Sunday, May 28, 2017

Something Is Very Wrong In Connecticut

First it was this November post:
"One of America’s Richest Towns Could Be In For a Housing Market Meltdown"

Then we watched it in residential real estate listings, month after month, for homes in the $4 to $40 million range:
$11.5 Million Stone Georgian Mansion In Greenwich, CT
$6.75 Million Estate In Greenwich, CT
Billionaire Businessman Lists Historic Connecticut Estate For $31.5 Million
$16.5 Million Historic Georgian Mansion In Greenwich, CT
11,000 Square Foot Stone Mansion In Greenwich, CT
Lionshare Farm – A 95 Acre Equestrian Estate In Greenwich, CT
$25 Million Historic Waterfront Mansion In Greenwich, CT
50 Cent Re-Lists Connecticut Mega Estate For $5.995 Million 
There are dozens and dozens of these things that hit the market over the last six months.

On May 14 it was:
Big Old Connecticut Estate Going to Auction, No Reserve
Well this is interesting....

General Electric is moving their headquarters from Fairfield, CT to Boston, broke ground on the new place a couple weeks ago.

Yesterday we read:
...The state’s population is falling: Its net domestic out-migration was nearly 30,000 from 2015 to 2016. In 2016, it lost slightly more than 8,000 people, leaving its population at 3.6 million. Indeed, recent national moving company surveys underscore the trend, showing more people leaving Connecticut than moving in. In 2016, the state also saw a population decline for the third consecutive year, according to Census Bureau estimates.

One of the companies, United Van Lines, reported that of all their Connecticut customers, 60 percent were leaving compared to 40 percent who were moving there. Only three other states had higher rates of people moving out – New York, New Jersey and Illinois. One out of five of those leaving said they were retiring....
Later in the day ZeroHedge posted:
Connecticut Credit Risk Soars To Record High As Tax Receipts Tumble
Connecticut’s general-obligation bonds are riskier than ever as plummeting income-tax collections and a $2.3 billion budget deficit moved all three credit rating companies to downgrade its debt.
As Bloomberg details, tax receipts for the current fiscal year ending in June will be about $451 million short of estimates from January, prompting Governor Dannel Malloy to empty the state’s already small budget stabilization fund. To help close the gap, public employees agreed to accept a 3-year wage freeze and to contribute more for their pension and health-care benefits under a tentative deal that would save more than $1.5 billion over the next two years.

As we previously detailed, The state of Connecticut has been hit hard by the double whammy of a deteriorating local economy, coupled with a plunge in hedge fund profits - as well as hedge fund managers permanently relocating to Florida - leading to a collapse in tax revenues. According to the the latest Connecticut budget released last week, the state is reeling from the consequences of sliding tax revenue from the super-rich, i.e. the state's hedge fund managers. The latest figures showed that tax revenue from the state’s top 100 highest-paying taxpayers declined 45% from 2015 to 2016. The drop adds up to a $200 million revenue loss for Connecticut....MORE
Two quick thoughts:

1) I appreciate the arrows-for-the-directionally-challenged on ZeroHedge charts.

2) The only people who seem to have any money are the colleges and universities.
The GE campus, appraised at $70 million was sold to Sacred Heart University for $31.5 mil. and taken off the tax rolls due to the uni's tax status.
And the state is eyeing Yale's $25.6 billion tax-free endowment, introducing a bill to tax the unspent earnings of any endowment located in the state with assets over $10 billion.
There's only one institution that fits the bill, so to speak.

That last is illegal as hell but Hartford is already trying to craft another way to get at the moola moola held in New Haven.
The school is resisting fiercely, here's the Yale fight song: