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The Slowdown In The Once Red-Hot Real Estate Market Is Palpable

A report from the Sunday Times. “The housing crisis in Silicon Valley has reached new heights. Police officers in San Mateo, priced out of a market where the median house price has surged to $1.3m (£1m), have taken to sleeping in their cars. In the nearby town of Sunnyvale, homelessness has nearly tripled in two years.”

“San Francisco’s pavements are so awash in human faeces from its soaring homeless population that they pose a greater contamination risk than developing world cities in Brazil or Kenya, according to a study by University of California, Berkeley.”

“When Apple opened its $5bn spaceship headquarters in Cupertino in 2017, the project included an 80-acre car park — enough for 11,000 cars — but just 19 units of new affordable housing in the city of 60,000. The plan was blessed by a local council known for its Olympic-level not-in-my-backyard policies.”

“The problem is worse in San Francisco, where one child in every 25 attending the city’s public schools is homeless. A recent proposal to build housing for teachers, who are leaving the city in droves, was blocked by the city council.”

“‘Richard Walker, an economic geographer at the University of California, Berkeley and author of Pictures of a Gone City, a book on the societal fallout of the tech boom, said the crisis is a confluence of monopoly profits flowing to Big Tech, and a libertarian attitude toward wealth redistribution. ‘This place is one of the greatest producers of inequality in the world. The only way you’re going to rectify this is through massive social mobilisation. It used to be called class struggle. You can call it whatever you want,’ Walker said.”

“He added: ‘The tech industry is regarded as so enlightened and innovative, we forget that they’re simply the latest generation of big capitalist. This is a new Gilded Age, and they are the railroad barons of our time.'”

From Bloomberg. “It was meant to be the latest San Francisco gold rush. After a startup boom that saw tech unicorns spend an unprecedented amount of time on the private market — amassing lofty valuations in the process — this was the year when dreams of IPO riches were supposed to become a reality. A city already flush with wealth prepared for a spending spree by thousands of newly minted millionaires. Then came the drumbeat of disappointing debuts: Lyft tumbled,Uber slid, Slack sagged and WeWork’s listing plans collapsed in an epic bust.”

“Now, San Francisco home sales are tepid, with prices even falling in some parts of the Bay Area. Party planners are paring back on ostentatious celebrations. Even as the short-term restrictions preventing some employees from selling their shares expire, many of them have been left with holdings worth a lot less than they expected — or will have to wait even longer for a payout as their companies delay plans to go public.”

“The slowdown in the once red-hot real estate market is palpable. In the spring, the prospect of IPO-fueled demand caused some homebuyers to rush to put in bids, trying to get ahead of the anticipated surge in prices, real estate brokers say. That frenzy has faded.”

“The flops have led to housing seminars such as one last month by real estate agent Robert Cruz in San Jose called ‘IPOs are in Trouble, Is Housing Next?’ Close to a dozen people considering buying a home came to the event, including some workers in the tech industry.”

“For some tech workers, the notion that IPO money would change their lives and lead to a spending spree may have always been more myth than reality. Srinivas Rao-Mouw, a software engineer at personal-shopping company Stitch Fix Inc., was awarded equity when he joined the San Francisco-based startup in October 2017, about a month before it went public. But his equity wasn’t worth what he expected once the lock-up period expired — even as Stitch Fix shares at one point more than doubled. He found himself getting outbid in his house hunt this spring and then deciding to call off the search.”

“‘The way I think about IPO money, going forward, is it’s not a panacea,’ Rao-Mouw said. ‘It might turn out well, it might not.'”

The Los Angeles Times. “This city sure knows how to roll up the welcome mat — that is, if you happen to move here from California. Just consider last week’s mayoral election. It was the most competitive race in recent memory, a referendum on growth in the rapidly expanding capital of Idaho. And candidate Wayne Richey ran on a very simple platform: Stop the California invasion.”

“The Rev. Bill Roscoe, chief executive of the Boise Rescue Mission Ministries, heard it from his Realtor when he moved to Boise from Redding in 2002. He keeps a sign on his desk that says, ‘I am not from Idaho but I got here as fast as I could.’ ‘If you come here and love it, everything’s fine,’ Roscoe said. ‘If you come here and fly that California flag in your driveway and have stickers on your car that say, ‘Santa Cruz,’ there’s going to be some hard feelings.'”

“Anyone moving to Boise from another part of Idaho is still saddled with the same bottom-of-the-barrel minimum wage, an anemic $7.25 an hour. So it’s most likely not the Idahoans who are driving up home prices and filling up rental properties, because they can’t afford to. The median home price in Ada County, where Boise is located, has risen 19.3% since February 2018, according to the Idaho Statesman. It is now a whopping (for Idaho) $349,994.”

“‘I know that you can’t stop growth, but what are we going to do about our quality of life here?’ asked Yvette Zoe, who moved to Boise in 1972. ‘My kids, they can’t buy a house because they can’t afford it right now, and they work. My grandkids, their schools are crowded.'”

“‘It’s really, really hard to swallow,’ Richey said, ‘when somebody sells their house in California for $700,000, comes here, buys any house they want in cash and still has money in the bank. Their kids get to go to college. They drive nice cars. And they get to enjoy everything we built over the years. We don’t get to enjoy it, because we’re working 40 hours a week and doing craft shows and doing yard sales.'”

“One salvo in Richey’s battle against newcomers was his property tax proposal, which he called Proposition Zero One Two Three. His basic tenet: The longer you live here, the less you pay. Sixty-year residents would pay no property taxes, while newcomers would shoulder the burden. ‘This gives much needed relief to longtime residents and forces new people to pay their share,’ he said on his Facebook page. ‘Maybe it just might make them think twice about moving here. It would also discourage out-of-state investors.'”

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This Post Has 96 Comments

  1. ‘Now, San Francisco home sales are tepid, with prices even falling in some parts of the Bay Area. Party planners are paring back on ostentatious celebrations. Even as the short-term restrictions preventing some employees from selling their shares expire, many of them have been left with holdings worth a lot less than they expected’

    Shouldn’t count your chickens before they hatch. This housing bubble stuff seems to spread around a lot of bad mojo.

    2. This housing bubble stuff seems to spread around a lot of bad mojo.

      Even with the panicked Fed pumping $120 billion of liquidity a day into the financial system, its Ponzi markets are a curious shade of green that looks just like red. As was the case in the lead-up up to the 2008 financial crash, the quality of the underlying collateral on all those loans that banks made with such wild abandon is deteriorating as the housing bubble bust starts to pick up speed.

      1. Fed pumping $120 billion of liquidity a day

        Is it a new $120 billion every day, or the same money recycled every day?

  2. What ever happened to the gay SF teachers who finally bought a house with help from grants from the teachers union????
    ————————–
    A recent proposal to build housing for teachers, who are leaving the city in droves, was blocked by the city council.”

  4. “The housing crisis in Silicon Valley has reached new heights. Police officers in San Mateo, priced out of a market where the median house price has surged to $1.3m (£1m), have taken to sleeping in their cars. In the nearby town of Sunnyvale, homelessness has nearly tripled in two years.”

    Heckuva job to the Fed on their hair-of-the-dog housing market price reflation program, which achieved its pinnacle of success in San Fransisco.

    “San Francisco’s pavements are so awash in human faeces from its soaring homeless population that they pose a greater contamination risk than developing world cities in Brazil or Kenya, according to a study by University of California, Berkeley.”

    Heckuva job, California Democrats!

    1. “…crisis is a confluence of monopoly profits flowing to Big Tech, and a libertarian attitude toward wealth redistribution.”

      Sounds like a perfect storm due to the consequences of command-and-control government policies.

    2. “In the nearby town of Sunnyvale, homelessness has nearly tripled in two years.”

      First off, thanks Ben for providing us all the meat from the paywalled articles and filtering through hours of msm bs. Saves a ton of time and money for anyone that wants to get actual news! I dont financially contribute a lot but i do here and there as this outlet is better than any other paid subscriptions I know of.

      This homeless epidemic is out of control. I have first hand witnessed families displaced or forced to move because of the cost to live in this failing state. If i had no morals or family and a substance problem i would likely prefer joining the ranks of the homeless. With middle class barely able to survive and living paycheck to paycheck why not just get a tent, sleeping bag, and some recreational drugs and live on someones front porch. You get free needles, food, steal what you need with no consequences, the world is your bathroom to crap where you please and have tax paid workers clean it up. As prof says, heckuva job California!

  5. His ba$ic tenet: The longer you live here, the less you pay. $ixty-year residents would pay no property taxe$, while newcomers would $houlder the burden.

    $ounds like a $liding $cale Calif. Proposition 13

    & now would such a system work for $ixty year owner$ kid$ & grand kid$ when they go to buy a $helter.$hack of their verys own? Kinda forces them to always live in Idaho.

    1. With an electorate where old people vote and young people tune out politics, eat the young wealth redistribution policies are an effective political strategy.

    2. I don’t know how wise Richey’s “zero, one, two, three” property tax proposal is, but I think he is onto something. Prop 13 is so bad for CA. If Idaho went that direction, then they definitely would be importing some of the worst of CA’s policies. Instead of a sliding scale property tax, all you need to implement is a progressive property tax. Make shelters valued at 2x- 3x median income the normal rate and then go up from there. Those who want to purchase 2nd, 3rd, 4th homes that are 5x-10x the local income are free to do so, but they’d pay an increased property tax rate.

      CAs prop 13 will eventually be its undoing. You can’t continue to have cops, firefighters, school teachers, nurses, let alone low wage service employees who have to sleep in their car or commute 2-4 hours a day in order to work. It will erode the society.

      1. “It will erode the society.”

        That’s pretty funny. You do realize this is the Bay Area you are talking about?

    1. Bloomberg entering the race is a gift for Warren/Sanders. I think Bloomberg will take from Biden more than anyone else. I don’t think he will pose much of a threat other than to put the nail in Biden’s coffin. The only thing I think that might help Biden at this point will be an Obama endorsement.

  7. “Then came the drumbeat of disappointing debuts: Lyft tumbled,Uber slid, Slack sagged and WeWork’s listing plans collapsed in an epic bust.”

    “Now, San Francisco home sales are tepid, with prices even falling in some parts of the Bay Area. Party planners are paring back on ostentatious celebrations. Even as the short-term restrictions preventing some employees from selling their shares expire, many of them have been left with holdings worth a lot less than they expected — or will have to wait even longer for a payout as their companies delay plans to go public.”

    So l long as the stock market keeps rising, none of these San Francisco sad panda stories matter in the big scheme of things.

    The Financial Times
    Markets Briefing Equities
    US stocks close at record highs on signs of trade war thaw
    Reports of additional tariffs being removed soothe nerves
    Peter Wells in New York and Alice Woodhouse in Hong Kong
    November 7 2019

    Wall Street’s three main equities gauges closed at simultaneous record highs, and Treasury bonds sold off, following reports the US and China agreed in principle to remove some tariffs imposed during their trade spat.

    The S&P 500 finished 0.3 per cent higher at 3,085.18, about seven index points higher than its previous peak close on Monday.

    The Nasdaq Composite rose 0.3 per cent and the Dow Jones Industrial Average advanced two-thirds of 1 per cent to have them extend their record run.
    …

  8. “‘It’s really, really hard to swallow,’ Richey said, ‘when somebody sells their house in California for $700,000, comes here, buys any house they want in cash and still has money in the bank. Their kids get to go to college. They drive nice cars. And they get to enjoy everything we built over the years. We don’t get to enjoy it, because we’re working 40 hours a week and doing craft shows and doing yard sales.’”

    Did someone pass a law that prohibited members of the Richey family from investing in the perpetual gold mine of California real estate and getting fabulously wealthy in the process?

      1. It’s a three step process:

        1) Get a job in California and move there.
        2) Buy real estate and amass incredible wealth, merely from HODLing your real estate assets.
        3) Cash in on your California investment and move to Boise, where you can afford to outbid the locals and enrich some lucky local homeowner by vastly overpaying on your purchase.

        1. That’s pretty weak. You’re asserting that locals shouldn’t complain about equity locusts because they could have moved out of state for x number of years only to move back and be said equity locust? Uh-huh….

        2. Isn’t the next step for the displaced Boise-ites to move to Ohio, Kansas, or Arkansas? The equity locust wave pushes inwards. Utah prices are basically the same as CA prices now in many places along the Wasatch Front.

    2. This is a free market. Someone had the wisdom or luck to invest in a CA house for $20K in 1970 and sold it this year for $2M and moved to Idaho.

      I agree with a sliding scale for property taxes. If you have lived in the same house for 50 years, and retired, you should not be forced out of your house due to property taxes.

      I also believe that if you are collecting a pension from any area in the US for the rest of your life, it should be reduced if you move out of the area paying you the pension. ie if you are a CA retiree collecting $100K+ as a pension, it should be drastically reduced if you are no longer contributing to the tax base where you are collecting the pension. ie moving to Idaho.

      1. “This is a free market.”

        Many people love the free market when they are getting richer off the ever-rising price of assets they bought.

        When things don’t work out in their favor, the free market is suddenly unfair.

        1. Why do you think this would be a good idea? I can’t think of a more unfair way of assessing taxes. It seems completely inequitable. You can make a solid intellectual case of a different tax rate based on income, but when you are assigning a different tax rate based on how long someone has lived in an area, that is strikes me as very undemocratic.

          You might as well say someone shouldn’t have to move because the rent got raised. Or someone shouldn’t have to stop filling up their car with gas because gas went up. The real issue is that housing wouldn’t be near as high in CA if there weren’t so many regs prohibiting building, NIMBYism, and the reign of Leave-it-To Beaver single family housing only zoning. Oregon and Minneapolis are correcting this. Weiner tried with SB 50. Maybe CA residents will wake up this year and start the slow process of digging themselves out of a hole that has been decades in the making. I’m not holding my breath. In the meantime, UT, NV, CO, ID, and AZ are going to continue to feel the repercussions of CA’s inadequate housing policies.

