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Some Writing On The Wall That Was Reminiscent Of 2007

It’s Friday desk clearing time for this blogger. “People are moving all over the Tall City which is causing a housing market shift. Midland real estate agent Jeaneen Pruitt said Midland real estate is all about supply and demand and right now, there is a lot of supply. ‘The oil and gas industry is slowing a bit and people are moving so raised supply and lower demand there is that you know shift that we were talking about,’ said Pruitt.

“‘I pulled some stats and saw 55 days on our active listings and I thought there is that shift. I have seen the shift with our active inventory and talking with our sellers and reassuring them and coaching them ,’ she said. Pruitt said Midland is great place to buy a home, but people can continue to see more shifts like this in the coming months.”

“There’s no shame in lowering your price. According to Zillow, nearly 1 in 8 sellers does so. But many don’t bite the bullet quickly enough. There may be other reasons your house isn’t selling. But ‘99.9 percent of the time,’ says California agent Thomas Nelson, ‘it is price, and it needs to be reduced.’ Nelson said he’d pull the trigger by the third weekend. Fellow California agent Michelle Carr Crowe would make a move after 30 days. And agents Mary Hutchison of Missouri and John Wiley of Florida would lower the price after just two weeks.”

“According to NAR, 18 percent of sellers lower their price more than once, with a few lowering it as many as four times before accepting an offer. Whatever you do, though, make that first price reduction count. One reduction can attract buyers looking for a bargain, as long as you drop it enough to be competitive, says Massachusetts agent Bill Gassett. But more than that could be the kiss of death. ‘Multiple price reductions will start to make your home undesirable,’ he says. Reductions ‘will usually draw even further negative attention, leading buyers to assume there must be something seriously wrong with your home.”

“Apartment List found new housing development lags behind job development in many major cities, however in the Myrtle Beach there is actually an oversupply of houses. Along the southeastern coast, the study found similar trends. Wilmington, Greenville, Hilton Head, Virginia Beach, all added less than one job permit, which is considered an oversupply in housing.”

“Traverse City’s residential listing inventory is at a 40-year low and has been for more than four years. A very savvy Realtor that I know who studies Michigan real estate statistics recently told me that ‘we are always about two to two-and-a-half years behind what is going on in southern markets like Ann Arbor.’ What is going on in Ann Arbor these days? A full-blown buyers’ market. Listings at the $250,000 price point there are sitting on the market.”

“The Pikes Peak Association of Realtors showed 1,651 homes were sold in June of this year, which is less than the amount sold last June. In Laura Karan’s neighborhood, she said she sees six ‘For Sale’ signs. ‘I’ve noticed that some of them are sitting a little longer than they used to, but I don’t know if that’s because of the price point or if the market’s changing,’ said Karan, a realtor with RE/MAX. ‘Because we have been on the upswing for so long, that we’re due to take a dip. So, that is a very good possibility.'”

“In the Bay Area, permits to build new homes and apartments tanked — falling nearly 50 percent in San Mateo County compared with the prior year, 30 percent in Alameda County, nearly 10 percent in Santa Clara County and 7 percent in Contra Costa County. ‘At this point, it’s become a noticeable decline,’ said Hans Johnson, a senior fellow at PPIC in San Francisco. ‘It’s the start of a worrisome trend.'”

“‘Real Housewives of Orange County’ star Gretchen Rossi’s home that she shares with fiancé Slade Smiley, may be auctioned off for allegedly being behind $26,000 in payments. According to court documents obtained by The Blast, a lien on the reality star’s home will be auctioned off to the highest bidder on August 26. The documents note the unpaid balance owed on the mortgage by Rossi totals $431,529.79.”

“In the second quarter of 2019, the number of Hamptons home sales declined compared to the same period a year earlier, according to the Elliman Report. It was the sixth consecutive quarter of year-over-year decline. The most striking figure in the Elliman Report is an 88.3 percent increase in the inventory of single-family homes. The months of supply—or the number of months it would take to sell all inventory based on the pace of sales—doubled, from 7.9 to 15.8.”

“Ernest Cervi, the regional senior vice president of East End operations for Corcoran advised sellers against holding out for a high price or asking for more than the market value. ‘If you want to sell your house, sell it now, because you don’t know what that’s going to look like in the future,’ he said. ‘You don’t know if you’re going to get more or less money. But if you want to sell it, let’s try and sell it now. Price it right to the market. It’s the perfect storm for people to come out and start buying.'”

“Real estate investment firm BH3 has taken over a $195 million non-performing loan on 125 Greenwich St., an 88-story luxury condo tower that topped out earlier this year in Manhattan’s Financial District. BH3 set up a debt opportunity fund last November in order to tap what it sees as a rising wave of non-performing loan opportunities in the markets where it operates, primarily New York City and South Florida.”

