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The Fundamental Focus Is To Collect Payments From The Borrower And To Remit To Investors

A report from Forbes. “In a recent survey, 39% of renters said they believed they would need to put down more than 20% to secure a mortgage. In reality, the median down payment on a mortgage in 2017 was just 5%. What accounts for this misunderstanding? For one, low down payments are a relatively new phenomenon. In 2006, just before the housing bubble burst, the median down payment was 20%.”

“With home prices climbing since 2012, lenders eventually caught on to the fact that high down payment requirements were making it difficult to attract new mortgage customers. So, around 2015 they began offering low down payment loans to borrowers with high credit and earning potential.”

“Borrowers with credit scores of 580 or above can put down as little as 3.5% on a Federal Housing Administration insured loan. The upside is that is typically easier to qualify for an FHA loan than a conventional loan with a private lender. Down payment assistance programs, which provide grants or loans, are more available than ever before. There now are more than 2,500 down payment assistance programs across the country.”

“‘My parents’ advice to me was ‘real estate is basically an elevator, all you have to do is get on,’ says Justine Boucher, a 31-year-old homeowner who realized she could buy a home after learning 20% was not a requirement.”

From the Nevada Appeal. “Two speakers with deep roots in the housing market are bullish on the Lahontan Valley. Bill Brewer, executive director of the Nevada Rural Housing Authority, and Aaron West, CEO of Nevada Builders Alliance, offered their latest overviews on the housing market.”

“Brewer gave background information on his agency’s role. He said rural is defined as any area under 150,000 residents. Brewer said the NRHA has assisted thousands of families who wanted to buy a house. In Churchill County, for example, he said the NRHA has helped 230 families and provided $36.7 million in mortgage assistance and $26 million in tax credit savings. ‘The entire state is rural except for Reno, Las Vegas, Henderson and North Las Vegas,’ he pointed out.”

“In 2016 at a CEDA breakfast meeting, the U.S. Department of Agriculture’s Rural Housing representatives said they were encouraging new residents to look at Fernley and Fallon as better areas for affordable housing, educational opportunities and quality of life.”

“Aided by the number of retirees moving to the Reno-Sparks area, West said the average sales price for a home is $420,000. Furthermore, he said buyers can’t find new homes for under $300,000. In fact, he said most new homes are selling for about $400,000.”

From DS News. “Jeff Smith, Head of Servicing at Wells Fargo, emphasized that customer service must remain a high priority in any environment. ‘Regardless of low delinquency rates or foreclosure volume, the fundamentals of helping customers sustain homeownership remains the highest priority,’ Smith said. ‘Providing exceptional service to a customer is key, whether it is a simple question from a customer who is current or assisting a customer who has a hardship explore options.'”

“DIMONT CEO Denis Brosnan told DS News that legacy systems, despite their faults, have remained in place for a reason. ‘The reason legacy systems exist or continue to exist, though, is because they work,’ Brosnan said. ‘The fundamental focus of a servicer is to collect payments from the borrower and to remit to investors and then to produce the interest statement at the end of the year, and those core systems are very good at that. They’re producing tremendous amounts of transactions with a high degree of reliability.'”

The Casper Star Tribune in Wyoming. “Gillette sits in the heart of Campbell County, home to a dozen coal mines. But the recent closures of the nation’s fourth- and sixth- highest producing coal mines, which are both located just outside of town, have placed the city’s economic fortunes in jeopardy.”

“Steven Laakso owns Signature Estate Group, a Gillette-based real estate company. Laakso predicted the recent layoffs could lead to a ‘buyers’ market,’ similar to what happened in 2016, when an influx of hundreds of houses suddenly went up for sale, he said. ‘There was an increase in supply and less demand,’ he said. ‘…When you try to sell your house, it’s less value and there’s more competition.'”

“Former Blackjewel worker Alisha Walker and her husband recently bought their dream house in the Red Hills neighborhood of Gillette with what Walker called ‘hefty mortgage payments.’ To keep up with both mortgage payments and monthly bills after the layoffs, Walker and her husband attempted without success to withdraw money from their retirement plan the day after the mines closed.”

