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If You Talk With Leaders In Mortgage, Title And Brokerage, You’d Think Our Housing Market Is About To Collapse

It’s Friday desk clearing time for this blogger. “With a real estate market with a glut of inventory, it takes more than an open house with cookies or cocktails to sell a property. To market a unit at mega-tower 432 Park Avenue, REAL New York developed a marketing concept around the view of Central Park. ‘It didn’t end up selling when we had it because it was overpriced, but marketing really only goes so far when you get to any possible issues with the actual product,’ says James Rozanski, director of marketing.”

“The region’s home prices have plateaued in 2019, leaving some sellers disappointed with missing last year’s peak. Year-over-year prices dipped across the region in July, according to CoreLogic data from Bay Area counties: median sale prices for existing homes tumbled 3.9 percent to $1.23 million in Santa Clara, dropped 2.5 percent to $1.45 million in San Mateo, declined 1.3 percent to $630,000 in Contra Costa, and fell 1.6 percent to $800,000 in Alameda.”

“‘We’re seeing more price reductions,’ said Chris Isaacson, manager at Coldwell Banker in Woodside. In the past, he said, ‘people were looking at what sold recently and tacking on 10 percent…That doesn’t work any more.'”

“Ramesh Rao, an agent in Cupertino, said lower prices, better selection, and a more cautious group of buyers are slowing sales. Homes listed for $3 million a year ago are priced around $2.7 million, drawing interest with a lower price, he said. Rao added that political and economic uncertainty, including a volatile stock market, changing immigration policy and trade wars, have weighed on foreign-born buyers working in tech. ‘They don’t want to pull the trigger,’ Rao said. ‘All of these concerns are throwing a monkey wrench.'”

“It may come as little surprise that Baton Rouge’s three hottest subdivisions are all in the under-$350,000 market, considering the numbers make it clear homebuyers aren’t gobbling up million-dollar-plus homes—a sector of the market that in July, as reported by Business Report, had amassed a nearly two-year supply of inventory. Millennials generally prefer newer homes, appraiser Winston Landry previously told Business Report, a trend to which he largely pointed as a reason for the local oversupply of million-plus dollar homes.”

“At a time when many Chinese investors are retreating from the US real estate market, leaving a trail of troubled projects and financial losses in their wake, Fosun International is poised to notch a significant win in lower Manhattan. But not all Chinese deal-makers are faring so well in the US. Earlier this month, it was revealed that Z&L Properties, will be kicked off a pair of troubled residential projects in San Jose, California, after breaking the terms of its development agreement.”

“Earlier this year, China Oceanwide Holdings halted construction on Oceanwide Plaza, its $1 billion mixed-use development in Los Angeles, for two months as the company recapitalised its investment in the debt-laden project. Beleaguered airline conglomerate HNA Group confirmed in January that it had sold a 90 percent stake in Manhattan office building 850 Third Avenue, reportedly at a loss, after picking up the asset in 2016.”

“A new report from Dodge Data & Analytics has identified a softening in seven of the country’s top 20 markets for commercial construction including multifamily, with some of it tied to declines in the multifamily sector. ‘It’s possible to say that both commercial building and multifamily housing are now ’rounding the peak,’ after the lengthy expansion this decade,’ said Dodge chief economist Robert A. Murray.”

“There are concerns that multifamily housing is overbuilt in some markets, the economist said. The markets showing declines during the first half of 2019 versus a year ago were: Seattle ($1.5 billion), down 57%, Miami ($3.1 billion), down 38%, San Francisco ($2.1 billion), down 24%.”

“In a bit of good news for Tampa Bay renters, many apartment communities currently have move-in specials. ICON Central, a 15-story tower in downtown St. Petersburg where units lease for up to $5,800, is offering a month’s free rent because some of the amenities are not yet finished. Darron Kattan, managing director of the commercial brokerage Franklin Street, said new rental complexes generally give concessions due to what he calls a ‘short-term oversupply’ of Class A apartments.”

“‘Pricing is so high on the investment side now that if they don’t raise the rents, the deal likely is not going to make any sense,’ said Kattan. ‘So the business plan from Day One is raising rents.’ In the end, rents, like water, seek a level. ‘If rents go too high, you have to have concessions,’ Kattan said. ‘Today’s brand-new construction in a year or two isn’t the shiniest new kid on the block. ‘That’s where you see rents not growing or going back down.'”

“If you talk with leaders in mortgage, title and real estate brokerage, as I do regularly, you’d think our housing market is about to collapse. The number of transactions and mortgage applications in the last two weeks has dropped significantly in our area, and those industry leaders are worried. Is the drop just normal summertime blues, or is something more ominous lurking over the horizon?”

“Arlington’s numbers this week are low with only 40 ratified contracts and 49 new listings. It’s too early to tell if this is because of weakening consumer confidence influenced by media bombardment about a possible recession coming soon.”

“On its face, the claim that since million-dollar homes in Aspen are taking up to three years to sell means that a recession is coming is ludicrous. But if it comes from the mouth of an establishment economist, the mainstream media gives such a silly claim credibility. Mark Zandi fits the mold of an establishment economist perfectly. He has been steeped in Keynesian economics from infancy.”

“Following revelations that owners of multi-million-dollar homes in Aspen are having to wait up to three years for them to sell, that listings of unsold mansions and penthouses are ‘piling up’ on Realtor.com across the country, that less than half of the cars offered for sale at Pebble Beach car auctions are fetching their asking price, and that art auction sales are down for the first time in years, Zandi thinks this somehow portends a coming recession for the rest of us: ‘If high-income consumers pull back further on their spending, it will be a significant threat to the economic expansion.'”

“How so? Just how many high-priced mansions can one person live in? How many fancy cars and high-priced art can one person drive, or hang on a wall? How many suits (or pant-suits) can one person wear? How many vacations to Belize can one take? Just how much impact will such extravagance have on the U.S. economy?”

“As Ben Casselman wrote in the New York Times on Wednesday, ‘Economists [such as Zandi] are notoriously terrible at forecasting recessions, especially more than a few months in advance.’ Adds Tara Sinclair, an economist at George Washington University: ‘Historically, the best that forecasters have been able to do consistently is recognize that we’re in a recession once we’re in one. The dream of an early warning system is still a dream that we’re working on.'”

“That’s the malady that Zandi suffers from, along with so many of his establishment colleagues, and gives the rest of us comfort that a three-year waiting list for million-dollar homes in Aspen portends nothing more than wealthy owners wanting to sell are just going to have to wait a little longer.”

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This Post Has 154 Comments

  1. No room for international crater today, I’ll catch up this weekend. I’ll post that Phoenix article I mentioned yesterday in a weekend topic.

