments of this still-unfolding disaster (which I"ve been chronicling here), it"s already clear that the implications for my part of the state will last for many, many years to come.

It"s amazing how instantly the status quo where I live has changed. The world my neighbors and I lived in when we all went to bed on Sunday night simply no longer existed by the time we woke up on Monday morning. Lives have been lost. Entire neighborhoods - thousands of homes - have burned to the ground. Businesses, hospitals and schools are now shuttered.

Having now experienced this personally -- on top of watching news reports over the previous weeks of similarly abrupt "before/after" transitions in Houston, Florida, Puerto Rico, Mexico City, Las Vegas and Catalonia -- I have a new-found appreciation for the maxim that when it arrives, change happens quickly -- usually much more quickly than folks ever imagined, catching the general public off-guard and unprepared.

We humans tend to think linearly and comparatively. In other words, we usually assume the near future will look a lot like the recent past. And it does much of the time.

But other times it doesn"t. And that"s where the danger lies.

The Cruel Math

In 1987 a Danish physicist named Per Bak released a landmark paper introducing the concept of self-organized criticality. Bak observed that complex systems draw stability through an ongoing cycle of corrective collapses that keep the overall system from becoming too over-extended.

His point is best understood by watching a sand pile being formed. The pile rises as more grains of sand are added to it, until it hits a critical mass. At that point, the addition of more sand grains is likely to cause a limited collapse of the pile. The more grains of sand added, the more frequent these localized collapses are:

The key takeaway is that the end result of these collapses is that the overall size and shape of the sand pile as a whole is maintained -- i.e. the smaller corrections are necessary for maintaining the ongoing stability of the larger system (in other words, the sand pile retains a constant shape over time)

Without them, the system would grow unchecked until toppled by other laws of physics, yet at this point the energy displacement of the collapse is so large that the system is destroyed or re-set (in other words, the sand pile would rise in height over time until it collapsed entirely)

In his later 1996 book, How Nature Works, Bak showed how the same rules apply to the complex systems around us -- earthquakes, traffic jams, biological evolution, forest fires, the distribution of galaxies in the universe — and financial markets, too.

His findings are universal to complex systems. Ongoing smaller corrections are necessary for long-term stability of the larger system. And while you can"t predict exactly when the next correction will occur, the longer it takes to happen, the larger it will be (as it has more pent-up energy to displace). 

Another way to look at this is: If the smaller corrections don"t happen, the system is being set up for a much bigger and more painful collapse in the future.

In many ways, we"re seeing this manifest via the rash of recent disasters.

Let"s look at hurricanes. 2010-2016 was one of the most mild periods on record when it comes to damaging storms making landfall in the US. For whatever reason, the usual seasonal "smaller corrections" just weren"t happening as frequently in the Atlantic.

Bak"s work would predict an increasing probability of an unusually busy season of destructive hurricanes to arrive. And, right on cue, 2017 has now been recognized as the 9th most-active Atlantic hurricane season in recorded history (and the season isn"t over yet!). Underscoring the point, September 2017 proved to be the #1 single most active month for Atlantic tropical cyclones on record.

Similarly, the US West is coming off of a long stretch of regrettable forestry management practices -- logging large trees, fire suppression, and livestock grazing -- which reduced the natural occurrence and frequency of smaller-scale forest fires that prevented the build up of combustible flora. As a result, the system has become much more vulnerable to unchecked fires -- a situation made worse by the effects of the prolonged recent drought (just as the warmer temperature of the Gulf of Mexico is making hurricanes there more potent). Which is why the American West is experiencing its third most severe fire season in history this year.

Et Tu, S&P?

Don"t forget that Bak"s rules for complex systems also apply to financial markets.

With that in mind, it makes the inexorable mania and lack of micro-corrections since 2009 downright frightening. Just take a look at this price chart of the S&P 500, which is currently in its second-longest-ever bull market run:

We see that as stock prices have been on a one-way ride higher over the years, downside volatility has dried up, to the point where it now practically no longer exists:

Going back 55 years, the average cumulative intra-day losses over a 25-day period is about 660 basis points, or 6.6%. As of yesterday (October 10), the last 25 days have seen a grand total intra-day loss of just 96 basis points, or 0.96%. If that seems small, it is.

In fact, outside of the period ending November 26, 2014, this is the smallest cumulative 25-day intra-day loss in the past 46 years – and the only one registering less than 100 basis points.

(Source)

Just as (until this fall) with the US east coast and hurricanes, or like my corner of California with wildfires, things since 2010 have been "too good for too long" for the financial markets. The usual cycle of smaller corrections has not been allowed to happen, resulting in an unnatural build-up of the system to a height from which a destructive re-set is increasingly probable.