“As of Thursday, the couple’s retirement plan was still frozen and her husband’s final paycheck was on hold at the bank, according to Walker. ‘Nobody knows where the rest of our money is,’ she said.”

The San Mateo Daily Journal in California. “Realtor Michael Verdone, who has sold property in San Mateo County for nearly 50 years, said he anticipates the market cooling will be short lived locally as well. While projecting a healthy market, Verdone noted there is some softening locally – particularly on the upper crust of the housing stock in communities such as Atherton, Hillsborough or other wealthy enclaves.”

“‘I’m seeing places on the market for a lot longer and I’m seeing price reductions on the higher end,’ he said. Verdone attributed the high-end market cooling to some sellers listing their properties at an unrealistic price which pushes away buyers who otherwise have a variety of alternative desirable properties available.”

This Post Has 133 Comments
  1. ‘Alisha Walker and her husband recently bought their dream house in the Red Hills neighborhood of Gillette with what Walker called ‘hefty mortgage payments.’ …‘Nobody knows where the rest of our money is’

    Aaaand it’s gone.

    1. Not sure I’d take the plunge on a pricey home when there had already been other recent mine closures in the area.

      It’s tough when you have a single industry supporting an entire community like this.

  2. DS News is a foreclosure industry website:

    ‘Regardless of low delinquency rates or foreclosure volume, the fundamentals of helping customers sustain homeownership remains the highest priority…Providing exceptional service to a customer is key, whether it is a simple question from a customer who is current or assisting a customer who has a hardship explore options’

    ‘The reason legacy systems exist or continue to exist, though, is because they work…The fundamental focus of a servicer is to collect payments from the borrower and to remit to investors and then to produce the interest statement at the end of the year, and those core systems are very good at that. They’re producing tremendous amounts of transactions with a high degree of reliability’

    So the Wells Fargo guy: ‘helping customers sustain homeownership remains the highest priority’. I’ve mentioned that if you look at the FHFA foreclosure numbers, they’re high, but they just roll these FB’s into new loans.

    ‘The fundamental focus of a servicer is to collect payments from the borrower and to remit to investors’

    Click!

    1. I wonder how Wells Fargo intends to keep customer service satisfaction scores high when they start ramping up the foreclosure process.

      1. They now offer a free kick in the balls from behind so that the foreclosure process doesn’t hurt so much by comparison.

  3. ‘Verdone noted there is some softening locally – particularly on the upper crust of the housing stock in communities such as Atherton, Hillsborough or other wealthy enclaves…‘I’m seeing places on the market for a lot longer and I’m seeing price reductions on the higher end’

    Once again, the weakest markets are the most expensive, and within those the most expensive neighborhoods are the weakest. We’ve seen this over and over. Indicates a bubble popping.

    1. “…communities such as Atherton, Hillsborough…”

      Now we’re talking about old money…with culinary schooled chefs, landscape gardeners, etc.

  4. ‘My parents’ advice to me was ‘real estate is basically an elevator, all you have to do is get on,’ says Justine Boucher, a 31-year-old homeowner who realized she could buy a home after learning 20% was not a requirement’

    Elevators go up and down Justine.

    More crow for jingle mail:

    ‘low down payments are a relatively new phenomenon. In 2006, just before the housing bubble burst, the median down payment was 20%. With home prices climbing since 2012, lenders eventually caught on to the fact that high down payment requirements were making it difficult to attract new mortgage customers. So, around 2015 they began offering low down payment loans to borrowers with high credit and earning potential’

    High credit?

    ‘Borrowers with credit scores of 580 or above can put down as little as 3.5% on a Federal Housing Administration insured loan’

    Eat yer crow jingle.

    1. “A bad credit score is a FICO score in the range of 300 to 620. Some score charts subdivide that range, and call ‘bad credit’ a score of 300 to 550 and ‘subprime credit’ a score of 550 to 620. … In contrast, an excellent credit score falls in the 740 to 850 range.”

      How Bad Is My Credit Score? What You Should Know – Investopedia
      https://www.investopedia.com/articles/personal-finance/…/how-bad-my-credit-score.asp

        1. “London Deutsche Bank staff ‘crying’ after huge jobs cull”

          Mr. Banker says: “Stop yer cryin’ and learn to code”.

        2. ‘…like seeing “the first person off the Titanic.”’