  2. ‘Pricing is so high on the investment side now that if they don’t raise the rents, the deal likely is not going to make any sense…So the business plan from Day One is raising rents’

    These guys are losing money from day one and it gets worser from there:

    ‘If rents go too high, you have to have concession…Today’s brand-new construction in a year or two isn’t the shiniest new kid on the block. ‘That’s where you see rents not growing or going back down’

    So if they are building in higher rents from the get go (which I have pointed out as a sign of speculation for about 5 years) just what happens when rents go down, as they are now?

    DONG!

    1. The real question is “why would somebody purchase something with negative cash flow?” The answer is, in a nutshell, a tsunami of liquidity from Fed in conjunction with their artificially low interest rates has led to massive malinvestment due to an extreme search for yield. There is nothing that hasn’t been poisoned. What’s their answer? Lower rates and more liquidity. They are trying to solve a problem with the same tactics that caused the problem.

    2. It’s not very far from positive cash flow to negative cash flow if expenses are rising, rents are dripping, and debt is 80% LTV w Fannie or Freddie.

      Who feeds an apartment building gone negative?
      The sponsor? NO
      The investment partners? NO
      The lender? NO

      Well, ultimately it will be the lender when they foreclose. Who bails out the lender? YOU!

      1. The PPT does not help Trump, And has no need to intervene in a market moving less than .1 of a percent. The tariffs begin Sunday and the market does not even care. A lot of sad Globalists today.

        1. What are these tariffs on? All the news says is “$100 billion worth of goods” without saying what they are. Honestly I haven’t noticed much difference in pricing on anything. There are so many seasonal fluctuations and sales that I have no idea what things should cost anymore.

          1. I have no idea what things should cost anymore.

            Just about everyone else is in the same pickle, but they don’t think about it too much. What things cost to bring to market is not at all the same thing as what things should cost you. Things should cost you what you are willing to pay. This goes for everything from houses to hot dogs.

            The cost of raw materials and energy have plunged quite some time ago. Retail prices not. It is interesting to watch. There are ways to obtain some of the necessities outside of prime retail channels but they take effort. Someone running the treadmill doesn’t have time for such things.

          2. The problem in a world of financialization is that when something is showing signs of deflating in value every effort is made to conceal it, a form of racketeering.

          3. What are these tariffs on?

            Not on bibles:

            “And so the U.S. trade representative said that it was granting some exemptions on about $2 billion worth of goods for reasons of health, safety, national security and, quote, “other factors.””

            “But, you know, going back through the record on this and talking to folks involved, it sounds like there were a bunch of Christian publishers who said that this would be harmful to our ability to distribute Bibles throughout the world. There were powerful Christian groups, like the Southern Baptist Conference, who said this is going to be bad for the worldwide practice of Christianity.”

            “And also, by the way, we – almost all of these come from China. Like, we depend on China for Bibles more than we depend on China for other types of books because they’ve become specialized. There’s, like, gold-brushed sides and embossed leather covers, and it’s a very fine printing process for the thin paper that you need to get that many words into a book.”

            “But, you know, there are regular mainstream publishers pointing out that this is a really troubling precedent because historically, all types of published work have been exempted from tariffs because we consider it a type of protected good that fosters the distribution of knowledge throughout the world. And to exempt a religious type of knowledge but not, you know, a biological textbook makes not much sense to lots of folks.”

            https://www.npr.org/templates/transcript/transcript.php?storyId=754837871

  4. ‘The region’s home prices have plateaued in 2019, leaving some sellers disappointed with missing last year’s peak. Year-over-year prices dipped across the region in July, according to CoreLogic data from Bay Area counties: median sale prices for existing homes tumbled 3.9 percent to $1.23 million in Santa Clara, dropped 2.5 percent to $1.45 million in San Mateo, declined 1.3 percent to $630,000 in Contra Costa, and fell 1.6 percent to $800,000 in Alameda’

    But Thornberg said unpossible! Eat yer crowz Thorberg! Where are you hiding?

    ‘We’re seeing more price reductions’…In the past, he said, ‘people were looking at what sold recently and tacking on 10 percent…That doesn’t work any more’

    If lending were so solid back then, how could the REIC just tack 10% on and sell the shack? And that went on for how many years?

  5. ‘On its face, the claim that since million-dollar homes in Aspen are taking up to three years to sell means that a recession is coming is ludicrous. But if it comes from the mouth of an establishment economist, the mainstream media gives such a silly claim credibility. Mark Zandi fits the mold of an establishment economist perfectly. He has been steeped in Keynesian economics from infancy’

    ‘Following revelations that owners of multi-million-dollar homes in Aspen are having to wait up to three years for them to sell, that listings of unsold mansions and penthouses are ‘piling up’ on Realtor.com across the country, that less than half of the cars offered for sale at Pebble Beach car auctions are fetching their asking price, and that art auction sales are down for the first time in years, Zandi thinks this somehow portends a coming recession for the rest of us’

    The other day a poster said something about his market that he “didn’t want” to happen, but had. I’ve always thought this sort of thinking was odd. When it comes to markets, wants don’t really matter. For many years people have said this blog “wants” prices to fall or wants doom and gloom, etc. Not true. Either there is a bubble or there isn’t.

    And what happens afterward is what happens. So now the REIC is spinning what they said wouldn’t and couldn’t happen. Prices are falling all over the US and the world. For years more statements about glut, oversupply have mounted into an orchestra.

    So now it’s a recession! No, prices can never go too high for Ho Chi Zandi! It’s Trump that caused this three year pile up of Aspen shacks and roadsters. The media has never been more of a propaganda mechanism than it is right now. Yesterday I read an editorial in the UK that said the biggest threat about Brexit was if the doom predicted about no-deal didn’t happen. Think about that.

    1. “When it comes to markets, wants don’t really matter. For many years people have said this blog “wants” prices to fall or wants doom and gloom, etc. Not true. Either there is a bubble or there isn’t.”

      As one of our more astute contributors so eloquently puts it, “you can want in one and hand shit in the other and see which fills up quicker”.

      One thing is for certain though. Any price halved or more is going to accelerate the economy, create jobs and increase profits. Houses, cars, widgets, appliances(🤣), basic materials, finished goods, etc.

    2. “Yesterday I read an editorial in the UK that said the biggest threat about Brexit was if the doom predicted about no-deal didn’t happen. Think about that”

      It would be the end of the EU, which is why Brussels is saying there won’t be a trade deal if Brexit goes through. They want an independent UK to fail, no matter what the cost.

      I saw another headline lamenting that a no deal Brexit could “push the UK into Trump’s arms”. I can envision the unelected technocrats in Brussels fretting over who else will run into “Trumps Arms”, especially if things go well for the UK after the divorce.

