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It Could’ve Been A Slam-Dunk, But People Got Greedy

A report from Reuters. “Citibank has agreed to pay a $30 million fine to settle charges of repeated violations of real estate holding rules and for failing to meet its commitment to take corrective actions, the U.S. Office of the Comptroller of the Currency (OCC) said on Friday. Federal law limits the time a national bank may hold foreclosed and ‘other real estate owned’ (OREO) assets.”

“In 2015, Citi said it lacked adequate processes to effectively monitor the holding period, and committed to developing and taking corrective actions, but it did not do so, the OCC said. As a result, between 2017 and 2019, the bank committed over 200 violations in South Dakota related to the statutory holding period for OREO assets.”

From Dow Jones Newswires. “Under federal banking regulations, there is a two-year limit on banks maintaining possession of a foreclosed property. The rules stipulate that banks can apply for an annual exemption that can push their ownership of a property to as much as five years. But after that, the bank is supposed to sell the property back into the market to prevent available housing inventory from being kept away from would-be homebuyers.”

“And according to the OCC, Citibank violated that rule by holding onto hundreds of foreclosures for longer than the five-year limit. ‘Following additional efforts to correct the root cause of the continued OREO holding period violations, the Bank recommitted to implementing corrective actions by August 31, 2018,’ the OCC said. ‘The Bank failed to meet its commitment, resulting in additional violations.'”

From Staten Island Live in New York. “While the number of foreclosures decreased across most of the city over the last year, they saw a spike of 183% during the third quarter of 2019 on Staten Island, according to Property Shark. The report revealed an increase in Manhattan foreclosures of 118%.”

“‘Ten plus years ago the foreclosure rate was high due to higher mortgage (and) cap rate, thus jumbo mortgage amounts,’ said Neila Nuzzi, associate real estate broker with Neuhaus Realty, Inc. in Richmond. ‘The cost of living is up. The prices for some amenities are up. Thus, the number of bills a person has to take on is substantially higher. When paying bills some folks (say), ‘Next month,’ and next month becomes plural, and you are (now) behind and the foreclosure process is a process that can take years. So if a person is not concerned about their credit, they live for free and then save a little more and buy something smaller in someone else’s name,’ she added.”

From News 5 Cleveland. “Cleveland Housing Court Judge Ron O’Leary is getting tough on bank-owned problem homes that have numerous code violations and could jeopardize neighborhood safety. O’Leary said too often homes obtained by banks through foreclosure aren’t being maintained properly and turn into problem properties. In many cases the banks are hiring third party property management companies that aren’t getting the job done.”

“‘These properties are wide open with a lot of code violations,’ O’Leary said. ‘Grass cutting, garbage—the probation officer did tell me that the properties were open meaning anyone could just walk in. Banks have the responsibility to maintain the property and they largely have the resources to do it.'”

“Cleveland homeowner Maurice Smith lives across the street from one of the homes owned by U.S. Bank that he said used to be a neighborhood nuisance. ‘It was really bad, to the point that is was an ugly sight for this neighborhood,’ Smith said. ‘I think they should do a better job, whichever bank or mortgage lender or whatever, take their responsibility also.'”

The Dallas Morning News in Texas. “After several years of ever-increasing sales, there are signs that North Texas’ million-dollar home market has hit a ceiling. The latest sales numbers show that purchases of million-dollar properties have leveled off. For the last few years, million-dollar home sales in the Dallas-Fort Worth area have grown at double-digit percentage rates.”

“But through the first nine months of 2019, million-dollar home purchases have been flat, with no change from 2018 levels. So far this year, 1,382 million properties have traded. Another 1,526 of these high-priced houses are still up for sale — about 5% more than a year ago. ‘The inventory is mostly at the upper end,’ said George Ratiu, senior economist with Realtor.com. ‘That’s not where the most demand is.'”

From Mansion Global. “The Washington, D.C., home owned by the founder and CEO of sportswear brand Under Armour has a new, slimmed down price of $24.5 million. Kevin Plank, who founded the company in 1996, first listed the property in February 2018 for $29.5 million, according to The Wall Street Journal. It’s not clear when or if the home was taken off the market, but its new asking price has been in place since last week. Despite the price cut, the property remains the most expensive on the market currently in Washington, D.C., according to listing records.”