          Much more pleasant than the last person on the Titanic…

          1. ‘Hundreds of Deutsche Bank staff have been fired in the biggest round of job cuts in a day since the financial crisis. Scores of bankers left the bank’s headquarters in the City of London for the last time in scenes reminiscent of the collapse of Lehman Brothers in September 2008, when thousands of employees were made redundant.’

            ‘In Asia and Australia, the same scenes played out as staff were dismissed. One employee, who worked in the equities division of the Hong Kong office and was among the first to be notified of the redundancies, said: “If you have a job for me, please let me know.”

            ‘In Bengaluru, India, an employee said that he and several colleagues had been handed letters and about a month’s salary, but added: “The mood is pretty hopeless right now, especially [among] people who are single-earners or have big financial burdens such as loans to pay.”

            https://www.thetimes.co.uk/edition/news/struggling-deutsche-bank-axes-hundreds-of-city-staff-93qgqq2hw

          2. LOL.

            These markets are at the stage that they have already hit the glacier, but, they keep playing the music.

      1. Why do you assume that only one factor explains the crazy high U.S. housing prices, when there are so very, very many?

        1. Prevalence of 30-year fixed-rate mortgages
        2. GSE and other federal government MBS agency securitization
        3. Federal loan guarantees
        4. Fed MBS purchases
        5. Fed put on low mortgage rates
        6. Push to get low income people into houses they can’t quite afford through low-downpayment and high debt-to-income loans
        7. Continuation of historically-low interest rates
        8. Hints by central bankers of plans to renew quantitative easing
        9. Record levels of investor penetration in U.S. residential housing market
        10. Lingering belief that “real estate always goes up,” following the post-financial crisis execution of the Fed put (i.e.successful post-2012 residential real estate price reflation through direct central bank purchases of MBS)
        11. $500K capital gains tax exclusion for owner-occupied housing
        12. Mortgage interest deduction

        I could go on, but you hopefully get the idea!

        1. Excellent list professor. I believe that all of these matter (the cause of the bubble is multi-factorial), but some of these matter more than others. I would say that a low down payment less than 20% and the fact that an individual can have up to 4 federally backed mortgages are two very serious culprits.

          1. Forgot my unlucky number:

            13. Belief that recent decades of appreciation can continue forever, due to a failure to realize that a 30+ year point of inflection has been reached in long-term interest rates. Unless interest rates can go a lot more below zero, which I doubt, the trend from here on out is flat or up.

        2. I don’t assume it’s only one factor, and realize that there are many.

          I’m only a defender of the 30 year fixed rate mortgage. I think the blame on these is misplaced, and that anyone calling for their abolition is being naive about how that will play out for the average American in real life.

          If I end up as one of the crow-eating pariahs here for taking this position, so be it.

          1. I think that the PTB know that if they loan money at these rates for thirty years, they are going to lose their Azzes. The only buy that makes sense right now is to use a thirty year mortgage and wait for the hyper inflation if MMT is used for entitlements. I am not advocating it but I can see the play. I think so can the banks so they are pushing hard to convince people to use 15 year mortgages. This will lead to buying a house at or near the top and paying the bank back it’s money prior to hyperinflation effectively eliminating the mortgage basically a lose lose.

          2. “…if MMT is used for entitlements.”

            Wouldn’t that require a Democratic president?

      2. Yes. The effective elimination of down payments and the need for good credit is the culprit. When you live in a nonrecourse state and can put down 3.5 percent, it is very tempting to take the gamble. Buy and the house goes up 24.5 percent and you have seven times your down payment. The house goes down 24.5 instead, you can walk away and cap your loss at 3.5 This asymmetric result encourages speculation.

        1. the culprit

          If you consider something a cause, then you don’t accept that there is a mania. Enablers they are, the cause they’re not.

          1. I think that is a good guess. I watched what the corporations were doing in 2011 selling 30 year bonds and decided to refinance my house with a thirty year loan. Similarly, if the people in the know Are pushing 15 year loans they think inflation is not a threat for that long. I think they would be making adjustable loans more attractive, if they saw inflation on the horizon.

