Philly, Bucks, and Mont. Realty Professionals

Philly, Bucks, and Mont. Realty Professionals We are a division of City Wide Realty (equal housing opportunity), specializing in Residential, Commercial, Investment Real Estate and Lending Services.

All types of residential and commercial property and lending services for all, investors, buyers, sellers and tenants in the State of Pennsylvania.

02/27/2024

WHERE THE MARKETS HAVE NEVER BEEN

~ by Ilya Zamarin

No doubt that over the past several months it’s been nothing less than magical, magnanimous, and jaw-dropping seeing the main market indexes and the stock market in general continuously making new highs and eventually reaching their highest levels ever during this year. The economy, it seems, has completely shrugged off any kind of worries in relations to the highest interest rates over the past two decades accompanied by the highest real inflation levels in over the past 30 plus years. Several sectors within the economy, and especially the tech, have outperformed most of the analysts’ expectations as corporate earnings have skyrocketed due to several circumstances worth noticing here.

Surely, a lot of the recent growth in stock values attributed to the rise in the revenues associated with the underlying securities is due to the current favorable economic conditions, the goldilocks or the equilibrium between the real interest rates, inflation, and the demand for the products and services these companies produce and represent. A lot of, however, is also due to the rising inflationary pressure on the assets that is otherwise called the asset bubble. In the excessively high interest rate environment, it is the stock market that starts to reflect such conditions with rising values first followed by a huge crash later as no economy is able to sustain itself solely on the rise in stock and index values along. After all, investors and markets represent a forward-looking discounting mechanism for all securities. If the sole rise in the companies’ earnings is mostly attributed to the inflationary rise in costs of goods and services produced by such companies, this does not represent any real growth in business by way of the organic and real increase in value associated with new growth in real demand.

It is these very times that prove once again without a shadow of the doubt that this economy and the markets in particular are being driven by the inflationary pressure on the fiat currency or the US Dollar rather than by the tangible, real growth in the business of the companies comprising those same markets. While the markets continue to grow in their values, a true measure of the economic activities is showing a completely different picture. Today’s Durable Goods Orders Report is showing a significant and seemingly unexpected decline of 6.1% in comparison to the expected decline of only 4.8%. In other words, lower income earners are not participating in the economy as they are behind the curve with the rising inflation while it is the higher income category along that is continuing to consume all the goods and services supplied to the market. This, however, does not secure any bright sustainable future as any successful economies must have all of their classes of citizens being able to participate for the most part.

In the meantime, it has been quite noticeable lately that the executives of the largest US-based enterprises have filed the reports with the SEC (Securities and Exchange Commission) to dispose of or to sell large quantities of their common stock in their companies. Why such drastic measures if not for an upcoming stock market crash. Why such a hurry if not for the markets reaching their multi-year tops. Why such large-scale selling to the tune of the billions of dollars-worth of their holdings if not for the economy to take a turn for much worse in the coming months and weeks. The answer may be exactly that – the incoming market crash led by a significant decline in the economic activities. However, there is another reason that most do not notice as, generally speaking, investors simply want to find the excuses to dump their shares thinking that markets have reached their crescendo. The insiders, as they are called, the top echelons of the companies, routinely participate in the insider selling program that allows them to blindly sell a predetermined amounts of shares granted to them by their companies at predetermined intervals of time. Of course, besides their routine sales, these executives file for and dispose of additional shares either as bonuses or preplanned payment from their companies for their superior services.

In my opinion, the reason for an alarming rate of the insider trading and their shares disposal is a combination of all of the above along with the fact that the markets have gone up too much too fast without an underlying economy showing a substantial amount of improvement to its core. Besides that, believe it or not, it is also a function of the crypto market and digital assets and specifically that of Bitcoin that is experiencing an inflow of funds from large and small investors and from large and small companies alike on an unprecedented scale. It seems that a large portion of the insider-traded dollars is ending up in amounts of Bitcoin tokens being currently taken out of the exchanges with billions of dollars flowing into it daily. There are numerous private wallets scooping up any available Bitcoin on the market to the tune of over two to four billion dollars per day. Remarkably, it is Bitcoin that has already started to demonetize other real assets such as gold. The Spot Gold ETFs (Electronically Traded Funds) have been seeing large outflows of funds that are being repositioned into what is now known as Digital Gold or into Bitcoin. The very next asset class that will start suffering a similar fate will be none other than the Real Estate Sector. While the commercial part of it has already started to crumble, it is the residential that is next to witness the magnitude of the outflows that will be reallocated into Bitcoin before it runs out of the reach of the Middle Class. More about it in my next segment.