      1. The Oligopoly media, at the behest of their globalist masters, are going all-out to try to frighten the British people into rethinking their support for BREXIT. But the nightmare scenario for the elites is if BREXIT ends up looking like a genius move as the EU and ECB run out of road for can-kicking and can no longer defer the consequences of their insane monetary and open borders policies. Then nationalists and populists in every EU country are going to be agitating for their own BREXIT and to be emancipated from the unelected, unaccountable globalist stooges ruling over them from Brussels.

        1. “open borders policies”

          Based on what I saw in London, it’s too late to close the barn door in the UK.

  6. ‘If you talk with leaders in mortgage, title and real estate brokerage, as I do regularly, you’d think our housing market is about to collapse. The number of transactions and mortgage applications in the last two weeks has dropped significantly in our area’

    Yip yip yip yip yip yip yip yip
    Sha na na na, sha na na na na
    Sha na na na, sha na na na na
    Sha na na na, sha na na na na
    Sha na na na, sha na na na na
    Yip yip yip yip yip yip yip yip
    Mum mum mum mum mum mum
    Get a job, sha na na na, sha na na na na

    Ev’ry morning about this time
    She get me out of my bed
    A-crying, get a job
    After breakfast ev’ry nay
    She throws the want ads right my way
    And never fails to say
    Get a job, sha na na na, sha na na na na

      1. I’m sure the ultra-low rates are going to squeeze every last drop of demand out that they can. But what happens when the Fed is out of ammo and at zero? Do you really think it’s sustainable?

        1. “But what happens when the Fed is out of ammo and at zero?”

          Negative interest rates?

          At what point will the Fed start mailing a monthly check to every household in the country?

          2. They’re already hawking that idea — universal basic income. All it will do is inflate the dollar.

            The other day I put a little cash into a preciousss mutual fund. It probably make much bank but I figured it was time to diversify into another sector somewhere. I looked into commodities funds but the expense ratios are sky high.

          3. will the Fed start mailing a monthly check to every household

            If it doesn’t enrich the banks somehow, it will never happen. The Fed is not altruistic.

      2. Application wise we are having a great month. Closing wise too. Note Small sample size

        This reminds me. Casey C/Konstantine/Serin went dark for quite a while and then just popped back up. This time pumped up about attending mortgage origination training and endlessly going on about how much A$$ his new job was going to kick. It’s funny and sad at the same time…most people don’t run their mouth/keyboard as much as him but just think how many people out there probably think the same way…no idea how to actually be productive, always looking for a scam to get in the middle of because that’s the only way they know to make any money.

        2. Casey Serin = the ultimate shoeshine boy. When you hear this fraudster is getting into the something, you know the top is in. Only a fool would be entering the game this late in the cycle. My god, it’s like the longest bubble ever and it took him this long?

    2. ‘If you talk with leaders in mortgage, title and real estate brokerage, as I do regularly, you’d think our housing market is about to collapse.

      That’s odd…Ben Jones and most of the motley crew over at the HBB seem to think the same thing. And can point to plenty of indications and warnings to back up their opinions.

    1. Platinum. 10X more rare than gold, and much higher industrial usage. Main sources of supply: Russia and Southern Africa – both dodgy from a risk management standpoint. Should be selling for twice the price of gold, yet is hundreds of $$$ less (but moving up fast over the past couple of months).

      2. The only risk in platinum is it is heavily tied to diesel engine pollution control. Thus the reason for its weakness over the last few years. That said it is probably not overpriced like palladium which is the metal of preference for gasoline cars. Of course, if you believe One and Tesla is about to take over the world both metals are overpriced so they will lose their major markets.

        1. Kelley Blue Book Brand Watch: Luxury Segment Topline Report

          American, not German:

          “In an auto market that is down year to date, sales of luxury vehicles are a bright spot. Luxury sales were up 6% year-over-year in June and up 2% in the first half of the year. All the gains in luxury this year can be attributed to the success of Tesla. WithoutTesla, luxury sales would be down 2%, roughly in line with the overall U.S. new-car market.”

          “Tesla and BMW dominate the top 5 car considerations accounting for 4 of the 5 top models. The Acura TLX and Lexus ES fell out entered the top 5 most considered Luxury SUVs this quarter. For the first time ever, Model 3 soared to the top luxury car position, dethroning BMW 3 Series.”

          1. Toys for rich big boys, electric cars 2% overall market share is not going to “save” the world. Particularly, since its overall carbon footprint really is not much less than gasoline models.

          3. Toys for rich big boys, electric cars 2% overall market share is not going to “save” the world.

            Dan, you believe windmills cause cancer. I think that about sums up the argument. On every metric, whether that is CO2, MPG-equivalent, PM 2.5, or PM 10, EVs are clearly superior and vastly less harmful to the environment than gas or diesel. The fact that you continue to argue otherwise really makes almost every other thing you say suspect. As the grid becomes more tied to renewables and batteries, the calculus gets even more favorable for EVs. I’ve said before, it’s not about Tesla. We at the beginning of a major S-curve adoption of EVs worldwide. Just like cell phones. At first only the wealthy have them, but eventually everyone has them as the cost curve gets bent.

          4. EV Market share world-wide:

            EVs as a percentage of total vehicle sales, by country

            Norway 49.1%
            Iceland 19.1%
            Sweden 8.0%
            Netherlands 6.7%
            Finland 4.7%
            China 4.4%
            Portugal 3.4%
            Switzerland 3.2%
            Austria 2.5%
            U.K. 2.5%
            Belgium 2.4%
            Canada 2.2%
            Denmark 2.1%
            France 2.1%
            US 2.1%
            South Korea 2.0%
            Germany 2.0%
            Ireland 1.6%

            Source: Statista

            The important thing to note is that the % is growing in every country. The direction of the trend is accelerating and with VW launching 20 new EVs over the next few years, it is only going to accelerate.

          5. I think that about sums up the argument.

            It doesn’t at all, and dismissiveness never seeks the truth.

            Over 100% of the energy produced by PV comes from fossil fuels. It is also demand pulled forward in the manufacture transportation and installation of the PV. Less than a even return.

            Tesla is for the rich not because they are so smart, it’s because they are ridiculously expensive. They may be priced at $50K, but >$100K has gone into the manufacture of each one made so far. 99% of the money paid for manufactured stuff goes for fossil fuel consumption. A conventional vehicle won’t possibly cost as much energy over it’s useful life. One eye must be blind to think this is efficient.

            Case in point; The Tesla is a heavy vehicle. The battery weighs a ton, because the stored energy density is much less than gasoline. You don’t get better efficiency pushing around a much heavier vehicle, unless it is heavy because of cargo.

          6. It doesn’t at all, and dismissiveness never seeks the truth.

            I put the windmills cause cancer people in the same category as “vaccines in autism”. Those truth seekers can find all sorts of nonsense to support their “truth”. Dan’s not going to change his mind when he links to URLs that start with “stop these things”.