The Hollywood Reporter in California. “How did the expansive property, known as The Mountain, list for 10 figures and end up selling for $100,000 in a Pomona courtroom? Infighting, a Hollywood wannabe and a big bluff caused America’s all-time trophy property to end up in legal chaos.In recent years, Victorino Noval and his business partner, a Southerner named Charles “Chip” Dickens, had been marketing the property with a goal of selling it for $1 billion. They had hired premier real estate broker Aaron Kirman — who has sold more than $6 billion in real estate in his career and hosts a CNBC show about flipping distressed luxury properties. Kirman was going to rebrand the property as The Mountain (it was previously known as The Vineyard) and spend $1 million marketing it to the world’s richest people.”

“When it was listed in July, the media ate it up worldwide. Stories appeared on CNBC and in The New York Times and The Wall Street Journal, among many others (including THR). If the tenor of Noval’s April 2018 fete was any indication, the expectation was that things were only going to get better. The Mountain looked ready to move.”

“Meanwhile, thanks to L.A.’s overheated real estate market, the property’s value soared, sometimes by as much as $500,000 a week. The appreciation was a blessing and a curse. Several legitimate offers were made, though nothing close to $1 billion. Noval and Dickens held out. But there was trouble on the horizon. Starting in 2018, L.A.’s luxury real estate market was showing signs of cooling after its historic seven-year run.”

“The region’s most high-profile trophy properties were being hit the hardest. The price of British heiress Petra Ecclestone’s Holmby Hills mansion, The Manor, was slashed from $200 million to $160 million (in July, the home would sell for $120 million, still a record for L.A. County). In 2017, 924 Bel Air Road, offered by megadeveloper Bruce Makowsky, had come on the market for $250 million. That price has been chopped to $150 million — and still no takers. ‘I think if they had priced [The Mountain] around $500 million, it would have sold for around $300 million, but they didn’t pivot fast enough,’ says a source who worked on the project. ‘It could’ve been a slam-dunk, but people got greedy.'”

“‘It backfired on them big-time,’ says attorney Ronald Richards, who represented Noval’s son, Victor Franco Noval. (In 2016, Victorino Noval’s holding company, Tower Park Properties, technically transferred ownership of The Mountain to his son’s holding company, Secured Capital Partners.)”

“Over the years, Dickens had borrowed a reported $45 million from the Hughes estate to develop the property. The trust’s lawyers claimed that the sum had ballooned to $200 million after accounting for fees, penalties and interest. Noval and Dickens believed it was closer to $80 million. On May 31, sensing another legal assault by the Hughes team, which was attempting to initiate a foreclosure on the property, Richards filed for Chapter 11 on behalf of his clients — a day before the trust could foreclose on the property.”

“The auction took place on a quiet morning in Pomona’s Civic Center Plaza. Lawyers for the Mark Hughes Trust, dressed in impeccable suits, milled around waiting for the attorney in charge of the sale to open the bids. Within minutes, The Mountain, which just months before was still being touted as the country’s first and only billion-dollar parcel, went on the auction block for a paltry opening bid of $100,000. The Mark Hughes Trust bid unopposed, paying that amount, and more significantly, assuming the property’s $200 million in outstanding debt. Dickens was there that day and watched silently as the property for which he’d fought for 16 years was sold back to his rivals for 1/10,000th his original asking price.”

This Post Has 94 Comments
  1. ‘‘Ten plus years ago the foreclosure rate was high due to higher mortgage (and) cap rate, thus jumbo mortgage amounts…The cost of living is up. The prices for some amenities are up. Thus, the number of bills a person has to take on is substantially higher. When paying bills some folks (say), ‘Next month,’ and next month becomes plural, and you are (now) behind and the foreclosure process is a process that can take years. So if a person is not concerned about their credit, they live for free and then save a little more and buy something smaller in someone else’s name’

    Zombie homes are a REIC statistic, shadow inventory is a conspiracy theory.

  2. ‘So far this year, 1,382 million properties have traded. Another 1,526 of these high-priced houses are still up for sale — about 5% more than a year ago’

    There aren’t many people in Dallas that can afford a $1 million (and up) shack. These people are fooked. Plus, if you look at these things they are on tiny lots, way the heck out of town, and many financed with zero or little down.

      1. Lacking property taxes it seems like the county would (should) seize the property and sell it for the tax arrears. That’s how the county pays for their K12 schools, the sheriff, the waste disposal sites, etc., to list a few things.

    1. Did a bit of zillow-ing to see what kind of house commands $900K+ in Dallas. Verdict: 40% overpriced. I glanced at about 10 houses and NONE of them were worth even $600K. The houses aren’t that big (under 3500 sq ft) and the property is under 1/2 acre. They’re far north of downtown too. In DC you can get some pretty nice stuff for $1M.

  3. “Citibank has agreed to pay a $30 million fine to settle charges of repeated violations of real estate holding rules and for failing to meet its commitment to take corrective actions, the U.S. Office of the Comptroller of the Currency (OCC) said on Friday.

    Sending bank officials to prison would sending a stronger message, but with our two-tiered justice system, that will never happen.

  4. ‘Under federal banking regulations, there is a two-year limit on banks maintaining possession of a foreclosed property. The rules stipulate that banks can apply for an annual exemption that can push their ownership of a property to as much as five years. But after that, the bank is supposed to sell the property back into the market to prevent available housing inventory from being kept away from would-be homebuyers’

    It used to be something like 45 or 90 days. We’ve been told the market is oh so red hot for over 10 years. Why would they need 2 years much less 5? In that amount of time a shack goes to hell.

    1. More and more proof that we are being lied to big time. Like this little report from the other day:

      October 8, 2019

      “While driving down a few streets in the suburban Orange County city of Fullerton, an unusual by-product of the housing crisis presented itself. Rows and rows of large houses known as ‘McMansions’ built within the past 20 years lined the streets, many with ‘For Sale’ signs pounded into the front yard. A small stretch of street nearby the California State University – Fullerton campus brought a succession of three houses with signs out front.”

      “”There’s another,’ said ‘Mary Jo,’ an Orange County realtor who did not want her name used, pointing at another of the large houses, this one advertising over 4,000 square feet. ‘I had a showing there last week and some people left without walking out of the foyer.’ ‘Younger people just don’t want them,’ she added, shaking her head as another large McMansion came into view. ‘That’s why so many of these houses are empty.’”

      “Many McMansions also have a stigma of being cheaply made. Mary Jo has been selling houses throughout Southern California for years and notes that older houses she sells come in much better condition.”

      “‘I’ve shown houses, both in Orange and LA, where ten year old houses were literally crumbling apart,’ remembered Mary Jo. ‘A lot of these houses were built so quickly, or had unusual parts on them, that builders were often rushed or couldn’t make heads or tails of what to do next. So some buildings have cracks in them ten years later. Some don’t have insulation because it was simply forget. Odd angled walls are coming apart because the construction crew didn’t know how to handle it. High ceilings get mold or permanent stains because they couldn’t be reached. Cheap plaster, cheap wood. Thin walls. You name it and chances are at least a few houses I’ve seen like this have had it.’”

      “All of this has spiraled to a large number of hard-to-sell homes that are overvalued, expensive, that the owners don’t want to take a loss on, and younger people don’t want to buy. It’s difficult to estimate the average number of unsold McMansions, but real estate agents have reported that McMansions are hard to turn around. So much so that some neighborhoods are estimated to have half of their McMansions unsold or in foreclosure.”

      “‘Some of our buyers only hang on to them for a year,’ said Mary Jo. ‘It’s the crisis hitting us. People can’t afford these, raise the money for a decent down payment, but then after a job loss or plain can’t affording it do to other higher costs, they foreclose or they sell the house. I can’t say how many are unsold in California, especially since many of them go in and out of being sold or on the market. But in Orange County it’s at least 10 to 15 percent of McMansions in states of not being sold in some developments, like if it’s in foreclosure or escrow. But it depends, become some neighborhoods have a much higher rate,’ Mary Jo explained, motioning to the row of houses with signs in front of them down the street.”

      http://housingbubble.blog/?p=2470

    2. “Under federal banking regulations“

      TBTF banks are beyond any federal regulations. They Keep housing prices propped up at any and all costs no matter what. 30m in fines is nothing when the fed is Handing billions to them daily. Drop in the bucket For the bank

      1. ‘They Keep housing prices propped up at any and all costs’

        Except that prices are sinking like a turd in a well. IMO, we should consider the implications. There could be a much more significant inventory of foreclosed houses out there. There could be any number of pre-foreclosures. And we might have a pretty serious cover-up. I don’t know that “banks” are the front lines in this. The HARP/HAMP thing refinanced millions of loans right into the GSE’s. Many of the loans over the past few years were backed by the GSE’s, including the loans made by non-banks like Quicken. Very little down anymore, so being underwater can happen quick. Most troubling would be that people thought these markets were appreciating rapidly and made decisions based on what was actually market manipulation.

        1. “There could be a much more significant inventory of foreclosed houses out there. And we might have a pretty serious cover-up“

          I am a believer this is the case

          1. It all comes out in the wash. The cover-up and obfuscation can go on for a while (perhaps longer than one might expect), but eventually demographics will shine a bright light on what the truth is.

        2. “Most troubling would be that people thought these markets were appreciating rapidly and made decisions based on what was actually market manipulation.”

          Would it be better for the Fed to redouble manipulation, in order to protect those who bought into the deception, or to just let the correction already underway play out to its natural resting point, thereby finally giving Millenials a chance to buy a house at an affordable price and get their adult lives underway?

          There are so many difficult wealth allocation decisions for the Fed to make!

          1. There are so many difficult wealth allocation decisions for the Fed to make!

            Which constituency to hurt and which to help? Decisions, decisions…

          2. The Fed does have a Constitutional mandate to pick which groups to reward and which to throw under the bus, doesn’t it?

          3. The Fed does have a Constitutional mandate to pick which groups to reward and which to throw under the bus, doesn’t it?

            I’ve always interpreted the Fed’s dual mandate (stable prices and full employment) as contradictory. An analogy I like is this: It’s like asking a football team to win the game while also keeping their jerseys clean. In other words, you can do one, but on the other.

            The full employment part is where the scope creep really comes into play and all sorts of QE and unconventional monetary policy comes into play. MMT coming soon to a theater near you!

          4. In other words, you can do one, but on the other.

            Meant to say, you can do one, but not the other.

          5. The only job of the Fed should be discount window operations to provide emergency liquidity when necessary. Otherwise stay the hell out and let the market decide what interest rates and asset prices should be.

          6. The only job of the Fed should be discount window operations to provide emergency liquidity when necessary.

            Great in theory. But seems to result in a risk of unacceptable losses for People Who Matter in practice.

    3. https://skystatement.com/citibank-fined-30-million-for-holding-onto-foreclosures-for-too-long/

      Citibank fined $30 million for holding onto foreclosures for “too long”
      October 12, 2019

      – I can imagine what happens to the condition of a property – assuming it’s unoccupied – after only one year of vacancy, esp. in a geographic location with any periods of cold/snow or hot/humid, or wet/rainy weather (which covers a big chunk of the U.S.). The 2-5 year rule was clearly written to “foam the runway” for banks by allowing them to KEEP THE PROPERTIES OFF THE MARKET FOR MUCH LONGER THAN NECESSARY. THIS PRACTICE WOULD OBVIOUSLY PREVENT A COLLAPSE IN HOUSING PRICES DUE TO THE MASSIVE INJECTION OF DISTRESSED, BELOW MARKET, REO INVENTORY. However, that’s exactly what was needed to clear the bad loans and excesses of the prior bubble. Think Resolution Trust Corp. during the S&L debacle. However, no palm goes un-greased in Washington D.C.

      “Under federal banking regulations, there is a two-year limit
      on banks maintaining possession of a foreclosed property. The rules stipulate that banks can apply for an annual exemption that can push their ownership of a property to as much as five years.”

      – “It used to be something like 45 or 90 DAYS (emphasis mine).”

      “As Citibank noted, the problem began in 2015. According to
      the OCC, in 2015, the bank found its own processes to be “deficient.” More specifically, the bank “lacked adequate policies, procedures, and processes to effectively identify and monitor the holding period for OREO assets,” the OCC said.”

      “The OCC stated that at that time, Citibank “committed to developing and implementing corrective actions to address these deficiencies.” “

      – Citibank apparently speaks with forked tongue.

      “But, the bank later submitted multiple requests to extend the holding period for REO properties that were “not made timely and resulted in numerous additional violations,” the OCC said.”

      – Blatantly flaunting the law…

      “Then, in April 2017, the OCC told Citibank that its internal controls on REOs remained “decentralized, ineffective, and inadequate.” After that, Citibank continued to submit “untimely requests” to extend the REO holding period, the OCC said.”

      “And things didn’t get much better from there.”

      – No, they didn’t, with obvious reflation of the housing market in housing bubble 2.0, with tremendous benefit to the banks, but not to Main St.

      – Citibank apparently used the classic strategy of stonewall and delay in order to impede the process and maximize corporate profits by keeping REO/foreclosures off the market for years.