02/22/2024

BEHIND THE AI RISE

~ by Ilya Zamarin

It is no secret that the today’s tech sector is no longer relying on the IBM, Microsoft, and Apple type of companies along. The AI-related companies and the semiconductor chip makers that tailor specifically to the side of the tech sector servicing the AI-derived services are the ones that are currently at the forefront of the major expansion, competition, and innovation that is projected to continue for several decades. After the latest blowout earnings results by Nvidia last night, the future of this sector will be greater than it was previously projected by most analysts and investors.

Rising by over 13% in the early Thursday trading, NVDA is now leading the rest of the techs and most of the major indexes to the next level. It is quite obvious now that the entire world is in dire need of modernization that is commanded by its transition into the realm of the Artificial Intelligence and its capabilities. From an unending increase in productivity to the most trusted way for automation, the computer chips and the supporting equipment are now in such a strong demand that even a slow moving, bloated, and dysfunctional government of the United States is now working feverishly on establishing of new and expanding the existing US semi chip production facilities to the tune of several billion dollars that is being thrown at the domestic tech giants to cement our leadership position in this industry forever.

Given the US-China conflict over Hongkong and the threat to our national security and that of the rest of the free world if China takes full control of that island in the near future, it is of the utmost strategic importance to have the chipmaking abilities and the international companies involved in their production and development to be based within the US borders. Most of the largest semiconductor manufacturers are now operating on the American soil while limiting our adversaries’ abilities to produce the most advanced, latest generation computer chips and equipment that is being used in both, civil and military applications.

The fact that this leading tech giant is able to beat its expectations in revenues, sales, and net income is impressive all on its own. The fact that Nvidia is becoming a go-to global leader in generative AI equipment and infrastructure with consistently outperforming production and sales quarter after quarter is, perhaps, the greatest signal for what the future holds. It is no wonder, therefore, that even seemingly totally unrelated Bitcoin mining companies are breaking into the AI sector at this very moment as well. It appears, the future of the tech and other sectors in this economy will heavily and entirely depend on the ability to adhere to, service, and expand on the AI technologies by all means necessary. It is expected that those companies that are intricately intertwined with all things AI will be the future market winners for years to come.

02/15/2024

A CRYPTO MINING BLISS

~ by Ilya Zamarin

For the past four years, I’ve been championing Bitcoin-mining industry as one of the most lucrative and most innovative sectors crisscrossing between the Tech and the Financial sectors while concentrating on one aspect that dictates the very existence of these companies – the creation or mining of Bitcoin. As a better term goes, the FinTech Industry is still being developed at the current time. However, the companies comprising this sector today are a lot more adapted to the current market, economic, and industry-specific conditions that are in the constant ever changing state. The level of sophistication these companies are operating with was not even being considered back in 2020. Today, it is the norm and the necessity.

While some miners continue to solely concentrate on mining bitcoin only and are not being involved in any other business opportunities, it is not the case for others that have chosen to diversify their operations into AI-based cloud services besides continuing to pursue better and more advanced bitcoin mining activities. Today, you can find several of the leading mining companies that make it their business to diversify into data collection and processing, and storage and distribution that is directly correlated to the AI advancement while providing these services to the most prominent Artificial Intelligence provider enterprises that have nothing to do with crypto mining at all.