  5. ‘In 2016 at a CEDA breakfast meeting, the U.S. Department of Agriculture’s Rural Housing representatives said they were encouraging new residents to look at Fernley and Fallon as better areas for affordable housing, educational opportunities and quality of life’

    ‘Aided by the number of retirees moving to the Reno-Sparks area, West said the average sales price for a home is $420,000. Furthermore, he said buyers can’t find new homes for under $300,000. In fact, he said most new homes are selling for about $400,000’

    These “rural” USDA loans are zero down.

    ‘The entire state is rural except for Reno, Las Vegas, Henderson and North Las Vegas’

  6. “Realtor Michael Verdone, who has sold property in San Mateo County for nearly 50 years, said he anticipates the market cooling will be short lived locally as well. While projecting a healthy market, Verdone noted there is some softening locally – particularly on the upper crust of the housing stock in communities such as Atherton, Hillsborough or other wealthy enclaves.”

    There’s no shortage of clueless shills missing the arrival of long-term trend reversion.

  7. . In reality, the median down payment on a mortgage in 2017 was just 5%

    Must have been even lower in 2018. And lower than that in California. Anyone who buys a house with 5% down is a speculator looking to ride a one way elevator to real estate riches. On top of the anemic downpayment, a significant number of these borrowers must be faking income to qualify because, with less than 5% down, the payments on a mortgage must soak up at least 50% of median monthly income. I’ve been scratching my head with all the houses I see being sold around San Diego at impossible prices and the mantra circulating that everything is cash buyers and conforming loans, the days of risky loans are long gone. It was possible for both of those things to be true. How much more absurd can it get…median down payment of 0% with downpayment and closing cost assistance?

    1. “Anyone who buys a house with 5% down is a speculator looking to ride a one way elevator to real estate riches.”

      Elevators go down as well as up.

      1. The article is very unspecific. It talks about global equities. Without the US playing the role of trade chump to promote globalism many global markets are overpriced. However the same policies could actually promote growth in the US.

        1. Take today, China’s stock market off another 2.6 percent, we are off around .5 percent. China due to being a dictatorship can take more pain than we can but it is not unlimited especially with its debt load. Only one way out major concessions to the US. What would that do the US stock market?

          1. Only one way out major concessions to the US ??

            Thats a bet I would not make…Like you said, its a dictatorship…He knows Trump is gone, in 16 months or 16 months plus four years…Either way he’s gone and the dictatorship is still in place…My belief is that China can take far more pain than we can…

          2. In response to the “Chinese can tolerate pain well” narrative I think it’s worth mentioning there is a huge difference between the Chinese generation born in 1970 and those born in 1990.

            The people from the 1970s have lived through hardship. The people from the 1990s, especially if urban, have known nothing but improving living standards and economic prosperity. Further, State Education taught the youth that prosperity is thanks to the Party (no Party, no new China is the slogan).

            The idea the kids from the 90s are strong red peasant soldiers ready to endure declining living standards with aplomb is pure State Propaganda.

          3. He knows Trump is gone, in 16 months or 16 months plus four years

            Presidents come and presidents go, but abnormally low interest rates seem to be a fixture of our current economic climate.

          4. The people from the 1970s have lived through hardship. The people from the 1990s, especially if urban, have known nothing but improving living standards and economic prosperity.

            My wife was born in the 1970s and saw some hardship. But she embraced the good life in Shanghai quickly after she graduated college and would be completely emotionally sideswiped if hard times were to return. Her peers truly have zero expectation of hard times. You have to go back one more generation to find the survivalist mindset and they are getting pretty old.

            The idea the kids from the 90s are strong red peasant soldiers ready to endure declining living standards with aplomb is pure State Propaganda.

            Agreed. BUT…their culture IS a little more harsh. The average Chinese person I would describe as the average American about 1/2 of the way through basic combat training. Still not that tough, but much more capable of enduring an a$$ chewing and feeling like nobody cares about them without freaking out.

          5. LOL, as if Americans these days could handle adversity. This ain’t the Great Depression generation. (A generation my parents belonged to, fortunately for me.)

          6. Paoburen ?? Good point

            And Carl…I give your opinion a lot of credence since you are married to a Chinese gal…

            With that said; Its still a “Dictatorship”…So, you either go along or you disappear…Remember who runs the military….

