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In California, We’re Attributing That Drop To Chinese Buyers

A report from the Bay Area Newsgroup in California. “Foreign buyers have cooled on the U.S. residential home market, dropping investments by more than one-third over the previous year and spending less in expensive California. About one-third of foreign purchases in California during a recent 12-month period were made by Chinese citizens. In the midst of a growing trade war, overall Chinese investment in U.S. residential real estate fell from $30.4 billion to $13.4 billion in the last year.”

“Foreign buyers, defined as non-U.S. residents and visa-holding foreigners living in the U.S., cut their spending by more than one-third, from $121 billion to $78 billion between the 12 months periods of 2017-18 and 2018-19, according to the survey. ‘It’s just a big drop,’ Gay Cororaton, senior economist for the National Association of Realtors. Political and commercial uncertainty during the trade disputes likely drove away Chinese investors. ‘If they don’t know how business conditions will be, they might not invest.'”

“Soaring real estate prices in California have driven many buyers to the sidelines. Bay Area home sales in June dipped to the lowest levels for that month since the depths of the financial crisis and recession in 2008. In a region with 7 million residents, just 7,300 home and condos were sold in June.”

“Median sale prices for existing homes in the nine-county region fell slightly in the first half of the year, to $900,000 in June, according to real estate data firm CoreLogic. The median home price peaked in May 2018 at $928,000.”

“Cororaton said the large drop surprised researchers. In California, she said, ‘we’re attributing that drop to Chinese buyers.’

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This Post Has 108 Comments

  1. ‘In a region with 7 million residents, just 7,300 home and condos were sold in June’

    It’s been this way for a long time. Yet the REIC will play little games with statistics, “oh bidding wars!” Ain’t nothin’ sellin’. Live by the speculator, die by the speculator.

    1. “Live by the speculator, die by the speculator.“

      – Right. Speculators drove prices to extremes. Shelter-buyers priced out. Speculators exiting the market. Shelter-buyers still priced out. It’s a long way down from here to affordable housing at shelter-buyer prices. Interest rates already rock-bottom. Prices must fall due to extreme air pocket. Wages aren’t going to make up for the huge disparity esp. in the coming recession. This won’t happen overnight, but it’s happening. Another Fed-induced asset bubble (now popping). Realtors might want to rethink their day jobs… I hope they saved all of those large commissions.

    2. Visited a home for rent in LA over the weekend. It was owned by a Chinese national who works for Oceanwide Development. Their LA project is stalled, reportedly because after importing $1 billion in funds, they cannot get any more money out of China.

      The property owner (whose mother bought the house 10-years ago when he came to school here) is going back to Shanghai for a “new assignment”. Just one example of demand destruction in the real estate margins.

  3. In the face of hyperinflation in rents, there is absolutely no honest talk in the media about the cause. Why are our enemies – the Chinese – allowed to speculate in our SHELTER? This is an absolutely despicable situation and our politicians have completely failed the people of the United States.

  4. Chinese buyers were not just active in California. I think a large part of luxury building throughout the country was aimed just at them. Too bad, what money they have in China will be increasing difficult to get out of China.

  5. Hey Ben and crew…

    Been following this site for maybe two years now and mostly just read but I’m curious about your thoughts on this news combined with specifically being tied to Silicon Valley.

    Let me clarify… wife and I are in disagreement to whether or not buying here in Bay Area is smart and I follow you guys so you KNOW my thoughts. But hers… are different. She is starting to come around with believing that a drop is coming but her argument is simply this. (She is in tech)

    Silicon Valley will never go away. The money and incomes will never go away so therefore you have an insulation to this particular area that is pretty bullet proof.

    My thoughts are that over the oncoming years companies will leave because of the technology and ability to work anywhere you are no longer married to a building and a NEED to commute down town. I’m not saying SV would become a future Detroit as the climate is amazing but…

    Anyways I’m not as good at selling the debate like maybe some of but the people in tech have forgotten about the dotcom days. They think they are untouchable basically and even a recession/ melt down will protect the techbros.

    So to sum I would love some thoughts…

    Also I know this website is great for people who already know what is up but is there like a greatest hits list of links that I could give someone a crash course I’d you will in why buying a house at this peak is a bad idea.