          1. “The real issue is that housing wouldn’t be near as high in CA if there weren’t so many regs prohibiting building, NIMBYism, and the reign of Leave-it-To Beaver single family housing only zoning.”

            During the Bubble #1 run-up whenever housing sales slowed the pissing-n-moaning would ensue, and eventually the Fannie and Freddie lending ceiling would be raised, and the flake’s borrowing chased prices even higher! While San Jose, CA might resemble Elysium to an outsider most of the local population doesn’t work in technology and couldn’t write a line of code to save their life. California’s bubble was created with easy lending, which will never be repaid.

          2. It is probably unconstitutional. High bar for one state to impede the citizens of another state from moving to that state and be treated equally.

          4. You make the same argument every few posts or so, OneAgainstMany. This is the BS being spread by the developer community of which you admit to be a part. You are a ZOMBY (Zoning Opportunist in My Backyard), and you are complaining about zoning regulations that have been a part of city planning since forever. Instead of taking a planned approach, Oregon and Minneapolis are outright eliminating single-family zoning, and a backlash is starting to build. These movements are happening because profit minded developers like yourself are duping the liberal cause folks into thinking SUPPLY SUPPLY SUPPLY is all they need to fix their housing woes.

            Nope. There are two parts to the equation. Supply and DEMAND. We do have a housing crisis and it is fueled by bad monetary policy. However, the simple fact made clear by these articles is that massive amounts of foreign wealth, primarily the Chinese, are buying up huge amounts of property, mostly on the West Coast, which is driving up costs and creating a domino effect that pushes residents down the chain to Portland and Denver, and from there down to Boise, until people can’t even afford to live in the tiny towns anymore.

            The West Coast liberal elite states could do (or pressure Congress to do) what Canada and New Zealand have done in the face of the same pressures from China buying up real estate, and impose taxes or laws restricting these purchases. Instead, we continue to do the opposite– we maintain the HB-5 VISA program that further incentivizes foreign purchase of our real estate.

            I appreciate a lot of your posts, but whenever you call for more SUPPLY SUPPLY SUPPLY, all I hear is the same greed from those who need to flip more houses, create more AirBNBs… because more thneeds is what everyone needs.

          5. Oregon and Minneapolis are outright eliminating single-family zoning, and a backlash is starting to build.

            What backlash? I have heard of no backlash, though I am sure it exists. If there is one, it would probably come from those housing-have’s who see their most valuable asset threatened by more supply coming to market. Or from those who bemoan the “character” of their neighborhood changing.

            By the way, it’s not my argument, but one that many economists from all sides of the spectrum have been making. It is one factor, among many, for CAs ridiculous housing prices. Texas doesn’t have near the problem that CA has because they allow for more development. But they also have more sprawl.

            But I largely agree that with your other points. This crisis is multi-factorial. Monetary policy is one plank and so is foreign demand. If you’ve been on this board long, you would also realize that I have been beating the drum that interest rates should go up, lending standards should be tightened, and restricting foreign ownership (or even a surtax) of primary residencies would be much more effective than a tariff.

            By the way, I’m not some huge developer. It is true that we do have a couple of large developments in our portfolio, but we are a minor player at best. I’m an IT/Operations guy, turned RN, now working for a family office managing several projects.

      4. ” it should be dra$tically reduced if you are no longer contributing to the tax ba$e where you are collecting the pen$ion”

        What happens when the tax ba$e community that i$$ues the pen$ion fund$ goes bankrupt?

        Hence, one might move from Newport Beach, CA … to Hilton Head, SC

      5. You’re not being forced out due to the property taxes; you’re being forced out because the math no longer works out for your reduction in income after retiring, if you didn’t have some sort of investment return to compensate for the gap left behind by the substitution of retirement and social security for job income.

        If you purchase a home, it ought to be understood from the moment of closing that you are responsible for the tax liability for the time that you own it and live in it.

        The mortgage probably should have been paid in full by the time you retire, so that what you used to pay in principle and interest would then cover your taxes, utilities and upkeep.

        1. No professor, proposition 13 is not as clear a burden on interstate commerce or the 14th amendment

          1. From Wikipedia about the pertinent part of the 14th amendment:
            “The Due Process Clause prohibits state and local governments from depriving persons of life, liberty, or property without a fair procedure. The Supreme Court has ruled this clause makes most of the Bill of Rights as applicable to the states as it is to the federal government, as well as to recognize substantive and procedural requirements that state laws must satisfy. The Equal Protection Clause requires each state to provide equal protection under the law to all people, including all non-citizens, within its jurisdiction.”

