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An Eyes Wide Shut Get In Get Out Strategy

A report from the New York Times. “The US luxury condominium and apartment market is in the midst of an amenities war. Prices for ultra-luxury condos in New York have been declining since peaking in 2016, according to StreetEasy. The site found a mismatch between decisions by developers to keep building bigger, better condos and the number of people willing to buy them, causing a glut at the high end.”

“Workforce housing is in short supply, yet developers focus on ultra luxury because that is where they think they can make the biggest profit, said Jessica Lautz, vice-president of behavioural insights at the National Association of Realtors. ‘What we have in any market cycle when the talk turns to amenities are signs that sales are slowing,’ said Jonathan Miller, president of Miller Samuel.”

From Bloomberg on New York. “Extell Development is building Central Park Tower, the firm’s ltra-luxury follow-up to One57, the Billionaires’ Row skyscraper that touched off the city’s high-end construction boom – and set the stage for the market’s current slowdown. Billionaires’ Row saw the biggest decline in the value of contracts signed in the second quarter, according to a report by Core. The median price of pending purchases dropped 91 per cent from a year earlier to US$5.14 million, the brokerage said.”

“Costly condos are not ‘flying off the shelves like One57 did when we started six or seven years ago, when we were the only game in town,’ Gary Barnett, president of Extell, said in a Bloomberg Television interview. ‘There’s certainly much more competition.'”

The Commercial Observer. “Kitchens with breakfast nooks. A washing machine and dryer in every apartment. A tanning bed. A large, resort-style swimming pool surrounded by lounge chairs and trellises for shade. When it opened in 2013, Aspen Heights, a private dormitory near the University of Missouri’s main campus in Columbia, Mo., looked like it had a lot going for it.”

“But six years later, Aspen Heights in Columbia is no more. Citing poor income performance and declining occupancy, the special servicer of the property’s CMBS loan took over the $50.2 million outstanding balance on the asset in late 2017, and the sponsor, Aspen Heights Partners, got a default letter 10 months later.”

“As a result, a growing tally of CMBS-backed student housing properties are landing in special servicing or default. Among the $1.53 billion of CMBS loans made on properties built after 2010, the delinquency rate has risen to 15.3 percent, according to Clancy’s research — more than six times the overall proportion of delinquent CMBS loans.”

“In Oxford, Miss., a $38.2 million CMBS loan helped PPG Manhattan Real Estate and H. Katz Capital Group buy the 753-unit Highland Square dormitory near the campus of the University of Mississippi in 2015, at a moment when the then 8-year-old building enjoyed a 95 percent occupancy rate. The property comes with an astonishing list of amenities. Still, those niceties haven’t proven sufficient to outshine the competition. By September 2018, occupancy had fallen below 70 percent, and the loan was transferred to its special servicer three months later. Now, the landlords are facing foreclosure even as the ownership duo is working to right the ship.”

“The reason for the distress? ‘Borrower indicated the student housing market is overbuilt and enrollment at Ole Miss has been stagnant,’ according to the special servicing notes.”

The Bowdoin Orient in Maine. “The new Park Row Apartments opened just in time for students to return to campus for the fall semester. Lisa Rendall, director of residential life and housing operations, reported a number of lingering issues with the apartments even after they opened. Doors with windows where there shouldn’t be and flooding showers were among the main complaints. Rendall noticed the incorrect installation of doors with windows to the hallway, giving view into apartments, and she purchased curtains and rods to cover the windows until the correct style of door can be installed.”

The Orlando Sentinel in Florida. “Clermont is an increasingly popular Orlando bedroom community — and more and more of those new residents are moving into apartments. But after hearing concerns from residents that apartment complexes are contributing to clogged and deteriorating roads, City Council members recently imposed a six-month moratorium on new multi-family development projects, including apartment complexes.”

“The city has seen several multi-family residential projects over the past three years. ‘We are looking to get out in front of an increasing wave in demand for apartments that we’re seeing across Central Florida, and specifically in Clermont,’ City Manager Darren Gray said.”