“‘As we approached the end of 2018, we saw some writing on the wall that was reminiscent to us of 2007,‘ said Gregory Freedman, principal & co-founder of BH3. ‘125 Greenwich represents to us the first real validation that the bull market that we’ve been in for the past eight or nine years has kind of come to an end, and we’re in a new chapter.'”

“Many new high-rises have changed the Phoenix skyline over the years, and there are even more in the works. Vacant, flat, dirt lots are quickly transforming into brand-new towers, as the city’s economy continues to add thousands of jobs every year. The growth, however, is sobering for some. ‘What it seems like they’re forgetting are people who already live here,’ said Camaron Stevenson with the Arizona Housing Coalition.”

“The median home price in Phoenix is now just under $250,000, up 97% since 2011. ‘We have one of the largest gaps in affordable housing versus people who need it in the country, and if we continue at this pace, we’re going to see a rise in homelessness,’ said Stevenson. ‘All the downfalls in the 2008 recession, we’re going to see that come right back at us.’

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This Post Has 140 Comments

  1. No room for international crater again, and there is plenty of that too.

    ‘‘Real Housewives of Orange County’ star Gretchen Rossi’s home that she shares with fiancé Slade Smiley, may be auctioned off for allegedly being behind $26,000 in payments.’

    We were told they could “just sell”? Man these real housewives are terrible at shack investing.

    1. The auction will go down at the Doubletree by Hilton Hotel Anaheim in Orange County. Anyone is allowed to attend and place a bid on Rossi’s property. The documents note the unpaid balance owed on the mortgage by Rossi totals $431,529.79.

      1. Run like hell, Slade. Get away from that toxic indebted harpie before she has you roped and tied at the altar.

  2. “‘I pulled some stats and saw 55 days on our active listings and I thought there is that shift. I have seen the shift with our active inventory and talking with our sellers and reassuring them and coaching them ,’ she said. Pruitt said Midland is great place to buy a home, but people can continue to see more shifts like this in the coming months.”

    What’s this shift thing? I think you mean cratering? And where is Thornberg hiding these days…come home for your crows dinner.

        1. I guess it’s all this data driven business decisions today. I was always good at math calculus etc. but it never excited me enough like Bezos or learning 6 sigma to make it a career.

    2. Around 16 months inventory in the Hamptons, is that much more than the six months inventory which the Realtors tell us is healthy?

  3. ‘Midland real estate is all about supply and demand and right now, there is a lot of supply. ‘The oil and gas industry is slowing a bit and people are moving so raised supply and lower demand there is that you know shift that we were talking about’

    West Texas articulate. But you get the idea. So Midland is swirling the bowl for the second time in 5 years.

    1. The sweet spots are played out and to move to the lower quality rock will take higher prices. Production has been fairly stagnant for at least six months but just like real estate by the time the MSM figures it out it is old news.

  4. ‘In the Bay Area, permits to build new homes and apartments tanked — falling nearly 50 percent in San Mateo County compared with the prior year, 30 percent in Alameda County, nearly 10 percent in Santa Clara County and 7 percent in Contra Costa County. ‘At this point, it’s become a noticeable decline’

    50% is noticeable. Somebody wake up Thornberg, there’s crow on the grill!

    1. The media is AWOL on what’s really happening:

      “The Mountain of Beverly Hills,” (previously known as The Vineyard) comprises 157 acres of largely undeveloped land off Benedict Canyon that hovers over Beverly Hills like a sanctuary in the city of Los Angeles, a monument to the mercurial dreams of the wealthy and well-connected.”

      “Now, the property has added another piece to its sad legend. A judge has denied bankruptcy protection for the owner, clearing the way for foreclosure.”

      https://bhcourier.com/2019/08/01/judge-denies-chapter-11-protections-for-the-mountain/

      1. ‘Big Price Reduction For This View’

        ‘This Castro Valley home has forever hill views, and the price has been slashed $900,000 from the original asking price.’

        ‘This home on 20 acres has sweeping views, a solar-heated pool and its own vineyard. There’s room for livestock, horses, and a barn that maybe used as a guest house but also a large storage space is available for equipment.’

        ‘Address: 33319 Palomares Rd, Castro Valley, California’

        ‘Price: $1,600,000’

        https://patch.com/california/castrovalley/big-price-reduction-view

          1. That’s not anywhere near downtown Castro Valley — it’s in the middle of Palomares Rd, a bit north of the wineries.

            So great location if you don’t like neighbors, but pretty far from anywhere with jobs or shopping — AND Palomares Rd can get closed during the winter due to mudslides and such.