Interestingly enough, by their overall design, Bitcoin miners are uniquely and ideally positioned to capture the AI-related business that none of the largest, most advanced of the tech firms are capable of absorbing on their own. It is the infrastructure of the mining companies that allows them to be the go-to tech service providers for this industry. Ultimately, it comes down to their ability to do data processing and to have the enormous energy capacity necessary to maintain the high-performance computers continuing to do their job. Combined with the cooling, physical warehousing and the flexibility of the physical space utilization besides energy capacity and access to low-cost supplies of it, these miners are rapidly becoming an extension of the AI service providers that are desperately in need of expansion with the help of the outsourcing the miners have the capacity for.

The marriage of both industries at this time, it occurs, is starting to present a new opportunity for investors to participate in both categories as the most revolutionary technological developments over the past two decades. Considering that demand for both, mined Bitcoin and the Artificial Intelligence services, will only continue to grow in the months and years to come, now is perhaps the most exciting time to consider making either or both categories a part of a diversified portfolio.

None of the above is a financial advice of any kind, of course. Consult with other professionals before considering investing in any product, service, or a security.

02/12/2024

WHEN THE FED WILL PIVOT

~ by Ilya Zamarin

Those of you that follow the economic news and are watching the Fed and its rate changing decisions may recall the Federal Reserve Chairman’s recent remarks that the Central Bank is not anywhere near being ready to make any interest rate adjustments in the near future. The current economic conditions, however and once again, prove that the Fed may be playing the same old trick on the markets by hiding its real intentions.

Now that we are back and are recovering from one of the worst last night’s Half Time Show performances at the Super Bowl of all times with male stripping; the go-go style female pole gymnastics with one decent older song in the mix; the new commercials that featured TV streaming services designed for couch potatoes; and at least one political commercial that had set you back over 50 years in time promoting an independent presidential candidate, let’s come back to the true reality that will be affecting us all for months if not years to come. That reality dictates that the interest rates must be adjusted lower in an aggressive fashion as soon as possible just as they were dealt with when the Fed started raising rates about two years ago.

As the inflation, measured with several economic standards, continues to decline rather rapidly, it is the Central Bank of this country that is not playing ball once again. While borrowers that depend on credit cards, business loans, and other adjustable-rate mortgages continue to suffer from the highest interest rate charges on their accounts over the past two decades, the Fed continues to sit on its hands not acting swiftly in lowering the Overnight Discount Rate in order to bring the borrowing costs down to most consumers desperately in need of cheaper financing. From real estate investing to new car buying and from retail purchasing to business credit borrowing, anyone who needs financing at this point or had the chance to borrow recently is facing some of the steepest lending costs or record in the recent history.

Even though the Fed is expected lowering interest rates several times this year, as usual, by the time Jerome Powell makes this most important economic decision of 2024, it may be a little too late as the damage to this economy from the prolonged high-rate exposure is severely damaging this economy from having a better traction going forward. The retail consumer along is facing a challenge of not being able to pay off nearly $1.3 trillion in just the retail credit card debt that is rising by the minute. Never before this nation had to face the insurmountable amount of debt as it is being faced with right now. Besides, it is not just the retail or internal amounts of debt consumers and business owners are facing. It is the national debt that is interlinked with the retail debt whether we like it or not.

The national debt and its repayment is directly linked to the amount of the tax revenue the United States is collecting from all sorts of income and sales operations including retail, wholesale, export, import, tariff, military, and even the alcohol consumption within this country. If the cost of borrowing is too high, the tax revenue inevitably and invariably declines in proportion to the amounts that are being borrowed. The more the borrowers must pay back on their debt, the lesser is the tax revenue that is being collected on all levels, Federal, State, Municipal or local.

Decreasing the cost of borrowing is the most essential and the most proactive job that this Fed can do for the moment. Decrease the rates and the rest of the economy will reciprocate in kind and fast…!!!

02/09/2024

THE MOST URGENT MESSAGE IN A YEAR

~ by Ilya Zamarin

Guess what time it is?! You guessed it, it is Bitcoin Time, baby!!! Yes, we are back to the discussion of perhaps the most important asset class and type of our lifetime. Those of you that follow know quite well that the recent commotion in Bitcoin’s value past the approval of the Spot ETFs (Electronically Traded Funds) was attributed mostly to the realignment of the locked-in positions within Greyscale’s Bitcoin Investment Trust. At this point, the initial pressure and selling of those willing to trade their Trust positions for the new Spot ETF ones is now over. What comes next is truly an incredible opportunity to get on board of a rocket ship as some of the most prominent fund managers are now projecting Bitcoin’s value to climb well above $100,000 per coin before the end of the year.