            Additionally, Californians have other related arguments. There is also the Comity Clause which is not part of the 14th amendment but the original constitution which protects citizens from one state who are within another state.

    3. “‘It’s really, really hard to swallow,’ Richey said, ‘when somebody sells their house in California for $700,000, comes here, buys any house they want in cash and still has money in the bank. Their kids get to go to college. They drive nice cars. And they get to enjoy everything we built over the years. We don’t get to enjoy it, because we’re working 40 hours a week and doing craft shows and doing yard sales.’”

      This seems like an important point to me. It’s the reason poor countries don’t let foreigners buy up all the beachfront property. But in the USA we haven’t thought of the states as separate countries for a long time so we don’t even consider things like that. But when the inequality gets too high it starts to seem like a good idea. It hurts when they come buy up all the nicest stuff, and then it definitely adds insult to injury when they can also monopolize the local commons built over decades because they have the time/energy/money to be able to enjoy it while everyone else barely survives. It’s a recipe for some real ugliness in the future.

  9. Here’s your plush Silicon Valley office, just ignore the tents
    The soaraway success of the tech giants is leaving thousands in the gutter
    The Sunday Times
    November 10 2019, 12:01am, The Sunday Times

    “He added: ‘The tech industry is regarded as so enlightened and innovative, we forget that they’re simply the latest generation of big capitalist. This is a new Gilded Age, and they are the railroad barons of our time.‘”

    – Just another example of extreme wealth concentration and inequality. This is why Socialism is now viewed favorably by so many.

    – Crony capitalism, monopolies, oligarchies, plutocracies, stock buybacks all contribute to this. Free markets don’t work without healthy competition (hint: they’re not working). Wages as a percent of corp. profits have been falling for decades. Unsustainable situation. This all predictably leads to a breakdown in the social fabric, social unrest, you know the script.

    “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair.” ― Charles Dickens, A Tale of Two Cities

    – Just livin’ “The Hunger Games.”

    1. This is a new Gilded Age, and they are the railroad barons of our time.‘” ?

      The railroads, then the gold rush, then the manufacturing line, then finally the Roaring 20’s…Then;

      The depression had devastated the nation. As Roosevelt took the oath of office at noon on March 4, 1933. Political and business leaders feared revolution and anarchy. Joseph P. Kennedy, Sr., who remained wealthy during the Depression, stated years later that “in those days I felt and said I would be willing to part with half of what I had if I could be sure of keeping, under law and order, the other half”.

      1. Leon Cooperman was on the other day and got teary eyed about Warren’s wealth tax. IMO, these individuals who are wealthy in the extreme better realize that what Warren is proposing is quite tame compared to what might come down the pipeline if things keep going the way they are. Just read a report the other day that the top 1% now have more wealth than the entire middle class. Sobering.

        1. Just read a report the other day that the top 1% now have more wealth than the entire middle class. Sobering ??

          The SWHTF if we have a severe downturn or worse. I don’t read zero hedge but assuming his post is one of facts you can see where this is headed if the economy goes into the chitter…

          It’s the “Greatest Economy Ever,” right? Well, it depends on who you ask.

          https://www.zerohedge.com/personal-finance/53-million-americans-drowning-cycle-low-wage-work

          2. “You think open borders is going to make this better?”

            I do not think that open borders will make it better. I have always believed in a robust eVerify system and to go aggressively after companies that hire illegal immigrants with stiff, severe penalties. I also believe in building a wall around the welfare state and any gov benefits. The immigration system should be revamped so that the regular citizen benefits from immigration rather than the corporations who get cheap labor. There are real benefits from immigration, both legal and illegal, but the flow unequally.

            On the other hand, I have little respect for politicians that demagogue and demonize based on ethnicity. Children of poor immigrants do better than children of poor US-born parents:

            https://www.npr.org/2019/11/04/776191773/the-american-dream-and-the-children-of-immigrants

            Why is this? The main finding is that immigrants who are coming to this country have already self-selected and signified that they are willing to move to where the opportunity is. Many poor Americans are tied to their location due to culture, history, family ties, and are unwilling/unable to move to where the opportunity is.

        2. Just like Uncle Warren, Leon Cooperman & Company, graciou$ly benefit$ from U$ taxpayer$ $pending 717Billion$ PER YEAR … to protect him & his method$ of monie$ generator$ so that he can pa$$ it along tax free to his family & minion$

          Happy Veterans Day!

          1. You have to tax things that can move, like housing.

            We are running massive deficits and when you break down total income/wealth and total taxes paid by each quintiles you see that vast disparities on the right hand side. It is very inequitable and has been for a long time.

      2. From “Gilded Age” – Wikipedia:
        “In United States history, the Gilded Age was an era that occurred during the late 19th century, from the 1870s to about 1900.”