      – Citibank wins, because they received only a “hand-slap” fine of a paltry $30M. That’s a pittance in my view, compared to market cap. and profits. No real consequences = no change in behavior.

      https://wallstreetonparade.com/2019/10/feds-powell-admits-a-bigger-bailout-for-wall-street-is-coming-feds-balance-sheet-ballooned-by-176-billion-since-september-11/

      Fed’s Powell Admits a Bigger Bailout for Wall Street Is Coming; Fed’s Balance Sheet Ballooned by $176 Billion Since September
      By Pam Martens and Russ Martens: October 9, 2019 ~

      “Nothing better illustrates the cronyism between Wall Street and the New York Fed, which, then and now, carries out the majority of the Federal Reserve’s bailout programs for Wall Street, than a passage from Neil Barofsky’s book, Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street. Barofsky had been the Special Inspector General of the taxpayer bailout program known as TARP or Troubled Asset Relief Program. In his book he writes about U.S. Treasury Secretary Tim Geithner who failed up to that position after negligently supervising the mega banks on Wall Street as the President of the Federal Reserve Bank of New York. Barofsky writes about Geithner’s sick plan to “foam the runway” for the Wall Street banks:”

      “For a good chunk of our allotted meeting time, Elizabeth Warren grilled Geithner about HAMP, barraging him with questions about how the program was going to start helping home owners. In defense of the program, Geithner finally blurted out, ‘We estimate that they can handle ten million foreclosures, over time,’ referring to the banks. ‘This program will help foam the runway for them.’

      “A lightbulb went on for me. Elizabeth had been challenging Geithner on how the program was going to help home owners, and he had responded by citing how it would help the banks. Geithner apparently looked at HAMP as an aid to the banks, keeping the full flush of foreclosures from hitting the financial system all at the same time. Though they could handle up to ‘10 million foreclosures’ over time, any more than that, or if the foreclosures were too concentrated, and the losses that the banks might suffer on their first and second mortgages could push them into insolvency, requiring yet another round of TARP bailouts. So HAMP would ‘foam the runway’ by stretching out the foreclosures, giving the banks more time to absorb losses while the other parts of the bailouts juiced bank profits that could then fill the capital holes created by housing losses.

      “As a direct result of Federal Reserve policies during the financial crisis, the United States of America is experiencing its worst income and wealth inequality since the late 1920s – another era when Wall Street had gained control of the levers of power in Washington.”

      – And finally (warning: expletives modified, but not deleted)
      https://www.goodreads.com/quotes/964648-but-there-s-a-reason-there-s-a-reason-there-s-a-reason

      “But there’s a reason. There’s a reason. There’s a reason for this, there’s a reason education sucks, and it’s the same reason that it will never, ever, ever be fixed. It’s never gonna get any better. Don’t look for it. Be happy with what you got. Because the owners of this country don’t want that. I’m talking about the real owners now, the real owners, the big wealthy business interests that control things and make all the important decisions. Forget the politicians. The politicians are put there to give you the idea that you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land. They own and control the corporations. They’ve long since bought and paid for the senate, the congress, the state houses, the city halls, they got the judges in their back pockets and they own all the big media companies so they control just about all of the news and information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying, lobbying, to get what they want. Well, we know what they want. They want more for themselves and less for everybody else, but I’ll tell you what they don’t want: They don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them. Thats against their interests. Thats right. They don’t want people who are smart enough to sit around a kitchen table to figure out how badly they’re getting f*cked by a system that threw them overboard 30 f*cking years ago. They don’t want that. You know what they want? They want obedient workers. Obedient workers. People who are just smart enough to run the machines and do the paperwork, and just dumb enough to passively accept all these increasingly shittier jobs with the lower pay, the longer hours, the reduced benefits, the end of overtime and the vanishing pension that disappears the minute you go to collect it, and now they’re coming for your Social Security money. They want your retirement money. They want it back so they can give it to their criminal friends on Wall Street, and you know something? They’ll get it. They’ll get it all from you, sooner or later, ’cause they own this f*cking place. It’s a big club, and you ain’t in it. You and I are not in the big club. And by the way, it’s the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head in their media telling you what to believe, what to think and what to buy. The table is tilted folks. The game is rigged, and nobody seems to notice, nobody seems to care. Good honest hard-working people — white collar, blue collar, it doesn’t matter what color shirt you have on — good honest hard-working people continue — these are people of modest means — continue to elect these rich c*cksuckers who don’t give a f*ck about them. They don’t give a f*ck about you. They don’t give a f*ck about you. They don’t care about you at all — at all — at all. And nobody seems to notice, nobody seems to care. That’s what the owners count on; the fact that Americans will probably remain willfully ignorant of the big red, white and blue d*ck that’s being jammed up their a$$holes everyday. Because the owners of this country know the truth: it’s called the American Dream, because you have to be asleep to believe it.” – George Carlin

        1. It is odd to see Carlin’s videos where he is on stage pointing to someone and saying, “They don’t don’t give a phuc about you,” and they’re laughing back at him.

  5. “Why would they need 2 years much less 5? In that amount of time a shack goes to hell.”

