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Large Moving Boats Headed On A Predictable Path

A report from Honolulu Civil Beat in Hawaii. “What will be the effect of Honolulu’s vacation rental Bill 89? There are four possible scenarios for an owner: They can take the unit off the market, rent it long term, sell the unit or try to illegally continue renting the unit. All of these alternatives will cause a financial loss.”

“How big the loss will be is an important question. The worst situation results when a large number of these owners decide to sell or rent their units long term at the same time and flood the market. This situation can be exacerbated by the number of new units at all price points that are coming to market for sale. I will say from my 30 years of analyzing markets all over the country that this reminds me of an overbuilt market.”

From The Real Deal on Florida. “The condo market is in a slump. The luxury sector is outperforming others. Sales are up in what one report defines as Miami Beach, yet down according to another analysis. Such headlines, especially in a slow market, can be confusing for buyers, brokers and builders.”

“Ana Bozovic, a broker who owns real estate data firm Analytics Miami, said that the information isn’t wrong in the most popular reports, such as those from Elliman and ISG, but believes they lack context.”

“‘The micro follows the macro, and while neighborhood data is helpful, awareness of the larger market cycle is more important,’ she said. Bozovic added that she would ‘love if these reports show transaction volume,’ noting that ‘no one knows we’re at 2010 transaction volume. That’s the most important thing. As a buyer, you do not want to be on the wrong side of a market trend.'”

“Bozovic compares different periods in the market to ‘large moving boats’ headed on a predictable path. ‘None of this is magic,’ she said. ‘What’s really important is [seeing] tops and bottoms. Markets are always cyclical, and anyone who thinks they’re not is misinformed.'”

From Curbed Atlanta in Georgia. “Midcentury houses remain popular with Atlanta homebuyers. Which makes these three listings a bit puzzling. All three are located in desirable northwest Atlanta communities, offering plenty of interior and exterior space. For the most part, they’ve been updated, too. But, in spite of price reductions for all but one, they’ve been hanging on the market for quite a while. (One is knocking on the 18-month mark.) So, what’s up with that?”

“Tucked away on Nancy Creek Road in Paces, this 1955 ranch features four bedrooms and three bathrooms in 3,006 square feet. These are accompanied by a great room complete with stone fireplace, a formal-ish dining room, non-1950s kitchen, and throwback office. It was originally listed back in May 2017 for $945,000. It received a price cut before being removed in October 2017. It returned again in February 2018 for $869,000. Since then, the price has been slashed three times, and now sits at $750,000.”

The Emeryville Eye in California. “Per the San Jose Mercury News, data indicates the real estate market all over the bay area is close to 2008 ‘recession levels.’ Emeryville home prices are down 17% year-to-year and sales numbers have heavily declined as well. In June, there were only nine home sales, down -55% from the twenty in June of 2018 and a -47% decline from the 17 sales last month. June 2019 sales were at their lowest level compared to June of 2018 and 2017.”

The Times of London on California. “On a summer morning, a man is hosing down the pavement in front of Old Siam, a restaurant in the Tenderloin district of San Francisco. ‘Once in the month, twice in the month, there’s poop in front of my door,’ he said. ‘I have to clean it. Who’s going to clean it up — the city? No.'”

“San Francisco, the richest city in America, is grappling with the dirty downside of its tech boom: a rash of human ‘poop’ deposited on the streets by thousands of homeless people who have nowhere else to go. It was revealed last month that the unhoused population has jumped to 9,743 in the city of 880,000. That was a 30% increase on the last official count in 2017 and, based on population, is 20 times the homeless rate in London.”

“Geoff Woo, the founder of HVMN, a San Francisco start-up that makes a ‘human enhancement’ drink, said the city has become ‘kind of like a Third World country. You have to watch where you’re stepping as you walk, not just for faeces but also needles. That is the reality of living in San Francisco.'”

This Post Has 104 Comments
  1. ‘All of these alternatives will cause a financial loss’

    Who knew that speculative buying of super expensive airboxes operated illegally would result in widespread financial a$$-pounding?