As it reached the $47,000 level overnight, Bitcoin is hardly finding any serious resistance while it is continuing to advance higher in the early morning trading today. It is Blackrock, Fidelity, iShares Trust, and ProShares type of funds that are now starting to drive the value of Bitcoin higher on almost a daily basis. The pool of the liquid, available for sale bitcoin is fast approaching only 5% of the entire amount in existence. Out of that entire pool of only 1 million bitcoin tokens left on the exchanges that are available for trading, 70% of tokens are not meant to be sold by their holders – they are simply staying on those exchanges for safekeeping. No other asset class in history has ever had a trading situation quite like this where some of the largest, most prominent fund managers in the world are trying to allocate hundreds of billions of dollars in their funds under management toward an asset that has a small fraction of it left for acquisition. This pool of liquid bitcoin is fast evaporating right in front of our eyes now.

Those that are quite familiar with my segments and those that understand the functionality of Bitcoin do know that this year is the year of Bitcoin’s halving. The halving was built into the design of the Bitcoin’s blockchain code making it twice as rare and twice as difficult to mine every four years. Each cycle, coincidentally, matches those of the general Presidential Elections in this country. Bitcoin is projected to have the daily limit of mined tokens to get halved somewhere around mid-April. At that point, the maximum amount of available Bitcoin to be mined all miners combined will be able to produce will be cut to only 450 each day. In other words, the entire globally mined number of these tokens each month will be limited to the value smaller than most of the exchanges are trading in a day!

The halving is the most unique feature of Bitcoin as Bitcoin’s total number of mined tokens is limited to 21 million. Bitcoin will never have a total number of it exceeding that figure no matter how much other want to break its code. As the current production or mining of it is reaching 20 million, it leaves the industry with only 1 million to be mined over the next 140 years. With each 4-year halving cycle, the difficulty of its production doubles, making it increasingly more costly and more difficult to mine it in comparison to the previous 4-year cycle. In order for the miners to keep their lights on, so to say, the value of Bitcoin must double at the very least. Historically however, the value of Bitcoin goes exponentially higher than doubling post halving and in each of its cycles when looking back at its trading history.

Today, investors can have a choice of either investing in the publicly traded stocks of Bitcoin miners or to place their funds into the Bitcoin Spot ETFs or to purchase Bitcoin itself off the exchanges specifically designed to trade cryptocurrencies. Some of the wealthiest people in the world that are involved in trading, investing, and the development or mining of Bitcoin tokens are projecting the value of each Bitcoin to reach such ridiculous levels over the next decade that I simply choose not to bring their estimated figures to light and as an object of my discussion. Simply put, the future of this most extraordinary asset is very bright but I will digress from making prognosticated estimates of its future value as Bitcoin manages to fool even the most sophisticated traders with its value adjustments most of the time.

As always, this segment is not meant to serve any kind of a financial advice. Consult with other professionals if you want to make any investments in this or any other assets.

02/08/2024

THE WHICHEVER WAY THE POLITICAL WIND BLOWS SHIFT

~ by Ilya Zamarin

Call it a pipe dream or a pie in the sky or a wishful thinking but the prospects of swift, determined, and decisive interest rate cuts by the Federal Reserve well before the Elections are fast evaporating into the thin air. Not too long ago, just a few short months back in 2023, there was a firm opinion with much of the Wall Street and the Main Street that the lower rates are all but a foregone conclusion to the high inflation / high-rate economic environment we’ve all been suffering of ever since the current administration has been in power.

As the current administration has firmly established itself as one that no one can ever trust on just about any matter, be it economic or political in nature, it is becoming increasingly difficult to accept or to believe in anything that is being released by the Biden’s White House and others within the sphere of the Government’s power and influence. There is simply too much of the conflicting economic information that is coming out to take it at full face and value when it is obvious that this economy is anything but in a complete neglect and disarray as it once was over three years ago.