    My argument to my wife is that if we pay for an 800 thousand dollar house that should be 5-600 in my opinion… she says we pay high rents so what’s the difference if we buy and hold?

    Forgive me for the run-on rambling post.

    Gary
    Oakland
    Rent currently 3400 for a one bedroom.—- thinking of 3 bedroom in 750-800 range … she is and I am arguing against. Thanks

    2. Bay area prices fell 40% during the last minor correction. Stack on the rampant mortgage fraud and subprime debacle since 2010 and you’ve got a real problem.

      Go for it. It’s your funeral.

      1. do you have links to subprime being in a similar situation? I agree but I don’t hear as much about subprime this time around.

        1. “but I don’t hear as much about $ubprime this time around.”

          NON.bank$ are $acrificial lamb$ awaitin’ to bee $laughtered.

          You won’t find them in yer local grocery store, ($tealth.loan.lender$) but they will di$appear: poof!

    3. If you apply the same argument to the stock market (“there are so many rich people and funds that need returns that stocks will never drop far”) will she believe it?

      Remember, stocks and real estate prices are set on the margins, by the last sale (of stock or “comparable” house). So it doesn’t matter if most of the techbros keep their jobs and think their house is worth $1M — if 10% lose their jobs and have to sell, those people will set the prices.

      And then there’s the matter of speculation and bubble psychology. When people think prices are going UP, they’re willing to spend more (e.g. risky mortgages or very high debt to income ratios), but when unearned appreciation stops or goes negative (like right now), that goes away.

      I strongly recommend hanging on for at least a year or two — I’m having flashbacks to 1999/2000, with bubble companies all of a sudden worrying about fundamentals like actually making money (see Uber laying off 400 marketers, freezing engineer/developer hiring). Then add in the uncertainties of the trade war, world situation, etc.

      1. Great points… thank you- hadn’t really thought about the few that lose their jobs are the ones that will set the price and it won’t matter about the high income earners still employed. Thank you.

        Regarding the final comment. I 100% agree and news like that with uber is exactly what has got her to have more of an open mind. She is still stuck on what we are paying for rent.

    4. Never say never.

      Also, do you really HAVE to pay $3,400 for a one bedroom in Oakland? I’m guessing there are liveable areas of Oakland that are more affordable.

      Before you can make any reasonable buy/rent comparison, I think you need to at least come up with a rent number that most people in your community can afford. You don’t have to go and live in a place that costs that amount, but that number is key to the past, the present, and the future of your market. I would go ahead and assume it will go down 10 to 20% in the future as well, just to be conservative. But I hate surprises.

      Then you need to work out an amortization table. I recently did this in google sheets. The formulas you want are PMT, IPMT, and PPMT. You plug in the purchase price, the down payment, and what you think the house will be worth at the end of the mortgage. From here you can work out your return on the down payment, and how long it might take you to break even on your investment (compared to renting). Don’t forget to include taxes, maintenance, insurance, and any other recurring costs of ownership.

      Ultimately no one can predict future prices. I suspect a lot of us on this blog are a little surprised things have gotten so out of hand so quickly, and are unsure of just how long the central banks can keep the party going. Who knows, maybe they can QE 4ever. I don’t think so, but I have been wrong before.

      But these tools will help you make an informed decision based on current prices. I would be surprised if buying was the right move in Silly Valley right now. Maybe if you plan to live in the house for decades. But you can let us know what you find!

      1. 100% agreed. We don’t have to pay that much. She likes new and the people building the new apartment buildings here are catering to people just like her. She is the one with the bigger income and says she has worked hard so she should be able to splurge on the niceties that these “luxury apartments” are delivering. I think it is a waste and am hoping that with all the new units coming online in the next year or two that prices in rental are suppressed as well.

        I have run the numbers and if we are going to buy and hold on to a house then the calculators say we win buying in the long run at these prices but of course…why lock in a price at 800K if it is going to be nearly halved over the next few years. Yeah…she may be able to afford it but it doesn’t make it a smart choice. Thanks for replying.

        1. There are too many reasons not to tie yourself to CA and especially Silly Valley. San Fran is overdue for The Big One. The whole state is due for fires. The place is overpopulated, overtaxed, and over-sanctuaried.