From Bisnow on California. “Add Trammell Crow Residential’s new 234-unit apartment project to the list of developments contributing to Oakland’s housing surge. Oakland’s increase in supply has created somewhat of a renter’s market, with more concessions, like a period of free rent or a signing bonus offered to potential tenants, the San Francisco Chronicle has reported.”

The Press Telegram in California. “For people who support more government control and less freedom, the goal is always to break the connection between effort and reward. That’s how they justify government redistribution of private property and anything else that one person enjoys but another person doesn’t have. If the only goal was to end the housing crisis in California, there are other policies that would accomplish more. Limiting the use of residential housing units for short-term rentals might create an oversupply of apartments overnight.”

From WSMV on Tennessee. “Dianne Bennett’s house on Elmhurst Avenue is the last single-family home on the block. The rest are three-story condos rented on sites like Air B&B. ‘You don’t know anybody, cause they come and go,’ she said. ‘You go any street now, and they are building these things.'”

“The visitor’s license plates, a sign that this neighborhood has turned into an area filled with short-term rental properties owned by investors. Dianne Bennett has her house up for sale.”

The Wall Street Journal on Arizona. “Becoming a homeowner is part of the American dream, and after three years searching, my husband and I found a fixer-upper in a quiet Scottsdale neighborhood. Unknown to us, however, the house next door was a short-term rental, an Airbnb that can host more than 16 people.”

“It’s known as ‘the party house’ for good reason. A party it is, day and night, from screaming kids in the pool at dawn to buses arriving to pick up a rowdy wedding group. Short-term rentals are usually filled with vacationers for whom every day is a celebration. This is no exception. There have been dozens of late-night, loud, drunken festivities filled with foul language. One group smoked so much pot, the smell was overwhelming in our front yard.”

“While the owner of the neighboring house has great reviews for being prompt and attentive to his guests, he is unresponsive to my concerns. He told me in one year he raked in more than $100,000 from this property. That’s quite a return, but his neighbors paid the price.”

From Short Term Rentalz. “Along with the insights of leading industry figures, I will evaluate the risks and rewards of the master lease model and whether its bubble is ready to burst. Short-term rental master leases have rapidly gained traction as disruptors such as Airbnb and HomeAway blur the lines between traditional hotels and rentals and the growth of OTAs provides more consumer choice and booking transparency. Newer players are realising the lucrative potential of the market and tailor their offerings to combine apartment-style amenities with hotel-standard services.”

“News that Japanese conglomerate SoftBank, which largely funds WeWork, is considering halving the office-share provider’s valuation to around $20 billion for its impending IPO should provide a stark warning to real estate tech startups not turning over profits with their master lease model that they should be valued accordingly as property companies and they will operate more sustainably if a downturn hits. For all this, supply and demand must be balanced for when a market shifts and investors come on board as ‘every market that goes up must come down,’ according to T5 Strategies managing director Sean Worker.”

“He added: ‘The winner is likely to be an ‘eyes wide open’ long-term model vs an ‘eyes wide shut’ get in: get out strategy. Near future volatility is highly probable – it may come down to scale up or consolidate!'”

This Post Has 67 Comments
  1. ‘Along with the insights of leading industry figures, I will evaluate the risks and rewards of the master lease model and whether its bubble is ready to burst’

    It would be funny if the consequences weren’t so large. Basically it’s “so much money is being shoveled into these money losing outfits!”

    BTW, I said these stupid student things were going to blow up years ago. Like the apartments, they paid too much for the land, invented a story about students “demanding” luxury, built it and now it isn’t working – foreclosure! Anyone reading here in the past 4 years knew this was coming. Actually they’ve been defaulting left and right for at least a couple of years. This isn’t new at all.

    1. “The US luxury condominium and apartment market is in the midst of an amenities war. Prices for ultra-luxury condos in New York have been declining since peaking in 2016, according to StreetEasy. The site found a mismatch between decisions by developers to keep building bigger, better condos and the number of people willing to buy them, causing a glut at the high end.”