          7. Carl, agree that Chinese BORN in the 1970’s haven’t known hardship – however, Chinese who GREW UP in the 1970’s (tail end of the Cultural Revolution) probably have.

            I’d also add two other things:
            1. It’s just a feeling, but I think the Chinese who immigrated to the US in the early years (say in the 1990’s and 00’s) were overall a better group than current immigrants, who seem to be richer and more spoiled (some of this may be due to the greed of US colleges and such, who now see foreign students as a source of money)
            2. From what I’ve seen in Silicon Valley, most of the current generation of Chinese children are truly spoiled little emperors/empresses, despite all the Tiger Moms (who may be two faced, both harsh on academics and spoiling on everything else)

          8. current immigrants, who seem to be richer and more spoiled

            Yeah, that’s definitely the ones that are making the news and paying full price at our colleges. I think of them like the “ugly Americans” of days gone by.

            Regarding the tiger moms and their kids I think there’s a big difference between the girls and the boys. I don’t think the princesses are nearly as bad as the little emperors. At least from my American perspective it looks like the girls have enough manners to function in other societies while the boys may not. But the young adults seem ok so maybe they grow out of it.

  8. “In 2006, just before the housing bubble burst, the median down payment was 20%. ”

    Well whoever wrote this has an alternative set of facts. 2006 was an age of NINJAs. Nobody put down 20% and mortgage loans were call options on appreciation.

    1. I was wondering about that myself. The only way I could reconcile it is if a lot more of the loans were caused by people trading up houses and a lot of the home equity from the previous house was being rolled into the loan

    2. Scdave, in the meantime we collect the tariffs from China and hurt China’s growth and ability to challenge us militarily. Thus it is still a far better policy that followed by Obama, W, Clinton and Bush I.

      1. PS China did make a bet on Biden since it owns the family. However that is looking increasingly unlikely and it cannot hold out for four more years dictatorship or not.

    1. I heard the strict lending talking point so many times I never actually looked up the data and I assumed there must be some truth to it. But not only was it not true, it was the opposite of true. Median percent downpayments were generally lower in the years immediately following the financial crisis than during or before. Just goes to show, the more often you here something, the more likely it is to be a lie. I’m generally skeptical but I admit to getting bamboozled by the MSM on this point.

    2. Does median down payment stats take into account cash buyers? Or is it only the subset of buyers who get a mortgage?

  9. “Borrowers with credit scores of 580 or above can put down as little as 3.5% on a Federal Housing Administration insured loan. The upside is that is typically easier to qualify for an FHA loan than a conventional loan with a private lender.”

    – There’s no downside, but for the taxpayer guaranteeing the loan. “Privatization of profits; socialization of losses.” As per our financialized economy. Maximum moral hazard, again.

    1. While speculators should put 25 to 30% down, as well as pay higher rates and points, as they enforced in the old days of lending, they just lie now. I suspect underwriters just take their word for it.

  10. Thank you for the data. The journalist who wrote the article should be taking a class in coding. It shows that the real deterioration in down payments started after 2005, it is consistent with the surging prices from 2006 to the crash. Absent Barney Frank the run away train could have been stopped in 2006 with a lot less damage to mainstreet.

      1. Yes. I am no fan of W but his administration did warn of systematic risk and asked for reform. Frank replied ” these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial risk”. Very similar to the Democrats saying in January that there was no crises at the border.

      1. He helped start the runaway train using a Jimmy Carter era law but he tried to stop it circa 2006 but was blocked by Congress Frank in particular. Facts are stubborn things.

        1. There is enough blame to go around, on both sides of the aisle.

          Political bickering and trying to score cheap argument points on the Internet are how the oligarchs distract you. Focus on seeking the truth, and don’t fall for it.

          1. If you do not know history you are much more likely to repeat mistakes. I think we are where we were in 2006. Yes bubble prices but we have a chance to minimize the damage to main Street. However that means not making it easier to buy a home like Harris is advocating but allowing the free market to work. If people cannot buy houses it means they are too high compared to wages, the market is telling us that and we should listen. Less demand will result in lower prices unless government steps in with more programs justified by any excuse to remedy racism to offset student debt etc.

