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We Had The Best Business In 2016 And 2017, Now Those Days Are Gone

A report from KCRA in California. “California is at the epicenter of a housing crisis. Thousands of people are fleeing the state, and many of them say they can no longer afford to live here. But today there’s help, and hope, for people wanting to buy that very first home. The help comes from a nonprofit housing group that’s been around for 35 years. That group is called NACA, of the Neighborhood Assistance Corporation of America.”

“The one-stop mortgage operation is sponsored by NACA, and the nonprofit has partnered with Bank of America. The bank has committed $10 billion to the NACA mortgage program, which does not require private mortgage insurance, or PMI. ‘No down payment, no closing costs, no points or fees,’ said Shawn Cunningham, a regional director for NACA. ‘We don’t even consider your credit score — and a below-market fixed interest rate,’ he added.”

From China Daily. “Over the past 10 months, Bei Qin, a realtor in Silicon Valley, California, has not had any clients from China, a market that used to be her major source of business. ‘We had the best business in 2016 and 2017. Every day, we had inquiries from Chinese buyers and every week our WeChat account had more than 10 new subscribers,’ said Qin, president of ACEQ Investment Group in Cupertino. ‘Now those days are gone.'”

“After a decade of increasing investment by wealthy Chinese in residential property purchases in the United States-the biggest proportion of international buyers for seven consecutive years-purchases plunged by 56 percent in the 12 months to March, according to a report by the National Association of Realtors.”

“Coco Tan, a broker in San Jose, California, said a key reason for the drop in home sales is the increasing difficulty in moving money out of China. Tan said that in the past, many Chinese buyers targeted ‘luxury homes’-those worth $5 million to $10 million. ‘Now, such houses sell very slowly,’ she said.”

“Keith Lo, a realtor in Los Angeles with more than 30 years’ experience, said people are still finding ways to get their money out of China and into the US-for example, through relatives and friends-but only $300,000 to $500,000 a year at most, to maintain their properties. ‘But I doubt they can continue to do that for long. It’s impossible to move a large amount to invest in a new property,’ he said.”

From The Cooperator in New York. “BloombergQuint reports that another blow may be heading toward the high-end real estate market, in the form of a revived effort by state lawmakers to impose a tax on second-home purchases of $5 million or more. Perhaps not surprisingly, high-end developers and clients — as well as their lawyers, appraisers, and brokers — oppose the idea on the grounds that there is already a glut of luxury condos with no buyers, with thousands more in the development pipeline.”

“To Donna Olshan, president of luxury brokerage Olshan Realty Inc., wealthy clients like hers aren’t going to invest in a depreciating asset. As she tells Bloomberg, ‘The notion that they’re just going to spend money because they want something and not consider the consequences or the risk is ridiculous.'”

From MSN Money. “Just 21% of Americans say now is a good time to buy a home, a drop from 28% in September, according to Fannie Mae. There was also a drop in the share of people who think now is a good time to sell a home, from 44% to 41%. The problem is price. ‘The net share of consumers expecting home prices to increase over the next 12 months has fallen to its lowest reading in seven years,’ wrote Doug Duncan, Fannie Mae’s chief economist.”

“‘It’s not just the overall supply of new construction that’s gone down, but the supply of starter homes, so it’s the affordability challenge at the entry level that’s been a particular challenge,’ said Rob Dietz, chief economist at the National Association of Home Builders. ‘Right now only about 10% of newly-built home sales are priced under $200,000. Five years ago that share was 1 in 5, and 10 years ago it was 40% of new home sales priced under $200,000.'”

“One component of the survey portends weaker sentiment ahead: Fewer people said their household income was slightly higher than it was a year ago. Just 16% said it was, down from 21% in September. That could be the one factor that will tame prices going forward. ‘I think what’s going to hold them back from over-heating is that prices have risen so fast relative to incomes,’ said Daryl Fairweather, chief economist at Redfin. ‘Any time prices get too high, there’s going to be this reaction where there just aren’t enough homebuyers to purchase those homes.'”