        3. Those country homes require deep pockets for things like the water well and RO system, the septic tank and pumped leach field system and the riding lawn mower too.

          1. That’s why you see a lot of cheap foreclosures out in the sticks – or at least used to before the speculators showed up. Oftentimes when the well pump gives up the ghost, the owners cannot afford to replace it because it’s not something you can easily do yourself, unless you have heavy equipment and expertise. The house then has no running water and things just go downhill from there.

          2. Oftentimes when the well pump gives up the ghost, the owners cannot afford to replace it because it’s not something you can easily do yourself, unless you have heavy equipment and expertise.

            Are we talking about really deep wells? At my parent’s house in
            Wyoming it was about 80ft and you could pull it out by hand and stick another submersible on there for a few hundred bucks IIRC. They have a lot of minerals in their water so since I was a kid we’ve had three separate holes drilled and gone through several of pumps. Only drilling new holes required heavy equipment and significant expertise. It was never a huge deal when failure occurred because my mom is allergic to living paycheck to paycheck.

          3. “…when the well pump gives up the ghost…”

            A pump is easy to deal with, but a new well cone (if collapsed) is an entirely different issue.

          4. Hahaha. I’m talking drilled wells in my area which are 200+ feet deep. You are not pulling that by hand even if you’re the strongest man in the world. You need a tractor at the bare minimum, and that’s if it’s poly tube where you can drag it across acreage. If it’s 20′ sections of schedule 80, you better be darn handy and able to rig up a mechanism to lift and hold as you take each section apart. Further, you can easily spend well over $1,000 for a stainless pump and motor. These are expensive jobs where you need a boom truck to do it right.

          5. you need a boom truck

            Sorry, I’ve had a tech pull a well like this with stuff loaded in the back of a pickup by hand, no boom truck. Lot’s of jacking and cold beers though.

        4. The market for big expensive houses is gone. The younger generation can’t afford to buy them and retirees can’t afford to maintain them. That market is gone for at least a generation.

          2. “The younger generation can’t afford to buy them and retirees can’t afford to maintain sell them.”

            I hope you can forgive my slight edit. Not to suggest the original statement was incorrect, but I believe the revised version captures the reason that homes are just sitting on the market with no offers in so many parts of the U.S.

      2. “The media is AWOL on what’s really happening:”

        Shamefully so, the media is necessary to get the herd to pay attention to the sheer insanity of it all. All the skulls have been emptied.

        The US has serious problems.

  5. “Ernest Cervi, the regional senior vice president of East End operations for Corcoran advised sellers against holding out for a high price or asking for more than the market value. ‘If you want to sell your house, sell it now, because you don’t know what that’s going to look like in the future,’ he said. ‘You don’t know if you’re going to get more or less money. But if you want to sell it, let’s try and sell it now. Price it right to the market. It’s the perfect storm for people to come out and start buying.’”

    Geez lets see 15 month of supply and cratering still….MAYBE I’LL GET MORE MONEY!!!! Sell NOW or forever be priced in!!! I mean Buy NOW or forever be priced out!!!

    F*** IT just give me my commission checks!!!

    1. “If you want to sell your house, sell it now, because you don’t know what that’s going to look like in the future,’ he said.”

      A mealy mouthed way of invoking the age old wisdom, “Get what you can get for your house today because it’s going to be less tomorrow for decades to come.”

  6. “Whatever you do, though, make that first price reduction count. One reduction can attract buyers looking for a bargain, as long as you drop it enough to be competitive, says Massachusetts agent Bill Gassett.”

    Slash price, stamp feet,
    Lather, rinse, repeat.

  7. ‘I’ve noticed that some of them are sitting a little longer than they used to, but I don’t know if that’s because of the price point or if the market’s changing…Because we have been on the upswing for so long, that we’re due to take a dip. So, that is a very good possibility’

    The local paper still insists it’s to the moon Alice! But I documented the ebola in Colorado Springs months ago.

    1. And in neighboring Manitou Springs, the inventory, having surpassed the 100 inventory that in 2007 was a precursor to a bursting housing bubble, keeps creeping higher while the greedheads cling to their wish prices.

      A full 1% of Colorado Springs residents have their realtors’ license. Once the real cratering begins, the competition for creditworthy buyers is going to get downright Hunger Games, though I’m betting the exodus of California equity locusts is only going to accelerate as SoCal spirals deeper into progressive dystopia.

      https://www.realtor.com/realestateandhomes-search/Manitou-Springs_CO

      1. A full 1% of Colorado Springs residents have their realtors’ license.

        Sounds low. But then again I am in California. I had to get mine before I could get my driver’s license.