          2. Political bickering and trying to score cheap argument points on the Internet are how the oligarchs distract you.

            Divide and conquer. Meanwhile the .1% run away with the gold.

          3. +10
            “Divide and conquer. Meanwhile the .1% run away with the gold.”

            Lot’s of people dont see this.

          4. “…making it easier to buy a home like Harris is advocating…”

            Plus it sounds like she wants to do this using race-based criteria, which I thought was illegal under U.S. lending laws. Albeit politically powerful attorneys don’t have to follow the same laws as the little people do.

            Giant red flag here!

          5. “Divide and conquer ??

            Well, that was the game plan in Trump winning the Presidency right ? And, it worked…

            Meanwhile the .1% run away with the gold ??

            And what was the first “big” act that Trump pushed through ?? Yeah, 1.5 Trillion dollar borrowing spree to reward the 1%…

          1. For millions it was too late but for millions more it would have prevented them from buying at inflated prices, thus it would have greatly reduced the impact on the overall economy thus allowing more real price discovery and less moral hazard

    1. Lest we forget, long before Airbnb, Mr. Frank and partner pioneered innovative strategies for off setting the cost of living by using a residence for creative income generation. For the faint of heart, don’t click this link if you aren’t prepared to see what the lives of government officials are really like. Of course, he went Schultz on the whole thing….I know nothing!

      http://www.free-press.biz/usa/Barney-Frank/Barney-Frank-shame.html

      1. And blue state mandates which are driving their electric rates through the roof like Germany and Australia.

        1. What if we built as efficient as Germany?
          No refrigerators in the garage… just in case. We can do better.

          1. German consumers pay three times the price for electricity as US consumers. Businesses do not due to government policies but taxpayers are paying for them. Efficiency does not make up for that particularly since the most economical efficiency occur without government mandates, no one who is paying for electricity likes to waste it.

          2. “no one who is paying for electricity [energy] likes to waste it”

            Hmmm…. explain all those mega SUV’s used to take one person to pick up milk. Don’t underestimate the stupidity of people.

        2. The True Price of Electric Cars
          Bloomberg
          July 8, 2019
          Lionel Laurent

          “Most people will be happy to see the back of the combustion engine. Cleaner air and less dependence on oil are good reasons to look forward to the mass adoption of electric cars.”

          “But for the 3 million or so Europeans working in the auto industry, the transition to the new technology is a source of great anxiety. While the numbers are hotly debated, carmaker jobs will probably become scarcer because electric vehicles need fewer parts and less maintenance than their gas-guzzling predecessors.”

          “Millions of European workers are anxious about their prospects as combustion engines start to be phased out. Politicians need to get a grip.”

          1. Slow transition to electric cars dooms BMW chief Harald Krueger
            LA Times
            July 6, 2019

            Even Paris Hilton couldn’t make BMW sexy again! Tesla is having a real impact on German luxury brands.

      2. “At its meeting Thursday, the TVA board voted to retire both Kentucky’s Paradise coal-fired power plant and the Bull Run coal plant near Knoxville, Tennessee. The utility’s President and Chief Executive Officer Bill Johnson said both decisions needed to be based on facts informed by a thorough review.

        “Let me tell you what this decision is not about—it’s not about coal,” Johnson told the board. “This decision is about economics.”

        Plunging Prices Mean Building New Renewable Energy Is Cheaper Than Running Existing Coal
        December 3, 2018
        Forbes

        “Across the U.S., renewable energy is beating coal on cost: The price to build new wind and solar has fallen below the cost of running existing coal-fired power plants in Red and Blue states.”

        1. Easy to make the assertion that they are cheaper but it is clear solar and wind drive up not down costs after a very small percentage is produced by them. If it was not true you would need neither government subsidies or mandates to support them. If it were true that it was cheaper California would have cheap electricity not expensive electricity. All that happens when you produce solar or wind now is you use your NG or coal plants less but the rate payers are still paying for the plants. You cannot close the plants because wind and solar are not reliable on their own and batteries are too costly. Bill Gates is right we cannot rely on wind or solar in the near term. They only support crony capitalists rent seekers.

          1. CA has a more temperate climate, so they use less heating a cooling. So even though they have higher rates, they have about 1/2 the per capita electricity costs.