How much longer this can continue is anyone guess. But Bak"s work explains why it can"t go on forever, and why the resulting collapse will be more devastating the longer it takes to happen. And with the world central banking cartel set to reduce total global QE -- just as with hotter water temperatures in the Gulf -- the conditions for catastrophy are ratcheting up.

We are getting closer and closer to the day when we awake to find the markets we had the day before no longer exist. Change happens that fast, even with financial markets. If you think you"ll be one of the smart ones to sell your current positions before things get too bad, talk to someone who was invested in the market on October 19, 1987 when it suddenly lost nearly 25% of its value in just a few hours.

While you"re at it, talk to someone in Houston, Tampa Bay, Puerto Rico or Mexico City. Or I can put you in touch with one of my friends from Santa Rosa. Any one of them will tell you how stunningly swiftly fate can upend your best-laid plans.

Takeaways From Tragedy

Fortunately this week, I was one of the lucky ones. My family and property were spared.

But I can"t say the same for many in my community. From their loss, as well as from the threat I experienced earlier this week when the fires were much closer, here are some of the key learnings that came out of this crisis:

• Preparation only matters if it"s done in advance. And it matters a LOT -- Those who had "go bags" and disaster kits in place before the fires fared much better than those who didn"t. They were able to evacuate faster, more safely, and with better self-sufficiency. And even a few small steps can make a big difference. I found that already having a stash of emergency cash as well as several containers full of gas for my car put me at a great advantage when it first looked like we were going to have flee our home. Putting it more bluntly: if you don"t have some sort of emergency prep kit at this point, you"re being unforgivably reckless. Need guidance on what to put in it? Read our free Guide To Emergency Preparedness.


• People matter much more than property -- for those who had only minutes to flee the flames, they only cared about getting their loved ones to safety. All the "stuff" they accumulated in life didn"t even factor into their thinking at that moment. The big learning here? Don"t let possessions take an undue importance in your life. A disaster can quickly take them from you, and when forced to choose, you"ll pick people over things every time. So instead, place your focus on nurturing the relationships you value and maximizing the quality of time you can spend with those people. If you could use some professional help in this area and are having trouble finding it, consider contacting the therapist we endorse (full disclosure: she"s my wife)


• Community is priceless -- no one can be prepared for everything. Community will provide for the things you lack. I"ve been blown away by the magnitude of the response from the generous folks living both within and without Sonoma County. As I wrote last week, tragedy offers a way for people to step into their best selves. Invest in your community now, so that it"s as robust as possible when you need to count on it. Looking for ways to build community? We have a free guide for that, too.

These learnings apply to any crisis, but of course, depending on the type -- natural, financial or otherwise -- additional preparations come into play.

In our recent report Part 2 -- Crisis Preparation: What To Do, we detail out, point-by-point, our complete list of the most important steps concerned individuals should take now -- before another disaster arrives -- to safeguard their investment capital, their property, and the personal security of their families. Because whether caused by Mother Nature or man"s own recklessness, we are due for more crisis. Don"t be caught unprepared. Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

DHS Selects 4 Contractors To Build Prototypes For Trump's Border Wall

The Department of Homeland Security has finally reached a decision in the long-delayed process of selecting contractors who will build prototypes of President Donald Trump’s promised border wall. The department announced Thursday that it has selected four contractors to build wall prototypes, and that construction is slated to begin this winter, according to CNN.

The announcement comes after the Government Accountability Office on Friday dismissed a complaint filed by contractors who claimed their bids had been passed over, allowing DHS to move forward after the complaints had threatened to delay the selection until November.

Customs and Border Protection"s acting Deputy Commissioner Ronald Vitiello announced that the designs will be constructed along the San Diego border. Four companies will be doing the building: Caddell Construction Co (DE), LLC, of Montgomery, Alabama; Fisher Sand & Gravel Co., DBA Fisher Industries, of Tempe, Arizona; Texas Sterling Construction Co., of Houston, Texas; W. G. Yates & Sons Construction Company, of Philadelphia, Mississippi.  

The government made two requests when it asked for bids: Designs for a 30-foot concrete wall, and anything else. The latter design plan will be revealed next week, CBP said.

According to CNN, construction on the wall prototypes was delayed after the shunned contractors filed protests about the decision back in July. The original plan had been to start construction in June.

However, further delays could ensue if bidders who weren’t selected choose to file complaints, the CBP said.

‘CBP did note that once contracts are awarded, companies will have another opportunity to protest, which could add further delays. Nevertheless, CBP said ‘we are confident in our processes, and we will proceed deliberately, to ensure compliance with the law.’”

The new designs that were selected will be added to the CBP’s “menu” of options for the wall.

“The prototypes will ‘help us create a "design standard" for operational walls,’ CBP said. ‘The new designs would be added to our menu of existing designs, and allow us to tailor a specific wall design to the unique demands of individual areas of the border.’”