From DS News. “Freddie Mac recently announced it sold via auction 2,243 non-performing residential first lien loans (NPLs) from its mortgage-related investments portfolio. The loans, with a balance of approximately $369 million, are expected to settle in January 2020. The sale is part of Freddie Mac’s Standard Pool Offerings.”

“The NPLs sold by Fannie and Freddie as of December 31 had an average delinquency of 1.4 to 6.2 years and an average loan-to-value ratio of 92%. Nearly half of the loans sold (45%) are from New Jersey, New York and Florida. The FHFA states that prior to the start of NPL program sales in 2015, these three states accounted for 47% of the GSE’s loans that were one year or more delinquent.”

“Given the delinquency status of the loans, the borrowers have likely been evaluated previously for or are already in various stages of loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 63% of the aggregate pool balance. Additionally, purchasers are required to solicit distressed borrowers for additional assistance except in limited cases and ensure all pending loss mitigation actions are completed.”

This Post Has 102 Comments
  1. Isn’t it interesting how knowledgeable these California UHS are about China and money laundering. Pretty open about it with the media too.

    1. They will never admit it was money laundering, they call it “investing”… yun made a guest appearance in that article and spewed out his normal lines of bs:

      Yun, NAR’s chief economist, said: “Fewer foreign buyers means fewer home sales and, consequently, slower US economic activity. However, America is currently in a unique situation, with a housing shortage stemming from multiple years of underproduction of new homes. Therefore, a lack of foreign purchasers is quickly being filled by domestic buyers, and not necessarily causing notable harm.

      “In future years, when the market is back to normal, foreign buyers will be important in terms of sales and prices.”

      1. ‘wealthy clients like hers aren’t going to invest in a depreciating asset’

        Note the idea of shacks and airboxes to live in doesn’t even enter into the discussion.

      2. Recent archeological excavations on Mt. Sinai have confirmed the long-rumored existence of an 11th Commandment that said “Realtors are liars.”

  2. ‘Right now only about 10% of newly-built home sales are priced under $200,000. Five years ago that share was 1 in 5, and 10 years ago it was 40% of new home sales priced under $200,000′

    You guys are a bunch of greedy fecks Bob. Your day is coming.

    1. That basically tells you everything one needs to know about naturally occurring affordable housing being built. It is a pretty much non-existent. Vehicle ownership and housing ownership is becoming increasingly a luxury good.

      1. Once the government gets out of the business of loaning insane amounts of federally guaranteed monies to help dodgy buyers buy houses they can’t afford, the market may find a way to normalize.

        1. One can hope. But I wouldn’t expect much to change quickly unless the homeowner/mortgage-owner cartel is stymied. They are going to resist loosening of regs that prompt more building, more density, and smaller & affordable homes because it will put them further under water. They become part of a massive constituency who benefits from higher, inflated housing prices and they are not going to let prices fall without a fight because it will harm them, even though it is right for society as Ben rightly points out.

          1. mortgage-owner cartel is stymied

            Ha! People deeply in debt don’t have a strangle hold on anything but their own necks. They can do some temporary damage, but crumble when the asset boom ends.

          2. They can do some temporary damage,

            The damage I am thinking of is in terms of zoning and restricting development that would hurt the value of their assets. Gotta protect those heirloom tomatoes:
            The Great American Single-Family Home Problem
            New York Times
            Conor Dougherty
            Dec. 1, 2017


            One focal point was Kurt Caudle’s garden. Mr. Caudle is a brewpub manager who lives in a small house on the back side of Ms. Trew’s property (that lot has two homes, or one fewer than was proposed next door). Just outside his back door sits an oasis from the city: a quiet garden where he has a small Buddha statue and grows tomatoes, squash and greens in raised beds that he built.

            In letters and at city meetings, Mr. Caudle complained that the homes would obstruct sunlight and imperil the garden “on which I and my neighbors depend for food.” Sophie Hahn, a member of the city’s Zoning Adjustments Board who now sits on the City Council, was sympathetic.

            “When you completely shadow all of the open space,” Ms. Hahn said during a hearing, “you really impact the ability for anybody to possibly grow food in this community.”

          3. Curious thing to mock.

            Not mocking per se, just pointing out the irony of protecting tomatoes while NIMBYism and regs lead to barriers which in turn lead to homelessness and humans sleeping on the street and in cars. But yeah, tomatoes are important.

      2. College education is fast becoming a luxury too. Yet another breadstuff of the nation being ruined by wealthy speculators.

        (and no, I don’t think the it’s the government that ruins it.)

    2. And the reality is there’s only $120k in materials and labor in them. That’s the average M&L and profit anyways.

  3. ‘The bank has committed $10 billion to the NACA mortgage program, which does not require private mortgage insurance, or PMI. ‘No down payment, no closing costs, no points or fees…We don’t even consider your credit score’

    Check out this article, as the REIC scraps the bottom of the barrel for the bay aryans.

    ‘I think what’s going to hold them back from over-heating is that prices have risen so fast relative to incomes…Any time prices get too high, there’s going to be this reaction where there just aren’t enough homebuyers to purchase those homes’

    Well that’s why you make the big bucks Daryl. But I do think we can chalk up the drops across the country, at near the same time, to running out of subprime borrowers.

    1. A decade ago, we contemplated using NACA to assist us in keeping our home. Our business went under and we were struggling bigly. Ended up short selling when we couldn’t modify the mortgage. I unsubscribed from NACA emails back then. We moved on, got new jobs and have been renting and saving bigly.
      Last week I got several emails from naca touting this program. Seems like they’re pulling out all the stops to get people to buy. Can’t find a way to unsubscribe either.

        1. Sounds great until when. upon a moment’s reflection, you realize that the masses betting on inflation is precisely what brought us to this precariously overvalued Housing Bubble.

          And if Democrats regain power, their redistribution policies may serve to undercut housing prices, by turning America into a ginormous egalitarian ghetto.

  4. ‘The NPLs sold by Fannie and Freddie as of December 31 had an average delinquency of 1.4 to 6.2 years and an average loan-to-value ratio of 92%…the borrowers have likely been evaluated previously for or are already in various stages of loss mitigation, including modification or other alternatives to foreclosure, or are in foreclosure. Mortgages that were previously modified and subsequently became delinquent comprise approximately 63% of the aggregate pool balance’

    behold, the foam on the runway for banks.

    ‘Additionally, purchasers are required to solicit distressed borrowers for additional assistance except in limited cases and ensure all pending loss mitigation actions are completed’

    The GSE’s have become foreclosure machines. They really don’t count loans going bad, meaning payment has stopped. The whole system is geared around getting FB’s back on the treadmill, with even better terms than they had before. And as has been the case since this started, the majority re-default.

    Lower housing prices are good for the economy. Walking away from loans you have no chance of paying off is good for the economy.

  5. Here’s an online auction:

    https://www.auction.com/details/5931-n-killdeer-dr-tucson-az-85743-1437229-o_1265l

    Here’s the zillow page:

    https://www.zillow.com/homedetails/5931-N-Killdeer-Dr-Tucson-AZ-85743/8600482_zpid/

    Price history
    Date Event Price
    9/25/2019 Sold $725,240(+65.5%)
    9/18/2019 Price change $438,216(+0.1%)
    9/17/2019 Price change $437,752(+0.2%)
    9/14/2019 Price change $437,000(+0.3%)
    9/11/2019 Price change $435,849(+0.3%)
    9/7/2019 Price change $434,505(+0.4%)
    8/31/2019 Price change $432,957(+0.1%)

    So it suddenly sells for almost 300k over asking and goes straight into default. We saw waves of similar sales in California last decade that turned out to be fraud.

    1. “So it suddenly sells for almost 300k over asking and goes straight into default.”

      No, that’s not what happened. There’s no way to foreclose that quickly. They would have to have missed at least 3 straight payments. The “sold” price is the lender “buying” it back.

      1. PS – I am sure it’s HELOC’d to the hilt. The “sold” price represents the amounts owed plus the attorneys’ fees, etc.

        1. I’m trying to find some documents on the Pima County Recorder’s website. There’s something weird about this situation.

          1. What is it you don’t understand about “every closing is a crime scene”? This isn’t a made up notion. Brokers and mortgage pimps know it and some of them happen to admit it.

