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Financialization Ruins Even More

by Karl Denninger

It’s completely out-of-hand.

I’ve now seen $500/nt prices for places that are very nice, but nowhere near worth that sort of money. Think about that folks; a “long weekend” is now over $1,500 just for the lodging. Disney has pulled this crap with the insane escalation for decades, but it’s now showing up anywhere driveable in a day (~6-8 hours) from a significant-sized city that happens to be nice. In a couple of cases I know exactly what you’re getting for the money since I’ve been there myself. What sort of capitalization does this impute to these places and how does that keep escalating? Someone has to forevermore pay more, and what’s worse is that the property tax assessments get jacked too, which means the “ratchet” under the price keeps going up as does the rent. The implied cap rates on those joints are flat-out insane.

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