The money for the process came from $20 million that Congress authorized the Department of Homeland Security to pull from other places in the budget earlier this year after President Donald Trump signed an executive order in January directing the federal government to begin construction on the border wall as soon as possible.

Of course, Congress has yet to appropriate any money for construction. Trump, for his part, has vowed to veto any spending bills that reach his desk in September unless they include funding for the wall – a promise that’s been complicated by Hurricane Harvey.

Read the full release below:

* * *

WASHINGTON - U.S. Customs and Border Protection (CBP) announced today that contracts have been awarded for concrete prototypes of the Border Wall.

The companies selected to construct concrete border wall prototypes are:

Caddell Construction Co., (DE), LLC, Montgomery, Alabama,

Fisher Sand & Gravel Co., DBA Fisher Industries, Tempe, Arizona,

Texas Sterling Construction Co., Houston, Texas, and

W. G. Yates & Sons Construction Company, Philadelphia, Mississippi.

These concrete prototypes will serve two important ends. First, given their robust physical characteristics, like, reinforced concrete, between 18-30 feet high, the concrete border wall prototypes are designed to deter illegal crossings in the area in which they are constructed.

Second, the concrete border wall prototypes will allow CBP to evaluate the potential for new wall and barrier designs that could complement the wall and barrier designs we have used along the border over the last several years. As the border security environment continues to evolve, CBP will continually refresh its own inventory of tools to meet that evolution.

CBP will make a decision on the “other materials” Request for Proposal (RFP) in the next week. CBP officials will meet with the vendors and determine construction timeline, however we expect to construct the prototypes in the fall.

Issued Jan. 25, Presidential Executive Order: Border Security and Immigration Enforcement Improvements, states that “the [Department of Homeland Security] Secretary shall take steps to immediately plan, design and construct a physical wall along the southern border, using appropriate materials and technology to most effectively achieve complete operational control of the southern border.”

On March 17, CBP issued two Requests for Proposals to acquire conceptual wall designs with the intent to construct multiple prototypes. One RFP called for concrete wall design and the other RFP called for Other than Concrete wall design. Today, CBP announces the award of the concrete prototype contracts. Prototyping is an industry-tested approach to identify additional solutions when considering a new product or methodology. Through the construction of prototypes, CBP will partner with industry to identify the best means and methods to construct a border wall.

The prototypes will inform future design standards which will likely continue to evolve to meet the U.S. Border Patrol’s requirements. Through the prototyping process, CBP may identify new designs or influences for new designs that will expand the current border barrier toolkit that CBP could use to construct a border wall system. The border barrier toolkit is based on USBP’s requirements.

*  *  *

While no images of the selected designs have been released, we noted a number of them in April...

“As Pretty as the Parthenon”

RENDERING BY CRISIS RESOLUTION SECURITY SERVICES, INC.

WHO Crisis Resolution Security Services of Clarence, Ill., a global security management firm

DESIGN CRSS says the wall is meant to evoke famous walls in history, using crenellations, parapets and buttresses, and would be “as pretty as the Parthenon.” The wall would be built on a 30-foot-high dirt berm, graded to prevent vehicles from approaching. It also would follow existing interior roads and highways, which the company says would make it easier to transport materials and to maintain, while avoiding private-property issues. It would also create a wide zone in some places between the wall and the border. Bridges and gates would allow the inhabitants of that zone to cross.

* * *

Doubling as Nuclear Waste Facility

RENDERING BY CLAYTON INDUSTRIES

WHO Clayton Industries of Pittsburgh

DESIGN Owner Christian Clayton has proposed devising a wall that would carry electricity generated from municipal, medical and nuclear waste. “The wall is just a building block,” Mr. Clayton said. “Think of the wall as big conduit." Mr. Clayton declined to detail many specifics of his plan, which would involve plants to convert the waste into power. Spent nuclear fuel rods and other waste would be buried 100 feet deep in a buffer zone between the border and the wall.

* * *

At an Angle

RENDERING BY CHANLIN INC.

WHO Chanlin Inc., of Middle River, Minn., a steel-fabrication construction company

DESIGN Chanlin’s design for a concrete wall consists of using 10-foot-wide by 30-foot-high panels with embedded steel plates welded in a vertical position. To prevent climbing or scaling with a hook, the design would be tilted 30 degrees toward Mexico and include a smooth concrete finish with a steel cap plate. Steel bars would allow border patrol to be able to see through the fence.