            They may be priced at $50K, but >$100K has gone into the manufacture of each one made so far.

            That is just not true. Just because you repeat something over and over, doesn’t make it true:

            “Auto teardown expert Sandy Munro, who once said the Tesla Model 3’s shoddy fit and finish reminded him of a Kia from the 1990s, this week admitted the car is the most profitable electric sedan he’s ever tested, with a roughly 30 percent gross margin.”

            https://www.bizjournals.com/sanjose/news/2018/07/17/sandy-munro-tesla-model-3-teardown-profit-tsla.html

            The fact is that Tesla could make a model 3 for under $30k last year.

            You know that Tesla model 3’s are economical when the boys in blue are trading in their Dodge Chargers for them:

            Tesla Model 3 gets the nod from police over cost and performance, bye-bye Dodge Charger

            “Bargersville Police Chief Todd Bertram commented: Two big things that we were looking at when shopping for cars were obviously cost and performance. Many times when you get a car that is in our cost price range, you sacrifice performance. With Tesla, the performance is better than the cars we are currently driving. It’s amazing, it’s smooth, it’s powerful, it handles great.”

            As far as EVs being heavier, yes they are. This is also one reason they are safer because they are less likely to be involved in a rollover as they have a different center of gravity.

      3. Platinum is primarily used in auto catalytic converters. Not used in electric cars. If car sales go down platinum with join real estate in the new trend. Gold and silver are safe haven investments which are countercyclical. They go up dramatically when conventional markets tank. Research prices from last recession and it is easy to see. That is why they have begun to rise recently. Equities in each go up much quicker yet. That is where I am invested along with uranium stocks. Uranium for a different set of reasons but the bull market approaching.

        1. If you believe that co2 emissions are a problem, nuclear plants are essential to reduce emissions in a meaningful manner.

          1. Nuclear plants are essentially in making the transition from carbon-energy to renewables. Until there is enough battery capacity and storage to account for the intermittent nature of renewables, nuclear is the cleanest option. A lot of US nuclear is coming offline because it doesn’t compete cost-wise vs. nat gas electricity or renewables. This is a mistake in my view because nuclear, while costly, is still clean. And once those plants get decommissioned, they don’t get turned back on. Better to wait to decommission then until renweables can stand on their own with abundant battery storage.

          2. Nuclear plants are essentially in making the transition from carbon-energy to renewables.

            I like the idea of renewables but I’m skeptical about everything but hydro. Do you honestly think that wind or solar will generate enough power to completely manufacture themselves all the way from ore in the ground to energy production and then generate a BUNCH more before reaching the point that they take more energy to maintain than they can generate?

          4. Do you honestly think that wind or solar will generate enough power to completely manufacture themselves all the way from ore in the ground to energy production and then generate a BUNCH more before reaching the point that they take more energy to maintain than they can generate?

            Yes, not even a doubt in my mind. Eventually even construction machinery, like buses, is going to transition away from diesel. For utilities and electricity, the key is batteries, lots of battery storage. Tesla selling Megapacks (but obviously not just Tesla, you have Panasonic, LG, CATL, BYD) to utilities will start the transition to where renewables will start to displace carbon all along the production cycle.

          5. renewables will start to displace carbon

            Batteries are not an energy source. They can not replace the energy source that charges them. You don’t need them for a hydro plant anyway, the lake is the capacitor.

          6. “Batteries are not an energy source. They can not replace the energy source that charges them. You don’t need them for a hydro plant anyway, the lake is the capacitor.”

            FWIW, when starting a hydro-electric power plant, banks of batteries are required to send DC through the field coils positioned around the rotor to energize the electromagnets (excitation) necessary to begin generating electricity.

        2. “Dan, you believe windmills cause cancer. I think that about sums up the argument”

          I believe the wind turbines, I never use the terminology windmills, cause sleep disruption and stress. I think that is very well documented. Sleep disruption has been linked to many health problems both cardiovascular and even some cancers. Do you dispute that evidence? Then, I think it is very logical that wind turbines cause some cancers in the people that unfortunately have to live next to them and many do live within the range of the infrasound or even worse audible sound. Tell me where the logic breaks down.

          1. “I put the windmills cause cancer people in the same category as “vaccines in autism”. Those truth seekers can find all sorts of nonsense to support their “truth”. Dan’s not going to change his mind when he links to URLs that start with “stop these things”’.

            The link between cancer and lack of sleep is well established. If you do not think wind turbines do not cause lack of sleep than you have never been around wind turbines. Your analogy is as absurd as comparing people who question whether the primary driver of climate change has been man made or natural variations as the same as holocaust deniers. Additionally, the people who say there is no reason to debate have usually lost the argument. Just realize that Trump has a higher IQ than you and move on. You may not like publications other than the MSM but their days of hiding facts are over. If you can show how the information published in Stop these things is false than fine do it. However, if you cannot than just saying I do not like the title is intellectually lazy at best but really intellectually dishonest.

          2. The link between cancer and lack of sleep is well established.

            That is absolutely correct. But there is a link, it is not causal. And then you are making a logical fallacy when you jump to windmills cause cancer. Specifically, this would be a “third-cause fallacy” (e.g. questionable cause):

            It asserts that X causes Y when, in reality, X and Y are both caused by Z.

            So no, wind turbines don’t cause cancer. The sleep disturbances from ambient noise from rail, planes, and highway traffic are far more salient than wind turbines, and yet I don’t see you beating the drum of shutting down freeway driving or rail lines where people are sleeping. But this is because you selectively pick out things to support a pro-oil, anti-renewables agenda. Just like selective support for birds killed by wind turbines but lack of concern for far more detrimental human actions and lack of regulation that hurts wildlife. You are using phony environmentalism as a pretext to support an oil agenda.

        3. Batteries are not an energy source.

          Yes, you are right. But it’s semantics really. Let’s not get hung up in the thick of thin things. Batteries are what will enable renewable energy (solar, wind, hydro) to be stored such that it solves the intermittent electricity generation and variable/peak demand problem. To quote Musk, “We have this handy fusion reactor in the sky called the sun, you don’t have to do anything, it just works. It shows up every day.”

          So you use the current energy production system (currently heavily carbon based) to produce PVs, wind turbines, dams, etc.). Also use the current energy production system to extract resources to build more/better batteries with innovation. Change the infrastructure and heavy equipment to work on batteries that get their energy from renewable sources. Rinse and repeat and iterate until the amount of extraction of oil/gas is minimal. I know you don’t agree with this, but you understand this right? I’m not saying the production of PVs don’t take carbon now. What I am saying is that we will get to the point where it will be negligible in the future if we continue on this path. Then all the regressive middle eastern petro states and places like Iran and Russia will starve. Some pain in the US too because we are #1 oil producing country now. But we are diversified, so we’ll do just fine.