    1. Hawaii is a corrupt state – deep blue with the lowest IQ population and the lowest voter turnout in the country – that has failed to invest in maintaining its infrastructure (they aspire to be California) so anyone buying an overpriced air box is going to find themselves in the crosshairs for a mountain of taxes and fees to make up the difference every time a water/sewer pipe breaks (daily) or some government employee swindles taxpayer money to benefit themselves and their families (hourly). The water company just makes up what they think I use and charges me for it; when they were externally audited it was discovered they werent charging customers properly and consequently some greatly abused the arrangement but rather than correct it they raised water hookups 5 fold – screwing the future generations, straight out of the libtard boomer bible.

      Statehood needs to be revoked – excise the cancer!

  2. ‘no one knows we’re at 2010 transaction volume’

    This article is about the different market reporting angles. Wasn’t 2010 when the bottom fell out of the market? And thousands finished and unsold and thousands more on the way.

    Ahem…

    ‘Per the San Jose Mercury News, data indicates the real estate market all over the bay area is close to 2008 ‘recession levels’

  3. “How big the loss will be is an important question. The worst situation results when a large number of these owners decide to sell or rent their units long term at the same time and flood the market. This situation can be exacerbated by the number of new units at all price points that are coming to market for sale. I will say from my 30 years of analyzing markets all over the country that this reminds me of an overbuilt market.”

    Oh the horror! You know just last year I was telling everyone that house prices only go up! Start writing love letters soon. This is just a “Shift”. We will be going higher thanks to my Lyft IPO baby!!! Rich people love to burn money, that’s why they are rich!!!!! All you doomsayers wishing for a crash will be disappointed. END OF STORY!

  4. Costar has gone behind a paywall, which is just as well as they are USELESS! But here’s the title:

    Developers Get Cold Feet About Apartments in US Technology Capital
    Investors and Builders Express Pessimism About the Next Three Years

    ‘San Francisco Bay Area apartment developers are expressing concern over economic headwinds in the next three years.’

    https://www.costar.com/article/18170837/developers-get-cold-feet-about-apartments-in-us-technology-capital

    Hey Costar, how can you use the word shortage with a straight face? The whole thing is falling apart and you said nothing ahead of time.

    BTW technology capital? Delivering food, illegal taxis, illegal bed and breakfasts, puddle watching websites. Jeebus you guys are a joke.

    1. “BTW technology capital? Delivering food, illegal taxis, illegal bed and breakfasts, puddle watching websites.”

      High tech means can’t build affordable housing and so large homeless population. Toilets are apparently still too high tech as well there in the SF Bay Area… That must be why everyone uses the sidewalk. See turd map. Instead of high tech, it’s more like medieval tech in many respects. Watch your step there in that high-tech utopia. Turds and needles all the way down. It’s really the extreme left politics that have mucked up the works, but won’t hear the truth from the MSM since it doesn’t fit the narrative. Socialism is civilization in retrograde.

      1. What about those nordic countries that have strong social welfare policies and are routinely measured as some of the best places to live? They aren’t exactly retrograde….

        1. And there’re plenty of places where it doesn’t work; see South America for examples. Or Cuba.

          Strong social policies work when there’s a sense of responsibility in both the giver and the receiver of the benefit. Once it turns into an expected or demanded entitlement the socialist contract is broken. We’re beginning to see this via things like seriously underfunded public pensions.

          1. “We’re beginning to see this via things like seriously underfunded public pensions”

            Are knot these pension$ managed bye “bidne$$.Professional$?”

        2. Sorry Bernie Bros But Nordic Countries Are Not Socialist

          “It is certainly true that Sweden, Norway, Finland, and Denmark are notable economic successes. What is false is that these countries are particularly socialist.”

          “[I]t is worth noting that the Nordic counties were economic successes before they built their welfare states. Those productive economies, generating good incomes for their workers, allowed the governments to raise the tax revenue needed to pay for the social benefits. It was not the government benefits that created wealth, but wealth that allowed the luxury of such generous government programs.”