* * *

Design Beyond Reach

DRAWINGS BY J.M. DESIGN STUDIO

WHO J.M. Design Studio of Pittsburgh, an all-women team of designers and artists

DESIGN In a submission meant to protest the project, J.M. Design Studio"s proposals are designed to “invite other realms of thought and consideration." One sketch shows nearly three million hammocks, for anyone’s use, strung across the border with 30-foot trees for support. Another one has a semicontinuous wall of nearly 10 million 30-foot-tall pipe organs, with openings every 20 feet allowing for people to pass through. Jennifer Meridian, a Pittsburgh artist involved in the submissions, called the actual border wall project "preposterous for so many reasons."

* * *

Memorial Wall

RENDERINGS BY REILLY CONSTRUCTION

WHO Reilly Construction and Croell Inc., both of Iowa

DESIGN This joint venture would use tilt-slab construction consisting of concrete with reinforced fibers that the company says would make the wall more durable and resistant to damage. The panels would be 30 feet high and 15 feet wide with a footing underground to prevent tunneling. The concrete material could be engraved, colored or etched to make it more aesthetically appealing or should there be an interest in establishing a memorial in some places.

* * *

Hadrian’s Wall

HADRIAN CONSTRUCTION

WHO Hadrian Construction Co. of Carlsbad, Calif.

DESIGN Company owner Rod Hadrian says his prefabricated product would make the wall cheaper and easier to install in remote border areas. The tridipanel wall system could be made to any thickness or color, and the diagonal pattern is meant to give the wall extra strength.

* * *

One-Way Visibility

RENDERING BY MICHAEL EVANGELISTA-YSASAGA, PENNA GROUP

WHO Penna Group of Fort Worth, Texas

DESIGN Penna Group’s proposal is for a double wire mesh fence that has a sheet of plexiglass lined with a one-way mirror allowing border patrol agents to see the Mexico side, but not the reverse. The fence would be 30 feet tall with a 6-foot footing, and both would be designed to sustain tampering by pickaxes, hammers, hand-tools, and torches for over an hour and a half. The double-lined, double-wire mesh design is often used in maximum-security prisons.

* * *

Perch

SAN DIEGO PROJECT MANAGEMENT, PSC

WHO San Diego Project Management, PSC, a full-service design-build organization

DESIGN This firm submitted a design for a wall similar to the ones used to protect medieval castles in Europe, according to the company. Most notably, the proposal includes a walkway on top called a “chemin de ronde” that allows for border agents to see Mexico through optical ports.

* * *

Camouflage

RENDERING BY CONCRETE CONTRACTORS INTERSTATE, SINGLE EAGLE INC.

WHO Single Eagle Inc. of Poway, Calif., a structural and decorative concrete specialist

DESIGN This proposal has a design option that could incorporate artistic representations of local cultures. The walls are built using a tilt-up method that is cast onsite and then put into position, making it easier to built the wall in remote areas.

* * *

Sensors

RENDERING BY DARKPULSE TECHNOLOGIES INC.

WHO DarkPulse Technologies, based in Arizona and New York

DESIGN Ballistic concrete is used, which the company says could withstand more than 12 hours of tampering. Using sensors, the wall and below-ground structure would notify border agents of the exact location of any tampering in real time. The wall would also include coating designed to prevent climbing and the use of grappling hooks.

* * *

Technology First

RENDERING BY VSCENARIO

WHO vScenario, a San Diego construction-technology company

DESIGN vScenario’s design would begin by using drones to develop a 3-D spatial model of the terrain. The proposed wall would feature cameras, volumetric microwave sensors and fiberoptics designed to detect intrusions.

* * *

Fitting In

WTC CONSTRUCTION

WHO WTC Construction

DESIGN This design aims to mimic a “rammed-Earth” construction style, which uses natural raw materials. The goal is a wall designed to look like an “extension of the surrounding landscape,” says the company. The system would include panels attached to reinforced concrete piers nested together to form a solid structure.

* * *

Mesh Fencing

RIVERDALE MILLS

WHO Riverdale Mills of Northbridge, Mass.

DESIGN A galvanized welded wire mesh called WireWall, which the company says is virtually impossible to climb or cut. The company’s fencing is in use along the U.S.-Mexico border in California, as seen above. The fencing could be up to 20 feet tall and could be installed to reach 6 feet below ground.

* * *

A Twist on Steel

HELIX STEEL

WHO Helix Steel, a unit of Pensmore Reinforcement Technologies, of Ann Arbor, Mich., and Leesburg, Va.

DESIGN Helix would mix concrete with its Twisted Steel Micro Rebar, a reinforcement designed to prevent cracking. The material is now used at some residential and commercial sites.