      “Workforce housing is in short supply, yet developers focus on ultra luxury because that is where they think they can make the biggest profit, said Jessica Lautz, vice-president of behavioural insights at the National Association of Realtors. ‘What we have in any market cycle when the talk turns to amenities are signs that sales are slowing,’ said Jonathan Miller, president of Miller Samuel.”

      As Ben stated, HBB has been stating this for YEARS….Yellan “The Felon” Bux going to Mal-investment Heaven. Don’t forget MSM narrative… building costs too high to built affordable housing due to trade wars. Prices been cratering since 2015/2016… We built affordable housing before but NOW it’s different. No mention of bubble land prices or speculative foreign “investors” that got their *** kicked

        1. Every town here in SWFL made the list, supporting what I’ve been seeing. And, based on the listings I’ve been watching, it’s probably worse than it’s being portrayed here.

          Some places are still selling quickly, if everything is right. But any that are less than desirable are sitting though many price reductions and often being delisted and relisted several times to make it look like the ‘time on market’ isn’t so bad. I know of many in my neighborhood alone that have been listed for over a year.

          1. I wonder why there’s a cluster in the Virginia Beach area too.
            I was surprised at Laurel, MD. It’s a regular suburb like any other, so I don’t know why so many of the houses are underwater.

          2. I can’t speak for the East coast but SWFL is a great place to live, that’s part of the problem in California as well. It’s better than most of the nation and lots of people want to live here.

            They come (and go) in waves and it drives the real estate market up and down more rapidly and drastically than most of the rest of the country.

      1. “The US luxury condominium and apartment market is in the midst of an amenities war…”

        Just lower the fooking price already.

    2. “…they paid too much for the land, invented a story about students “demanding” luxury…”

      See:

      https://www.theguardian.com/commentisfree/2017/dec/07/university-food-bank-vice-chancellors-pay-students-poverty

      Cut from article:

      “Halls of residence have been transformed from being functional units to study for a degree into luxury apartments, which are often so expensive I cannot imagine how anyone affords them.”

      USA Universities have been transformed into stories of mass greed, so different than even a few decades ago.

      What a sad, sad story.

      Do these college administrators and REIC developers have any moral compass at all?

      1. My freshman dorm room had painted cinderblock walls, a poured cement ceiling, and indoor-outdoor carpet on a concrete floor. It was pretty much constructed like a parking deck.

        A formica-top credenza desk, a chest of drawers, a cubby hole with a coat rod and a twin sized bed spring with a mattress about 4” thick made up the furnishing, maybe 10’ x 15’ a the most.

        Yeah, I know, uphill both ways through a blizzard. But I don’t understand how anyone could even be thinking luxury housing with the education itself costing what it does these days. And who needs more than that at that stage of their life? You just roughed it through college. I lived at home and commuted a couple of semesters along the way to save money on top of it.

        1. That’s what my son’s dorm room looks like right now. $2400 a semester, about $4k with a decent meal plan. I’d have preferred to not pay for all that but my son desperately needed to get some experience on his own with my ex far away. So living at home wasn’t the best option for him and he wasn’t interested in coming to California.

          1. The “adulting” experience for your son ought to be worth at least a portion of the investment. Good luck to you both…

          2. That’s what I think. And I don’t know of a better, safer way to get that experience for $1000/mo total. Best of all he’s loving it and hanging out with all the international students and seems to be really blossoming without the need to stay home and comfort his mom all the time while she complains about how hard life is. Side note, his 19th birthday was yesterday, which means no more child support checks to his mom. Divorce is a long and difficult process but life just keeps improving as it recedes into the past.

          3. There’s nothing wrong with dorm life, especially when he’s getting used to the pace of classes and making new friends. Give him a year or two and let him decide if he wants to continue with dorm life, or go in with buddies for an apt.

            btw, my dorm room was almost exactly the same, except I shared with 1-2 other ladies. Shared bath/shower down the hall.