  9. “…says Massachusetts agent Bill Gassett. … Multiple price reductions will start to make your home undesirable…”

    OK, agent Bill Gassett.

    Work with me on your warped logic.

    If price decreases makes your house undesirable, then prices increases should act like a [buyer] stampede of Buffalo?

    Apparently, agent Bill Gassett is math challenged.

  11. The reason the stats show 1 in 8 properties have had price reductions in the large number that comprise listings where owners are content to let sit forever hoping for big profit and others who bought in last couple of years who would have to pay money at closing table due to being under water.

    My guess is that the motivated ones are actually much higher proportion.

    As I have said many times on this blog, there is something very obvious going on in new SFR construction, at least here in SW Florida. Developments where a year ago were going gangbusters, now have just a few crews working. I am professionally active in many new home developments and in 1 very modern 350 to 600k price range has 1 house under construction and a couple hundred vacant sites. Very nice place and very nice location historically characterized by high demand. No joke, this is happening and no one is reporting on it locally. Apparently same in the referenced California locations too. Rest of country? Maybe soon to follow.

    1. The media briefly reported new shacks piling up by the thousands in “hot” markets, but stopped talking about it. Orange County was over 4,000 at last word, mostly built for Chinese. Greater Dallas was over 6,000. 30,000 airboxes on the way for bay aryans. Oops! A 20 year supply of luxury Miami condos. No biggies. We’ll just run the AC for a couple of decades and watch that carbon footprint grow baby! In Arizona they’ll throw in a pool. Move in ready!

      What a fudgin’ disaster this all is.

      1. Hopefully the greedy lenders, buyers and desperate sellers don’t all get bailed out with my tax dollars this time. Let em burn.

    2. I’m seeing some real bizarre stuff in Philly right now. Been kind of casually looking since April just for funsies.

      I see this type of situation a lot: new construction “luxury” (usually with a butt ugly exterior) 3000 sf 5 bed 4 bath shack listed at $800,000 across the street from an older, but in good condition, cuter 2100 sf 5 bed 3.5 bath listed for $320,000.

      Who the h*ll would buy the luxury one? Apparently no one, most of them have been on the market at least 6 months. And things in the $300s aren’t exactly flying off the shelf either.

      1. Wow, it’s that situation in Folsom except the older one is $620k. If it gets down to $320k (hope springs eternal) the new one will sit until it’s auctioned with no reserve.

  12. Someone is lying or exaggerating about Ann Arbor, unless we can get to a definition of what a “full blown buyer’s market” is. I’m not seeing anything in Ann Arbor inconsistent with the rest of SE Michigan.

  13. Just heard that the Trump administration is limiting cash-out re-financing to 80 percent of home value from the previous 85 percent. Just another example of this administration trying to stop homes being used for speculation and from being used as ATMs. Trump wants money to be made through production not acquiring more debt. Very different from W and Obama who both encouraged soaring house prices to fuel consumption. Of course they were both Globalists so the US going broke to fuel the growth in developing countries did not bother them

    1. Trump wants money to be made through production not acquiring more debt ??

      You did not get the memo ?? Check the deficit spending buddy…

      1. The deficit spending is still under Obama’s average of 1.1 trillion a year. Only a Republican Congress slowed him down

      1. So Trump is going to be president until 2029? It would be great but is not going to happen so that is not his debt. To avoid apples to oranges comparisons the methodology has to be the Same Trump is responsible for deficits from the time he takes office to the day he leaves and nothing more. This is just the mirror imagine of the gymnastics that the MSM goes through to try to minimize the debt Obama ran up.

        1. “Trump is responsible for deficits from the time he takes office to the day he leaves and nothing more.”

          aqdan on a 1$t date: “you had me @: “Bill Clinton”!

      2. Longer post seems to be lost, so briefly fake news, Trump is not going to be President to 2029. I can say that Obamacare will cause 100 trillion in deficits but he still is only responsible for His own deficits. But what did we gain for his deficits. Trump’s tax cuts kept businesses in this country and he is rebuilding the military, cannot see how the $9 trillion in deficits under Obama accomplished much.

        1. reinging in spending.

          It doesn’t look like that is part of the spectrum for the next election.

    4. The 80 percent limit will not be sufficient to stop negative equity and walkaways in the next real estate downturn. It’s a bandage on a gunshot wound.

      1. A cash-out refi taken as the economy nears stall speed is actually selling your place to the bank. The fed.gov seems to not care as that cash will likely be spent, e.g., helping the velocity of money.

    6. “they were both Globalist$”

      What’$ In yer genetics aqdan? … Purity’$.of.x1.homosapien.lineage?

  15. [about building permits declining] “It’s the start of a worrisome trend.”

    What’s worrisome about it?