    2. Someone please explain to me (I’ll even accept one from Mr. Banker this time) the likely reason for the frequency of price changes on this one — wouldn’t any sane person looking at that MLS history smell a rat? What was the point of so many insignificant movements in it?

      1. It’s one of the problems of so many data sources that are auto-stripping numbers from other websites. It is confusing.

  6. “Inquiries by Chinese for US properties were down by 27.5 percent year-on-year in the first quarter, and have fallen for four of the past five quarters, according to the website.

    California, the top destination for Chinese residential investment in the US, is feeling the impact.”

    Nobody could have seen it coming!

    1. “…Nobody could have seen it coming!…”

      Unless your a HBB reader, where discussion threads about “hot” money from primarily China bid up Orange County Real Estate to absurd levels.

      HBB readers were flashing a red alert about Chinese money laundering in the OC at least 3, maybe 5 years ago.

    2. Dumb question of the day:

      Now that the Chinese investors have largely left the building, what will prop up housing prices in areas where they bid them up?

      1. Prices will and are going to drop over time, but I assume there is a resistance on the “supply side” of the equation that sustains prices to a certain extent. If people believe their homes are worth a million dollars but the market won’t sustain the price, they will either (a) decide not to sell, or (b) eventually, face reality. Sometimes, eventually, takes a while, so the market can cycle slowly down for a while until there is wide realization and panic sets in.

      2. All the FB’s that got outbid by them foreign infestors. Realtor will assure them that now is the best time to buy before they return and back to the moon!

  7. “A report from KCRA in California.”

    “Vallejo police on Sunday night are investigating the death of a man who police believe was shot by an off-duty Richmond Police Department officer. Several social media accounts have reported that the victim is Eric “CheddaMan” Reason.”

    Total bummer when ‘ya pick a fight with someone who is armed.

    1. A commercial advertising auctions for SFRs with renters already in place is on the radio here in Las Vegas:
      https://www.auction.com/lp/nv-rentals/
      ONLINE AUCTION NOVEMBER 11–13
      Invest in Henderson Turn-Key Rental Properties in the Las Vegas Area
      These homes are ready to go with renters in place. Income-producing cash flow starts the day you close escrow.
      VIEW HOMES NOW

      1. even cali homes were 2X median income or lower. just personally, I have friends who bought homes in the S.F. Bay Area in 1996-97 for $145,000 to $165,000–perhaps 12-13 times annual rent or 120 times monthly rent. These homes were in a highly-sought after small city with excellent schools, and they shot up to $600,000 by 2006 and $3 million in 2018.

        https://www.oftwominds.com/blog-photos/housing-bubble11-06.jpg

        1992 $146,000
        2018 $1,049,494
        https://www.redfin.com/CA/Milpitas/2242-Levin-St-95035/home/553505

        2000 $150,000
        https://www.redfin.com/CA/Los-Angeles/158-W-Ave-27-90031/home/6945944

        1995 $150,000
        https://www.redfin.com/CA/Los-Angeles/1521-W-84th-Pl-90047/home/7292711

        1995 $150,000
        https://www.redfin.com/CA/Sun-Valley/8340-Glenoaks-Blvd-91352/home/5270118

        1998 Sold $150,500
        https://www.redfin.com/CA/Los-Angeles/6001-Eucalyptus-Ln-90042/home/7084011

        2000 $170,000
        https://www.redfin.com/NY/Brooklyn/3064-Nostrand-Ave-11229/home/40846184

        1998 sold $140,000
        https://www.redfin.com/NY/Brooklyn/234-Troutman-St-11237/home/40745173

        1998 sold $150,000
        https://www.redfin.com/NY/Brooklyn/206-Nichols-Ave-11208/home/40763381

        1996 sold $161,000
        https://www.redfin.com/NY/Brooklyn/39-Jefferson-Ave-11216/home/40732792

        1998 $120,000
        https://www.redfin.com/NY/Brooklyn/152-E-45th-St-11203/home/40777442

        2000 $120,000
        https://www.redfin.com/NY/Brooklyn/7-Bills-Pl-11218/home/40792009

        My boss, graduated STEM in mid-late 80s. His starting salary was 45k.
        Today it is the same. Yet price of everything has surged 9000%.