While the labor gains are being reported as some of the best on record, it is somehow and magically so that some of the most prominent and largest companies based in the United States are laying off hundreds of thousands while the White House is touting us of low unemployment and higher payroll gains, all at the same time. It wouldn’t be so if the steel, tech, real estate, and banking industries were doing well. Unfortunately for all of us, while the stock market is continuing to make new gains day after day, the day-to-day operations of some of the largest enterprises are painting a much grimmer picture than what we are being made to believe.

In a politically charged year with yet another highly contested election, it is prudent to be cautious assuming anything this government is telling us is true. The contrary point of view proves to be a better way to understand actual or factual data rather than blindly following those that tend to manipulate the general public for a living. The best way to evaluate what it is that this government is truly doing in delivering its message each and every time is to believe it is Z when the politicians are telling you it is A. When the announcements coming from private and public companies present a slowdown in hirings and a ramp up in firings while the Government is trying to make us believe the labor pool is getting smaller while employment is growing, it is time to take the actual situation very seriously. Given the fact Democrats are losing their chances of keeping the power in their hands in November, their Party is expected to have every trick in the book being employed to manipulate and to steer more voters into their camp at any cost.

Therefore, it is my opinion that the economy is not growing at several percentage points as we are being told is the result of the Bidenomics. It is also my opinion that the Fed will pivot at the most opportune time to help the Democrats win the White House this year, and not after the elections. The Fed, being just as politically motivated as the IRS, simply can’t afford to stay neutral as Jerome Powell is trying to make us believe in his recent statements to the public. Instead, every tax rate, every interest rate, and every employment rate adjustment will be made to serve the current political powers currently in charge of this nation. The self-serving nature of the Party in power is what will determine which way the economic winds will be blowing up until the end of this term and well before November – all with fake results being presented as the norm.

01/30/2024

THE RATE-CUTTING CAVALRY IS HERE

~ by Ilya Zamarin

As US manufacturing sector hasn’t improved in more than a year while the US household employment has actually cratered just this past December, the domestic economy continues to get inundated by cheap imports that violate all sorts of labor and quality standards besides continuing damaging local businesses, small and large. While the economy in the United States is slowing down with major indexes clearly showing this fact, the previous rise in costs or inflation is finally on the decline as well. As lower inflation is good news, this time around it is a sign of the total economic mismanagement by the current administration rather than the genius of its virtue.

Let’s get back to the original source of the inflationary disaster this country and much of the world had to endure over the past three plus years. The fact that the Biden Administration has meddled with the US energy sector on Day 1 of it taking control of the White House is the reason for the inflation rising faster than ever and higher than at any point in the past three decades. The cost of goods, services, housing, and energy has skyrocketed to the breaking point of the small business and the US consumer living mostly paycheck to paycheck, in the process.

The housing market, once the ultimate American Dream, is now a pie in the sky for some and a pipe dream for others as mortgage rates are still very high in comparison to where they were in the past. The real estate market, therefore, is stagnant and is illiquid, at least for the moment, as housing demand is not as robust as once used to be in not so-distant past. None of this is a good reflection on the current administration, as you may notice. Housing affordability is one of the most important factors within any economy and especially the one in America. Keeping housing costs too high in the election year is a doomsday scenario for the incumbent party. But attempting to fix this problem within nine months of the general elections is, perhaps, a bit too late regardless.

As the left-leaning politicians are noticing their popularity is slipping away from them at an alarming rate, their efforts to repair the damage are now front and center and are becoming the major theme of their campaigns. It is no surprise, therefore, to see Democrat senators such as Elizabeth Warren sounding the alarm on the enormous cost and the burden the high interest rates represent in an environment where inflation is slowing down along with the main economic growth that is starting to show weakness as well. As these political hacks are panicking that their thrones will be taken over by the other party in just a few short months, they are starting to sound the alarm on the effects of the high rates, high borrowing costs to the Federal Reserve that is solely in control and in charge of the Federal Overnight Discount Rate changes that set the tone for adjustable-rate mortgages and short-term borrowing costs.