          1. The Nordic Democratic-Socialist Myth

            “During the past few decades, the Nordic countries have gradually been reforming their social systems. Taxes have been cut to stimulate work, public benefits have been limited in order to reduce welfare dependency, pension savings have been partially privatized, for-profit forces have been allowed in the welfare sector, and state monopolies have been opened up to the market. In short, the universal-welfare-state model is being liberalized. Even the social-democratic parties themselves realize the need for change.”

            “Curiously, the American admirers of Nordic-style democratic socialism pay no heed to any of these facts. For them, the Nordic countries serve as a Shangri-La, a promised land reachable through generous welfare policies, high taxes, government redistribution, and a massively expanded public sector. Never mind that a closer look shows that these policies are not what explain the success of Nordic societies, and that the Nordic people themselves are becoming less enthusiastic about democratic socialism. Unfortunately, the American Left is more interested in the Nordic myth than a nuanced view of the actual benefits — and drawbacks — of democratic socialism.”

            Same author as Debunking Utopia: Exposing the Myth of Nordic Socialism

            Dr. Nima Sanandaji is an author and researcher of Kurdish-Iranian origin who migrated to Sweden as a child. He grew up with welfare support and personally experienced how the welfare state with one hand gave the less well-off opportunities to climb the social ladder, while with the other hand unintentionally trapped them in welfare dependency. He has previously written twenty books, some of which have received international acclaim. Sanandaji is the president of the think tank European Centre for Entrepreneurship and Policy Reform.

  5. And now the ISM numbers are looking frothy. When the bottom fell out of manufacturing it was “don’t worry services still booming.”

  6. 30 Day Notice!:

    What does hi$tory teach about limiting money acce$$ & credit$ when it’$ needed the wor$test?

    Trump administration reducing the size of loans people can get through FHA cash-out refinancing

    ‘People really started using their homes as ATMs, and when the market plummeted they ended up upside-down’

    Starting Sept. 1, the Federal Housing Administration will limit the loan amounts for cash-out refinancings to 80% of the home’s value or less. Previously, borrowers could take out up to 85% of the property’s equity.

    The new loan amount limit is in line with the limits already in place at Fannie Mae and Freddie Mac.

    MarketWatch | Jacob Passy | 8/5/19

    1. Reactions are best summed up in this comment to the article:

      ————————–
      FHA is the lender of last resort.
      If your finances are bad enough to require using FHA, a cash-out re-fi is the last thing you should be approved for. That’s pouring gasoline onto the fire.
      ————————-

      I have to agree. Why is FHA offering cash-out refis at all? I don’t want to be on the hook for someone’s cruises and Dow Cornings. If somebody wants to do a cash-out, then make them go to a non-government lender for a new loan and buy their way out of the FHA loan.

      1. I thought the Dow Cornings were purchased to avoid the need to pay for a cruise or even a drink at the bar. I do not know but given their popularity they seem to have an impressive ROI.

          1. Wife’s birthday, daughter visited for the weekend, so I drove the family up to Lake Chelan for a nice lunch then to a clean “pay” beach. A woman there was sporting a hefty pair of implants, real strap-gap stuff! Her Latino husband didn’t notice me…’cause he was busy staring at my blonde wife’s Speedo gap as her 35″ legs slowly entered the cool water.

    2. In 2009, the limit was reduced from 95% to 85%, now reduced to 80%. In TX, you can only do 80%, that’s been the rule since cash out refi’s were first allowed here. You can only do one a year as well.

      I knew a guy who did a cash out refi into something stupid, like an 8% loan. He was less than happy when he found out he had to keep it for at least a year…

    3. “Starting Sept. 1, the Federal Housing Administration will limit the loan amounts for cash-out refinancings to 80% of the home’s value or less. Previously, borrowers could take out up to 85% of the property’s equity.”

      Just need real appraisers who can make the numbers work!

  7. “San Francisco, the richest city in America, is grappling with the dirty downside of its tech boom: a rash of human ‘poop’ deposited on the streets by thousands of homeless people who have nowhere else to go.”