Builders Complain Of Record Labor Shortages: Up To 75% Of Employers Can't Find Workers

Late last month we reported the remarkable anecdote of an Ohio factory owner who has numerous blue-collar jobs available at her company, but has one major problem: she is struggling to fill positions because so many candidates fail drug tests. Regina Mitchell, co-owner of Warren Fabricating & Machining in Hubbard, Ohio, told The New York Times this week that four out of 10 applicants otherwise qualified to be welders, machinists and crane operators will fail a routine drug test. While not quite as bad as the adverse hit rate hinted at by the Beige Book, this is a stunning number, and one which indicates of major structural changes to the US labor force where addiction and drugs are keeping millions out of gainful (or any, for that matter) employment.

Mitchell said that her requirements for prospective workers were simple: “I need employees who are engaged in their work while here, of sound mind and doing the best possible job that they can, keeping their fellow co-workers safe at all times." And yet, almost nobody could satisfy these very simple requirements.

Whether it was due to pervasive drug abuse, or for some other reason, but fast forward two weeks when in response to a special question in the July NAHB/Wells Fargo Housing Market Index (HMI) survey, US homebuilders said that labor and subcontractor shortages have become even more widespread in July of 2017 than they were in June of 2016.

This is a concern as the inventory of for-sale homes recently struck a 20-year low. And while economists and the public cry for more inventory, many builders are pressed to meet demand. A labor and subcontractor shortage in the building industry has worsened over the past year, according to the National Association of Home Builders/Wells Fargo Housing Market Index survey of single-family builders.

The July 2017 HMI survey asked builders about shortages in 15 specific occupations that were either recommended by Home Builders Institute (NAHB’s workforce development arm) or that NAHB found to be particularly significant when tabulating Bureau of Labor Statistics data for a recent article on Young Adults & the Construction Trades.  Shortages (either serious or some) were at least fairly widespread for each of the 15 occupations, ranging from a low of 43 percent for building maintenance managers to a high of around 75 percent for the three categories of carpenters (rough, finished and framing).

In addition to workers employed by single-family builders, the HMI survey asked about shortages of subcontractors, which have become even more widespread lately.  In the July 2017 survey, the incidence of shortages was higher for subcontractors than for labor directly employed by builders in each of the 15 occupations. At the top of the chart, for example, 85% of builders reported a shortage of framing subcontractors, compared to “only” 77% who reported a shortage of framers directly employed.

According to the NAHB, historically, this has not always been the case: an average shortage calculated across the 9 trades that NAHB has covered in a consistent way since 1996 shows that labor and subcontractor shortages used to track each other fairly closely.  Since 2013, however, a persistent gap has opened, with the 9-trade shortage for subcontractors running 5 to 7 percentage points higher.

One possible reason for the shortages proposed by the NAHB, is that some workers who were laid off and started their own trade contracting businesses during the housing downturn have returned to working for larger companies. This would improve the availability of workers directly employed by builders slightly, while shrinking the pool of firms available for subcontracting.

The 9-trade average shortage for labor has increased from a low of 21 percent in 2012 to 56 percent in 2016, and now 63 percent in 2017.  And this trend has been very consistent.  For each of the construction occupations covered in both years, the shortage percentage, whether for labor directly employed or subcontractors, increased between 2016 and 2017—with the sole exception of excavator subcontractors, for which the percentage remained roughly the same.

In an ominous coincidence, the 9-trade average labor shortage is now at its highest since 2000 (which marked the end of an extended period of strong GDP growth that tightened many labor markets and drove the overall unemployment rate down to 4.0 percent).  The current labor shortage seems especially severe relative to housing starts, which have only partially recovered from their post-2006 decline.

NAHB"s conclusion: "the historical pattern has been quite consistent across construction occupations.  Shortages for most of the occupations are more widespread now than at any time since 2000.  The exceptions are shortages that are at their all-time worst since NAHB first started asking the questions in 1996.  For directly employed labor, the shortage of painters is now at its worst ever.  For subcontractors, in addition to painters, shortages of framing crews and electricians are also at their all-time worst.  For excavator subcontractors, the 2016 and 2017 shortages are essentially tied for worst all time.

But what is most troubling is that despite such "record" labor shortages, wages across both the construction sector, and certainly across the entire labor market, just refuse to rise. If a historic lack of qualified workers fails to boost wages.... what will?

The Cost Of Light Through The Ages

"Could all historians (and economists) please just turn their attention away for a short moment?! " asks Der Spiegel"s Guido Mingels, as he reflects on the evolution in the costs of making light work through the ages (spoiler alert - it appears deflation is a "good" thing).

Let"s talk straight: All man had achieved before 1800 isn"t really worth mentioning. Easy peasy stuff. For thousands of years nothing really happened.

These days, you visit a museum and are expected to marvel at an ancient plow or a knight"s armor, when back then they didn"t even have electric lighting. No switch, anywhere!

The history of artificial lighting accompanies and enlightens the Anthropocene, as some call the times from the year 1800 onwards, when mankind started showing off what its real capabilities were. Without light in the coal pits and in the factories, which from then on could be lit at all times, the industrial revolution would have had to have been postponed.