The startling contrast between their actions over the past year and the year 2024 is that this current administration and most of the senate couldn’t care less what the rates were like and how the real estate and the housing sector behaved up until this very moment since now it is their own arse is on the line. “The Fed’s decision to raise interest rates rapidly, and keep them high, has resulted in higher costs for home purchasers, higher rents, and reductions in new home and apartment building — and the job growth that comes with these investments,” she said.

Interestingly enough, it is the conservative politicians, economists, and much of the Wall Street that was vehemently against rapid and aggressive interest rate increases, in the first place. I do recall sounding the alarm on this issue two years ago when the whole debacle with the inflationary pressures and the increase in interest rates as a countermeasure has started. Unfortunately for us, there was no senate cavalry coming to the real estate and business owners’ rescue two years ago. Unfortunately for incumbents, their feckless attempts to fix the self-inflicted high interest rate problem come a little too late for their own political survival. Many changes will be coming this November. The Prime Rate will be lower, I have no doubt. The political echelons currently keeping US citizens hostage to their disastrous policies will most likely not survive the November elections in its present form however.

01/29/2024

THE DEADLY CYCLE OF THE OIL TRADE

~ by Ilya Zamarin

I know most of you do not closely watch or monitor the energy cost fluctuations on the world stage. However, the cost of oil, the wholesale per barrel price to be exact, is perhaps the most important factor in the global stability and regional turmoil that happens oh-so often, especially in the Middle East. There is a simple parabola that works with an exact precision and an extremely high predictability -- the higher the cost, the higher the probability of an armed conflict to occur somewhere.

In the past several months, we’ve witnessed a significant decline in the energy prices. Oil, in particular, is the commodity that dictates a substantial improvement or deterioration in the anti-inflationary controls used by the governments in order to contain the wholesale and retail costs. The higher the price, the higher is the price for most of the goods around the world will eventually be. The decline in the cost of energy is also a death blow to some of the most despotic, tyrannical, dictatorial, and frankly suicidal regimes keeping their own citizens hostage to their delusional dogmas.

The weakness of the leadership of the politically and economically strongest nations ultimately creates fertile conditions for the terrorist attacks, sabotage, and detrimental activities by the most notoriously bad actors on the global stage such as Russia, China, Iran, Syria, Venezuela, and North Korea as an example. Given a chance to have the oil prices go higher, these are the countries that will inevitably and invariably use any excess funds from the sale of their newly-produced oil supplies to subvert or to undermine the rule of the land and the order of things on the ground, so to say.

The most recent oil energy cost cycle is not the exclusion. In the past several months we’ve witnessed the Light Sweet Crude Oil plummet down from above $100 per barrel to below $70 each. Unfortunately, as it happens more often than not, the result of the prolonged oil price detraction is creating the sort of conditions the most dangerous regimes are looking to exploit. See, the countries that typically can only survive on one or a few select commodities that their economies can produce in volume can only do so if the prices of these typically rough, unrefined supplies go higher, not lower. The higher the price, the higher are their revenues that they surely do not use to advance their economies or to better the livelihoods of their citizens. Instead, these are the bad actors that use their excess oil, gas, and a few other natural resource revenues to bolster their terrorist activities. Hence, it is in their interests to have prices head higher as that allows them to freely support their militant adventures they sponsor all over the world.

He who controls the oil calls all the shots. He who controls the prices has controls over other nations. He who controls the supplies demands the tribute from other countries. Effectively, ending the high-cost energy policies is what will allow the world to stabilize and to improve its use of the alternative energy sources. Unfortunately, it is not in the interests of the globalists to see these costs decline any further as they benefit from the war activities allowing them to profit from their arms sales to others. That is the sole reason why we see such a sinister and prolonged manipulation of the oil prices. Drill Baby Drill seems to be the best solution to the global stability. But then again, this is my opinion only. The facts are a lot more complex than and are not necessarily only tied to the energy production and price machinations.

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