          1. you understand this right?

            Condescending never seeks the truth.

            The leg that’s missing from the stool described above is the energy return on PV and wind. It doesn’t produce enough energy to replicate itself. The more you try to go “renewable” the more and more oil you use in an ever widening spiral. This charade steals a precious energy resource from the future, while making life more expensive for everyone.

            We figured this out in the ’70s and now Germany has figured it out again on a grand scale, also France and Spain. Cheerleaders like Elon can’t change reality, only the perception of it. Yes, the sun shows up every day.

          2. It doesn’t produce enough energy to replicate itself.

            What are your assumptions for “replicating itself”? EROEI is well above 1 and varies from 3 to 12 based on which numbers you reference. In other words, it does replicate itself. It’s not as high of a payback as hydro, nuclear, or coal, but it is getting there with technology advances. Even concentrated solar is about at at a 20 EROI.

            The biggest error I think you are making is that you are ignore the rapid increases in technological process and efficiency, which is hugely important. So we’re not talking about PV panels with technology from the 70s. Take the transition from incandescent lightbulbs to LED as an example. It used to take 40 watts to power a 450 lumen bulb, now it takes 4 watts for an LED bulb. That is a 10 fold decrease in energy consumption.

            There are lots of assumptions that matter regarding where PV panels are placed, the angle they hit, where they are manufactured, the efficiency (e.g. southern Europe vs Germany, for instance). Then you have to add the massive increase in batteries, and now virtual power plants coming online (like that Herriman, UT multifamily apartment complex I linked to the other day). It’s not going to matter whether these energy sources are “buffered” or not when you have all the generation being stored at the point of use and distributed among multiple nodes.

            Any time Energy Return On Energy Invested (EROEI) is > 1 or net energy gain is > 0, then there is a net energy gain.

          3. The biggest error I think you are making is that you are ignore the rapid increases in technological process

            Incorrect. The advancement of PV hasn’t been a technology innovation, it’s been a financial innovation. It’s only a couple of years since I stopped working as an engineer in that field.

            I do not think that anyone anywhere in the world has tried to demonstrate that a solar array can produce enough power to make a replacement solar array, with all the inputs included. Ironic? Too obvious?

          4. The advancement of PV hasn’t been a technology innovation, it’s been a financial innovation.

            Financial innovation has spurred much better adoption of PV systems, but that ignores the huge gains in efficiency and materials (e.g. polychristalline) over time. It also ignores new emerging technologies such as perskovite, double sided PV panels, clear panels (e.g. solar windows), and solar roof tiles.

            Efficiency Of Solar PV, Then, Now And Future

            “Early silicon solar photovoltaic sells did not, however, have good efficiency. In addition, running them were a bit costly. However, as time passes, efficiency increased while the cost decreased. In 1955, Hoffman Electronics-Semiconductor Division introduced photovoltaic products with only a 2% efficiency, with an energy cost of $1,785/Watt (USD). In 1957, Hoffman Electronics were able to introduce cells with an increased efficiency, at 8%. The same company’s solar cell efficiency was increased to 9% in 1958 and 10% in 1959. The efficiency skyrocketed to 14% in 1960. In 1985, researchers at University of New South Wales, Australia were able to construct a solar cell that has over 20% efficiency. A 20% efficiency solar cell were patented in 1992.”

            “It is interesting to observe that on average over time, the efficiency for all the four technologies considered have increased proving that solar PV is on an upward trajectory as far as improving the efficiency is considered.”

            National Renewable Energy Lab efficiency chart over time:

            https://www.energy.gov/eere/solar/downloads/research-cell-efficiency-records

          6. I do not think that anyone anywhere in the world has tried to demonstrate that a solar array can produce enough power to make a replacement solar array, with all the inputs included. Ironic? Too obvious?

            You are talking about a solar breeder plant. I think one such plant was proposed by a Japanese-Algerian partnership in the Sahara desert. I don’t know what has happened to it. Probably very difficult to put up such an enterprise in the middle of a desert.

            But this is beside the point. Your original claim was that renewable from PV don’t create enough energy to replicate itself (e.g. EREOI < 1). That just isn't true.

            Your argument is a little bit like saying that New York isn't a viable city because it doesn't grow enough food to support all its inhabitants. Solar manufacturing facilities don't need to be powered only by solar arrays. This is also why I've advocated for not phasing out nuclear because it is a good, clean energy source that will be useful on our energy transition to a low-carbon energy mix.

            When solar panels have been produced often times aren't the ideal location for deploying the solar panel. It would be possible to make it a closed loop (e.g. solar breeder plant), but it might be more costly. Eventually though I suspect that as battery technology improves on large scale (e.g. like the Tesla mega packs), you'll see some sort of solar breeder plant like you've described. I fully expect to see Tesla start capturing the energy from the sun using their PV panels, storing them in their Megapack batteries, and distributing it to vehicles. They won't cut out the grid overnight, but slowly they will.

      1. I have the silver etf, SLV. Basically paper form of silver, but it only goes up at same rate at metal. The mining stocks are where the big gains are made but the big stable ones go up slower. I bought barrick about 6 months ago for $13.18. Earlier in week it approached $20. Not bad for really safe stock. Some of my others up over 100% but smaller more risky companies. The “rip your face off” rally will be when uranium prices move higher. New 90 day domestic nuclear fuel cycle working group is about half completed and their findings could be the big catalyst for domestic uranium and fuel cycle providers. Look it up. Very few know what is transpiring. President holds all the cards.

    5. You buy nothing. You hoard cash and watch it appreciate against a sea of crashing asset prices.

      1. My sister and her husband sold their house and moved to Indonesia. The dollar is strong and they are living like kings over there. In some respects, investing in your own self and quality of life (not really an investment, sure) isn’t a bad way to go. I am hopefully we’ll get a massive Airbnb bubble. Then I’ll switch to being an Airbnb consumer and travel the world on the cheap as demand plummets.

        “Be fearful when others are greedy, and greedy when others are fearful.” – Warren Buffet

          1. Wow, thank you for sending that Tarara. I had no idea of that change. Good for Las Vegas for regulating. The way the realtor explains it is that the investors were just skirting the law and doing illegal Airbnb rentals because the consequences were civil in nature and didn’t have an immediate effect, so basically amounted to a slap on the wrist. But now adding the penalty to the property tax bill allows the county to pursue foreclosure (instead of simply having the fine be a “lien” against the property).

            This is the way that regulation should work for short-term rentals. The unit that I manage is within the Palms Place casino and is part of the owner/rental pool, so it’s all above board. This makes me think about the conversation I had with Ben a couple of weeks ago about Arizona law and how the conservative/libertarian-oriented politicians passed legislation that basically handcuffed cities and counties from doing anything to regulate Airbnbs this way.

          2. No prob. I think we might have one in my neighborhood. Mustn’t be any trouble since that’s all I’ve heard, and these people call the cops if someone in a car lingers too long in front of their house.

      2. “You buy nothing. You hoard cash and watch it appreciate against a sea of crashing asset prices.”

        BINGO

      3. You hoard cash and watch it appreciate against a sea of crashing asset prices.

        That’s the Fed’s worst nightmare and won’t be allowed to happen until they lose control. But if they lose control then what? Will cash that’s created by a Fed that’s lost all control really be a good store of value?

        1. won’t be allowed to happen

          Hard for me to see or imagine how the Fed could force everyone to have no money and only their debt product.

  8. “‘….We’re seeing more price reductions,’ said Chris Isaacson, manager at Coldwell Banker in Woodside. In the past, he said, ‘people were looking at what sold recently and tacking on 10 percent…That doesn’t work any more…’”

    Hey Chris, let me introduce you to some new REIC math.

    Do this: ….tack on *minus* 10 percent.

    Who knows you and your FB might get lucky…

  9. “If rents go too high, you have to have concessions,” Kattan said. “Today’s brand-new construction in a year or two isn’t the shiniest new kid on the block. “That’s where you see rents not growing or going back down.”

    This is the point i think many folks are forgetting – the new construction with the latest stuff – but also the less lived in feel, will get the wanna be pretenders to move in.

    It is the ‘luxury’ apartments from 5-10 years old that will really suffer – and what will the REITs then do? Rennovate them with new paint and put in a dog track or whaterver

    1. what will the REITs then do?

      Assets will be liquidated and resold at a lower price. The REIT managers can take a vacation.

    2. “what will the REITs then do”

      That made me thing of the movie Soylent Green, where “luxury” apartments included a shapely young woman.

  11. “If you talk with leaders in mortgage, title and real estate brokerage, as I do regularly, you’d think our housing market is about to collapse. The number of transactions and mortgage applications in the last two weeks has dropped significantly in our area, and those industry leaders are worried. Is the drop just normal summertime blues, or is something more ominous lurking over the horizon?”

    “Arlington’s numbers this week are low with only 40 ratified contracts and 49 new listings. It’s too early to tell if this is because of weakening consumer confidence influenced by media bombardment about a possible recession coming soon.”

    Eat yer crows taxpayers!!!!!!

  12. Ramesh Rao, an agent in Cupertino, said lower prices, better selection, and a more cautious group of buyers are slowing sales.
    ————————
    Lower prices and better selection are SLOWING sales? Either that’s a misprint or Ramesh is an idiot, or I truly dont understand supply/demand forces.

    1. “Ramesh Rao, an agent in Cupertino…”

      This guy likely doesn’t know anything about a free market system because the “fed.gov” has goosed the markets with easy credit and rescued the failures when reality appeared.

  13. Chinese markets (Seattle, Bay Area, Orange County, etc…) crumbling faster than a fortune cookie….

    1. Speaking of Chinese cookies (which fortune cookies are not) a few years ago my former boss visited our now defunct Beijing team. As a parting present, someone gave him a large box of “Chinese cookies”, which he brought back and left in the break room. I tried one. It was, to be polite, weird. It wasn’t sweet at all, and it tasted kind of savory, I think they had some kind of bean paste in them. The box, mostly untouched, sat there for several days until my boss finally threw it out.

      2. I remember when an acquaintance brought back a bunch of candy and edibles from a trip to China. I didn’t even eat one. Most of it ended up in the trash as well.

        1. I will not feed animals Chinese treats. Of course, I like cats and dogs more than I like most people. I think Chinese cookies can be served at DNC events. maybe that is the problem with Biden too many Chinese cookies. He should be checked for lead and Mercury poisoning.

      3. “Chinese cookies”

        Hahah :-). Been there. The pastries are what they are. What annoys me is when they ruin ice cream by putting a bunch of red beans in it.

        1. I like the green tea ice cream. Also I like the pastries as they generally aren’t too sweet. I really like the egg custard ones “Dan tat” I think they are called in Cantonese.

        2. I dunno, I really like Chen Ba Mau (3 color dessert) at the local Vietnamese restaurant. But I’ve never had red beans on ice cream…

  14. Thing$ is ugly + wor$er & wor$er & wor$er:

    Ulta Beauty, Inc. (ULTA)
    NasdaqGS – NasdaqGS Real Time Price. Currency in U$D

    Quote : $240.83. ($-96.62) (-28.63%)

    as of 1:36PM EDT. Market open. 8/30/19

    unUnited Kingdom Brexit < 63 days!

    Fa$ter!, fa$ter!, fa$ter!

  16. “he owes $476,000 on the townhome, which is only worth around $263,000.”

    It’s exactly what’s occurring right now.

  17. In the same breath:

    “If you talk with leaders in mortgage, title and real estate brokerage, as I do regularly, you’d think our housing market is about to collapse.”

    “It’s still a great time to buy a home or refinance. “

    2. Stay safe buddy. Reading the Sun Sentinel and PB Post following this. All my FL fam are in St Pete now…

      1. Thanks man I appreciate that.

        Although I don’t like wishing ill on others I hope this one turns north cause if it comes straight in it might get ugly.

  19. “It may come as little surprise that Baton Rouge’s three hottest subdivisions are all in the under-$350,000 market, considering the numbers make it clear homebuyers aren’t gobbling up million-dollar-plus homes”

    The real surprise is that anyone in Baton Rouge can afford a 350K house. Per wikipedia:

    “The median income for a household in the city was $30,368, and for a family was $40,266.”

    Who exactly is supposed to be able to afford a $1M+ house in Baton Rouge, other than a few high level politicos?

      1. I have noticed two things in my little burg comparing bubble 1.0 with 2.0

        1) They built far fewer houses this time around. As in 200-300 per year vs 1200.
        2) The shacks are a lot more expensive this time. During 1.0 there were plenty of houses in the low 200’s. Now starting prices for new construction are in the mid 300’s.

        Other interesting things:

        Population growth has slowed. It grew 30%+ per decade between 1990 and 2010. It won’t reach 20% this time around. Still a healthy clip.

        There seems to be an uptick in local tech employment at smaller firms, after decades of decline as Hewlett Packard slowly pulled out. That said, local tech wages are way below the national average, so for most it means commuting to jobs in Denver, or if you’re lucky you can work from home. The competition for any decent paying job is fierce.

        From what I am observing, local builders are mostly catering to the very limited supply of upper income households. And from what I have observed there is a huge construction boom in communities closer to Denver, like Erie and Superior. I drove through them recently. Prices aren’t that much higher in those places than in my little burg, and I expect those places will capture the bulk of the “drive until you qualify” crowd. But the overbuilding in those towns is painfully obvious, it isn’t going to end well.

        1. “drive until you qualify”

          And, to the casual transient visitor, Land as Far as the Eye can See.

          1. I just wonder where the water is coming from for all the new houses. I read the other day that the average US household pays $100 a month for water and sewage.

        2. Historic Asset Boom Passes By Half of Families
          WSJ
          David Harrison
          August 30, 2019

          “The decade long economic expansion has showered the U.S. with staggering new wealth driven by a booming stock market and rising house prices.”

          “But that windfall has passed by many Americans. The bottom half of all U.S. households, as measured by wealth, have only recently regained the wealth lost in the 2007-2009 recession and still have 32% less wealth, adjusted for inflation, than in 2003, according to recent Federal Reserve figures. The top 1% of households have more than twice as much as they did in 2003.”

          “Meanwhile, a decade of rising equity prices has buoyed the 1% wealthiest households, pushing the value of their financial assets up 72% since the recession, after adjusting for inflation.”

          “Starter price homes have increased 41% since 2009, while income has grown 8%.”

  20. “‘Pricing is so high on the investment side now that if they don’t raise the rents, the deal likely is not going to make any sense,’ said Kattan. ‘So the business plan from Day One is raising rents.’

    I’ve got my own business plan, Kattan. I wait till the developer goes bankrupt because the rent is too damn high, then once the building gets bought up in a foreclosure auction for a fraction of what “investors” sank into it, then I leisurely mosey on down to the property manager’s office and inquire about renting at a much more reasonable price. Genius move, huh Kattan?

    1. Maybe he is thinking of packing 10 illegals into a two bedroom, raising rents to the rental is cash flow positive since the illegals cannot insist on maintenance particularly when they are violating the lease due to their numbers. Then quickly selling it. Might have worked with Chinese buyers.

  21. Market$ have x3 days to re$t before it’$.to.the.moon.Alice!

    Ray Dalio warns of ‘$erious problem$’ and a bond ‘blow-off’ as a repeat of the late 1930s loom$

    Jeff Cox | CNBC | 8/30/19;

    He cited three factors: Ineffective central bank$, high levels of debt$ and the U.$.-*China conflict.
    Dalio previously predicted a “paradigm $?hift” that would benefit gold.

    In the latest essay, he spoke of how central banks are being forced to keep interest rates low and “print money to buy financial assets” in order to prop up markets and make huge fiscal deficits affordable. He said there are “strong deflationary forces at work” as capacity has surged.

    “These forces are creating the need for extremely loose monetary policies that are forcing central banks to drive interest rates to such low levels and will lead to enormous deficits that are monetized, which is creating the blow-off in bonds that is the reciprocal of the 1980-82 blow-off in gold,”

    1. Dalio has also said recently that Capitalism isn’t working for the vast majority of Americans.

      1. It has worked since globalism with it related open borders.

        The business cycle used to have times when capital earned a great return and then labor shortages would allow workers to get their share. With open borders and cheap goods from places like China workers never get their turn. However, since you already said you are voting for Warren, you really do not seem to want workers to get their fair share under capitalism. Sorry you are just another millennial voting for the problem not the solution. This is exactly why I cannot have too much sympathy for millennials. They vote for the policies which have made housing too expensive and have depressed wages, then they complain about both. Their solution is to throw away the economic system which has historically created wealth and vote for the system which has historically led to economic collapse and often tyranny which is socialism.

        2. Sorry you are just another millennial voting for the problem not the solution.

          Not a millennial. I’m gen X. Our version of capitalism isn’t working for most Americans. Dalio is right. Big structural reforms are needed. That is what Warren is all about. She started out as a conservative, until she saw the data and the ideology in practice.

          1. ‘She started out as a conservative, until she saw the data’

            Elected in the most heavily Democratic district in the US. And pretended to be native American for almost 4 decades.

          2. Yes, I am just commenting on where she came from ideologically. He assumed that people who declared bankruptcy were deadbeats, cheaters, etc. But her investigation into the causes of bankruptcy and the personal situations led her to question her libertarian roots.

            “Ms. Warren’s political awakening didn’t simply happen all at once. Her road to Damascus was a long one. But over several decades, she transformed from a largely pro-business and politically disengaged academic — a sort of default Republican — to a fierce consumer advocate and bankruptcy expert whose advice was sought on Capitol Hill, and then, finally, to a Democratic force on the Hill herself.”

            https://www.nytimes.com/2019/08/25/us/politics/elizabeth-warren-republican-history.html

          4. ‘Her road to Damascus was a long one’

            Yes, that is quite unfortunate that she persisted in that for so long. I am glad that she has recognized the pain that this caused native Americans and has apologized:

            “Like anyone who’s being honest with themselves, I know that I have made mistakes,” said Ms. Warren, who was met with a standing ovation when she took the stage. “I am sorry for harm I have caused. I have listened and I have learned a lot, and I am grateful for the many conversations that we’ve had together.”

          5. That is what Warren is all about.

            Insiders Don’t Criticize Other Insiders

            Back in 2009, when the Obama administration was busy ensuring the nation’s financiers would become larger, more powerful and never serve a day in jail despite their historic crime spree, Larry Summers had dinner with Elizabeth Warren. During the course of that meal, he instructed her about how power really functions in the U.S.:

            A telling anecdote involves a dinner that Ms. Warren had with Lawrence H. Summers, then the director of the National Economic Council and a top economic adviser to President Obama. The dinner took place in the spring of 2009, after the oversight panel had produced its third report, concluding that American taxpayers were at far greater risk to losses in TARP than the Treasury had let on.

            After dinner, “Larry leaned back in his chair and offered me some advice,” Ms. Warren writes. “I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: They don’t criticize other insiders.

            “I had been warned,” Ms. Warren concluded.

          6. That is what Warren is all about.

            LOL, LibertyBlitzKreig? Come on now, you can do better than that.

            You are right. Warren is not an insider, never has been. She’s not Biden and she’s gone after banks and proposed breaking up tech companies. This doesn’t win many friends with “insiders”.

          7. LibertyBlitzKreig

            Is Warren’s anecdote misquoted? Can it not be taken at face value? Citations are not endorsements.

            Warren is not an insider

            She’s an insider pretending to be an outsider. You must not have understood the anecdote. She wouldn’t be where she is if she wasn’t an insider.

          8. She’s an insider pretending to be an outsider. You must not have understood the anecdote. She wouldn’t be where she is if she wasn’t an insider.

            Ironically, you didn’t understand the anecdote because it comes from her book and says exactly the opposite of point you are trying to make. Or perhaps you do and are intentionally trying to mislead by not providing context.