The costs for the production of light, one of the most important enablers of progress, have dropped in a way that is hardly imaginable. The environmental economists Roger Fouquet and Peter Pearson have retraced this development for England.

You will find more statistics at Statista

One hour of light (referred to as the quantity of light shed by a 100 watt bulb in one hour) cost 3200 times as much in 1800 in England than it does today, amounting to 130 euros back then (or a little more than 150 dollars).

In 1900, it still cost 4 euros (close to 5 dollars).

In the year 2000, we arrived at a cost of 4 euro cents (5 U.S. cents).

You can also put this into relation with the amount of time that an average worker needed to labor during different ages in order to earn enough for the 100 watt bulb to glow for an hour - just like the economist William Nordhaus has done in one of his classic essays.

The people of Babylon, in 1750 B.C., who used sesame oil to light the lamps, had to work for 400 hours to produce the said amount of light.

Around 1800, using talcum candles, 50 hours needed to be invested.

Using a gas lamp in the late 19th century, 3 hours were due.

Using an energy saving bulb today, you will have to work for the blink of an eye - a second.

*  *  *

The chart and text were first published by German journalist and author Guido Mingels. It is available as a book here. As always, our charts are free to use and share, just quote DER SPIEGEL/Statista as the source and include a backlink to the graphic"s URL (this page).

Indian Authorities Seize Half A Billion Dollars Of Heroin

The Indian coast guard seized 1,500 kilograms of heroin, the largest bust ever uncovered by authorities in any county, after commandeering a shady Panama-flagged vessel sailing in the Indian Ocean.

The vessel, which was operating under the name MV Henry, was intercepted off the Gujarat coast near the city of Porbandar, according to Reuters. Crewmembers said the ship was sailing from Dubai to Alang, a town in Gujarat known for shipbreaking.

The Indian Times published a description of the encounter between authorities and the ship’s crew, as well as a video taken by the Coast Guard.

“When quizzed, the master of the ship said that the vessel had no documents as it was headed to the Alang ship-breaking yard in Bhavnagar to be broken.

The vessel was subsequently detained and was tugged to the Porbandar port on Sunday where the authorities during inspection found the vessel to be carrying 1500 kgs of heroin.”

Eight Indian nationals were also found aboard the ship. They have been brought in for questioning by authorities and are currently under investigation.

According to the BBC, citing a UN report on the international drug trade, India is part of a transit route, due to its proximity to Afghanistan. Smugglers take the heroin across the Indian Ocean to eastern and southern Africa. India also has a severe heroin problem in the state of Punjab, which is in the border with Pakistan.

In an earlier story about Punjab’s drug epidemic, which is similar in many ways to the crisis in the US, the BBC reported that 53% of the state’s drug users prefer heroin.
 

Views From The Top Of The Skyscraper Index

Authored by MN Gordon via EconomicPrism.com,

On a warm Friday Los Angeles morning in spring of 2016, we found ourselves standing at the busy corner of Wilshire Boulevard and South Figueroa Street.  We were walking back to our office following a client wire brushing for events beyond our control.  But we had other thoughts on our mind.

Amongst a mob of pedestrians, we gazed up at the skeleton frame of what would become the Wilshire Grand Center.  For the first time in several years the buzz and hum of diligent building activity was eerily silent.  In fact, construction efforts were shut down for the day.

Sadly, less than 24 hours earlier a distraught electrician had taken a swan dive off the 53rd floor.  The man’s death prompted an immediate work stoppage and evacuation of the tower.  “It sounded like a bag of cement fell off the edge of the building,” one observer remarked.

Naturally, the sound of impact was far too grim for us to contemplate.  Instead, we wondered how time must have simultaneously slowed down and sped up for the jumper as they descended toward the ground.  Did they want a redo before it was game over?

We have a hunch that over the next couple of years, vast numbers of people are going to experience the rush that comes when time simultaneously slows down and speeds up.  Not because they’ve committed a base jump off a skyscraper – though some will.  Rather, it’ll occur at the precise moment they come to the rude realization that they’re broker than broke.

We’ll have more on this in just a moment.  But first some context is in order…

A Grand Ego Stroke

Several weeks ago the Wilshire Grand Center officially opened.  The building claims to be the new tallest building in Los Angeles, and tallest building west of the Mississippi.  But we have some reservations.

Because the top of the Wilshire Grand Center is actually about 18 feet shorter than the U.S. Bank Tower that’s several blocks away.  However, there’s a bizarre looking 100-foot spire at the building’s peak.  Apparently, this spire has a very determined purpose.

Per the Council of Tall Buildings and Urban Habitat – if you can believe there is such a thing – a spire is considered an architectural feature and is, thus, counted when measuring the building’s 1,100 foot height.  Tall buildings arbiters’ aside, we ain’t buying it.  But our opinion on the matter doesn’t matter.