          4. There’s nothing wrong with dorm life,

            And I think this is why the dorm life continues in some of these uber expensive cities a la WeLive, Ollie, and Common. Not that dorms are desirable, but they might be the least bad option in some cases, even for those 23-29-year-old single workers who aren’t in college.

          5. “…no more child support checks to his mom.”

            Are we going to read about that in the news? 🙂

            I don’t think so. If she had more ambition maybe.

    3. “…the master lease model…”

      My daughter is renting a room in a house off-campus this year up in Bellingham, WA. A property management firm is leasing each bedroom, not the entire place. They are wringing every last dollar out of the area’s student population.

      1. There are people who are leasing houses, then turning them into boarding houses through illegal subletting – or Airbnbs. It’s all a symptom of the same disease – Bernanke/Yellen/Powellbucks which have turned shelter into a speculative orgy.

        1. “…which have turned shelter into a speculative orgy….”

          That’s exactly what it is.

          Really sad for 99% of the population who just want decent place to live within reasonable financial means.

          IMO, the REIC should be ashamed of what they have done.

        2. There are people who are leasing houses, then turning them into boarding houses through illegal subletting – or Airbnbs.

          The thing that is interesting in Ben’s article is that the Arizona state backed by zealous conservatives/Libertarians passed laws prohibiting local cities from prohibiting nightly rentals or putting regulations on them. They took the concept of private property and basically put zero restrictions around it. In my mind, this is what happens when you get so wedded to an ideological position that you neglect reality. Of course Airbnb/VRBO/Uber/Lyft need to be regulated.

      2. And those student dollars to pay for these “professionally managed” rooms come from where? For the most part, loans. Student loans that will haunt the borrowers for years to come, with no way out. Talk about pulling forward demand…

    4. We have four new renters above us. They are all college-age, but none of them are in college. This is a change from the past two years where we had college students above us. Anecdotally it does seem like student pipeline into colleges/universities is slowing pretty substantially.

  2. ‘It’s known as ‘the party house’ for good reason. A party it is, day and night, from screaming kids in the pool at dawn to buses arriving to pick up a rowdy wedding group. Short-term rentals are usually filled with vacationers for whom every day is a celebration. This is no exception. There have been dozens of late-night, loud, drunken festivities filled with foul language. One group smoked so much pot, the smell was overwhelming in our front yard’

    This is the Craiglist thing from last decade all over again, just with venture capital money being used to bribe local and state officials. Is there any doubt it won’t end up the same way?

    1. “A party it is, day and night, from screaming kids in the pool at dawn …”

      Pool? They have a swimming pool? Do the upset neighbors realize just how, er, interesting life can get for people who have a pool?

      For example, just how easy is it for someone to, say, toss a gallon of used motor oil over the fence and into the pool every now and then?

      1. “’While the owner of the neighboring house has great reviews for being prompt and attentive to his guests, he is unresponsive to my concerns.'”

        First you need to do something to get his attention.

        “‘He told me in one year he raked in more than $100,000 from this property.'”

        With a bit of imagination on your part this could change.

        1. do something to get his attention

          Like report him to the city, state and federal tax authorities. He most likely did not report that income.

          1. Tarara linked to a realtor explaining the new Las Vegas law that really has some teeth for punishing repeat Airbnb/VRBO/Homeaway offenders. It sounds like there were laws in place, but they didn’t really function as a deterrent to the behavior until the fines were rolled into extra property taxes rather than being placed as a lien on the property.

          2. report him solely on the pool

            It’s probably more difficult to identify and notify his insurance company than the tax authorities.

        2. “‘He told me in one year he raked in more than $100,000 from this property.’”

          The Fed should DEFINITELY keep lowering rates, preferably going negative, to ensure this a$$ clown can continue to make money hand over fist at the expense of people who just need shelter, and society as a whole. Great policies.