            Additionally, California utilities entered into long term purchase agreements at high prices early on, helping the industry to grow and solar and wind generation to become cheaper. It wasn’t cheap then, it is now though.

            So now, new solar and wind is cheaper that existing coal. That wasn’t the case 20 years ago. It just goes to show that technology progresses. Battery tech also rapidly advancing and is the lynch pin for storing all the excess energy generated by renewables.

            Here is Bill Gates on the issue:

            https://twitter.com/billgates/status/1130272680056373248

          2. So even though they have higher rates, they have about 1/2 the per capita electricity usage.

          3. “CA has a more temperate climate, so they use less heating a cooling…”

            This would be news to my friend in Blythe , CA, whose electric bill in the summer gets up over $500 per month. The desert areas of California use a heckuva lot of electricity for air conditioning!

          4. Battery tech also rapidly advancing and is the lynch pin for storing all the excess energy generated by renewables.

            That’s an ironic statement. So-called renewables and cute little EV luxury cars take more energy to build than they will ever produce/displace in their lifetime, and all that energy to build is demand pulled forward. Don’t look, but it is a huge government subsidy to the conventional energy producers. Savings like this will bankrupt us.

        2. I do think that, at a minimum, we have overcome static friction on EV adoption. Just going to take a little while for the infrastructure and mainstream adoption to catch up.

          1. Tesla is producing about 2 percent of the light vehicles sold in the US and we are rapidly running out of Cobalt. Just how are we going to produce the necessary batteries if EV vehicles become more than virtue signaling toys?

          2. Without offshoring to China the slave labor and environmental devastation caused by unregulated rare earth metals mining and refinement ‘alternative’ energy would not be economically viable. And it never will be. There are no rare earth mines in the United States anymore even though we have significant deposits. They closed long before these coal mines. They can’t compete for the same reason coal mines can’t compete. It’s not the energy technology that coal is competing with, it’s the mining and labor costs.

          3. Honestly, does anyone really believe that if there were no OSHA and Bureau of mines regulations and these coal mines were using the equivalent of slave labor that a wind mill would be an competitive economically viable source of energy? Really?

          4. US EV sales up 34% year-over year.
            US auto sales down 2.4%

            Skate to where the put is going to be, not where it is.

          5. Anyone who can afford a Tesla can afford to fly to China and visit some of these mines and refineries and the vast wastelands and cancer villages that surround them. Even with all of this, Tesla still loses money on every car they build.

          6. Just how are we going to produce the necessary batteries if EV vehicles become more than virtue signaling toys?

            Musk is trying to get Cobalt out of his batteries altogether. Panasonic is going this way too. Battery tech is advancing very rapidly. Lithium prices are coming down and US senators are fast-tracking more domestic approval of US mines for lithium.

          7. One, try googling Gates and “Let’s quit jerking around with” also yes California has great weather but that does not mean the mandates have not caused people to pay far more for electricity and just think what it would cost people in Ohio.

          8. Anyone who thinks an industrial civilization can run on solar panels, windmills, and EVs, please post your contact info. I have a portfolio of investment properties in Brisbane, Vancouver, and San Francisco I’d like to discuss with you. Also a side gig in black marketing the organs harvested from North Korean political prisoner rare earth metals mine workers who get too tired to work after six months on 800 calories a day of rice porridge and bamboo sprouts. Taiwanese businessmen pay top dollar. We market the organs on sale as ‘The Green New Deal’.

          9. fly to China and visit some of these mines and refineries and the vast wastelands ??

            I have seen pictures…Pretty bad…

          10. that does not mean the mandates have not caused people to pay far more for electricity and just think what it would cost people in Ohio.

            ABQDan, I suggest you watch the interview with Gates in its entirety instead of relying on something taken out of context:

            https://www.youtube.com/watch?v=d1EB1zsxW0k&feature=youtu.be

            Gates is basically saying that we need much more than solar panels and batteries to solve climate change. He talks about the CO2 from agriculture and meat, the manufacturing of steel, and airplanes. He is basically saying that we should reject simple solutions where people say “solving global warming is simple, we can do it by assigning a CO2 rating to each company”. Gates is saying that the solution to climate change must be comprehensive and address huge problems like the reliability of Tokyo.