    I know that is a rhetorical question. However, to walk through the total analysis. The big banks want to keep houses high to protect their other mortgage assets. The asset inflation is deliberate to promote consumer demand which is 70% of the US economy. The consumer demand is needed since the globalists have shipped manufacturing jobs to places like China. The globalists make money by paying 10 cents an hour at the place of manufacturing and then charging US prices to American consumers who rely on debt to maintain their lifestyles. Trump threatens this, thus the globalists must remove him by any means necessary.

    1. Let’s remember that we just heard from the head of the GSE’s that residential lending is worse now, lower quality, than it was last decade. Low down, low credit scores, higher LTV, higher DTI. It’s called risk layering. Any one of these factors could blow up a loan. Plus foreclosure/default statistics are useless when the GSE’s have basically become serial default hiding machines, including FHA. If you look at lending compared to the past, most loans these past few years were subprime. They just don’t all it that anymore.

    2. The big banks want to keep houses high to protect their other mortgage assets.

      A possibility less complex than a massive conspiracy is that the banks cannot afford to write the loss on their books.

  6. Bit off topic, i have noticed that nearly all properties i see that go off market go to contingent status rather than pending. Last year and prior majority of homes that went of market immediately showed as pending. Guess the days of as is, all cash offers are done. i understand the difference between the two labels, i just think it’s fascinating the rapid change. I wonder if contingent homes report in NARs “pending home sales” stats too…

    1. There are still lots of as-is cash offer houses out there. Just not in cities. Rurul flyover is falling apart.

      1. No doubt about that but obviously with the retraction of foreign all cash buyers, that percentage has declined significantly. I am guessing the very small percentage of straight to “pending” sales are the ones with all cash or passing contingencies. Nothing new here as the blog talks about it all the time, i just went through all the pending sales in my area and caught that almost all pending show as contingent. Was not the case last year

  7. “opting out of future tax cuts?” Considering the demographic shift of Colorado’s population, there will be no future tax cuts, under any circumstances.

    Proposition CC explained: What it means to end the spending caps in TABOR and the money at stake:

    “What you need to know is this: As the ballot language states, your tax rates won’t go up. You’ll pay the same state income and sales taxes next year whether it passes or not.

    However, your overall tax liability has the potential to go up in some years. Under current law, the state has to issue refunds when it collects more revenue than the cap allows. By eliminating the cap, the state will be able to spend all of the taxes it collects. And by eliminating potential TABOR refunds, voters would effectively be opting out of future tax cuts in economic boom times like now.

    The $428 million in excess taxes collected in the 2019 fiscal year will get refunded as scheduled, unless lawmakers take action. But taxpayers would miss out on any refunds owed in 2021 for taxes collected this year and into the future.”

    https://coloradosun.com/2019/10/11/proposition-cc-explained-2019-election-colorado/

      1. The point is that TABOR has kept state, county and municipal spending in check for decades. But as the Centennial State becomes bluer and bluer, it’s obvious that TABOR’s days are numbered.

        That said, almost all the ballot issues to sell bonds and increase taxes to pay for them went down in flames last year, so it’s possible that Prop CC might fail to pass.

  8. “Dickens was there that day and watched silently as the property for which he’d fought for 16 years was sold back to his rivals for 1/10,000th his original asking price.”

    We’ve been told that 50 percent off won’t happen. What percent off is 1/10,000th of the original asking price?

    (1/10,000 – 1)*100% = -99.99%

    1. I was just in LA yesterday and I cannot for the life of me understand why somebody would want to live there, let alone pay an ungodly sum for a house. I could not wait to leave. I got hit up for cigarette money by a white guy wearing only a pair of shorts, no shoes, whose torso and arms were black as coal from, I don’t know, sleeping in a coal pile or something. He was out of his mind. His hairstyle would best be described as “tumbleweed,” as that was a major ingredient. He was late 20s at the oldest. Of course I didn’t give him anything. I don’t support peoples’ $12 pack smoke habits. What a miserable city.

  9. “Rows and rows of large houses known as ‘McMansions’ built within the past 20 years lined the streets, many with ‘For Sale’ signs pounded into the front yard.”

    We haven’t seen this yet in our area of San Diego. Fullerton is just a short drive north. I wonder how long it will be until housing market eee-bola reaches San Diego County from neighboring Orange County?

    1. Is there a presumption that every famous man who appeared in a photo with Jeff Epstein was involved with his shady activities?

      I certainly hope the public doesn’t jump to such conclusions. A more interesting hypothesis is that Epstein set up photo opportunities with the rich, famous, and powerful as a means of currying favor, cultivating an image of respectability and creating blackmail opportunities. One shouldn’t assume that anyone in a photo with him was in the know with his illicit private behaviors.