    This last part–nowhere else to go–is simply not true. A relatively small percentage of the homeless are people who financially can’t afford a place to live or have friends or family to take them in. Homeless people with nowhere to go DO exist in the Bay Area, but there are not many compared to the visible homeless, and a lot of those people sleep in their cars. They do not defecate on sidewalks.

    People who defecate on sidewalks are mostly drug addicts and/or mentally ill. They will do so regardless of the price of housing and whether they have somewhere else to go. Is SF, the homelessness crisis is a proxy for the opioid crisis.

    1. ‘a man is hosing down the pavement in front of Old Siam, a restaurant in the Tenderloin district of San Francisco’

      So the poop is a few feet further from the door to Old Siam! And it’s wet. Do you have spring rolls?

      1. Presumably he (or the store owner next to him) hosed it far enough to reach the nearest storm drain. I wonder what that does to San Francisco Bay.

        1. Avoid the seafood at his place, I’m sure its billed as fresh and local. Reminds me of seeing raw sewage in Kowloon run straight into the bay 30 years ago which is the same story everywhere in Asia really and I think thats what separates 1st world from 2nd world – sh!t management. Even a city like San Diego has had trouble not polluting their coastline over the decades – to the point of being sued by the EPA. The math is simple, too many people in one place = sh!thole.

      1. That was supposed to be directed at Anonymous Coward, although Ben’s spring roll comment ruled out Chinese for lunch today!

  8. How are you coping with cratering bond yields?

    One strategy to consider using, for those who are patient, though in the housing market long-term:

    Park your money in a GSE mortgage-backed securities fund over the next couple of years. After yields finish cratering, along with housing prices, sell the MBS fund for a capital gain and use the proceeds as part of a downpayment on the home you purchase at deep discount to bubble-era prices.

    1. Is it possible to surf a tsunami?

      Aug 5, 2019, 11:31 am
      How To Beat The Risk Of Negative Yields
      Marilyn Cohen, Contributor
      Intelligent Investing
      Marilyn Cohen is an LA-based fixed income money manager
      Should US bond yields turn negative, there’s investment risk that is manageable using individual bonds.
      Getty

      As the $14.5 trillion in global negative yielding bonds grows, what kind of maneuvering should you be doing?

      First off, we older investors will never forget the Y2K scare and the disaster that never happened. Right now many investors are as worried about negative yields happening in the US as we were worried about our computers in 1999 being unable to digest the change-over to 2000.

      I quote the August 5th Barron’s which in turn quoted BofA Merrill Lynch Research: “Net buying in global bond funds is on pace to reach a “staggering record” of $455 billion in 2019 which compares with the $1.7 trillion of inflows over the past 10 years.”

      For 2019, US bond fund inflows have been huge. Investors have sold stocks for the safety of bond funds. You can look up the Lipper Fund Flows or Yardeni Research’s excellent flow of funds charts (www.yardeni.com/pub/ecoindiciwk.pdf) to see the magnitude of this shift.

      The point is, if we approach zero percent interest rates or heaven forbid, go to negative rates, my guesstimate is the money flows into bond funds of all types will become a tsunami.

    2. Sux to have piled into risk assets just before a cratering event.

      FTfm Pensions industry
      How pension funds are reacting to negative bond yields
      Fed interest rate cuts raise prospect of a bigger push into riskier assets
      Jay Powell, chairman of the Federal Reserve, speaks to the media after the US interest rate decision © Manuel Balce Ceneta/AP
      Chris Flood yesterday

      A quarter of the bonds issued by governments and companies worldwide are currently trading at negative yields — which means that $14tn of outstanding debt is being paid for by creditors in a bizarre reversal of normal practice.

      Negative yields have forced long-term institutional investors, such as pension schemes and insurance companies, to make unprecedented changes to their asset allocation mix because sovereign bonds can no longer deliver the returns needed to meet the promises made to retirement savers.

      Negative bond yields are a direct result of the vast asset purchase schemes introduced by central banks to stave off a worldwide economic slump after the financial crisis.

