Speaking of Major Cities… Can You Afford to Live in One?

K and I are in LA this week, visiting four of our five grandkids. LA is a sprawling collection of little cities and towns, some of which are very nice, and most of which are ordinary and even depressing. But it is bordered by the Pacific Ocean on one side, mountains and foothills on another, and desert on the east. It also has fantastic wealth. And, of course, it has Hollywood.

One thing LA doesn’t have, however, is affordable housing. If you are in the top 1% of income earners, you can live well there. If you are in the top 10%, you can live comfortably. If you are in the bottom 90%, it’s going to be a struggle.

For example, a very modest, two-bedroom house in a modest neighborhood anywhere in the city proper will cost you at least $1.5 million. Which is why so many people, including Number Two Son, are relegated to renting. But rents have been steadily rising since my boys came here nearly 20 years ago. A recent survey by SmartAssets.com ranked LA as the third most expensive city in the US, according to rental rates.

Here are the most expensive US cities, from a cost-of-rent perspective.

Market Update: Young Investors Are Fleeing the Trading Platforms

2020 and 2021 were big years for get-rich-quick strategies. Stimulus checks, meme stocks, crypto and NFT mania, and a bullish market in stocks brought in millions of new players. And many of these traders did well. According to the WSJ, 2.5 million became millionaires.

This year is a different story. Inflation is high. We are two-quarters into a recession. The stock market is floundering. And the Johnny-Come-Laters are running for the exits.

Cryptos have crashed and Robinhood, the app where most of the meme stock trading took place, has seen declining activity since the middle of the summer.

Alas! The Trillionaires Are Now Mere Billionaires!

Three of the biggest digital companies in the world – Meta, Alphabet, and Microsoft – lost value after they reported disappointing earnings last week. The worst hit was Meta (formerly Facebook), which is now worth a paltry $270 billion, compared to its one-time valuation of $1.1 trillion.

Meta employees are worried. According to a source that spoke to the New York Post, Zuck told his employees, “You have three months to prove your worth, put in 200% effort, or you can resign now if you don’t like it.”

But as pointed out by Joel Bowman of Bonner Private Research, you’ve got to feel especially sorry for Zuck himself, who saw $100 billion of his personal net worth disappear (from $142 billion to a “mere” $38 billion).