        “The average annual wage per industrial worker (including men, women, and children) rose from $380 in 1880, to $564 in 1890, a gain of 48%. However, the Gilded Age was also an era of abject poverty and inequality, as millions of immigrants—many from impoverished regions—poured into the United States, and the high concentration of wealth became more visible and contentious.“

  10. Ok so this could be Missoula, but no one talks about it here.

    But if the average household income is $55k, but 90% of the RE ads are for $500-700k houses, that’s not targeted at the locals, right?

  11. San Jose. Friend of mine decided to move into MIL’s house once she went to assisted living. Paying no rent which is totally unfair to his brothers-in-law, but totally justified in his mind because they’re paying for some deferred maintenance on what is likely a $2 million house in a nice area with a big lot. MIL trashed the place though. Obviously, the tension is adding stress.
    Meanwhile, Zillow had his 1000sf 3 bed valued at $1,000,000. Only offer they’ve had: $870k, and they’re not giving it away.

    A month later and they’re hoping for any movement. Got a nibble at $849k, but the offer never materialized. They’re sweating bullets because they need the money to make the move up to walnut creek. They bought fha for 630k, and promptly heloced the shizz out of it for “necessary improvements” like solar, which they now have to pay $12k to Tesla to get out of if the buyers won’t assume the lease, which they shouldn’t because the deal comes without a warranty.

    Meanwhile, wife’s bitter because she thought the sweet equity gainzzzzz were going to mean she could take a sabbatical. He’s got a great job, but it includes 2.5 hours of commuting a day, so shes doing all the heavy lifting at home and that heavy lifting requires many bottles of expensive wine.

    You can’t buy happiness, but you sure can fark it up by overpaying for shelter.

    1. “offer never materialized
      sweating bullets because they need the money
      promptly heloced the shizz out of it
      wife’s bitter
      2.5 hours of commuting a day”

      LOL@ these clowns.

      I have so much money left after “throwing money away on rent” every month that I don’t know where to throw it.

      1. Definitely a clown show. Some day in the future the husband will be coming home after his 2.5 hour commute to a wife sprawled out on the entry floor from too much boxed wine.

    2. Appreciate this Econ teacher. This is whats really happening vs the altered reality we often here in MSM like its down a little, the markets “softening” or “cooling”, not as many bidding wars, the gains are down a tad. I have witnessed a handful of friends from the bay area to sacramento and the surrounding areas (folsom and grass valley) sell in the last 6 months and not one got asking price. The quickest sale out of all of them was 40 days and a 10% reduction in price which after fees was below their purchase price 4 years ago. The longest was over 6 months and about 25% less than asking with a month gap to relist as “new”. On the flip side i have a friend whom with a family of 4 and total take home just under 60k purchase a 500k house… as we often hear on hbb, lending standards are back to the sub prime bs, shacks are not selling over asking or even at asking and DOM is up every month. The only thing keeping this insanity going is the fake bs news the sheeple believe and frenzy over from the likes of Diane and NAR. Anyone who believes buying now will turn a profit or is speculating on RE is in for a world of hurt. Aka D00med!

    2. Posted from phone, now on home laptop, yes the WSJ article loads without paywall:

      “Some 33% of people who traded in cars to buy new ones in the first nine months of 2019 had negative equity, compared with 28% five years ago and 19% a decade ago, according to car-shopping site Edmunds. Those borrowers owed about $5,000 on average after they traded in their cars, before taking on new loans. Five years ago the average was about $4,000.”

      For Mr. Banker:

      “The lender that originates the new loan typically pays off the old lender, and the consumer then owes the balance from both cars to the new lender. The transactions are often encouraged by dealerships, which now make more money on arranging financing than on selling cars.”

      1. “For Mr. Banker:”

        Mr. Banker thanks you personally and extends his sincere thanks to this country’s education system which makes it all possible.

    3. Wouldn’t it be far more cost effective to repair the old car? Even if it needs a new engine engine or transmission.

      1. Deferred maintenance stacks up pretty quickly, and not just in the drive train. Poorly kept interiors can be hard to repair and make even a well-running car feel “down scale”. Too many people tie their self-image to their vehicle so anything with dings, rips and rattles causes mental anguish.

  14. ” … so shes doing all the heavy lifting at home and that heavy lifting require$ many bottle$ of expen$ive wine”

    My experience is that $ituation makes for a delightful poolside discussion companion.

    1. “Making Detroit a Worse Place to Live”

      “In addition to destroying the livelihoods of individual property owners, Act 123 has made Detroit a less attractive place to live. ”

      And it really didn’t need any help.