      1. The puck goes where the subsidies are. As they are cut we will see if the growth continues. I am sure the impending cut caused some of the sales this quarter. Also we still do not know about whether Tesla turned a profit or is still burning through cash. Finally you do not answer my question, projecting forward we have the same number of years of reserves for oil and Cobalt at this year’s use where are we going to get the Cobalt. If the growth is anywhere near what the EV bulls are saying we will be out by 2035, it will be the shortest transition in history

        1. What I mean by shortest transition is that we will move meaningful to EVs by 2030 and have to move back to ICEs by 2035

          1. I think we have reached peak car in the US. It makes no sense to have as many vehicles that we do. Vehicles are sitting idle 95% of the time. We will get self-driving one-way or another, whether electric or just self-driving gas cars. I see a secular decline in the number of autos produced going forward.

        2. There are 3 trends in automobiles: 1) Electrification 2) self-driving and 3) ride sharing.

          Apple was going to create their own self-driving, electric vehicle. For all we know they are still working on it (project Titan). They will need something new after peak smart phone and watch sales start to saturate. They were interested in buying Tesla a few years ago when Tesla sales were about 1/0th what they are now. Alphabet (Waymo) is going full speed ahead in CA with it’s self-driving vehicles after having been doing extensive testing in AZ for the past couple of years.

          I got of the train in Farmington, UT and our local transit authority has a self-driving electric shuttle going all around the shopping center. I think the days of individual car ownership are numbers. I know Musk says that Teslas will be self-driving robo taxis, but I think the first step will be to open up some sort of ride sharing Tesla service first.

          1. Tom Steyer is going to enter the Presidential race. one, that ought to make you happy. It makes me happy too, although for probably a different reason.

          2. Tom Steyer

            Says online that he’s one of those liberal billionaires who pledges to donate at least half his money before he dies. I’m guessing that he considers an attempt to defeat Trump a charitable contribution…especially if he’s the candidate.

          3. Ah, predictions…

            Musk in 2016: “A Driverless Tesla Will Travel From L.A. to NYC by 2017, Says Musk”

            https://www.nbcnews.com/business/autos/driverless-tesla-will-travel-l-nyc-2017-says-musk-n670206

            P.S. An electric, driverless shuttle puttering around on a set course in a limited area is one thing. A driverless vehicle that can go anywhere, at any time, in any weather, is another thing completely. BTW, I hope / wish full autonomy will be around by the time I’m a senior, so I don’t have to sit home. But I’m not holding my breath.

          4. by the time I’m a senior

            Except that it’s not necessary. I live in a little village near a small city. We have a shuttle service, it’s a short bus with a driver. Scheduled run to various points and you can catch a ride to the hospital or shopping in the city from all corners of the village and back again for $1. It is a simple and cost effective solution without super expensive supposed technology. The local rail around the lake used to perform the same function. It still could, and cheaper than a Tesla. It would occasionally run over the odd child or old lady playing on the tracks though.

        3. Automobile companies are not going to completely abolish ICEs. Anyone who thinks it will be a 100% complete transition is deluding themselves.

          Tesla just won’t be in that business.

          1. After having driven an EV, I would never go back to a gas car. Almost every other person I know who has made the transition feels the same way. I think it will be an S curve. The cost between EV and gas parity will be hit in 2022 in Europe. Once it is cheaper to own and operate an EV, I don’t see why auto manufacturers would invest in designing them or consumers would purchase them.

  11. He is entering because Biden is circling the toilet bowl. I would love a real AOC green new deal debate. Now he will force it. Americans have been conned into believing in CAGW but poll after poll shows they are only willing to spend like $100 a year to fight it. Just wait to they find out the true cost of the proposals.

    1. the true cost

      Oh, we’re not going to find out the true cost of anything. The wealthy here have enough money that a few wonderful taxes will pay for an infinite amount of foolishness.

  12. ‘The entire state is rural except for Reno, Las Vegas, Henderson and North Las Vegas,’ he pointed out.”

    Those “exceptions” account for about 85% of the state’s population. There’s not a whole lot left in the “cow counties”, and even fewer jobs except a few in mining in Winnemucca and Elko.

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