          I wouldn’t call tech bulletproof. I guess you don’t have kids, but I would imagine that your wife is getting up there in years (by this I mean nearing 35), which puts her on the hipster chopping block. Her job is always in danger from H1B. The smaller companies can go kaput the minute the VC stops flowing in. The larger FAANGs are under a microscope for monopoly, which doesn’t bode well either. In other words, your wife needs to at least think about what would happen if she lost her job, or had to take a pay cut. She’s almost better off taking a pay cut NOW and relocating to a cheaper area where luxury can be had for half those prices. Anything has to be better than paying $3400/mo.

          1. ughhhhhh….yeah. I agree with everything you have said. I think I can get her to wait at least a year. Ironically, she is passed that age and always says she is concerned about her job but she works with people who all live on the tech ether and it definitely alters her thinking. She is on the finance side of things so sees the money being doled out to engineers and it dulls the senses.

            I used to frequent Patrick.net for my housing info and that isn’t the same so I found this place and all of you give me hope that I am not the only crazy one…because people around here treat me like I am cuckoo for thinking things are coming down. Thanks Ben for the peace of mind that I am not alone.

            Gary

          1. That is easier. 😛 yes we pay but if things go south we are not tied here and rents could go down. 30,000 apartments in Oakland coming online in the next two years…if there is a downturn…rents could follow suit. The building we moved into a few months a go gave us six weeks free rent.

        3. Yeah…she may be able to afford it

          Ya know, if you have to borrow the money for 20 or 30 years, you actually cannot “afford” it.

    5. insulation . . . bullet proof . . . untouchable

      Quite the delusions of grandeur. Silicon Valley at its core is globalist crony capitalism and fraud. The sooner she realizes that the globalists lost the 2016 election, despite their election meddling, the better off you and she will be. The DOJ and FTC have been untethered. If only the SEC could be too.

          3. regarding “everything is tech”

            well.. I can’t get into specifics but “someone I know” 😛 works for one of those shouldn’t be tech but is considered tech for whatever reasons and basically because the market values “tech” companies higher than “non tech” the new goal of all the start ups is to force themselves into the “tech” genre if you will just to get those higher valuations sooo the thinking goes that they will all be given a pass for whatever reason. Which is all bullshit we know that… I just wish we could go back to basics and the government stop propping this bs up.

    6. inventory tells the tale- price discovery takes a long time,but they can’t hide inventory build

    7. Silicon Valley will never go away. The money and incomes will never go away

      She’s a little overconfident but I think she has reason to be. I think the basic premise here is generally correct.

      so therefore you have an insulation to this particular area that is pretty bullet proof.

      This is where I think things go wrong. I think she is assuming that this “bulletproof-ness” justifies current valuations. That’s a bad assumption. I think it might be bulletproof at 2x household income and stable at 3x. But after temporarily being well above that you would also expect it to temporarily go below that before normalizing. Could she see the possibility that she is correct…but not until AFTER a major price drop?

      1. so you remember the articles a few months back about the IPO’s this year were going to flood the market with new rich people who were going to pump up the housing market and keep this ride going?

        She was way more confident in her argument and now with the recent news of those IPO’s and the layoff’s of uber she is starting to see a little light… so I am hoping this continues and she comes around that current valuations are not sustainable. – Thank you Carl.

        1. The “IPO Effect” was dispelled even before the IPOs happened. Most people, except some at the very, very top were not going to see sudden wealth anyway near enough for them to be buying even average shacks in Mountain View, etc with cash or mostly cash, much less one of those homes with gently sloping ramps to the underground garage so their Ferrari’s don’t get scraped up.

          1. how come we can’t like comments on here?

            Yep..of course since I follow this blog I am up to date on all that IPO effect being bullshit but she brought it up as a way to try to argue her point that the Bay Area is insulated from the “coming crash”. Soo…. I call it a win that she has since agreed it didn’t happen.

    8. Tech nerd here. Virtual Reality tech is going to make huge leaps in the next five years. I just talked to a Google recruiter who specializes in VR but they require relocation to SV (for now). Facebook paid $2B for Oculus a few years back and are heavily investing.