        He bought a house in LA for $70K the same year he started work.

        A fairly well built small 2 bedroom house in Santa Clara (aka Silicon Valley) 1990 cost about $35k, by the end of the 90s you could sell it for $400k and move the next day.

        1. “My boss, graduated STEM in mid-late 80s. His starting salary was 45k. Today it is the same.”

          The STEM grads were fewer in number and valuable back in the 80’s. Things remained so until the Internet made the world small and competitive.

          1. everything was fewer in back in the 80’s, the entire US population was @ ~200 mill
            back then, all IT required on the job training. these IT jobs do not require 200 certifications or even a diploma

            silicon valley was founded by normal Americans who retrained to get into the tech sector.
            This is illustrated in the cultural artifact Superman 3, where Richard Pryor enters a computer programming school and excels. Such schools were the bread and butter for silicon valley.

            I knew people out of high school get tech jobs, full time, AND in addition as a benefit get additional training and education in said tech job from their employer. They even paid for college!

            but with globalism, that’s all gone, and so are the 2X median housing prices that existed in major cities of the US since the 1800s.

            now we have imported the living standards of bombay

  8. https://www.msn.com/en-us/money/realestate/more-americans-say-now-is-a-bad-time-to-buy-a-home/ar-BBWq3dt
    More Americans say now is a bad time to buy a home
    Diana Olick
    4 days ago
    The problem is price. Affordability has weakened considerably since the surge in summer buying. Home price gains had been cooling off at the start of this year, but then mortgage rates began falling, buyers rushed in and prices heated up. Now mortgage rates are rising again, adding to the problem.”

    https://www.zerohedge.com/markets/first-time-buyers-are-vanishing-us-housing-market
    Young First-Time Buyers Are Vanishing From US Housing Market
    by Tyler Durden
    Sun, 11/10/2019 – 20:00
    Seeing as most young Americans are saddled with student-loan debt, underemployment and other economic blights, few have any money left for important large purchases like a home. At this point, it’s beginning to look like millennials will be remembered as the first rentier generation in the country’s history.”

    “To wit, 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.”

    – The REIC addresses the issue (cue “Super-REIC”):
    https://www.kcra.com/article/help-arrives-for-hundreds-hoping-to-buy-homes-in-california/29752525
    (incorrect link, above)
    Help arrives for hundreds hoping to buy homes in California
    Updated: 7:07 PM PST Nov 10, 2019
    Mike Luery Reporter

    – Claimed problem: We’re running out of 1st time conventional, shelter-buyers. You know, the cohort that starts the gravy train running by “getting on the housing ladder.”
    – Actual problem: We’re running out of fat 6% commission checks.
    – Note: This apparently wasn’t a problem during the run-up phase while housing bubble 2.0 was inflating. Plenty of commission checks then when buyers were overpaying due to the FOMO/mania. Now that we’re on the downside? It’s a problem.
    – Why did this happen? Because they’ve been priced out of the market by the unconventional buyer cohort (i.e. foreign, speculator, flipper, Wall St., short-term rental (STR) buyer/investor, etc.).
    – Who allowed/enabled this to happen? The Fed and other unelected, unaccountable, global central banksters, as they coordinated / colluded together to prop up housing and stock market prices after the GFC (that they themselves created). Aided and abetted directly by housing GSEs, FHFA, and indirectly, the CFPB by looking the other way. Thanks Senator Running Deer/Fauxahontas! You’ve got my vote!
    – How did they do this? With unconventional, “out of thin air”, ex nihilo, digital money printing, (QE, ZIRP, “Not QE”, etc.). Aka currency counterfeiting and debt monetization.
    – Result: Asset price inflation in spades.

    – Questions:
    “The one-stop mortgage operation is sponsored by NACA, and the nonprofit has partnered with Bank of America. The bank has committed $10 billion to the NACA mortgage program, which does not require private mortgage insurance, or PMI. ‘No down payment, no closing costs, no points or fees,’ said Shawn Cunningham, a regional director for NACA. ‘We don’t even consider your credit score — and a below-market fixed interest rate,’ he added.”