            This source isn’t as credible as “LibertyBlitzKreig” which is Russian-type propaganda, but perhaps you could try it to understand the context which you failed to grasp:

            https://www.washingtonpost.com/news/wonk/wp/2014/12/14/elizabeth-warren-is-changing-washington-without-giving-up-her-outside-status/

            “Enough is enough with Wall Street insiders getting key position after key position and the kind of cronyism we have seen in the executive branch,” she said. “Enough is enough with Citigroup passing 11th-hour deregulatory provisions that nobody takes ownership over but that everybody comes to regret. Enough is enough.”

            he fact is that Biden is the insider and is assuring large democratic donors that nothing fundamental will change. Sanders/Warren are outsiders that are promoting universal health care, a wealth tax, and large ideas that would challenge the elites.

          9. Her road to Damascus

            That right there is pretty grandiose. It implies a change from bad to good so radical as to be humanly impossible. A Miracle.

            I am always leery when a leopard changes its spots, especially so when it helps them blend in with the sheep better.

          11. her book

            How cute that you think a politician, particularly one who lied about her heritage, is truthful in a book.

        3. “The business cycle used to have…”

          “We no longer have business cycles, we have credit cycles.” —Peter Boockvar

        4. Her road to Damascus

          The NYT author’s words, not Warren’s.

          Road To Damascus: Idiom, The Free Dictionary:

          “A sudden, radical change in attitude, perspective, or belief. The term refers to the biblical story of Paul, who converted from Judaism to Christianity while traveling the road to Damascus (Book of Acts, chapter 9). It has long been used figuratively, sometimes put as a road to Damascus moment. For example, “Where gun rights are concerned, a ‘Road to Damascus moment’ occurs when a formerly anti-gun or gun-shy person decides to become a gun owner” (John Pierce, Minneapolis Examiner, August 7, 2009).”

        5. You should see if Rachel Maddow is hiring.

          Nice. Don’t you have some senior citizens on facebook to send some inflammatory conspiracy bunk to so they will share it with their grandchildren and blame the Soros/MSM/Bilderberg consipiracy?

  22. The only risk in platinum is it is heavily tied to diesel engine pollution control. Thus the reason for its weakness over the last few years. That said it is probably not overpriced like palladium which is the metal of preference for gasoline cars. Of course, if you believe One and Tesla is about to take over the world both metals are overpriced so they will lose their major markets.

  24. Dale Carnegie: “How to win MegaChurch friend$ & Influence a Chinese Emperor!”

    Trump’$ New Trade War Tool Might Just Be Antique China Debt

    Collector$ of pre-Communi$t debt are lobbying the White House to force Beijing to make good.

    By Tracy Alloway | Bloomberg | 8/30/19

    President Donald Trump’s next move in an increasingly fraught trade war with China could be one for the history books, literally. The Trump administration has been studying the unlikely prospect of reviving century-old claims on Chinese bonds sold before the founding of the communist People’s Republic.

    The defaulted China bonds can be found in the attics and basements of thousands of Americans, or on EBay, where the certificates sell as collectibles for as little as a few hundred dollars each. The PRC, which succeeded the Republic of China after it replaced the imperial dynasty, has never recognized the debt, though that hasn’t stopped decades of attempts to collect payment on it.

    Now, with Trump ratcheting up the trade rhetoric with China, holders of the antiquarian bonds are hoping he’ll press their case, even as other parts of the U.S. government are accusing people of fraudulently selling the same paper.

    Perhaps the only thing more peculiar than the story of the Chinese debt and the bid to seek payment on it, is the cast of characters drawn into its orbit. President Trump, U.S. Treasury Secretary $teven Mnuchin, and U.S. Commerce Secretary Wilbur Ro$$ have met with bondholders and their representatives. Kirbyjon Caldwell, pa$tor of a Texas megachurch and spiritual adviser to George W. Bush, has been charged by the U.S securities regulator for $elling the debt to elderly retiree$. (Caldwell has pleaded innocent and maintains that the bonds are legitimate.)!

    The Hukuang Railway bond is a thing of beauty. Printed with an ornate border and carrying a large chop, the debt was sold in 1911 to help fund construction of a rail line stretching from Hankou to Szechuan.

    The U.S. once referred to the money that flowed into China at the turn of the 20th century as “dollar diplomacy”—a way of building relations with the country (and its massive untapped market) by helping it industrialize. The Chinese have another term for it: For them it fits squarely into China’s “Hundred Years of Humiliation,” when the Middle Kingdom was forced to agree to unfair foreign control.

    Soon after the imperial dynasty was overthrown in 1911, the Republic of China began tapping the international capital markets for funding too. That included selling a series of gold-backed notes to fund the nascent country. It’s these bonds that Bianco, who co-founded the American Bondholders Foundation in 2001 to represent holders of pre-communist debt, is hoping could be a useful political leverage in Trump’s fight with China.

  26. International investors take a small step back from US commercial real estate, as yield is less attractive

    International investors became net sellers of commercial real estate this year for the first time since 2012. There was no one country accounting for the change, instead a small pullback in purchases that changed the investment equation.

    Investors made direct acquisitions totaling $21.3 billion in the first half of 2019 but sold a little bit more at $21.4 billion, according to a new report from Real Capital Analytics.

    https://www.cnbc.com/2019/08/30/international-investors-pull-back-from-us-commercial-real-estate.html

    Good riddance. Well at least there will be a greater fool for them to sell to unless there isnt… I’ve witnessed a few of these in my local area, one in particular had been sitting vacant for about a year with an over grown lawn. then one day i noticed an asain guy out front smoking cigarettes and yelling on his phone while weed waking the front yard. I would see this guy there every morning repeating this for a couple months and watching different contractors showing up to fix up his investment. a month later the property is on the market. seems like no one is biting. I feel like we will see a big flood of these “investment” properties soon but thats just my feeling.

    https://www.trulia.com/p/ca/santa-cruz/702-park-way-santa-cruz-ca-95065–2084363811

    1. See next comment for more details. I wrote that next comment before the first one was un-moderated, hence the disconnect.

  29. A shocker for recalcitrant sellers of property: For 7 straight months now, the nominal ARM/5 mortgage rate has been higher than the FRM/15 rate. Historically unusual. More housing price drops coming. After points and fees, the spread is even higher. Data source: FreddieMac PMMS.
    The last time something similar happened was during the bubble busting in 2008-2009. Related note: Rates shown are nominal rates, and not the fees/points-inclusive APR rate measure. APR is considerably higher, and the spread between ARM/5 and FRM/15 is even wider.

    2. I love how the Left believes that doing what the people voted for (implementing Brexit) is Fascist while opposing the voters’ will is “democratic”. It’s so Orwellian.

      They’re just upset that Boris Johnson shut down the debate and that there will be a no deal Brexit in 2 months.

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