      Guess who will lead the charge into remote work with VR? SV companies will. The Bay area will always be a nice place to live (downtown is another story), so prices will always be higher. But young talent living with two people per room will bail as soon as they have alternatives.

      Companies will have access to a much larger talent pool and workers will have access to much lower cost of living. I think cities will be like bars in the future. They’ll get hot for a while then tech workers will move to the next interesting location, all while keeping the same job.

      1. I was thinking similarly…

        Thank you…her argument was that the money is right here so the talent will ALWAYS be right here but it is becoming more and more apparent that the talent…AND money can be anywhere really. I am an editor and work from home as we speak. I have a client I have never even met on the other side of the coast.

        1. AAA Dev here formerly from one of the big VR players. I’ve been running a team distributed worldwide out my house. Only one person of about 40 has been located in California (LA/SD). Have engineers everywhere from Helsinki to Mesa to Taipei to Cleveland. Same for other personnel – Spain, Germany, Florida, Ecuador, etc. Creates some interesting arbitrage situations.

          If we’re going to have an all hands meeting, it is going to be in some place like Las Vegas 🙂

        2. the talent…AND money can be anywhere really.

          I’ve worked in half a dozen “this is the thing” industries. This is not the thing anymore is why I worked in half a dozen.

          1. they are trying to shield themselves by saying everything is tech so no matter what the thing is…because it is tech…it draws capital and on the ride goes.

          2. everything is tech

            How much of tech is necessary? I don’t use half the apps I’m given. The few apps I’ve purchased are for my son’s entertainment. If/when VC money dries up and/or investors require profitability, a large portion of tech goes poof.

        3. Remembering last time… housing at the edges of the Bay Area tanked, condos (particularly 1bedrooms) tanked… the nicer stuff and detached houses dropped but not by nearly as much. I think that while a lot of people will lose their shirts, most prices won’t drop to what I consider “affordable.” There are a lot of priced out people in the wings. You want a condo, some might drop back down to the 100 levels, but maybe not in the neighborhoods you like.

          This combined with an earthquake though would be a different story…

      2. Virtual Reality tech is going to make huge leaps in the next five years.

        I remember hearing about VR in 1992/1993. And, here we are.

        1. I think it was ahead of its time back then. I have hung out with a few people in that field and been shown some stuff. I can’t believe what they are now capbable of… they are still waiting for a few things to fall in place before it could go main stream which could also not happen but the tech is still amazing. I answered your “everything is tech” comment in a different area because there was no reply under it. not sure what to have done in that case.

    9. Iffin’ ya can get into the $helter.$hack for 0% (Zero) down & can wear a bankruptcy name.tag ’till a gubmint aid.for.your.$alvation program arrives, eye’d say: GO for it, pu$h.thee.button!

      1. I don’t want to push the button! 😛

        fyi…you have a weird way of typing. What i$ the rea$oning for all thi$ bu$ine$$? It make$ it hard to follow you.

    10. “Hey Ben and crew…”

      Can you do a 20% down payment and also have 6-months of payments in the bank…just in case?

        1. Realize that we are at the RE peak right now…nothing but downhill until the fed steps in to stop the slide. Most people around the Santa Clara Valley will continue making their payments despite being slightly upside down. The folks selling right now are probably leveraged up to their eye teeth and cannot continue making their payments. The problem with a down-turn is that it’s like dominoes falling, and eventually you or your spouse will experience a lay-off too. Hence, the 6-month cushion I mentioned. Do you or your wife come from money that can prop you up for a while?

          1. 46 years old and never had a six month cushion…not sure I could even imagine that. My wife has been a good saver before I came along so she has been smarter with the finances. Which is why this scenario doesn’t make sense. The one time you want to make a bad financial decision it is buying at peak or just under. The idea that the market is 10% below peak in some areas is making her chops wet. egags…that isn’t a deal yet, dear. Regarding family money…we are pretty independent so wouldn’t even ask but I am sure in an emergency we would have a place to go but rather not get to that point.

          2. None sense about the layoffs. Even in 2008 the vast, overwhelming majority of Americans kept their jobs.

        2. Gary. I would like to reply to your question but, to difficult on the IPhone. Small key board. For what it’s worth I will reply this weekend if you interested in checking back. Don’t be looking for any positive responses here on this blog. Most here are pretty negative on SV. BTW, my family has been here for about 110 years. Kids are fourth generation.