  3. Prices for ultra-luxury condos in New York have been declining since peaking in 2016, according to StreetEasy.

    So now the MSM is belatedly conceding that NYC skyboxes and mansions peaked in 2016. Hmm…where did I read that first? Wasn’t from a Real Journalist, if memory serves.

  4. ‘Borrower indicated the student housing market is overbuilt and enrollment at Ole Miss has been stagnant’

    I posted a Bloomberg article probably a year and a half ago with a guy noting the number of students in the US is in terminal decline, across the board. But it’s recession proof! Leading the way in foreclosures. Ha ha.

      1. Good article. Even though the population of youngsters decreased, a higher proportion of the population went to college, maintaining the numbers of students. I doubt that that proportion will increase any more. Too many Gen Z (and their Gen X parents) are watching their older siblings get crushed by debt. I think we’ll see a lot more commuting. And how much of that young population is immigrants kids? Asian and Indians will go to college for sure, but the Latin element, I’m not so sure.

  5. “Extell Development is building Central Park Tower, the firm’s ltra-luxury follow-up to One57, the Billionaires’ Row skyscraper that touched off the city’s high-end construction boom – and set the stage for the market’s current slowdown.

    With the central banks gearing up to flood the globe with more “stimulus” – which benefits only the .1% – this new “ultra-luxury” development may not be as crazy as it seems.

    1. Yeah right, that’s why sales are off 91%.

      white el·e·phant
      /ˌ(h)wīd ˈeləfənt/
      noun
      noun: white elephant; plural noun: white elephants

      -a possession that is useless or troublesome, especially one that is expensive to maintain or difficult to dispose of.
      -“a huge white elephant of a house that needed ten thousand spent on it”

  6. ‘Oakland’s increase in supply has created somewhat of a renter’s market, with more concessions, like a period of free rent or a signing bonus offered to potential tenants…Limiting the use of residential housing units for short-term rentals might create an oversupply of apartments overnight’

    Wa? But bay aryans need millions of shacks and airboxes to bring prices down! Then when prices fall it’s doom and gloom. What a bunch of hypocrites.

  7. This is for all the website clowns that think they spotted something new:

    May 30, 2018

    There Is An Air Of Doom And Gloom

    A report from National Real Estate Investor. “While apartment rents are still growing nationally, in a few cities and submarkets rents are growing more slowly or even beginning to shrink. The number of new apartments scheduled to open in the U.S. totals 274,700 units, up from 235,300 units added in 2017 and 220,800 units added in 2016, according to Reis Inc. Rent growth is seriously slowing down in a handful of markets. ‘We expect total completions by year-end to reach a new cyclical high. Markets such as Nashville and Charlotte, leaders in new apartment construction, will face more pressure at the top end of the market,’ notes an analysis by CoStar Portfolio Strategies.”

    “Flooding damaged many houses in Baton Rouge, La. in 2017. For a time, that helped fill many rental apartments in this small city. But now many of the houses are repaired and are attracting apartment renters, pushing average rents lower over the 12 months that ended in the first quarter. ‘San Antonio is another market where supply is the main culprit,’ according to the research firm. Developers opened 11,000 new apartments over the past two years, a 6.8 percent increase in inventory, which is 24 percent above the historical average for 2002-2016.”

    “‘Landlords are offering generous concessions,’ says Barbara Denham, senior economist for Reis. ‘There is significant new construction throughout New York City, including the Upper Manhattan submarket. Secondary core submarkets like Long Island City in Queens are also already showing negative rent growth, and led the nation in the amount of new apartments under construction today, according to CoStar.”

    From Realtor.com. “College Station is best known as the home of Texas A&M University and more than 68,000 students. But these Aggie football fans got a little carried away on their latest housing boom, putting up too many new residences. As a result there are more homes for sale than buyers to scoop them up. Hence, the discounts. ‘To be blunt, the housing market is crashing right now,’ says Jeff Leatherwood, a broker at Aggieland Properties. ‘Properties built for the purposes of student housing are just overbuilt. We are a huge college town, and most of our market is rental properties.’”