    1. I get your point. Understood.

      However looking at what a similar trend sparked in 06 and 07, a lot of bad things happened to a lot of good, hard working people. Real estate downfall led to unemployment and recession.
      That probably is something to be worried about to a fair amount of people. For many of us who are older a d fairly well established, it presents a good opportunity. However a lot of young people, my son included, it may make for tenuous next 5 years or more. Going into college as an economics major he will see some interesting case studies in real time. Have had many discussions with him about opportunities that spring up in down times. Think he will be ready. Time will tell

      1. in 06 and 07, a lot of bad things happened

        Not enough bad things for people to learn their lesson, apparently.

        IMO the best thing that could happen for your son and for mine is to have a horrible 5 years and then for them to be able to buy a house for less than 3x their income. And it has to be even more horrible than previously necessary because of the mistakes made in 09-10 when we bailed out the culprits.

        1. Real estate downfall led to unemployment and recession.

          The only shame in the loss of Bubble Jobs is that they were ever created in the first place. A young person with no debt will have the best long term chance if the correction comes full on. Older people with lots of debt will be screwed six ways from Sunday, as we see here every day.

  17. I bought something with 3 price reductions and still got it 7% under the 3rd reduction. I’m attracted to things like that, not repelled. Just overpriced in the beginning, what isn’t?

    2. I don’t care what the initial price was or how many reductions. What are the comps and where are they going? You don’t want to catch a falling knife as a buyer or ride the market down as a seller.

    1. Markets
      Negative-Yielding Debt Hits Record $14 Trillion as Fed Cuts
      By Samuel Potter
      August 1, 2019, 3:23 AM CDT
      Updated on August 1, 2019, 7:30 AM CDT
      – Total of negative-yielding debt globally rises to new record
      – More than a quarter of investment-grade bonds yield below zero
      – Negative Rates Are ‘Simply Negative’ for the Economy, Okada Says

      On the day Jerome Powell attempted to moderate market expectations for further easing, the world’s stockpile of negative-yielding bonds notched another remarkable record.

      The Federal Reserve’s rate cut helped swell the total of all debt with sub-zero yields to more than $14 trillion for the first time. The market value of the Bloomberg Barclays Global Negative Yielding Debt Index closed at $14.1 trillion on Wednesday, after the biggest one-day jump in a month.
      …

    2. The Financial Times
      Sovereign bonds
      Investors rush to safety in government bonds
      Yields around world tumble in response to fears over the effects of fresh Trump tariffs
      The yield on 30-year German government bonds plummeted into negative territory for the first time in history
      Colby Smith in New York and Tommy Stubbington in London 6 hours ago

      Investors flocked to the safety of government bonds on Friday, sending yields around the world to some of the lowest levels on record in a bet that President Donald Trump’s plans for additional tariffs on Chinese imports will hit growth and force central banks to pump more stimulus into the financial system.

      With prices rocketing, the yield on 30-year German government bonds plummeted into negative territory for the first time in history, briefly pushing the country’s entire government bond market — the bedrock of European debt markets — below 0 per cent. Germany is now the largest economy to have had entirely negative yields, following in the footsteps of Denmark and Switzerland.

      “The moves in Europe in particular are fairly staggering,” said Iain Stealey, international chief investment officer for fixed income at JPMorgan Asset Management. “The assumption in the market had been that the trade tensions had stabilised.”
      …

      1. Yields around world tumble in response to fears over the effects of fresh Trump tariffs ??

        Makes you wonder if the “Con Man” has some bets placed before he makes the tweet…Surely a man of this level of ethical & moral character would never do this would he…

          2. opinion

            You might want to also consider that Alwaleed bin Talal paid for Obama’s legal education.

    3. The pump priming for central banks to further reduce interest rates seems to be working amazingly well.

    4. Markets
      Germany’s Longest Bond Goes Negative for First Time
      Rates on 30-year bunds dip briefly to minus 0.002% as investors seek haven assets
      German government-bond yields
      Source: Tullett Prebon
      By Paul J. Davies and
      Patricia Kowsmann
      Updated Aug. 2, 2019 2:27 pm ET

      Investors spooked by a revival of trade tensions piled into safe assets on Friday, pushing 30-year German government yields into negative territory for the first time.

      The move meant that at one point on Friday effectively all of Germany’s debt—considered the safest in Europe—would require investors to lose money on any bond bought and held to maturity. It reflects deep pessimism about the ability of the economy to generate growth over the coming decades and the expectations of more extreme monetary policy to come.