  16. Released this week Fiddy years ago.

    From Wikipedia,

    In 1968, DeCarlo recorded four songs at Mercury Records in New York with Leka as producer. The singles impressed the company’s executives, who wanted to issue all of them as A-side singles. In need of a B-side, Leka and DeCarlo resurrected an old song from their days as the Glenwoods, “Kiss Him Goodbye”, with their old bandmate, Frashuer.

    With DeCarlo as lead vocalist, they recorded the song in one recording session. Instead of using a full band, Leka played keyboards himself and had engineer Warren Dewey splice together a drum track from one of DeCarlo’s four singles and a conga drum solo by Ange DiGeronimo recorded in Mr. Leka’s Bridgeport, Conn. studio for an entirely different session.[3] “I said we should put a chorus to it (to make it longer)”, Leka told Fred Bronson in The Billboard Book of Number One Hits. “I started writing while I was sitting at the piano going ‘na, na, na, na, na, na, na, na’… Everything was ‘na na’ when you didn’t have a lyric.” Gary added “hey hey”.

    whttps://www.youtube.com/watch?v=Fs3ZZkKnvng

    1. The Financial Times
      Chinese economy
      Contractors hit as China local government defaults rise
      Slowing economy puts strain on public finances and raises risk of social unrest
      NANCHANG, CHINA – OCTOBER 22: Aerial view of exposed riverbed at Nanchang session of Gan River on October 22, 2019 in Nanchang, Jiangxi Province of China. The drought in Jiangxi province has affected 4,338 thousand people as of Monday, according to local department. (Photo by Liu Zhankun/China News Service/VCG via Getty Images)
      Nanchang, the capital of Jiangxi province, was found to have reneged on a payment of Rmb161m © Liu Zhankun//VCG /Getty
      Sun Yu in Beijing 9 hours ago

      China’s local governments face a record number of lawsuits for failing to pay their contractors as the country’s slowing economy puts a strain on public finances.

      The financial outlook has deteriorated so markedly that analysts have warned that there is a risk of social unrest.

      Chinese courts have listed 831 local governments as being in default in the first 10 months of this year, compared with 100 in the whole of 2018. The value of these local authorities’ overdue payments grew by more than 50 per cent from Rmb4.1bn at the end of last year to Rmb6.9bn ($984m) at the end of October.

      The totals do not take into account the amount owed by local government finance vehicles and companies operated by municipal or provincial officials, more than 1,000 of which have been listed as defaulters over the past three years.

      The large increase in cases provides a glimpse into the worsening financial position of many Chinese local governments as they struggle to revive economic growth that fell to a 30-year low of 6 per cent in the third quarter.

      “The surge in government defaulters could lead to a social crisis with workers taking to the street and protesting against official agencies. That’s the worst-case scenario for Beijing,” said Chen Zhiwu, head of the Asia Global Institute at the University of Hong Kong.
      …

    2. Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
      https://www.ft.com/content/0bd50be6-041a-11ea-a984-fbbacad9e7dd
      fastFT
      Hong Kong politics
      HK police shoot protester as calls for strike cause gridlock
      Universities suspend classes and train lines close as clashes erupt across city
      Alice Woodhouse, Nicolle Liu and Sue-Lin Wong in Hong Kong 2 hours ago

      A protester in Hong Kong was shot by police on Monday morning as calls for a general strike from anti-government demonstrators led to a heavy police presence and transport chaos across the Chinese territory.

      Police confirmed live fire was used and one man had been shot in Sai Wan Ho, a neighbourhood on Hong Kong island, after earlier saying at least two demonstrators had been hit by live fire. The Hospital Authority said one person was in a critical condition following a gun shot wound.

      At lunch time, riot police fired tear gas to disperse a flash mob of hundreds of office workers in the heart of Hong Kong’s financial district, sending people fleeing into luxury shopping malls for safety.
      …

    3. Navarro says Trump will not roll back tariffs for phase one trade deal with China
      Krystal Hu and Ben Werschkul
      Yahoo FinanceNovember 9, 2019, 9:36 AM PST

      It is widely expected that, as part of a phase one deal, the U.S. and China will roll back part of the tariffs levied during the year-long trade dispute.

      But Peter Navarro, assistant to the president and director of the Office of Trade and Manufacturing Policy, argued forcefully against and even shook his head no at the suggestion of tariff relief in an interview with Yahoo Finance’s The Final Round on Friday, casting a shadow over the much-anticipated deal signing.