      Quantitative easing programmes were intended as emergency measures that would be withdrawn once it was clear that a sustainable economic recovery had begun.

      But with the trade war between the US and China slowly suffocating global economic growth, central banks have embarked on a fresh round of liquidity measures to try to prevent a recession.

      1. Awe p$haw, “tariff.dude” don.thee.con, a$$ured the farmers & everyone: “TradeWar$ are ea$y!” … Going on year #2

        “But with the trade war between the US and China $lowly $uffocating global economic growth, central bank$ have embarked on a fresh round of liquidity mea$ures to try to prevent a rece$$ion.”

        U.$. $ervice sector $lows in July to weake$t rate in almost three years

        MarketWatch | Greg Robb | 8/5/19

      2. Would you consider coal to bee an “a$$et.risk?”

        Miners & farmers uh.oh!

        Indu$tries | Metal$/Mining | Associated Press

        Contura wins auction for three of bankrupt Blackjewel’s coal-mine asset

        CHARLESTON, W.Va. — Contura Energy has made a successful bid at an auction for the assets of three Blackjewel LLC coal mines, including two of the top producers in the country.

        The results are subject to a federal bankruptcy judge’s approval Monday in Charleston.

        Bristol, Tennessee-based Contura Energy’s CTRA, -2.73% $33.75 million bid was an increase from its original offer of $20.6 million as the stalking horse bidder for the Eagle Butte and Belle Ayr mines in Wyoming and Pax Surface Mine in Scarbro, West Virginia. They’ve been closed since Blackjewel filed for Chapter 11 bankruptcy protection July 1.

        Successful bids totaling $59.44 million also were made for Milton, West Virginia-based Blackjewel’s other eastern U.S. assets.

        The results did not indicate whether any mines would reopen and potentially enable hundreds of idled miners to return to work.

        The auction came after miners who said they hadn’t been paid by Blackjewel recently blocked the transport of coal along train tracks near Cumberland, Kentucky. Knoxville-based Kopper Glo Mining LLC was the highest bidder at $7.55 million for the Black Mountain property where those miners worked along with Blackjewel’s Lone Mountain complex along the Virginia-Kentucky line.

        Bids also were made for Blackjewel’s other Virginia and Kentucky properties.

        Contura’s offer included an $8.1 million deposit toward the purchase to be applied to cash-strapped Blackjewel’s expenses. Contura would acquire the assets without assuming Blackjewel’s liens.

        Blackjewel’s 401(k) employee retirement plan would be terminated under the proposal, allowing workers whose paychecks have bounced to have immediate access to their contributions.

        Blackjewel holds the license to mine coal in Wyoming while Contura, a company created out of the 2015 bankruptcy of Alpha Natural Resources, holds the state mine permits. Blackjewel recently missed a $1 million tax payment owed to Campbell County, Wyoming — one of Blackjewel’s largest creditors.

        Contura had sold the Wyoming mines to Blackjewel in 2017. They were among the top-producing coal mines in the U.S.

        Blackjewel follows other major U.S. coal producers that have filed for bankruptcy protection in recent years, including Englewood, Colorado-based Westmoreland Coal Co. in October and Gillette, Wyoming-based Cloud Peak Energy in May. An auction for Cloud Peak is set for Thursday. The company is selling its assets to cover nearly $400 million in outstanding debt.

        St. Louis-based Peabody Energy Corp. emerged from bankruptcy protection in 2017. Both St. Louis-based Arch Coal and Bristol, Virginia-based Alpha emerged in 2016.

      3. global economic growth

        Which for the last decade has been all based on credit expansion, and mostly in China. The sooner that charade ends the better.

      4. “Negative yields have forced long-term institutional investors, such as pension schemes and insurance companies, to make unprecedented changes to their asset allocation mix because sovereign bonds can no longer deliver the returns needed to meet the promises made to retirement savers.”

        The beauty of the public pensions is that the state can always raise taxes or shift budgets so that they can continue to make good on their promises…until they can’t.