Korean Air / Hanjin Group financed construction of the Wilshire Grand Center.  The claim that this is the new tallest building west of the Mississippi, regardless of spire gimmickry, offers Korean Air Chairman Yang Ho Cho a grand ego stroke.  We recommend that he enjoys it now before he rues it.

You see, the construction of marque skyscrapers has an uncanny track record of coinciding with the late stages of an artificial, cheap credit induced building boom.  If this holds true, the Wilshire Grand Center will forever be a monument to ZIRP, NIRP, and QE.  What’s more, there are several other new skyscrapers monuments that’ll be opening their doors real soon.  This can only mean one thing…

Views from a Top of the Skyscraper Index

The skyscraper index was first elaborated by Andrew Lawrence in January 1999.  The idea is simple enough.  The world’s tallest buildings are often completed on or around the onset of economic downturns.

What the skyscraper index does is it accounts for the long lead time that massive ego stroke projects like construction of the tallest building in the world take to come to fruition.  By the time these mega edifices are complete the free flowing credit that bubbled up their construction, and other bubbles throughout the economy, has nearly exhausted itself.  This is about the time the boom turns to bust and the economy slips into recession.

For example, the Burj Khalifa in Dubai, which is the tallest building in the world at 2,126 feet, was completed in 2008.  If you recall, this was shortly after the onset of the Great Recession.  The cheap credit that pumped up the Burj Khalifa was the same cheap credit that pumped up the U.S. residential real estate bubble.

At the moment, several other tallest building records that dwarf the Wilshire Grand Center are nearing completion.  The first being the Central Park Tower in New York, which upon opening its doors in 2019 will be the new tallest building in the United States at 1,550 feet.  The second being the Jeddah Tower in Saudi Arabia, which will be completed in 2020 and will be the new tallest building in the world at an insane height of 3,281 feet.

Based on the open date of the Central Park Tower and the Jeddah Tower, the Wilshire Grand Center may be an early indicator of the approaching panic.  The timing is hard to precisely pin down.

But what is clear is where the credit has come from to pump up these grand ego strokes.  It has come from precisely the same place where the credit that has boosted world stock indexes to record heights has come from.  Mass central bank balance sheet expansion and zero to negative interest rates.

These asset price inflation puffers are always fleeting.  Views from a top of the skyscraper index show a coming day when time simultaneously slows down and speeds up in a great manic panic.  This is the day the debt edifice crumbles.  Why wait to get your financial house in order?

Stunning Footage Of American's Crumbling Infrastructure

Via StockBoardAsset.com,

It’s no secret that America’s infrastructure is in dire need of repairs. Earlier this year, America received her infrastructure report card from the American Society of Civil Engineers’ and received a repulsive D+. The ASCE guesstimates the US would need to spend $4.5 trillion by 2025 on infrastructure.

Here’s the breakdown of the report card:  

• Aviation: D


• Bridges: C+


• Dams: D


• Drinking Water: D


• Energy: D+


• Hazardous Waste: D+


• Inland Waterways: D


• Levees: D


• Parks and Recreation: D+


• Ports: C+


• Rail: B


• Roads: D


• Schools: D


• Solid Waste: C+


• Transit: D-


• Wastewater: D+

With that being said, I’ve spent the entire weekend inspecting America’s infrastructure at the Port of Baltimore.

At some locations, I was given special access to a behind the scenes view of America’s crumbling infrastructure that the public is not allowed to see. The reasons you’re left out of the know is because it destroys the mainstream narrative that everything is awesome.

Even Jack Ma, the founder of Alibaba Group says, “the US wasted trillions on warfare instead of investing in infrastructure”.

In the Sunday Edition, Alastair Williamson is on site at a marine terminal in the Port of Baltimore. He provides an interesting view of America’s deteriorating infrastructure blended with the current shape of the US economy.

In this video, Alastair is given special access to behind the scenes of America’s crumbling infrastructure. This view is rarely seen by the mainstream public. Enjoy!

Infrastructure 'Stimulus' - Chinese Ghost Cities & The Big Money Drain

As President Trump"s "Infrastructure Week" comes to an ignominious end, NIRP Umbrella"s Alex Deluce reminds us that spending money on bridges to nowhere and cities of the future is anything but the stimulating panacea it is talked up to be...

Is a Chinese credit bubble in the cards? Well, it will be interesting to see if China’s authorities can get through the unwind of US $3 trillion worth of excess credit and the distressed debt on banks’ balance sheets.

From 2009 to 2016, more than 10 trillion of Chinese investment was thrown at infrastructure, ghost cities, and corruption thanks to a helping hand from the Chinese banks and foreign lenders eager to participate in the Chinese growth story.