    – Who’s guaranteeing these “beyond”-subprime mortgages to “low and moderate income buyers.” I’m assuming the GSEs are backing these loans, and by extension, the U.S. taxpayer. Please correct me if I’m wrong. (I hope I’m wrong.)
    – How can a buyer with good credit can get similar treatment/terms? You can’t? You don’t say…
    – What’s next? NIRP (i.e. pay me to take a mortgage – don’t laugh).
    – Where’s the oversight, or a related question: Who’s palms were greased?
    – This is not materially different than the progression of housing bubble 1.0.
    – Will it end well this time?
    – What about Naomi?

    1. “The one-stop mortgage operation is sponsored by NACA, and the nonprofit has partnered with Bank of America.

      Gosh, Mr. Banker, I always knew you were a philanthropist at heart. Helps restore my faith in human nature, the benevolence you’re showing to FBs.

    2. “millennials will be remembered as the first rentier generation ”

      Lol. “Rentiers” COLLECT rents. I.e. landlords.

      Hadda get fancy….

      1. I can’t even read Bloomberg at home or on the phone because I use Adblock Plus.

        Most articles from “real journalists” websites can be read for free on the archive.is site.

      1. Yes, the same fate befell my AR-15 before I could follow through on my sincere and heartfelt pledge to surrender it to Beto’s gun grabbers…for the children.

    1. “Meanwhile, my physical precious metals reside serenely in the secure vault at my local bank.”

      That’s just about the worst place possible to keep them. If you don’t hold it, you don’t own it.

  9. I just started getting ads in the comment threads. I’m using Firefox. How do I get rid of them?

    1. They threw me off too as they look like comments but i realized what they were and clicked a couple. you can click on them and send some ad generated funds to the hbb 😉

    2. Use PrivacyBader (EFF) and uBlock Origin. Throw in a little NoScript and you’re good to go!

      (well, and the JT Extension of course!)

      1. Great to read about how everybody wants to avoid chipping in a penny to a blog. It’s been going on for over a decade. And you wonder why I don’t post very much or offer snazzy do-dads.

        1. Oh and zero-guts says the top MAY be in for the the bay aryans. I only documented that over a year and a half ago.

          1. And right you were. Newly built in my area is selling now for less than used. City Ventures built up these fancy commuter friendly shacks in droves and the pricing has been reduced reduced reduced. Bay area housing shortage is a myth. Supply is outpacing demand and price is proof

            Now selling 760k

            https://www.zillow.com/community/scotts-valley-grove/8508225_plid/

            Sold previously for 900k

            https://www.zillow.com/homedetails/377-Hansen-Ter-Scotts-Valley-CA-95066/249640619_zpid/

        2. $50 donation sent via PayPal. I’ve got Ad Block but derive much value from this site. Understand why readers want to block pop-up ads, but for heaven’s sake, people, this blog and its creator deserve our financial support. Don’t be freeloaders – either click on the ads, or be a grateful donor.

        3. Couple youtubers ive watched seem to cherry pick the exact same articles you post and often speak of them in the same order as your posts read out (coincidence?!) These videos make you watch a commercial or two. One of these guys is a realtor with about 8k subscribers. I get more value from reading here than being read too and appreciate the work you do here as, i am sure, do many other of the followers of your blog, i also get joy out of clicking on an ad for a business i do not care for as i know its costing them monies ;).

          1. I see that all the time even with Bloomberg and the WSJ. I have a methodology made over many years to search and requires reading obscure RE media – some of the best and earliest material, BTW. I do this for my own knowledge. Having to put it out publicly pushes me to make it a whole picture. If I know what’s happening in most cities, I have a better grasp of the housing bubble. Internationally even more so. I have been cutting back even more on international articles cuz I don’t have time. I have to pay the bills like everyone else.

            This mornings post will include some WSJ articles. I pay their subscription because they have some great journalism that makes this blog and my own knowledge better. Same with the Globe and Mail, etc. I hear people complain about the quality of journalism yet they won’t support it. And the REIC gets a greater sway as a result. Last decade southern California had dozens of news outlets that did independent reporting on housing. Now it’s down to a handful, which are REIC dominated and only acknowledge any negative trends well after they’re established. It’s an uphill thing but as I said I’ve been climbing it for around ten years.