    3. Is that your personal strategy Bear? My guess is that San Diego prices are never going to crash to what you can comfortably afford, at not in the timeframe where you can enjoy it. You may have to move out of state.

      (I’m just glad that I never had kids. So I can retire wherever I damn well please without needing “to be near grandchildren.”)

      1. I can retire wherever I damn well please

        Ahem. Children take their own path in life if you let them. Retirement requires financial security. It has a lot more to do with getting out of debt and living modestly than the number of people out there that call you gramps.

        1. Problem is that if Gramps wants to interact with his grandkids, then he needs to live near them. Which usually means living in a city where housing prices are certainly not modest.

          1. Babysitting and subsidies. Or better yet, kid skips the phone call and just moves right in, toting grandbaby. I’ve seen it multiple times. Memo to empty nesters: downsize ASAP.

      2. We have sufficient savings to buy a modest San Diogo home, comparable to the one we rent, but in an area without the high quality education premium. But I am not at all convinced that home ownership is a good diversification strategy.

        1. San Diego…yegads!

          Anyway, there are some circumstances under which I could imagine buying a place, but if the Fed continues its policy of propping up home prices at above market rates, I’m not sure it will ever make sense to buy.

  9. Toronto – i dont know how this can be happening. Unless it is new condos and people are having to accept the new built units that they signed for 2 years ago.

    According to Urbanation Inc.’s condominium market results for the second quarter of 2019, condo sales are up by 77 per cent. They’ve increased to 8,902 units from the same time period last year.
    This increase is the second largest growth period the city has seen on record, only after the second quarter in 2017, which saw the sale of 11,413 units.
    Record High Sales in 905 as GTA Prices Reach $1,000 PSF – our newly released Q2 report: https://t.co/D4nBABIXSo pic.twitter.com/UwFaZP6zyz

    1. For you maybe. People pulling inventory off the market, waiting for Amazon.

      In my nabe, almost everything is sitting on the market because people are pricing 15-20% too high.

  10. STAGflation or stagFLATION

    discuss

    me thinks there will be a weird post tariff inflation bump- then kerflush

  11. Ben, Are you in Arizona? Have you noticed the inventory dropping and prices heating up? Is AZ just late to the party? Mr. Cromford the local real estate statistician says thinks we’re guaranteed to still see price appreciation as the market it really heating up.

    1. Yes, I have a secret bunker in the Hualapai mountains. Internet is a little slow, but there’s all the Saguaro berries I can eat.

          1. For fresh market sales, yes. Frozen berries are more likely mechanically picked.

            Blueberries and blackberries are sturdy enough for mechanical picking. Red raspberries, not so much.

      1. Saguaro berries? I’ve never tried them. I wonder how they stack up to my grandpa’s huckleberries he used to forage up in Priest River, ID.

    1. I love that Mortgage Watch, ignore the data in front of your face on home values and “please select price from the drop down menu.”

        1. Love is blind, apparently. There are plenty of places you can actually find price drops. Phoenix doesn’t seem to be one of them, at least yet.

          1. July 13, 2019

            “In June, I was in a Phoenix doctor’s office and overheard two women talking about how the housing market was ‘crashing again.’ While I waited, I couldn’t help but listen as one woman told the other that her home’s value could fall like it did during the crash of 2009.”

            “Real estate experts don’t see signs of a crash looming. ‘It’s not happening’ said Tina Tamboer, senior housing analyst with the Cromford Report, about a potential plummet in the area’s home prices. ‘It’s still a sellers’ market, but people need to be reasonable and not crazy about pricing their home,’ said veteran agent Bobby Lieb.”

            http://housingbubble.blog/?p=2051

          2. June 9, 2019

            “The priciest home for sale in Phoenix has sparked its fair share of controversy. The spiral house that famed architect Frank Lloyd Wright designed for his son David in the upscale Arcadia neighborhood is listed for $9.9 million, which represents a $3 million price drop. The 2,553-square-foot house built in 1952 was listed in September for $12.95 million.”

            http://housingbubble.blog/?p=1852

          3. May 14, 2019

            “Metro Phoenix’s new condominium craze took a breather last year. ‘The resale market is selling well for the ‘right’ condos in well regarded buildings, but it has certainly softened a little,’ said David Newcombe, a condo expert.”