In fact, hundreds of new cities in China are essentially empty. The hope is that rural population someday move in.

Roughly 40% of the 300 million Chinese expected to move into a town by 2030 will mostly be moving to smaller cities in the “chengzhenhua” system.

As OfTwoMinds" Charles Hugh Smith recently explained, building bridges to nowhere isn"t just a waste of money in the present; it saddles the economy with productivity-draining costs for decades to come.

If there is anything the political left, right and center can agree upon, it"s the lasting benefits of spending more (borrowed) money on infrastructure: roadways, rail lines, airports, seaports, pipelines, dams, electrical lines and so on: the physical networks of advanced civilization.

That Roman roadways constructed 2,000 years ago are still visible illustrates the longstanding value of reliable infrastructure: Roman political control and trade depended on roadways and sea transport to tie the sprawling empire together.

This is the basic assumption behind the notion that virtually any and all infrastructure spending will create value far into the future.

But is this really true? Does rebuilding and/or adding infrastructure create economic value?

To answer, we need to look at two issues: productivity and cost-benefit.

Infrastructure creates new value when it boosts productivity, generally by lowering costs of moving goods, energy, etc.

The value created by increased productivity must far outweigh the cost.

Consider the classic "bridge to nowhere" infrastructure project: a bridge is constructed between a sparsely populated island and the mainland. The payoff is a handful of residents are spared the time and inconvenience required to ship their vehicles between the island and mainland on a ferry.

Does this time savings translate into increased productivity, or merely extra leisure? And what was the cost to gain this very modest increase in leisure/productivity? Spending tens of millions of dollars on the bridge actually reduces the productivity of the entire economy due to the opportunity cost: the millions of dollars could have been more productively invested elsewhere, and spending the money on a low-value-creating bridge deprived the economy of the capital, labor etc. that could have been better invested in productivity-generating projects.

As correspondent Bart D. explains, opportunities to boost productivity via new infrastructure are scarce:

Why anyone believes that building "infrastructure" somehow promotes economic growth in this day and age (as though it were 1950’s) is delusional. The reason "infrastructure" worked back then to build economic activity was simply because it lagged behind the burgeoning private industry. These days there is no ‘hard industry’ left to "lag behind." Building a bigger road between the suburbs and the Mall won’t create prosperity for anyone except the owners of the road building company. Unlike a 1950’s road linking a steelworks to a port or a Beef farm to a meatworks."

In other words, when commerce already exists but is cumbersome, infrastructure that smooths the flow yields enormous productivity gains.

One example of this from history is the construction of the first stone bridge across the Seine River in Paris. This single structure changed commerce, tourism and social relations in the city, as it enabled two carts to pass side by side and enable pedestrians to cross the river safely.

For more on this impact of a single durable, commerce-enabling bridge in Paris, read this book: How Paris Became Paris: The Invention of the Modern City.

Replacing existing infrastructure is also problematic. It may well be necessary, but since it won"t boost regional productivity (since it"s merely replacing existing structures), it acts as a tax on the regional economy: if the replacement costs $1 billion and generates no real gains in productivity, it is in essence a tax that bleeds capital from the economy that could have been productively invested elsewhere.

Rebuilding a bridge generates higher spending on materials and wages, but if it doesn"t generate additional productive capacity equal to its cost, this additional spending (in our world, always paid for with borrowed money that accrues interest for decades to come) runs out once the project is complete, but the costs of paying for the replacement continue on for decades.

As a rule of thumb, if a replacement bridge costs $1 billion, it will cost users and taxpayers $3 billion over the life of the loan/bond that funded the project.

Borrowing immense sums to spend on infrastructure that doesn"t boost productivity actually cripples an economy by channeling scarce capital and tax revenues into projects that only boost spending for a few years at best, while the costs of borrowing the money pile up for decades to come.

In other words, building bridges to nowhere isn"t just a waste of money in the present; it saddles the economy with productivity-draining costs for decades to come.

This high future cost for no-productivity gain infrastructure effectively bleeds the economy of income and capital for decades, for the temporary sugar-high of infrastucture spending today.

A rigorous cost-benefit analysis might conclude that some aging, marginal infrastructure should be torn down rather than replaced. If self-driving vehicles will reduce vehicles on the roads significantly-- and some estimates range as high as an 80% reduction in traffic--perhaps we should wait for this technology to mature before spending trillions of dollars on infrastructure that is about to be under-utilized.

We should instead ask: where are the big gains in productivity going to come from going forward? The answers to that question should guide our public and private investment decisions.

In the meantime, we should question whether proposed infrastructure spending is actually an "investment in our future" or just another bureaucratic boondoggle designed to enrich crony-cartels and justify rising bureaucratic budgets: