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The Risks That Come With Illiquid Assets Never Appears To Be A Problem When Money Is Flooding In

It’s Friday desk clearing time for this blogger. “In Seattle and King County, home prices in May were down substantially from a year ago. The price of the median home in Seattle dropped 5.4 %, to $784,925, compared to May 2018, according to the Northwest Multiple Listing Service. The year-over-year slumps were even sharper in some pricier neighborhoods. In Capitol Hill, the median price fell 6.2%, to $984,000. In Ballard, they were off 7.8%, percent, to $785,000, and in Bellevue, they were down 12.4 percent, to $902,000.”

“Patti Green-Kent, a broker in Pullman, said the average price of homes sold this year in Pullman is $276,000, which is far below the $406,000 mean price of the 64 homes currently listed. Green-Kent said several upper-end houses for sale now are essentially the only homes with declining prices. ‘It’s not because the value isn’t there,’ she said. ‘It’s just that there’s not as many upper-end buyers.'”

“By the end of May, Greater Las Vegas Association of REALTORS® reported 7,855 single-family homes listed for sale without any sort of offer. That’s up 90.7% from one year ago. For condos and townhomes, the 1,876 properties listed without offers in May represented a 134.8% jump from one year ago.”

“While there are few solid numbers to prove how many of the sky-high apartments are inhabited by living New Yorkers and how many are owned by tax-happy LLCs, we looked at voter registration numbers to give us a clue. At 432 Park Avenue, where a penthouse sold for $75 million, there are just 17 registered voters residing in nine apartments, or seven percent of the building’s 125 units. In One57, a Billionaire’s Row skyscraper with 94 condos, there were 14 voters in 10 apartments, which works out to 11 percent.”

“Los Angeles prices for luxury real estate have generally softened in recent months. ‘There will be about five years of new luxury inventory hitting the market in affluent areas such as Bel-Air, Beverly Hills and Brentwood the next 18 months,’ said Eli Karon, a broker associate at Douglas Elliman, who noted that every third house in certain pockets of these neighborhoods seems to be under construction.”

“With this oversupply, buyers can get picky, take their time to find the home they truly desire and then negotiate hard, Mr. Karon said. For instance, he noted, a home in the tony Bird Streets sold in April for $15.75 million from a list price of $22.995 million, which was first listed just under $26 million. That’s a 40% discount from the original list price, with 255 days on market. ‘There’s just not the demand there to move these properties,’ Mr. Karon said, ‘and that trend will continue.'”

“Southern California homeowners increased the number of homes for sale in a year by 5,672 — or 18% — as selling times increased 12 days. As of May 30, the report found 36,335 homes, an 18% increase over 12 months, listed in the four counties (Orange, Los Angeles, San Bernardino and Riverside).”

“Amidst Alberta’s recession and the resulting depressed housing market, a couple in Calgary has resorted to a creative way to ‘sell’ their upscale home: a raffle. The couple say they are thinking out of the box as they are struggling with a mountain of debt, with no possible sale at cost recovery levels and poor prospects for waiting out the market. The home cost $2.9 million to construct, but the assessed value of their property by the City of Calgary had plummeted to $1.6 million.”

“Global house prices have cooled over the past 18 months, with no indication of an alarming ‘bubble’, according to HSBC. Two countries have seen a sharp correction in house prices in the period. One is Sweden, whose house prices fell by 10 per cent in early 2018. ‘Aside from a collapse in construction, we have not seen the weakness spread to the rest of the economy,’ HSBC said.”

“The second country is Australia, which recorded a 7 per cent decline in house prices in the fourth quarter of last year. Turkey is also seeing house prices fall, with a circa 14 per cent year-on-year drop in the last three months of 2018. Meanwhile, in China, house prices are down in the largest cities.”

“A brother of President Uhuru Kenyatta’s lawyer Desterio Oyatsi has joined the list of distressed borrowers being hounded by auctioneers. Pancras Oyatsi’s Sh135 million home in the upmarket Karen neighbourhood will go under the hammer this week after he failed to pay off a loan. He is one among many borrowers caught up in a battle with lenders. Glen Makindu’s business ventures since 2014 have been an unmitigated disaster, punctuated by three auctions of his property and closure of his construction firm that employed 22.”

“‘I have lost hope and my integrity is in tatters because all my property has been attached,’ Makindu said, capturing the despair that has cloaked borrowers who are engaged in business. ‘There is simply no money in the market which is why so many borrowers are in distress. Everyone is broke,’ said Garam Auctioneers Managing Director Joseph Gikonyo.”

“Despite the growing appeal of Cambodia’s property sector with international investors, there are concerns of a supply glut, especially in the mid to high-end segment. CBRE Cambodia warned of ‘oversaturation in the high-end segment.’ The new supply of high-end condos is estimated to spike by 243 per cent this year, followed by the affordable and mid-range sectors at 100 per cent and 78 per cent, respectively. But the forecast of a glut has not prevented mainland developer Guangzhou R&F from launching two more high-rise developments.”

“The Singapore government will be reducing the supply of private residential units later this year amid falling demand since cooling measures were introduced. The ministry said there are around 44,000 private housing units in the pipeline. This comprises around 39,000 unsold units from GLS and en-bloc sale sites with planning approval, and an additional 5,000 units from sites that are pending planning approval. Another 24,000 existing private housing units remain vacant.”

“Emerging oversupply of units in Sydney pushing rents down in the nation’s biggest city. The total number of vacancies Australia-wide is now at 77,664 properties for rent, a rise of just under 10,000 dwellings over the past 12 months.”

“The U.K.’s most famous fund manager has suspended trading in his flagship fund after a string of poor performance and investor withdrawals. At its peak, the Woodford Equity Income fund managed £10.2 billion ($12.9 billion) of assets, but according to Morningstar, that has shrunk to just £3.7 billion as of the end of May. Ryan Hughes, Head of Active Portfolios at AJ Bell, said that with an element of the fund in illiquid investments, the fund was forced to sell its more liquid holdings to fund redemptions, which in turn can ‘exacerbate the problem.'”

“‘Events such as this are rare but it is a reminder to all of the risks that come with investing in illiquid assets while offering daily liquidity to investors. This never appears to be a problem when money is flooding in but when sentiment turns it can come back to bite investors badly as has happened here,’ Hughes said.”

This Post Has 141 Comments
  1. ‘In Seattle and King County, home prices in May were down substantially from a year ago. The price of the median home in Seattle dropped 5.4 %, to $784,925, compared to May 2018, according to the Northwest Multiple Listing Service. The year-over-year slumps were even sharper in some pricier neighborhoods. In Capitol Hill, the median price fell 6.2%, to $984,000. In Ballard, they were off 7.8%, percent, to $785,000, and in Bellevue, they were down 12.4 percent, to $902,000’

    But Redfin said the bottom was in a couple of months ago? Eat yer crowz Redfin!

  2. ‘But the forecast of a glut has not prevented mainland developer Guangzhou R&F from launching two more high-rise developments’

    This is just one more example of how QE creates more deflation and wealth destruction.

    ‘he noted, a home in the tony Bird Streets sold in April for $15.75 million from a list price of $22.995 million, which was first listed just under $26 million. That’s a 40% discount from the original list price, with 255 days on market. ‘There’s just not the demand there to move these properties’

    More Yellen bucks going to money heaven.

  3. ‘the average price of homes sold this year in Pullman is $276,000, which is far below the $406,000 mean price of the 64 homes currently listed. Green-Kent said several upper-end houses for sale now are essentially the only homes with declining prices’

    Eeee-bola Pullman!

    ‘It’s not because the value isn’t there…It’s just that there’s not as many upper-end buyers’

    1. Title: “Palouse housing is buyer’s, seller’s market”

      NOW is the best time to buy or sell people!!! Hurry, my Benz isn’t gonna pay for itself

      1. buy, sell, its ALWAYS the best time long as theirs a commission to be made! pretty soon we will have 0% interest rates which will send values to the moon and beyond!

    2. Pullman, WA is a college town (Washington State). Maybe this is also a sign of Peak College?

  4. ‘Southern California homeowners increased the number of homes for sale in a year by 5,672 — or 18%’

    Where are these thousands of shacks coming from? And what the REIC won’t mention is these YOY percentages are on top of big percentage increases last year. Same in Seattle.

  5. “…with no possible sale at cost recovery levels and poor prospects for waiting out the market. The home cost $2.9 million to construct, but the assessed value of their property by the City of Calgary had plummeted to $1.6 million.”

    “…with no indication of an alarming ‘bubble’, according to HSBC.”

    LOL

    1. ‘One is Sweden, whose house prices fell by 10 per cent in early 2018. ‘Aside from a collapse in construction, we have not seen the weakness spread to the rest of the economy’

      Aside from that collapse…

      They say prices fell in two countries and then name several. How can ya miss Kenya?

      ‘I have lost hope and my integrity is in tatters because all my property has been attached…There is simply no money in the market which is why so many borrowers are in distress. Everyone is broke’

  6. The Car Industry Is Under Seige
    By Jack Ewing
    June 6, 2019
    The New York Times

    “The internal combustion engine is under attack from electric challengers. Car ownership is becoming optional in the age of Uber. Regulators around the world are fining companies that don’t do enough to cut carbon dioxide emissions, even as buyers demand gas-guzzling S.U.V.s. Global auto sales are slipping for the first time in a decade, disrupted by President Trump’s escalating trade war.”

    “The major auto companies will spend well over $400 billion during the next five years developing electric cars equipped with technology that automates much of the task of driving, according to AlixPartners, a consulting firm. They must retool factories, retrain workers, reorganize their supplier networks and rethink the whole idea of car ownership.”

      1. All of this hoopla is promoted by one Jim Appleton, president of the New Jersey Coalition of Automotive Retailers. Dealerships really hate Tesla because Tesla doesn’t follow the “stealership” model.

        By the way, did you see how all the major automakers are now asking DJT to reverse the easing of fuel economy standards?

        1. reverse the easing of fuel economy standards

          Trump administration says no new talks with California on car rules

          “The industry, she said, is worried about what will happen if California wins that fight in court and the companies have to meet different sets of standards.”

          “The letters expressed concern that an extended legal fight could lead to long-term instability that would be “untenable” for the car business.”

          1. Automakers Tell Trump His Pollution Rules Could Mean ‘Untenable’ Instability and Lower Profits
            The New York Times
            Coral Davenport
            June 6, 2019

            “WASHINGTON — The world’s largest automakers warned President Trump on Thursday that one of his most sweeping deregulatory efforts — his plan to weaken tailpipe pollution standards — threatens to cut their profits and produce “untenable” instability in a crucial manufacturing sector.”

            “In a letter signed by 17 companies including Ford, General Motors, Toyota and Volvo, the automakers asked Mr. Trump to go back to the negotiating table on the planned rollback of one of President Barack Obama’s signature policies to fight climate change.”

    1. Car ownership is hardly “optional” in the Age of Uber.

      Imagine getting to work in the Salt Lake Valley by Uber… My spouse took it to work once and round trip was $45. Working 5 days a week four weeks a month that is over $900 a month. You can easily buy a brand new premium vehicle for less than that and not have the increased security risk of getting into random vehicles with strangers…

      Makes sense NYT is shilling for more corporate hand-outs to help make EVs economically feasible.

      1. Not to mention, both Uber and Lyft are hemorrhaging money. The only solution is for them to dramatically raise the cost of getting a ride.

          1. Seems like eventually they become the taxi companies they replaced. Except with a nationwide app and no company cars and no medallions. All profits flowing to the very top and a bit of additional convenience for the users. But no real cost savings for the users.

          2. All profits flowing to the very top and a bit of additional convenience for the users. But no real cost savings for the users.

            I wonder how lucrative Uber Eats will be and package delivery will be. We have lots of Uber Eats delivery drivers show up as well as Door Dash, Grub Hub, and Postmates.

          3. I wonder how lucrative Uber Eats will be and package delivery will be.

            How many people are willing and able to pay that much of a premium to avoid leaving home? I question that the numbers will work once the stock stops appreciating.

          4. All profits flowing to the very top and a bit of additional convenience for the users. But no real cost savings for the users.

            That’s the ultimate design intent. It’s a dog eat dog world.

            I wonder how lucrative Uber Eats will be and package delivery will be. We have lots of Uber Eats delivery drivers show up as well as Door Dash, Grub Hub, and Postmates.

            That’s a weird one. In some situations it’s technically cheaper, or at least a wash, for a person to order delivery. In which case it makes sense, not counting any diminished enjoyment from the food due to packaging and cooling compared to eating it in the serving restaurant.

            As for things like Amazon Prime… they are just too good a time savings and too wide a selection to compete. I used to shop at Fry’s Electronics ALL the time, ever since one arrived on Northwest HWY in Dallas, TX. Referred to it as Nerdstroms. But Amazom, Newegg Premier, and the like save me too much time and distance – aka, Auto fuel and wear and tear on my car. There’s a Fry’s over in Renton, but the round trip for me adds an hour travel time (at least, depends on 405 traffic), and the selection can’t compare to online even if the price matches.

            I know I went a bit off topic there, but Amazon is first and foremost a logistics company, and they have made their own fleets of not just delivery drivers, but warehouse workers (Camperforce anyone?), and cargo trucks and planes. Many of those workers have same sorts of insecurities as working for uber/lyft/door dash/etc

          5. Because I run so many Airbnbs, I see a lot of different people. It is clear to me that a good share of the Uber/Lyft drivers have questionable citizenship status (read: illegal immigrants). I see quite a few Guatemalans and lately Brazilians delivering. Even if they are making $8-9/hr after wear and tear, it still is more than they make in their home country and then the send the rest back in remittances.

          6. How many people are willing and able to pay that much of a premium to avoid leaving home?

            I think quite a few if it means that they can afford the treat of having good food while forgoing the vehicle. How long has the pizza delivery driver been around? I don’t think food delivery is going anywhere.

            I always hear people say, “Well at least it was cheaper than renting.” For many people the amount that they could save if they designed their life around not having a car would easily pay for the occasional food delivery service splurge. Owning your own car and paying the related expenses so you can go to Applebees or Olive Garden is much more expensive than it appears.

          7. OneAgainstMany

            I didn’t realize you were an AirBnB-Lord. Are you seeing any growing resistance or regulatory threat to the ones you personally are managing?

            For many people the amount that they could save if they designed their life around not having a car would easily pay for the occasional food delivery service splurge.

            We all sort of went car crazy after WW2, further designing our society around it and we’re paying for it now more than ever (worldwide really). There is a lot of optimization we could make transportation-wise if we’re willing to. Having the will to is the big question, IMHO. For example, I think there’s room to move the norm in many areas from multiple cars per family to something like a single high-efficiency car, supplemented with something like an extended EV golf cart for short range tasks. Except that right now every other testosterone -laden lifted pickup driver would attempt to run them off the road. It would take a shift in energy prices, and a national initiative to change laws and redo some infrastructure, along with a chance in the social status that comes with it all.

            But screw it. Every rural high-school kid should have his own rolling coal…

          8. I didn’t realize you were an AirBnB-Lord. Are you seeing any growing resistance or regulatory threat to the ones you personally are managing?

            My career has taken me through various industries. I started out as a CS major but switched to information systems in college and worked in a large data center managing AIX/Unix/Solaris/Linux boxes and Cisco 5000/6000 switches. I eventually graduated with a dreaded “humanities” degree with a secondary education endorsement. I taught some undergrad classes at the university I attended and fully intended to teach high school, but I got sucked away into corporate training for a more lucrative job. I climbed the ranks of that company and inherited a global customer service team, mostly because I was the only person who could understand the call center software and program the phone ACD. Got laid off around the 2008-2009 and didn’t want to jump back into the narrow skill set I had created for myself so I went back to school and became an RN. I practiced for a couple of years (still licensed but haven’t done a shift for 10 months now) but got a job offer to help open a large luxury apartment complex in SLC. I convinced the ownership group to do a handful of Airbnbs as a marketing angle and for corporate travelers having seen the real need that travel RNs have for good housing. So I have about 25 of these I manage on behalf of the owner.

            I can’t see any regulatory threat coming in Salt Lake City because the population views regulation as a 4-letter word. It’s the reddest state of any. But if/when regulation comes, it will be first and foremost in the suburbs where you have Airbnb-lords doing the entire house thing. The accountant I work with just bought a nice house and is now Airbnb-ing out is condo fully-furnished for more than he could get on a lease. Everybody’s doing it. People might gripe about it (and there are real problems), but it’s a little bit like online shopping: it’s not going away anytime soon.

          9. OneAgainstMany,

            Ahh. that ties together the other things I remember you saying. And I agree that it’ll be the suburbs / SFH neighborhoods that see regulation first. Is the complex you are managing having to follow some of the local hotel regulations?

          10. Is the complex you are managing having to follow some of the local hotel regulations?

            Yes. Any stay less than 30 days is taxed the full occupancy tax (state and city). It is about a 13% charge, not including Airbnb’s variable fee. Airbnb collects and remits this automatically. Many local jurisdictions have cut deals with Airbnb because they are going to make sure they get their slice of the virtual hotel money. Airbnb has done this voluntarily so they don’t get sued by local governments. For now the greater Salt Lake market is in a truce.

            You’d be surprised at how many guests I have who stay for 1-3 months. Lots of different reasons for this: guys going through a divorce (wife has the house), people relocating for a new job, small tech gigs at “Silicon Slopes”, etc. I even have birther toursists lately from many different countries!

          11. But screw it. Every rural high-school kid should have his own rolling coal…

            IMO this is why Tesla is important. They were the first to make desirable alternative transportation for people who need it rather than just making fun of them for wanting something that ANYBODY in their situation would want. So despite all of Tesla’s negatives I will always respect them for that.

          12. You’d be surprised at how many guests I have who stay for 1-3 months.

            That’s one thing that makes sense. Almost all apartment complexes are “this is the lease duration, take it or GTFO”

            I even have birther toursists lately from many different countries!

            As in overstay their Visa so the baby born can have American citizenship? I really wish we would plug that loophole retroactively.

          13. I really wish we would plug that loophole

            I wouldn’t be surprised if this and educating foreign nationals are addressed in Trump’s second term. If the Democrats want to defeat him in 2020, they’d better start coming up with solutions.

          14. I really wish we would plug that loophole retroactively.

            Yeah, seems like a weird thing to be “proud” of here…

          15. As in overstay their Visa so the baby born can have American citizenship?

            I don’t even know if they are Visa overstayers. I think they just strategically plan their visit so their baby will be born here. Last three guests I have had do this have been Russian, Italian, and Brazilian.

        1. If the Democrats want…

          I suspect the Democrats/Republicans are still used to telling us all what they want us to want.

          1. I suspect the Democrats/Republicans are still used to telling us all what they want us to want.

            Agreed. It’s difficult playing left and right (D v. R) when it’s really up and down (globalist v. anti-globalist).

            Bartender, check! It’s been a LONG weekend!!

      2. Imagine getting to work in the Salt Lake Valley by Uber…

        This is true if you live in Saratoga Springs, Eagle Mountain, Herriman, etc. But if you design your life in such a way that doesn’t revolve around moving from one box to another stuck in traffic, then it is possible. A handful of people do it where I work (apartment complex on major Trax line). Mostly they are medical working at the U or Imed or they work at Goldman Sach’s downtown.

        1. Also, the apartment complex I work for everyone gets a free, yes free, eco pass. So that is unlimited use of Frontrunner, Trax, and bus system. A guy on the 6th floor zips down the hall on his Segway Ninebot scooter to solve the “last mile” problem.

          But you are right in a sense that SLC is not quite urbanized enough like Boston or Montreal to where it truly is optional to have a vehicle. But with a little bit of planning, it is possible. And considering that the average vehicle expense per year fully-loaded is $9k, there is a big benefit to figuring out how to cut out the vehicle if you can swing it. It’s how I bought my model 3 btw.

          1. how to cut out the vehicle if you can swing it. It’s how I bought my model 3

            That sounds kind of silly. How I bought my energy Hog by not needing a vehicle. Priceless.

          2. The point is that I avoided having a vehicle for several years to save up for the vehicle I wanted. I suppose I could have continued to only have one vehicle between wife and I, but that truly is not feasible in our city. It’s feasible in some areas, not in others.

        2. You can live in downtown, near TRAX, and still have 3+ changes to get to a job in West Valley City.

          The “savings” may be there, but the opportunity costs need to be calculated. Spending an extra 1+ hour a day in public transit does not increase productivity or quality of life.

      3. and gas and insurance and depreciation. I think Uber for the moment is cheaper than owning. Won’t be true forever as eventually Uber drivers realize they are screwed.

      4. It wouldn’t make sense to use Uber/Lyft for your daily commute. What would make sense is to use mass transit for most of your commuting needs (if possible/feasible) and then use Uber/Lyft to fill in the gaps.

    2. Car ownership is becoming optional in the age of Uber.

      Someone owns the car. Uber doesn’t.

      Globalist propaganda and a stock pump in one sentence.

    3. The Hyundai IONIQ is kinda cool. $2500 / $239 a mo lease. If you can charge at work its a no brainer.

      1. LOL, whatever they’re advertising for a lease, you might as well double it. Because that’s probably what it will cost you to lease an actual vehicle.

        1. If the fed can maintain access to easy credit for the used car market then the residual values for leased vehicles will remain high making the numbers work.

    1. That article jives with what I was saying on the previous post. The low jobs numbers can possibly be attributed to poor mobility.

      From the article:

      “Poor immigrants will gladly pool their wages to crowd into expensive apartments near their U.S. jobs, such as in South Arlington near Washington, DC. But that common sense practice also spikes rental prices and so blocks the arrival of young Americans who do not want to lower their living standards when they move into the bigger cities.”

      1. But that common sense practice also spikes rental prices and so blocks the arrival of young Americans who do not want to lower their living standards when they move into the bigger cities.

        True. It’s just another stage in the cramdown. Blue collar America has always wanted to limit immigration to avoid the cramdown. The 1% want it over with and for those who formerly thought of themselves as middle class to accept their lot as the new serfs. The big speed bump is the millions of guns out there…the modern guillotines just sitting there sharp and ready…and the standoff continues…if they can get rid of the guns the cramdown will commence in earnest.

    2. All by design. The globalist pigs are getting exactly what they wanted, and the dumbed-down Americans, with their fat faces shoved into their iPhones as they obsess over Twitter, IG, etc., cannot be bothered to understand what’s going on around them as their country circles the drain.

    1. “Cangoroo clarified it is a real company after many people speculated online that its website was created as a joke.”

    2. “Cangoroo, a Swedish-based pogo stick rental company, has become the latest player in the micro-mobility boom.”

      That “micro-mobility” is a term and that we have a “micro-mobility boom” are beyond pathetic.

        1. Yes, yes it would. These scooter rental companies make no sense. The average life span on these things are like 3-4 months. They just aren’t built strong enough.

          I am high on eScooters. But they should be owned, not rented. They make the transit system much more feasible because they solve the last mile problem pretty well and most are easy to carry.

          1. I am high on eScooters

            Seriously? You don’t drive the last mile into work in your car?

          2. There are times to drive and times to take transit. This afternoon I came out of my apartment and ran through five different cities. Got on the train and rode back to my place. I am going to get an electric scooter to throw in the back of my model 3 at some point. I’m debating between 3 models right now (Turbowheel Lightning, Boosted Rev, and Mercane Widewheel).

          3. “I am high on eScooters.”

            You’re high on a lot more than that. You seem to buy into every one of these ill-advised, money-sucking fantasies hook, line and sinker.

    3. ‘The one thing I worry about with Cangoroo is it’s so lacking in seriousness I think it further confuses the conversation around a really important and transformative set of technologies that answer the needs of the 21st century’

  7. Uber Shares Tumble After COO, CMO Depart

    “Bloomberg reports that Barney Harford, the chief operating officer, had been largely shielded from the public spotlight after he was the subject of an internal review over racially insensitive remarks last year.”

    “Rebecca Messina, the chief marketing officer, had only been at the firm for nine months.”

    “Bloomberg reports that two longtime Uber executives are being promoted to fill the void.”

    A fish rots from the head down.

    1. “Bloomberg reports that two longtime Uber executives are being promoted to fill the void.”

      Hmmm, so that what it takes to get companies to promote from within instead of hiring an ivy league buddy. Guess I better remember that if somebody ever offers to put me in charge.

  8. In Seattle and King County, home prices in May were down substantially from a year ago. The price of the median home in Seattle dropped 5.4 %, to $784,925, compared to May 2018, according to the Northwest Multiple Listing Service.

    There’s that gosh-darn mix issue again.

  9. ‘It’s not because the value isn’t there,’ she said. ‘It’s just that there’s not as many upper-end buyers.’”

    Au contraire, Ms. Green-Kent. Closed deals are what sets (or “shifts”) the current market value. “Upper-end buyers” are opting out of overpaying for overpriced shacks. Poof goes the Yellen Bux valuations of yore.

    BTW, pick a friggin’ name, you pretentious hyphenated-name harpy.

  10. Is my impression that 10-year Treasury yields were never in the history of mankind before 2009 as low as their current levels?

        1. To me it’s suggesting the Fed is caught in a low rates trap of its own design.

    1. Seen his videos before, did not know he was a realtor… sure his colleagues most looooove him! Going to be hard now listing to any of his extreme doomsday views knowing he is a realtor

      1. his extreme doomsday views knowing he is a realtor

        That was when I stopped regularly checking his channel (when I found out he was a realtor.) Liked his cat.

        I think I’m burned out on gloom and doom. I’ve been hearing it since I was young; seems to me that those – some in my family – are so much better off not knowing about [[stuff]]. I’m still capable of being shocked though, which is good.

          1. (drumminj, hint, hint)

            I’ve thought about this quite a bit. Sadly, I don’t think there’s a graceful way of doing this outside of blog software. I could add something to add ‘amendments’ to existing posts that the extension could apply and it would look like an edit to folks using the JTE, but to everyone else the original text would still be there.

        1. Look up. You can insulate yourself from gloom and doom. Enjoy life and don’t go into debt to do it. It’s not that difficult.

          1. Absolutely. I just had a bad couple of years. Took me a little while to get over it but I think I’m finally there. I know you know what that’s like 🤗

        2. “That was when I stopped regularly checking his channel (when I found out he was a realtor.) Liked his cat.“

          Did a little digging up on him. Last transaction was back in 2016. Not sure his story or why no more transactions but it seems like he exited RE. If that’s the case, I will give him back “some” of the credibility that I took away yesterday. He hits some key points that I can agree with but a majority of his views are a bit over the top IMO. Real exposure to real estate can be a great tool and perhaps he walked away with some good hindsight.

    2. Plan on watching, but his title makes no sense to me: “HYPERINFLATION IS COMING – HOUSING BUBBLE WILL BURST – TRUCK ORDERS COLLAPSE – TARIFFS”

      If hyperinflation is coming, then actually housing would be a decent investment. When hyperinflation hits, you have a flight to real assets.

    1. Gorgeous! I ran a 25-mile slog this afternoon along the Jordan River Parkway trail. It was breathtaking. Truly amazing views and saw plenty off amazing wildlife.

    2. Very pretty, and good for the soul.

      You just drive out there today, or out camping/rv?

  11. Glacier National Park Quietly Removes Its ‘Gone by 2020’ Signs

    1 day ago June 6, 2019

    Glaciers Appear to be Growing, not Melting in Recent Years

    By Roger I. Roots, J.D., Ph.D.,

    May 30, 2019. St. Mary, Montana. Officials at Glacier National Park (GNP) have begun quietly removing and altering signs and government literature which told visitors that the Park’s glaciers were all expected to disappear by either 2020 or 2030.

    The ‘gone by 2020’ claims were repeated in the New York Times, National Geographic, and other international news sources. But no mainstream news outlet has done any meaningful reporting regarding the apparent stabilization and recovery of the glaciers in GNP over the past decade. Even local Montana news sources such as The Missoulian, Billings Gazette and Bozeman Daily Chronicle have remained utterly silent regarding this story.

    https://wattsupwiththat.com/2019/06/06/glacier-national-park-quietly-removes-its-gone-by-2020-signs/

    1. And yet my third grader is being taught, “Since a lot of the ice is melted in the world, polar bears are not living as long as they used to. Without the ice, they can’t hunt for seals.”

      1. Polar bear populations have increased significantly over the last thirty years. You can’t throw a snowball up there without hitting one.

      2. It’s so much worse now. My daughter is 27. When she was in college she took a summer course, don’t remember the title but it was leftist feminist SWJ crap. (I was an ardent feminist in my “yout”.) I saw the change in her within two weeks and asked what’s the deal? I argued each point and told her to question what she was being taught. I was really worried.

        At the end of the course, she declared it was mostly crap and said, you know, they almost got me. I was so relieved.

      3. The fact checking quality on public school textbooks and curriculums leaves so, so very much room for improvement.

        That’s one of the few things I don’t mind about my ex. When my kids have been home-schooled (they’ve been in public as well) the quality of what they’ve been taught is good. No coincidence that 3 of their 4 grandparents taught High School many decades ago and adhere to the old education standards, and that rubbed off. Lots of hand me down textbooks from the 60’s and 70s for things like Algebra, Geometry, History, Biology, Literature, etc.

  12. Are gold and silver part of the everything bubble? I see various outlets/people suggesting them as an investment to hedge against impending deflation but I don’t see how their prices aren’t just as rigged as the stock market. Any guidance is greatly appreciated.

    1. Are gold and silver part of the everything bubble?

      Gold and silver (and platinum) are the mortal enemies of the Keynesian fraudsters at the central banks, and there is ample evidence of their systematic manipulation (suppression) by the central banks in collusion with the Usual Suspects, i.e. traders for DB, JPM, etc. To my mind, any prudent investor should have at least 5% of their portfolio in physical precious metals that they have direct possession of. When people start losing their trust and confidence in fiat currencies backed by nothing, the stampede into safe haven assets like precious metals is going to be epic, IMHO.

      1. I think it all depends on how centralized of the economy becomes. Are gold and silver safe haven assets in Pyongyang? Once the central planners have enough power, there are no safe haven assets. You own what they allow you to own and what you own is worth what they tell you it’s worth.

        1. It happened here, in ’33, when executive order 6102 outlawed the trading or private ownership of gold.

          1. After that, I’m guessing the almighty dollar was where you’d have wanted to be.

    2. hedge against impending deflation

      Deflation makes it difficult to repay debts. Real assets will be sold at a discount.

      Might be they said it was an Inflation hedge?

      1. Inflation, hyper-inflation, deflation. These are all concepts I’m still trying to grasp. I’ve come a long way from the NYC law firm summer associate in 1999 who asked if there was a bear statue.

        1. Knowing but not understanding the significance of the Wall Street Charging Bull statue.

        2. Try thinking of it this way:

          – Inflation means you need to spend more money this year to buy the same bundle (items and amounts) of goods and services you bought last year.
          – Deflation means you need to spend less money currently to buy the same bundle as last year’s.
          – Hyperinflation is where the fiat money in your pocket, paycheck, and savings amount is losing value very rapidly, making it increasingly difficult to maintain your standard of living based on your available income and savings. This is the point when anyone with liquid assets goes to gold or other forms of physical property which will maintain its value in the face of an unstable currency.

          1. One more thing: The rush into gold or real property may occur on the first whiff of high inflation, which ironically may eventually morph into a deflationary force. I’m thinking here about bubbles, where speculators grab real assets (e.g. residential and commercial property) in anticipation of a period of high inflation. A massive bubble may result from a large number of investors adopting the same strategy. I could go on, but I would need to drink my morning joe first…

          2. Try thinking of it this way

            Thanks! I get it at an academic level. It’s following commentary on the economy and markets where I feel like I’m peddling a tricycle on the autobahn.

          3. “It’s following commentary on the economy and markets where I feel like I’m peddling a tricycle on the autobahn.”

            Throw your questions out here as they come up. I’m into demystifying economics.

          4. Another thing to think of: Inflation or deflation of WHAT?

            In posts here I’ve specifically mentioned ‘Inflation of the Money Supply’ which is as it sounds, an increase in the amount of money out there, but it’s not the same as the most popular generic Inflation, which is increase in consumer prices.

            In this specific example above, I’m talking about QE and other central bank action where the money made out of thin air is available only to the banks and doesn’t make its way (for the most part) to the general population, and as a result you don’t see prices for regular consumer goods increasing the same way prices of equities and hard assets like RE that the banks and other with access to the inflated money are buying up. An insidious thing as it rearranges the ‘distribution of the pie’ so to speak without the losers being being made directly aware (like in the 70s).

          5. without the losers being being made directly aware

            The obfuscation of this contributes to confusion.

          6. In posts here I’ve specifically mentioned ‘Inflation of the Money Supply’ which is as it sounds, an increase in the amount of money out there, but it’s not the same as the most popular generic Inflation, which is increase in consumer prices.

            The best article I’ve read in the past year or so on inflation vs. deflation was from Barry Ritholz. His very appropriate conclusion was this:

            “We have deflation in the things we want, but inflation in the things we need.”

            https://www.bloomberg.com/opinion/articles/2018-06-04/most-of-us-really-are-not-fabulously-rich

    3. My hunch is that the prices, or at the swings in them, is as rigged as most other commodities.

      I’m really not familiar with them but I have seen a couple things.

      One was when a friend move out here and needed some cash ASAP, but hadn’t setup a new bank. He had a number of 1oz gold coins, and I took him to a shop where he was able to sell them for near the current day’s price.

      The other is that there seems to be a debate among some about having actual possession of the gold yourself vs. having it in some broker’s vault – a lot of accusations about there not being enough physical gold to match the ownership claims in the latter, much like naked shorts on stocks – no idea how real that is though.

      1. “vs. having it in some broker’s vault”

        If you are buying gold as a crisis hedge, then it seems imprudent to assume you’d be able to recover it from a broker at a point of extreme societal breakdown. What if the broker didn’t actually keep the gold in the vault, but assumed that he could obtain it on the spot market when he needed it? You’d be screwed.

    4. Gold and silver are good inflation hedges. In periods of deflation, when the dollar cost of goods and services is generally falling, precious metals will tend to fall as well. Of course given the Fed’s target of creating 2% annual inflation in perpetuity, dollar deflation is unpossible.

  13. Assets which appear highly liquid when money is flooding in can easily be left high and dry when it floods back out.

    1. Liquidity is like a taxi in the rain: it disappears when you need it the most.

      1. I saw the extreme version of that principle once at an airport in Vietnam. It was raining, and everyone who normally rode bicycles was taking a cab. So there were very few cabs available to pick up the sea of people standing in front of the airport looking for rides. It was a nightmare to be the one tall white American guy in that crowd!

      2. As to your point on liquidity, there is a converse principle, which is that the best investing opportunities lie in wait for those who have liquid assets available at points when liquidity has generally dried up, such as during a recession or a financial panic. We bought a couple of brand new cars along the way for cash, at points when we were the only customers in the dealership.

        1. We bought a couple of brand new cars along the way for cash, at points when we were the only customers in the dealership.

          I’m thinking of Buffet’s aphorism: Be greedy when others are fearful and fearful when others are greedy.

          Also, “keep your powder dry.”

          This is what happened to me in 2010 when we bought our condo. I was dumbfounded that so many of my friends were buying houses in the 2000s and I just couldn’t wrap my head around the prices they were paying. Nothing made sense and so I was an outspoken bear. I was like a lone voice in the wilderness. But then things changed when the GFC came in and we did end up buying a condo for about $125k that was selling for about $220k the year before. “When the facts change, I change my mind. What do you do sir?” (Keynes quote).

  14. Koch network opens its doors to Democrats as it expands political engagement

    ‘The move to open its doors to Democrats comes after recent disagreements with lawmakers and Trump on how they’ve handled the immigration status of Dreamers — immigrants brought into the country as children. The two sides have also disagreed on trade policy, with Trump remaining firm on tariffs that have been implemented on goods coming from China.’

    https://www.cnbc.com/2019/06/06/koch-network-open-to-democrats-as-expands-political-engagement.html

  15. This is when FSBO backfires. Guy is asking too much and banking he can double his “investment”… realturds will boycott his listing as that’s what they do around here on FSBO homes and any that represent the buyer will demand 3%

    “New pictures coming soon. Home will be ready to show by 6/21/19. Expect quick sale. Neighbors just sold in about 10 days. Cash offers highly preferred. Our home is FSBO, but we are offering a 2.5% buyer’s agent commission. “

    List: $1,350,000

    Zestimate® range
    $1.06M – $1.19M
    Last 30-day change
    +$65,865 (+6.2 %)
    One-year forecast
    $1,121,432 (-1.0 %)

    https://www.zillow.com/homedetails/104-Bordeaux-Ln-Scotts-Valley-CA-95066/16122174_zpid/

    1. I don’t see what FSBO has to do with it. You can make the same dumb mispricing error, leading to never selling, with realtor assistance.

  16. “I don’t see what FSBO has to do with it”

    I was eluding to his expectations of an “all cash, pay me what my neighbor sold his house for” along with (at least here) the fact that many realtors boycott FSBO unless they are willing to pay a premium. Not to mention the over pricing of his shack (looked at comps and he is way above).

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