    “This overabundance of housing, particularly homes aimed at students, could get worse before it gets better, local professionals fear. ‘There is an air of doom and gloom,’ Leatherwood says. ‘When the school year starts again in September, homes [that didn’t get student renters] will flood the market.’”

    From the Seattle Times in Washington. “The shift has been sudden: Last year, rents rose about 4 percent. Just two years ago, rents were soaring as much as 9 percent annually. ‘One, two, three years ago, we would literally have people move out and we’d be there to do a quick cleaning, and change the locks, and have someone literally move in a couple hours later. We didn’t lose a day of rent,’ said Chris Benis, who rents out a dozen houses on the Eastside. Some tenants would even rent houses sight unseen.”

    “But in the last couple months, two of his houses became vacant and drew just one tenant application each, and it took about a month to rent out each house. ‘We didn’t have people banging down the door to rent’ them, Benis said.”

    “Rents at Seattle-area apartment buildings have also cooled way down recently, and are actually below their highs reached last summer. But dig deeper and it’s a bit confusing: Experts have pinned the apartment-rent slowdown on the record number of new apartments flooding the market. Julie Purchase, principal of Avenue One, which manages about 600 single-family home rentals in Greater Seattle, said the huge jump in new apartments has had a chilling effect on the home rental market, too.”

    “Purchase said in the last few years her firm could automatically raise rents about 10 percent when a new tenant came in — now they’re cutting rents 5 to 10 percent just to get enough applicants, and even still, it’s taking about two weeks longer to rent the typical house than it used to. ‘I expect it to be tough (to raise rents) as long as they continue to build 11,000 (apartment) units a year here,’ Purchase said.”

    “One wild card to watch out for is whether landlords cash out and sell their houses now to take advantage of the for-sale market, which continues to be as hot as ever — particularly now that home rentals aren’t offering the same returns. Purchase said last spring about 5 to 10 of her clients sold their rental houses, while this spring it’s tripled to about 25 to 30. About 30,000 single-family homes across the region were converted from for-sale to rentals during the housing bust. In all, about 145,000 houses in the Seattle metro area are now rented out. There are only about 4,300 houses on the market right now in the metro area, so even if a fraction of those rentals went up for sale now, it could make a difference.”

    From the Daily Camera in Colorado. “A group of Boulder renters are facing rent increases as high as $500 a month after their landlord reneged on lower rates. The complex’s owner says the situation was a result of a mistake made by a previous property management company. Caught in the middle are the tenants of Wonderland Creek Townhomes, who have until June 8 to make a decision: either pay up or move out.”

    “The former property management group, Brinkman Construction, of Fort Collins, sent out letters March 28 to residents notifying them of the hikes, and a Saturday deadline to announce their intention to stay or vacate. Four Star took over May 1. On May 16, the company sent out a notice that Brinkman had acted ‘without the owners (sic) consent or approval’ and gave the renters one week to decide whether to renew under increases that were $700 to $800 higher than the rates Brinkman offered. ‘Unfortunately, the renewal rates that were offered by Brinkman cannot be honored by the owner as this would significantly impact the community and interfere with the overall well-being of the asset,’ read the letter, copies of which were obtained by the Camera.”

    “As a nod to the about-face, the new, higher rents were presented as discounts from market rates that Four Star could charge; about $200 less, on average. ‘The owner has consciously and generously agreed to a concession,’ the letter read. Scott Woodard, a representative for the group that owns Wonderland Creek Townhomes, said substantial increases were needed because the current lease rates were special, move-in deals offered in the complex’s first year to prop up vacancy.”

    “‘We couldn’t continue to honor any more of those rates at that point when we discovered that error’ on May 15, Woodard said. ‘We were back on our heels as far as these letters of intent, and it’s going to cost us a lot of money.’”

    “Shelly Darnutzer has already made up her mind. ‘If this is the final offer,’ she said, ‘then I will be moving out.’”