      1. There were pictures of serial killer John Wayne Gacy posing with Rosalyn Carter, in his capacity as an organizer for the Chicago Democratic Party, which is arguably more vile than the crimes for which he was gassed.

        1. Nobody would have inferred that Rosalyn Carter was Gacy’s accomplice, based on that photo. But Me2 issues are entirely different.

      2. I think you have the right of this professor. It seems that Epstein was savvy in cultivating an aura of trust and credibility that he leveraged for his own shady purposes.

      3. photo opportunities

        It was more than that per the article.

        One shouldn’t assume that anyone in a photo with him was in the know with his illicit private behaviors.

        “By the time Mr. Gates and Mr. Epstein first met, Mr. Epstein had served jail time for soliciting prostitution from a minor and was required to register as a sex offender.” Gates knew or should have known. It’s called due diligence.

      4. One shouldn’t assume that anyone in a photo with him was in the know with his illicit private behaviors.

        Of course. But while I agree that they should always be innocent until proven guilty as far as the law is concerned I won’t necessarily assume the opposite case either. I’m sure that at least some of them partook. Just no way for me to know which ones.

    2. I haven’t seen any photos of Saddam Hussein’s sons, Qusay and/or Uday, hanging-out with lightweight Jeffrey Epstein.

    1. Cannot find a more globalist organization than CFR. The story has already been disproven on one point. The punitive tariffs remain they just are not getting raised. The Chinese farm buy is massive and Trump continues to work on the other issues with China.

      1. I agree with you Dan about the CFR. Their work should be taken with a grain of salt. Nevertheless, I do think their conclusions here are valid because the bulk of income gain that has been fueling American consumption these past 6-8 years has come from housing appreciation. As that starts to slow and then stop, I would expect some big declines in consumption and a slowdown in the economy. Trees don’t grow to the sky. The only way for more discretionary income to be freed up will be to reduce housing as a percentage of Americans’ budgets. But doing so is going to involve a painful restructuring of the economy.

    1. The only problem is that it looks like Trump is responsible for even more death in Syria. That’s the catch with being world police. You get blamed for other people’s thousand-year wars.

      1. Perhaps but neither are blood nor treasure is being expended. Bush II and Obama are responsible for the Syrian and Iraqi messes. Trump has left both places more stable than he inherited. Thus, he reduced bloodshed and destroyed ISIS. It is time to quit while the US is ahead. nation building in that area is impossible and expensive in blood and treasure. We have reached the stage of nation building, with there be a Kurdish nation, a reunited Syria or Turkey having a border area. Those are the choices and they have significant problems. Let the parties in the area decide which is the lesser of evils.

  10. https://www.reuters.com/article/us-india-realestate-banking-insight/realty-bites-indian-property-slump-leaves-beleaguered-banks-Realty bites: Indian property slump leaves beleaguered banks exposed

    excerpt:

    India might have thought the worst of a bad loans crisis was past, but a severe cash crunch in the real estate industry could augur fresh strife for its banks.

    A slump in the residential property market is leaving many builders struggling to repay loans to shadow lenders – housing finance firms outside the regular banking sector that account for over half of the loans to developers.

    With about $10 billion of development loans coming up for repayment in the first half of 2020, according to Fitch Rating’s Indian division, the fallout could spread to mainstream banks that have lent money to the shadow lenders or invested in their bonds.

    1. Interesting article. It does say though that banks non-performing assets are improving though:

      “Banks’ gross non-performing assets fell to 9.3% of total loans as of March, from 11.5% a year earlier, according to the Reserve Bank of India (RBI).”

    1. Who know that entrusting our money issuance to a criminal private banking cartel could ever end badly.

      1. Yes, it is not like the founding fathers saw a problem with a fiat currency or later leaders warned against a national bank. Wait, they did.

  11. Been browsing my local MLS and seeing some really odd stuff in my trendy neighborhood (don’t worry guys I’m renting). Multiple current listings were “last sold” less than a year ago. They are invariably the really overpriced, shiny new stuff. $650k+ with 3 beds and 5 baths (wtf?). I’ve found 3 or 4 of these “run for the exits” type listings in the last week. At the same time, I went to an open house today for a 2 bed 1.5 bath going for $199k. Perfectly nice, cute little house. Updated and well maintained. An actual starter house. Been on the market 6 months and no offers (lots of price drops though). And inventory is spiking.

    Then there’s this little gem of a description:

    “Looking for a home with INSTANT EQUITY, well look no further! This home is Priced UNDER appraised value! This charming and spacious townhome is located in the highly…”

    So they’re JUST GIVING IT AWAY? They have so much equity it’s like “here you go you can have some of mine.” That is so nice of them!