      A rate for 30-year German bonds dipped briefly into negative territory, touching minus 0.002%, according to Tullett Prebon, while 10-year and 20-year bonds also touched record lows during the morning. Yields fall when bond prices rise.
      …

    1. Are you talking about Tom’s Diner on Colfax? I have no problem with them preserving it as long as they give him 4.5 million for it. Otherwise they’re screwing him over just to get something they want for free.

  20. Published 8/1/19 — FBI document warns conspiracy theories are a new domestic terrorism threat:

    “This recent intelligence bulletin comes as the FBI is facing pressure to explain who it considers an extremist, and how the government prosecutes domestic terrorists. In recent weeks the FBI director has addressed domestic terrorism multiple times but did not publicly mention this new conspiracy theorist threat.”

    https://news.yahoo.com/fbi-documents-conspiracy-theories-terrorism-160000507.html

    LOLZ I live below my means, didn’t buy an overpriced used house, don’t pay for any kind of subscription TeeVee, use ad-blockers for internet on phone and PC, don’t see movies at the theatre, don’t spend money at restaurants, don’t take expensive vacations, drive a used car, deleted all social media, and am more focused on finance, fitness, and nutrition than in participating in Amerikwa’s garbage culture of consumption, celebrity worship, and narcissism.

    I read books from the library and used bookstores. And alot of internet, specifically #WrongThink internet. If something gets banned from social media, I go directly to the source, bookmark it, and read it there.

    This is a civil war that you will lose 🙁

    1. You can see where this is going. Anyone who disputes The Narrative is now going to be labeled a conspiracy theorist. Now all we gotta do is start classifying those conspiracy theorists as domestic terrorists.

      First they came for the conspiracy theorists, and I did not protest because FBI assured me they were domestic terrorists….

        1. Rachael peddles globalist-approved conspiracy theories. Those are acceptable and encouraged per our overlords. Orange Man Bad!

          1. She may very well be in trouble now that Crossfire Hurricane is Crossfire Boomerang.

    2. This is a civil war that you will lose

      The left will always lose on the facts and their dismal records, but instead of acknowledging defeat, they’ll always resort to the globalist/leftist playbook of attack the messenger. Note the concerted effort by the Oligopoly media to smear Tulsi Gabbard as a Kremlin stooge and Assad apologist, rather than address the substance of her criticisms of Kamala Harris and her sorry record as Attorney General of California.

      https://www.realclearpolitics.com/video/2019/08/01/kamala_harris_i_dont_take_assad_apologst_tulsi_gabbards_opinions_seriously.html

    5. “Published 8/1/19 — FBI document warns conspiracy theories are a new domestic terrorism threat:”

      Timing of this is amazing.

      AUGUST 3, 2019

      UPDATES: MASS SHOOTING AT WALMART IN EL PASO, AMERICA’S SAFEST CITY

      UPDATE 5: An eyewitness has claimed she saw 3-4 shooters dressed in black. El Paso PD has said they apprehended 1 suspect, and that the scene is no longer active.

      Updates: Mass Shooting at Walmart in El Paso, America’s Safest City
      https://www.infowars.com/breaking-police-warn-of-active-shooter-at-el-paso-walmart/ – 322k – Cached – Similar pages

    1. “The debt surge is partly by design, a byproduct of low borrowing costs the Federal Reserve engineered after the financial crisis to get the economy moving. It has reshaped both borrowers and lenders. Consumers increasingly need it, companies increasingly can’t sell their goods without it, and the economy, which counts on consumer spending for more than two-thirds of GDP, would struggle without a plentiful supply of credit.”

      That’s it in a nutshell.

    2. “The two 28-year-olds in West Hartford, Conn., have about $51,000 in student debt, plus $18,000 in auto loans and $50,000 across eight credit cards. Adding financial pressure are a baby daughter and a mortgage of around $270,000.”

      They’re already dead, and they know it too. They’re just waiting for a miracle to happen…like Tinkerbell with the magic fairy dust.

      1. Like the Warren student loan debt jubilee?

        If she gets elected and carries out the plan, can those of us who already paid off student loans demand reparations?

      2. I have a little pity for the student loans, buy the $50k in credit card debt is just self-inflicted.

    1. I keep hearing this — another recession, another recession is coming blah blah. But nothing much yet. Ben’s been posting “fooked” articles for years and yet nothing is crashing and no one is panicking. Probably because it’s just commercial debt and not kids or old grandmaws being tossed onto sidewalks. The debt will just be bought for pennies on the dollar, losses will be traded up the food chain until it some bleeding heart at the Fed QEs it and it ultimately gets added to the massive National Debt where it will be absorbed like ants into the sun.

      The banking system is not going to collapse under its weight, because it’s turtles all the way down. No, I think it will be something external that does it. Some act of war, or, more likely, masses of Baby Boomer finally fookin sell off their stocks to the nursing home. That won’t be for 15-20 years at least.