          1. ‘Don’t be looking for any positive responses here on this blog’

            Oh really? I say buy as many and as large as you can possibly borrow for.

          2. And snap up a few of those new shacks in Merced! The builders can even get you some of those USDA loans.

          3. Don’t be looking for any positive responses here on this blog.

            He was asking for assistance to bolster his argument. From the looks of it, he got some helpful responses.

          4. Don’t be looking for any positive responses here on this blog.

            You are so lucky davey wants to sell you some real estate. Don’t pass this up! You probably qualify for a loan 20x family income, and you should plug into that wealth generator before the door closes!

          5. I’ll check back…so would appreciate any response from you. I have been stalking this site for sometime so I know what the over all consensus is in general but was looking for a bit more targeted thoughts directly tied to the power of the tech industry.

    11. “Silicon Valley will never go away. The money and incomes will never go away so therefore you have an insulation to this particular area that is pretty bullet proof.”

      I think they also said that about Detroit in 1965. You wouldn’t happen to be working with a Realtor named Suzanne would you?

      https://www.youtube.com/watch?v=20n-cD8ERgs

      1. classic… detroit in 65… yes. that is exactly what I am talking about…

        for all the smart tech people I am shocked that they live in the bubble (no pun intended :P) mentality that this can’t end.

    12. I’d shoot myself if I was paying $3,400 a month to live in $h1tty a$$ Oakland.

      I’d move out of the Bay Area, the next downturn is going to hit the highest priced areas the hardest. More and more companies are moving to tax friendly states where the CoL is lower and where young people are moving. Combine that with more people being able to work remotely. I’d rather be buying in Raleigh and Nashville than the Bay Area or Boston right now.

      1. it is really not my jam either but I’m here for the missus and her bart commute to Downtown SF is really nice. door step to door step in 35 minutes and that is kind of priceless to her.

      2. “Combine that with more people being able to work remotely.”

        I’ve always thought more people could work remotely particularly those who are not producing tangible products, but Apple built this huge circular office complex on some of the most expensive RE…so everyone could be [there] rather than somewhere. Go figure!

        1. I’ve always thought more people could work remotely

          They can. But apparently managing remotely is more difficult than working remotely.

  7. Local (to me) data point:

    The Chinese national and his wife who paid $50K over asking for the 2br 1/2 of a duplex next door to us are gone. First he disappeared, after many yelling matches with his wife and late-night cigarettes smoked within smelling distance of our front door. Next she disappeared, seemingly overnight, with the kids. The first stage happened last year, the second this spring. I’m not sure how their sale price compared to what they paid for the place a few years ago, or even whether they sold or walked away.

    1. Was there ever a “for sale” sign up? Did you see people looking at it? Have you checked the local recorder’s office for the address? A little searching will likely find the answer.

  9. Trump unveils a policy to prevent immigrants from being a burden on taxpayers and the New York times headlines it as a policy favoring the wealthy and in the text as being racist. Not surprised, but just another example of progressive spin of the news.

    1. Then don’t look at the WaPo — they win the prize for election meddling. I guess they didn’t mention that Trump’s policies would more closely resemble those of Canada and Australia.

    2. The policies announced today are good. It’s what I’ve been saying all along: the wall that needs to be built is around the welfare state and its concomitant benefits. A physical wall is less important.

      I’m doubtful that DJT can do much real immigration reform now. He has poisoned the well with his rhetoric.

  10. China’s Lowest Bond Yields Since 2016 Look Really Juicy to Some
    [Bloomberg]
    Tian Chen and Qingqi She
    Bloomberg August 12, 2019

    (Bloomberg) — China’s benchmark government debt is the closest in years to yielding just 3%.

    Escalations in global trade tensions since April have put a damper on sentiment, helping spur a rally in Chinese sovereign bonds. The yield on the country’s 10-year debt is down about 40 basis points since a peak that month, falling as low as 3.03% Friday. It hasn’t traded below the 3% threshold since November 2016.

    The returns still stand out for bond investors just as a record $15 trillion of the world’s debt yields less than zero. While bulls are expecting China to add stimulus to counter the economic risks of a protracted trade war with the U.S., the People’s Bank of China signaled Friday it will hold back from deploying large-scale measures. Retail sales and credit data due this week are forecast to confirm a slowdown in growth.
    …

    1. The 30-year Treasury bond yield is on the brink of falling to an all-time low
      Published: Aug 12, 2019 4:06 p.m. ET
      The 30-year bond yield last hit an all-time low in July 2016
      Getty Images
      By Sunny Oh

      The yield for the longest-dated Treasury bond is now a hair’s breadth away from plumbing its lowest level in history.

      Investors said the $22 trillion U.S. government debt market was now approaching this key milestone on a combination of factors including the growing world of negative-yielding government bonds, expectations for Fed easing spurred by rising recession concerns, and the absence of inflation pressures.

      The 30-year Treasury bond yield (TMUBMUSD30Y, -5.61%) ended at 2.13% on Friday, following a relentless rally in long-term government bonds in the past few weeks. The 30-year yield is only three basis points away from its all-time low set in July 2016, when it touched 2.10% after the U.K. voted to leave the European Union. Debt prices move in the opposite direction of yields.

      The rate for the so-called long bond had risen to a multiyear peak of 3.46% in November, but has steadily retreated since the U.S. central bank reversed its plans to push for rate hikes and later cut interest rates in July.
      …

      1. “Queen h5” = “Don’t cry for me Argentina!”

        Market$
        Argentina’s 48% $tock Rout Second-Bigge$t in Past 70 Years

        Bloomberg |By Sarah Ponczek | August 12, 2019

        The surprise outcome in Argentina’s primary vote roiled the nation’s financial markets, sending the S&P Merval Index plunging 48% in dollar terms.

        That marked the second-biggest one-day rout on any of the 94 stock exchanges tracked by Bloomberg going back to 1950. Sri Lanka’s bourse tumbled more than 60% in June 1989 as the nation was engulfed in a civil war.

        1. NO!Deal.Brexit = NO Chao$ … Go Ireland!, Go Scotland! …
          Oct 31$t, fa$ter, fa$ter!

          Economic$
          Fear$ of Argentina Default Loom Large as Trader$ Dump Everything

          Bloomberg | By Sydney Maki and Aline Oyamada | August 11, 2019

          Credit-default $waps $pike as bond yield$ $oar into distre$$
          Pe$o drop$ to record, $tocks plunge on Macri’s primary debacle

          “The market is starting to price in default,” said Edwin Gutierrez, the London-based head of emerging-market sovereign debt at Aberdeen Asset Management. “The market is unwilling to give Fernandez the benefit of the doubt.”

          Credit-default swaps now show that traders are pricing in a 75% chance that Argentina will suspend debt payments in next five years. On Friday, the likelihood was just 49%. Its dollar-denominated government bonds lost roughly 25% on average, pushing down prices to as low as 55 cents on the dollar. Yields on shorter-maturity notes soared past 35%.

          The peso tumbled as much as 33% to a record-low 60 per dollar and the Merval stock index lost the most ever in intraday trading.

          Argentina’s 48% Stock Rout Is Second-Biggest in Past 70 Years

  11. WTI was up slightly while Brent was down very slightly. Gasoline prices in this country tends to follow Brent. However, drilling activity follows WTI. With the new pipelines lowering transportation costs, we could see both lower pump prices and higher drilling activity. Highway it takes a real steady genius to pull that off, right? Lol

    1. Over.production$ = Glut$

      $audi’$ exporting more monie$ to India, … Go dog! Go!

      The Saudi Arabian oil titan has been investing heavily in refineries as it looks to double its daily processing capacity to as much as 10 million barrels of crude oil by 2030, according to Bloomberg. Meanwhile, Reliance has been seeking to sell off large parts of its assets, which include cell-phone towers and gas fields, to lower its debt – estimated at $32 billion by Bloomberg.

      Saudi Aramco’s profits slumped 12% to just under $47 billion in the first half of this year, according to its earnings release.

      “I am truly delighted to welcome Saudi Aramco, one of the largest business enterprises in the world, as a potential investor in our Oil to Chemicals division,” Ambani said in a statement. “We have a long-standing crude oil relationship with Saudi Aramco and we would be happy to see this further strengthened with this investment.”

      Reliance has agreed to purchase 500,000 barrels of crude oil a day from Saudi Aramco as part of the deal, Ambani said.

      “Saudi Aramco’s interest is a strong endorsement of the quality of our assets and operations as well as of the potential of India,” he added.

      https://amp.insider.com/saudi-aramco-buys-15-billion-stake-reliance-industries-mukesh-ambani-2019

      Read the original article on Business Insider Copyright 2019

  13. Highway, do you even think about what you post? The Saudis are buying more refineries because they see good growth potential for oil demand in countries such as India. It is hardly bad news for US producers of crude. The Saudis finding a major crude field in India would be bad, but not seeing the need for more refineries. Might limit US refinery expansion at worse but new refineries have not been built in the US for decades, there are a couple small ones I think still in the planning stages.

    1. R.i.p … Ro$$ Perot … I$ a 36,000% + increa$e $ignificant?

      Markets
      Texas Pays a Record $6,500 a Megawatt-Hour for Power in the Heat

      Bloomberg | By Millicent Dent and Naureen S Malik | August 12, 2019

      An extreme heat that propelled electricity demand in Texas to an all-time high and sent power prices surging to a record on Monday afternoon is threatening to do it all over again Tuesday.

      Electricity price$ $urged 36,000% on Monday afternoon to average as much as $6,537.45 a megawatt-hour across the Texas power grid, a record in data compiled by Bloomberg. Prices for some power contracts traded on the Intercontinental Exchange also spiked, with one hub in Texas jumping to $675 a megawatt-hour, David Hoy, a trader at Dynasty Power, said in an interview.

      “This is blowing up,” he said.

    2. There’$ that Kenyan.Obama $pooky # again aqdan:

      Farmer$ 2013

      Market$
      Corn Future$ Post Wor$t Rout Since 2013 on U.S. Acreage Surprise

      Bloomberg | By Isis Almeida , Michael Hirtzer , and Lydia Mulvany| August 12, 2019,

      Grain fall$ by exchange limit, down 6% after USDA report
      Outlook met by trader skepticism over accuracy of data

      Hi Jack!

      “It is hard to understand the USDA yield estimates,” said Jack Scoville, a broker at Price Group in Chicago. “We were out in central Illinois over the weekend and the crop was silked and making ears, but only a couple of areas were far enough along to get a good count. The early area yields were good, the rest was blister or less and hard to count in any reliable way.”

      Still, corn plants are proving to be resilient thanks to advances in seed technology and precision farming, a trait pointed out earlier this month by Ray Young, chief financial officer of Archer-Daniels-Midland Co., one of the world’s largest agricultural commodities traders.

      “With the seed technologies of genetics, it’s amazing what yield can be,” Young said in an earnings call Aug. 1.

      Corn futures for December delivery fell by the limit of 25 cents to $3.9275 a bushel Monday on the Chicago Board of Trade. That left the price down 6%, a record for the contract and the steepest decline for most-active futures since April 2013.

      Rich Nelson, chief strategist at Allendale Inc., said he expects futures to drop to $3.30 by the time the December contract expires, based on current market conditions

  14. From the previous thread:

    “Their calculus is that it’s more profitable to compete on amenities than by cutting rents.”

    Calculus? REALTOR math at its finest, LOL…

    1. It’s easier to toss in amenities rather than scale back the rental income because that messes with the investor due-diligence and the prospectus.

    2. If someone has enough intelligence to do basic calculus, there’s no reason for them to be in such an unskilled, low intelligence profession as a REALTOR.

  15. I think Seattle will fare far worse than California from the lose of Chinese buyers…Seattle could drop 50% from here once the speculative Chinese buyers disappear…Look out below, were only in the 2nd inning of Bubble 2.0. Be prepared, this time is going to be much worse than 2008 bust.

  17. About one-third of foreign purchases in California during a recent 12-month period were made by Chinese citizens.

    Is one-third a lot?

  20. This is an absolute disaster for the US economy. How are we supposed to sell the country away to the Chinese now? How am I supposed to earn my commission and travel next year? Who’s going to pay for my new Mercedes?

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