    TLDR — I really do believe things are taking a turn south here in Philly, and I sincerely hope that I am not just suffering a bad case of wishful thinking.

    1. Online letting (renting) arrangements was always doomed. Both landlords and tenants benefit from face to face meetings and interactions so mutual trust and expectations can be established and maintained.

  12. The Plunge Protection Team seems to have shown up on this mid-October Monday, to ensure that Wall Street traders don’t pull a lemming stampede over trade deal uncertainty.

    1. Investors are loading up on cash. That’s not a good sign.
      By Andrea Riquier
      Published: Oct 12, 2019 11:27 a.m. ET
      It’s possible some investors are waiting for a good time to pounce on beaten-down stocks, but not likely
      MarketWatch
      See if you can spot the moment when investors first lost faith in a China deal and started stockpiling cash.

      Investors are moving more and more money to cash in a sign of mounting skepticism about the ability of financial markets and the economy to deliver more growth.

      An analysis from research firm DataTrek, drawing on fund flow data from the Investment Company Institute, shows that there was $3.4 trillion in U.S. money market funds as of October 2. That’s about 14% higher than at the end of 2018, and has risen nearly every week since May.

      “What’s strange about this recent influx of capital is that short-term rates have been declining all year,” DataTrek founder Nicholas Colas wrote. Money market funds “are seeing strong inflows in 2019 even as 2-year yields have been cut in half,” he added.

    1. Despite the size of the bond buying program, “the Fed does not wish for us to refer to it as quantitative easing or QE4,” said Spina. “Yet, this is exactly what the Fed is doing but due to the timing and enormity of the program.”

      “I believe fund managers and investors are going to have time this weekend and this week to digest this very secretive-like news from the Fed on this massive debt monetization scheme,” said Spina, noting that he does not see gold falling below $1,450, “where excellent support exists and instead, gold should be working through this consolidation phase which will take it to record levels in the coming several months.”

      1. gold should be working

        What could possibly go wrong? If we are in the biggest web of interconnected debts in history, one possible thing is cascading defaults leading to liquidation of real assets.

        1. one possible thing is cascading defaults leading to liquidation of real assets

          At that point there’s nowhere to hide. Except cash, I guess?

  13. Turkish companies went on an epic construction spree over the past decade, enabled by massive loans extended by Eurozone banks. Now that Trump is blustering about slapping sanctions on Turkey for its incursion into Syria, the Turkish lira is slipping again, making loans denominated in dollars and Euros increasingly difficult to repay – especially since Turkey’s housing bubble and CRE sector are both in trouble. If Turkish firms end up defaulting on their loans to EU banks, a number of PIIGS banks with heavy exposure to non-performing Turkish loans are going to be in serious trouble, despite all the bailouts and “stress tests” conducted by the ECB. Got popcorn?

    https://www.nasdaq.com/articles/turkish-bank-group-launches-loan-restructuring-plan-for-companies-2019-10-14-0

      1. Turkey is already littered with half-finished speculative developments that developers can’t afford to finish because the weakened lira made imported building materials prohibitively expensive. Trump’s announcement of sanctions will further accelerate the demise of developers who binged on debt in euros or dollars to embark on a speculative building spree, and will now have to pay the piper, or more likely, default. Cue new Eurozone banking crisis in 3-2-1….

        https://www.theguardian.com/world/2019/jan/28/fate-of-castles-in-the-air-in-turkeys-151m-ghost-town

  14. Marketwatch headline: Private equity deals depress workers’ wages. No kidding. The financialization of everything and been part and parcel of the oligarchy’s looting and asset stripping of the productive economy and the increasing pauperization of the vanishing middle class. When are the sheeple going to wake up and start fighting back?

    https://www.marketwatch.com/story/private-equity-deals-depress-worker-wages-study-finds-2019-10-14?mod=mw_latestnews

    1. “Labor productivity jumps by an average of 8% over two years, the study adds.”

      Today’s special, “Boiled Frog”

  15. Mortgaged to the grave: Homebuyers are borrowing into their 70s as more lenders stretch mortgage terms to 40 years. Embrace your debt serfdom, proles!

    * Six out of 10 mortgage deals can now last up to forty years as standard

    * Demand for longer-term mortgages has increased significantly since 2007

    * Experts say the demand is driven by first-time buyers buying larger homes

    https://www.dailymail.co.uk/money/mortgageshome/article-7549887/40-year-mortgages-borrow-80s.html

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