    The Democrat and Chronicle in New York. “Kevin Morgan, a nephew of Robert ‘Bob’ Morgan, pleaded not guilty Tuesday morning for his role in a years-old fraud scheme. Kevin Morgan, 42, is accused of fraud in a 62-count indictment that includes Robert Morgan’s son Todd Morgan, 29, and two others — Frank Giacobbe, 43, of East Amherst, Erie County, and Patrick Ogiony, 34, of Buffalo. He was arraigned midmorning in federal court in Buffalo and is being held in lieu of $100,000 unsecured bond.”

    “The four men are charged with wire fraud, bank fraud and conspiracy to commit wire fraud and bank fraud. They are accused of obtaining over $167.5 million worth of loans connected to seven properties, including apartment complexes in Buffalo, Syracuse and Avon, Livingston County. Kevin Morgan is the last of the four to be arraigned on the charges in federal court in Buffalo. He is vice president of Perinton-based Morgan Communities, while Todd Morgan is a project manager. Robert Morgan is chief executive officer. Kevin Morgan was indicted on 35 counts, while Todd Morgan was indicted on 26 counts.”

    From Rochester First. “Todd Morgan, the son of prominent Rochester developer Bob Morgan, pleaded not guilty to charges of fraud on Thursday. Prosecutors say Todd and his cousin Kevin Morgan misled financial institutions in order to get bigger loans for seven properties across Western New York. Prosecutors say the pair would take steps, like turning on televisions and radios, to make vacant buildings appear occupied.”

    “Two loan officers, 43-year-old Frank Giacobbe of East Amherst and 34-year-old Patrick Ogiony of Buffalo, were also charged in the case. And Wednesday, U.S. Attorney J.P. Kennedy said the investigation is still underway and more people could face charges in the investigation.”

    http://thehousingbubbleblog.com/?p=10448

    1. I’m surprised Lawrence Yun let Diana write that article. Don’t you know interest rates are low and now is a great time to buy?!?!?

  8. The economic picture looks grimmer by the day, which is great news for the stock market, as the worser things look, the more likely it becomes for central bankers to enact large-scale hair-of-the-dog stimulus measures.

    So in short, there has never been a better time to back up the truck and load up on stocks.

      1. Does it still signal anything if the Fed deliberately created the inversion? I said last September that if the Fed raised, it would cause an inversion. The Fed raised twice by a quarter point each time. Now the Fed will be cutting back for the second time by a quarter point. If I could see it the Fed should have been able to see it, thus it was deliberate. Ironically while I think it was done to hurt Trump, most likely it moved a recession from 2020 to 2021.

    1. China takes more action to boost its slowing economy
      By Laura He, CNN Business
      Updated 7:56 AM ET, Fri September 6, 2019

      China took more action Friday to boost its economy, reducing the amount of cash banks have to keep in reserve.

      The People’s Bank of China said it would slash the reserve requirement ratio for most financial institutions by 50 basis points. It’s the first cut in the ratio in eight months and the move, which takes effect over the next three months, could unleash 900 billion yuan ($126 billion) for long-term lending, the central bank said.
      China’s economic growth slumped to its lowest level in nearly three decades in the second quarter. Industrial production, an important indicator for the country’s economy, also posted its worst growth in 17 years. The world’s second biggest economy is grappling with fallout from the trade war with the United States, as well as domestic challenges as it tries to rely less on debt to fuel growth.

          1. “…Everybody’s going Zimbabwe….”

            Not an impossible scenario.

            The only “shortage” we may end up with is paper to print money on.

          2. The only “shortage” we may end up with is paper to print money on.

            Where we’re going we don’t need paper. Can you run out of zeroes?

  9. “About 30,000 single-family homes across the region were converted from for-sale to rentals during the housing bust. In all, about 145,000 houses in the Seattle metro area are now rented out.”

    Thanks, Obama, Bernanke and Yellen. Heckuva job.

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