      1. That won’t be for 15-20 years

        Things are more fragile than ever. Your prediction fits well into your leveraged investment plan. Good Luck!

      2. Logical fallacy noted: “Because a long-heralded prediction has not yet happened, it therefore will never happen.”

        IT DIDN’T WORK: Despite the Fed, the yield curve is stuck in ‘recession’ mode, stocks are a mess, and manufacturing is in retreat
        Theron Mohamed
        Aug. 1, 2019, 06:33 AM
        AP Photo/Richard Drew
        – The signals for a coming recession are now all flashing at the same time.
        – The Federal Reserve’s first cut to interest rates since 2008 did not change the yield curve (the margin between short- and long-dated US Treasury yields).
        – The yield curve has inverted before every US recession for the past 50 years.
        – The yield gap between three-month and 10-year Treasury bonds slid further below zero.
        – The yield gap between two-year and 10-year Treasury bonds briefly shrank to 10 basis points, the narrowest margin in four months.
        – Choppy stocks also point to market uncertainty.
        – Real-world data shows a contraction in manufacturing.

        The Federal Reserve’s first cut to interest rates since 2008 was intended to bolster the US economy. Instead, a key recession indicator stayed stuck, flashing red.

        The yield curve, or the margin between short- and long-dated US Treasury yields, narrowed on Wednesday. The catalyst was Fed Chairman Jerome Powell’s description of the central bank’s 25-basis-point reduction as a “mid-cycle adjustment” intended to protect against “downside risks,” dashing investors’ hopes for a procession of cuts over the coming months.

        The gap in yield between three-month and 10-year government bonds slid further below zero to hover at about -5.5 basis points. The measure — which shows how uncertain bond investors are about the short-term fate of the economy — has inverted before every US recession for the past 50 years, according to the Financial Times.
        …

        2. has inverted before every US recession for the past 50 years, according to the Financial Times.

          Which does not mean that just because it is inverted that a recession is imminent. Due to the QEs nothing is normal, negative interest rates never occurred before QE, and were thought to be impossible. The yield has been inverted for sometime yet we still have above 2% growth, show me one time when we had above 2% growth, low inflation and an inverted yield curve and it might mean something. The recessions happen with either low growth and an inverted yield curve or high inflation which means the fed is actively raising short term rates to cool the economy and the curve inverts. Neither exists so while the curve has been inverted for sometime nothing is happening.

          1. 2% growth

            You mean GDP? That is a man made number.

            What’s the “growth” when you subtract debt accumulation?

          2. “Due to the QEs nothing is normal, negative interest rates never occurred before QE, and were thought to be impossible.”

            The thought that QE may have screwed up the normal behavior of the bond market crossed my mind as well…

          4. I just renewed a conservative (OK prep for the end of the world) one year CD at Goldman Bank at 2.5%. If the Ten Year TBills are at 1.7%, an inversion has continued, and is growing.

            Any comments on this?

      3. People said this about those calling the last bubble several years before it happened. People recognized the market’s irrational behavior, but it continued on for longer than anyone thought. The great deflation isn’t going to happen overnight, but rather over the next decade.

        1. It seems like a bad idea to use illiquid investments, which by their nature are very hard to unwind, to bet against an inexorable incipient trend which is likely to play out over decades.

          Yet so very many recent homebuyers in the U.S. have done this very thing.

    2. I like the part with the bank creating a mortgage that they know has a high probability of default. Then Wall street buys a naked CDS that pays-off big when the mortgage goes into default. If the folks that sold the naked CDS can’t pay up…no worry, the taxpayers have their back. The people with the mortgage can’t file bankruptcy because the Wall street lobbied against that policy; they have to default so that the naked CDS kicks-in!

  23. I started the proverbial ball rolling on the 1031 exchange this morning. Is there an interest in hearing about my selling and buying experiences?

      1. The house is in a non-grantor trust and is considered an investment. So long as the replacement property has the same liability and equity (minus sale expenses), there will be no tax consequence. Financially, it’s a no-brainer. We’ll be getting a roughly $1.5M home with a $266K mortgage in our desired school with a yard to meet our son’s sensory needs. Because the trust owns the property, property taxes are an expense and the SALT cap doesn’t apply. My husband and I are technically renters. That helps if/when I go back to work. The 1031 exchange also preserves our cash.

        1. As I was meeting with our realtor this morning, a mother and daughter stopped to admire the grape bunches hanging from the front corner fence. The mother and her husband recently sold their home not too far inland and were looking to downsize. She asked to see the house and backyard. She was clearly smitten.

          1. She was clearly smitten

            That of course is priceless. Are you saying you turned an inheritance into a $ 1/4 million debt?