            “Paradise Valley’s 85253 ZIP code saw condo prices fall 20% to a median of $325,000. Central Phoenix’s 85003 ZIP code experienced an 18% decline in condo prices. North Glendale’s 85303 area saw condo prices fall 17% to $99,308. Goodyear’s 85338 ZIP code posted a 14% decrease in condo prices. Downtown Phoenix’s 85004 ZIP code saw condo prices drop 9% to $245,000 last year.”

            http://housingbubble.blog/?p=1681

      1. He got lucky on the timing, it would appear, however there’s no saying there won’t be another massive bubble where he cashes out and makes a good profit. It’s just a gambling tool, in my opinion. Unsurprisingly, he likes to gamble.

        1. I’m not sure what you’re insinuating but it sounds like somebody, again, pissed in your Cheerios. Aren’t you supposed to be retired and happy? Instead you troll here and belittle people. How sad.

    1. When the investor peacocks start rocking on the balls of their feet it’s time to sell your entire position!

  12. Can you feel it? I can.

    What was it? 3 months ago that the vocabulary was foggy. Normalization, return to balance, aspirational pricing, moderation of expectations, etc.

    Some very cryptic wording to make shifts subtle. And those who spewed these words believed. What about today’s vocabulary? Starting to sound a bit less nuanced. Would you agree? Somehow reality does eventually set in even on these folks.

    It’s happening right before our eyes in real time. Perhaps some 1st signs of panic to begin soon? Imagine what we will be hearing in 6 months? 1 year? I think we are on the precipice of something big. Your thoughts?

  13. Bitcoin up over $1000. Money must be pouring out of China. This sucker (China) might go down.

      1. China spent trillions of US dollars supporting it’s currency so one day it could truly become a reserve currency like the dollar or Euro. In one day, it flushed that down the toilet. Xi is lashing out at the US and lashing out at Hong Kong. Money is flowing from China and Hong Kong and intelligent people are leaving as they see him move from the capitalist and political reforms of communism. Xi can have a prosperous China with a free market or he can have a poor China with a return to full communism. What he cannot have is a prosperous communist country. For over a hundred years it has been tried all over the world without success. Today China did not shoot itself in the foot it blew it off. Smart play was to just buy tens of billions of US farm products. But he did not want to lose face, now he may lose his head and end up an organ donor. As I was writing this I saw that China has been labeled a currency manipulator, checkmate!!!

        1. I heard an interesting hypothesis today that Trump doesn’t want a deal with China but rather a divorce after realignment of supply chains.

          1. I agree, I have said similar things. Do not get me wrong if the deal was sweet enough he would take it to coast to a re-election. However, he is winning this war and China’s forced error today proves it.

          2. cods$wallop

            Ireland & Scotland will assist the Un.United Kingdom with their brexit travail$ bye choosing EU + $elf.National.Independence

            Who owns Jaguar, Land.Rover$, Lotu$ … Englishman?

          3. Boris Johnson to defy any vote of no confidence

            ‘Constitutional experts confirmed yesterday that Mr Johnson would technically be under no legal obligation to quit if he lost a confidence vote. Tory Remainers have conceded that there is no “absolutely foolproof” parliamentary mechanism to stop a no-deal Brexit.’

            ‘On Friday Mr Cummings made clear to government advisers that Britain would leave with or without a deal on October 31. He told colleagues that “nothing will stand in the way of that” and that the prime minister had the power to set the date for the next election after Brexit has been delivered.’

            ‘Catherine Haddon, a senior fellow at the Institute for Government think tank, said that, technically, under the Fixed-term Parliament Act, the prime minister was not required to resign upon losing a vote of confidence. “In terms of a strict reading of the legislation, Boris is not required to resign. It is completely silent on all of this,” she said.’

            https://www.thetimes.co.uk/article/boris-johnson-to-defy-any-vote-of-no-confidence-s28ksnhzm

          4. < 90 day$ … Quite exciting!