      “There’s no rollback at all,” Navarro said. “So we need the tariffs there, but the tariffs are really our best insurance policy as well to make sure that the Chinese are negotiating in good faith.”
      …

        1. Not a bad choice, if the award is intended to go to someone who leads in the face of massive opposition.

    4. The Washington Post
      Business
      In latest China pivot, Trump says partial trade deal might not be completed this year
      WASHINGTON, DC – November 08: President Donald Trump talks to reporters before he departs the White House en route to a campaign event in Georgia, in Washington, DC. (Bill OLeary/The Washington Post)
      WASHINGTON, DC – November 08: President Donald Trump talks to reporters before he departs the White House en route to a campaign event in Georgia, in Washington, DC. (Bill OLeary/The Washington Post)
      By
      David J. Lynch
      November 8, 2019 at 10:00 a.m. PST

      President Trump suggested on Friday that the United States and China may not complete a partial trade deal this year, raising fresh doubts about prospects for a commercial truce that once was expected to be signed next weekend.

      “We’ll see what happens,” the president replied when a reporter asked if the agreement would be concluded in 2019.

      Speaking on the south lawn of the White House, the president added to confusion over the state of the roller coaster talks. He denied reports — which the White House had confirmed one day earlier — that he had agreed to remove some tariffs as part of an initial deal.

      “I haven’t agreed to anything,” Trump told reporters. “China would like to get somewhat of a rollback, not a complete rollback because they know I won’t do it.”
      …

    5. Stocks sink to start the week as Trump says reports on ‘level of tariff lift is incorrect’
      By Chris Matthews and Mark DeCambre
      Published: Nov 11, 2019 9:38 a.m. ET
      Treasury markets are closed in observance of Veterans Day
      Getty Images
      It is Veterans Day

      U.S. stocks retreated at the start of trade Monday as investors optimism for a near-term U.S.-China trade deal waned after comments from President Donald Trump played down his willingness to remove tariffs on Chinese imports.
      …

  18. Is the day of reckoning for cryptocurrency at hand?

    The Financial Times
    Digital currencies
    Central bank group BIS taps Benoit Cœuré to lead digital currency push
    Basel-based hub seeks to create public alternatives to private payment initiatives
    CHÂTEAUDUN, FRANCE – OCTOBER 4: Benoît Cœure, member of the Executive Board of the European Central Bank, listens to a question from one of the attendees to his conference at the Campus Les Champs du Possible on October 04, 2018 in Châteaudun, France. Benoît Cœuré met with Mme Sophie Brocas, Préfète d’Eure-et-Loir, M. Philippe Vigier, Député, and M. Claude Terouinard, Président du Conseil départemental d’Eure-et-Loir during his visit to Châteaudun. Photo by Omar Havana for Financial Times
    Benoît Cœuré will head a unit charged with producing public alternatives to private initiatives, such as Facebook’s Libra coin © Omar Havana for Financial Times
    Izabella Kaminska in Basel 3 hours ago

    Benoît Cœuré has been picked to head a new unit of the Bank for International Settlements (BIS) charged with producing public alternatives to private digital currency initiatives such as Facebook’s Libra coin.

    Mr Cœuré comes to the role from the European Central Bank, where he has been a member of the executive board with oversight of payments systems since January 2012. His eight-year term expires on December 31.

    The Basel-based BIS, owned by 60 central banks, will unveil its initiative to tackle private sector monetary and payment innovations. The Innovation Hub will have unprecedented power to add to the stock of public monetary goods.
    …

  19. No “pent-up demand” for $500,000 starter homes happening here:

    “according to data from the National Association of Realtors, the median age of first-time home buyers has increased to 33 in 2019, the highest median age since they started collecting the data back in 1981. Meanwhile, the median age for all buyers hit a fresh record high of 47, climbing for the third straight year, and well above the median age of 31 in 1981.”

    https://www.zerohedge.com/markets/first-time-buyers-are-vanishing-us-housing-market

    1. Let’s see, median first-time housing buyer and housing buyer in general keeps getting higher and higher while American life expectancy is actually reversing. The demographic bubble is going to be far more vicious than anything done by the Fed with interest rates.

  20. No “pent-up demand” for really anything happening here:

    “It should be no surprise that 33 million Americans say they can’t afford to travel this winter,” said WalletHub CEO Odysseas Papadimitriou. “Even though unemployment is near record lows and the stock market is near record highs, there are a lot of things weighing on consumers financially right now.”

    Papadimitriou said many cardholders are “racking up credit card debt at a pace reminiscent of the run-up to the Great Recession” — a time when millions of cardholders, many suddenly unemployed, couldn’t pay their card bills.

    And, he added, “Student debt clearly is a problem.”

    https://nypost.com/2019/11/09/many-cant-afford-to-take-vacations-this-season-study/

    1. Of course there’s an app for cannabis friendly lodging.

      Bud and Breakfast
      Search for:
      Menu
      Search for:
      Explore Cannabis Friendly Lodging

      Search internationally 420 friendly – inns, rooms, bed and breakfasts, and more.

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