          2. Are you saying you turned an inheritance into a $ 1/4 million debt?

            The trust already has a $266K liability. In a 1031 exchange, anything less than a $266K liability is considered “boot” and taxable at, IIRC, 24%.

  27. Wall Street Journal — Families Go Deep in Debt to Stay in the Middle Class:

    http://archive.is/pTTCd

    Linked from Drudge to original piece, Archive Today link provided in case WSJ paywalls it.

    Note the prevalence of new car loans, cable TeeVee, and other bad choices…

      1. There have been stories on this blog that they do not even change their own lightbulbs. Hence, their preference for luxury rentals with all maintenance provided.

  29. Good morning, boys and girls. The word of the day is “apogee.” This is the point in a rocket’s flight where the booster and sustainer have both burned out, and now the rocket has reached the peak of its arch, but the pull of gravity is starting to exert itself. Now the rocket will begin its re-entry and terminal plunge back to earth.

    Let’s use the word in a sentence, boys and girls: “Formerly super-heated housing markets, having burned through their Yellen Bux rocket fuel, have now hit apogee and will soon be plunging back to earth.”

    https://www.forbes.com/sites/johnwake/2019/08/01/seattle-house-prices-hit-a-wall-los-angeles-new-york-chicago-hit-zero-real-appreciation/#4cda71373353

    2. The word of the day is “apogee.”

      Things to note about this subject are:
      1. Gravity was asserting itself all along…it just wasn’t obvious while ignited rocket fuel was big dumped into the nozzle. Fuel suddenly runs out and then you notice it.
      2. It’s obvious something has changed the moment the fuel runs out. You haven’t reached the apogee yet, and observers far away see that your velocity hasn’t changed yet so it doesn’t seem like a big event for them except for the lack of flame. But if you are on board feeling the acceleration up until that moment it’s obvious your whole world has changed.
      3. When you reach the apogee the distant observers now finally know something has changed…but those on board have already known for a while that it’s going to end badly because they’ve been accelerating downward from the moment the fuel ran out.
      4. Acceleration is a leading indicator of velocity. The media only reports on velocity. But anybody paying attention follows acceleration instead.

    3. Or go into orbit and stay stable at a fixed price for decades.

      Wolf Street had a chart awhile back showing LA home prices from 1990 to 2000. Completely stable with no gain in real prices.

      However, looking at the housing prices vs inflation, showed a 50% drop over this decade.

      History can repeat itself.

    1. fastFT Markets
      Wall Street eyes biggest weekly drop of 2019 as Treasuries surge
      Peter Wells in New York yesterday

      The yield on the benchmark US Treasury is poised for its biggest weekly decline since 2014 as a clouded outlook for interest rates and an escalation in the trade war between Washington and Beijing pushed investors towards haven assets and put Wall Street on course for its steepest weekly drop since December.

      As investors have found themselves caught off guard by newsflow and data, they have pushed the yield on the 10-year Treasury down 20.6 basis points over the past five sessions to its lowest since late 2016 and lined it up for its biggest weekly decline since December 2014.

      The yield on the policy-sensitive two-year has dropped 12.8 basis points this week, in what would be its biggest drop since late May. Overall, this has put the iShares core US Treasury bond ETF up 1.1 per cent over the past five sessions, putting it on track for its biggest weekly rise since early June 2012.
      …

    2. When the globalists do something he does not like, he knows how to do something they do not like. He wanted a .50 percent cut in the federal funds rate, they do not give it to him so he raised the tariffs on China without telegraphing it. I think the .25 rate cut was just right but I love the tariff on China, they were trying to run out the clock. The industries being impacted in China are very low margin so the ten percent rate is going to be devastating. I said last year in September that the rate increase was not needed that they could wait until December. The Fed did it to hurt Trump in the elections and keep him from exceeding 3% growth. Now, the federal funds are right given market conditions. However, I can see why Trump is angry, illegal investigation dragged on forever, fed trying to undermine him, globalists in Congress and in the media trying to undermine his attempts to bring manufacturing back to the US, the same with the help of a major part of the judiciary trying to get the borders open to illegals etc.

      1. ” I said last year in September …”

        Dow 9/19/2018: 26,743.51

        Dow 8/2/2019: 26,485.01

        11 months = (-258.50)

        Progre$$ = ba$$ackward$

        “Go dog!, GO!”

  32. Wall Street is not main Street. Obama’s policies worked for Wall Street, but were horrible for main Street. We did not have a real recovery until Trump took over. Eight years under Obama wasted.

    1. We did not have a real recovery

      We haven’t had a recovery yet. Buying nice stuff on credit that you can’t pay for isn’t a recovery.

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