            The definition of coddiwomple is: “to travel in a purposeful manner towards a vague de$tination”.

          5. “to travel in a purposeful manner towards a vague de$tination”

            Reminds me of the army principle that if you want to be left alone walk fast and carry a clipboard. Doesn’t matter which direction. Wish we’d have had a word for it back in the day…

          6. UK retailers $uffer weake$t July $ales growth on record: BRC

            Barclaycard said the proportion of consumers who said they still felt comfortable making big purchase$ had dropped to 54% from 60% over the course of a month, while job loss fear$ had risen to the highe$t in more than two years.

            New car sale$ $uffered their bigge$t July fall since 2012, motor industry data showed on Monday, and Britain’s biggest private-sector employer, supermarket chain Tesco, said it was cutting 4,500 jobs on top of several thousand earlier this year.

            Reuters | Reporting by David Milliken; editing by Kate Holton

        2. Xi can have a prosperous China with a free market or he can have a poor China with a return to full communism.

          What he surely will have is a smoldering pile of debt and corruption to deal with. The biggest in history. The problem with a mountain of debt is that it must grow or die. China is not a wealthy country, they just built a lot of stuff on credit. Stable prosperity is not one of their choices.

    1. Australia saw iron ore drop by over 8 percent today. China has to figure out what to do with its excess steel capacity. Additionally, it had to figure out how to pay back the loans for that excess capacity. Agriculture in its entirety makes up about 1 percent of our GDP. The soybeans we sell to China can be sold elsewhere and the impact on our GDP will be negligible. Farmers can be compensated for a small fraction of the money raised by the tariffs. Farmers are used by companies such as Apple to avoid talking about the detrimental impact globalism has on US workers. It sux Apple and Tesla you put your factories behind enemy lines but now you will pay the price. Soon the Chinese money buying US real estate will dry up and soon even higher tariffs will be imposed meaning American workers will soon be able to buy houses at much closer to historical wage price ratios. Big losers were seen today, multinational corporations having major operations in China. Too bad you are like Ford in Nazi Germany, you are on the wrong side of history.

      1. .99¢ ro$e.colored glasses + wrong mushrooms = aqdan’$ global $olution$ delusion$.

        “Farmers are used by companies such as Apple”

        Eye’ll send a memo to Jack Scoville @ InsideFutures

  14. 3:10 EST Dow down 951, S&P down 100.

    But still at extreme levels from a P:E standpoint. So what happens

    1. “So what happens”

      They cheerfully get to annouce: “we closed above our se$$ion low$!”

    2. Here, the glass really is half.full:

      Oil prices could cra$h by $30 if China buys Iranian crude: BofA
      Bank of America Merrill Lynch warns the oil price could $lip $harply if China buys Iranian oil.

      Beijing could undermine Washington’s foreign policy stance by ignoring U.S. sanctions placed on Iran.

      Dan Murphy | CNBC | 8/5/19

      “Don’t forget there are other producer$ that would also be targeting that trade with China, so for instance you could see Iraq or Saudi Arabia step in and try and discount the volumes that they would be exporting to China as a way to circumvent Iran getting that extra market share,” he added.

      Traders fret on crude demand

      Crude oil prices slumped further on Monday, as traders focused on a deteriorating demand outlook.

      Analysts at BofA Merrill Lynch said the latest round of US tariffs could reduce global oil demand by 250,000-500,000 barrels per day, adding to worries about a demand slowdown that is challenging the fundamentals for crude.

      1. tariffs could reduce global oil demand by 250,000-500,000 barrels per day

        Are you telling me that making things locally is conservationist?

        1. It has been fascinating to watch media simultaneously say climate change requires huge public expenditure paid for with tax dollars but an increase in the cost of a smartphone (toy) via import taxes is the end of the world because it harms consumers.

      2. Libya lost 450,000 barrels of production last week and there is no indication when it will restart. The world uses over 100 million barrels of oil a day. 500,000 barrels is the end of the world? I do not think so.

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