          2. https://www.macrobusiness.com.au/2019/11/real-estate-companies-hit-property-panic-button/

            ‘Now that all of Australia’s institutions are working hand-in-hand to “manufacture” an upswing in the housing market, all fortunes should improve but for how long and how far remains an open question.’

            I’ve mentioned this manufactured upswing before. IMO it’s criminal. For year after year they bemoan the lack of affordable housing, then the establishment pounces on the public to gin up a fear of missing out frenzy?

  10. “For the meeting tomorrow, I don’t really feel that there is a real need to stop fishing as it’s already slow in the WCPFC [Western and Central Pacific Fishery Commission] region, and there will be other areas, in the Atlantic, that will stop fishing soon. Plus, so many ships have gone drydock already ahead of schedule so there is about at least 15% fewer seiners operating in the WCPFC at this time,” the head of a fishing company that will attend the meeting tomorrow told Undercurrent’.

    “At this time, the main issue is what to do for next year,” he pointed out.’

    “One item that we will be tacking tomorrow is to lessen the fishing days to buy next year. Fewer days means indirectly less effort so that prices will be more stable next year. And in case we have less days it is easier for the individual company to stop fishing when prices drop and there is no big cost that we need to recover. The idea is to buy 15-20% fewer fishing days per vessel next year compared with previous years”, the source said, noting this “should be acceptable to all”.

    “This is more of a risk mitigation plan and not a control measure,” he told Undercurrent, stressing that prices should have now reached the bottom. “We have hit the bottom and the only way is up. How long they will remain at the bottom level is the main question,” he said, foreseeing the current price to remain stable until the end of the year and restart moving up in January 2020.’

    ‘An oversupply of skipjack tuna has led raw material prices for delivery in Bangkok, Thailand to dive from $1,600/t in March to $900/t this month, a record low. This has caused many purse seine boats around the world to operate at a loss.’

    ‘Rumors of some exchanges done at $850/t last week reported to Undercurrent seemed later to be rather speculations on prices’ next level and not an actual traded level. The head of a tuna fishing firm active in the Western Pacific Ocean told Undercurrent that vessels continued to fish despite the sharp price drop, to cover their vessels’ costs.’

    “The problem, why fishermen still continue to fish, is because of the expensive vessel days that they have purchased. If they catch, the loss is less than losing $20,000 per day, of which half is the days’ cost in the Pacific,” he said’.

    “I can understand that if they have bought VDS days, then maybe it is cheaper for them to continue to fish to cover those, as well as other fixed costs. So they just lose money more slowly,” the trader added.’

    https://www.undercurrentnews.com/2019/11/12/clashing-views-ahead-of-tuna-fleet-crisis-meeting/

    1. But…but…the permabull analysts on CNBC assured me that Everything is Awesome and that I should Buy Moar Stawks!

    2. “The problem, why fishermen still continue to fish, is because of the expensive vessel days that they have purchased. If they catch, the loss is less than losing $20,000 per day, of which half is the days’ cost in the Pacific,” he said’.

      Textbook example of the tragedy of the commons combined with sunk cost fallacy.

  11. Police warn that Hong Kong, a global financial hub and the most overpriced RE market in the world, is on the verge of a “total breakdown.” That’s gotta be comforting for “investors” who signed on the dotted line for insanely overpriced skyboxes and office rentals before the current unrest erupted.

    Gosh, I’d sure hate to see social unrest break out in financial hubs like NYC where young people are forever priced out of decent housing and face bleak futures as debt slaves on the globalists’ incorporated neoliberal plantation.

    https://www.zerohedge.com/geopolitical/hong-kong-police-warn-city-brink-total-breakdown

  12. Milpitas Post
    San Jose startup will pay workers $10,000 to leave Bay
    Area
    Launched Tuesday, San Jose-based MainStreet aims to entice people frustrated by astronomical housing costs and soul-sucking traffic to places such as …
    49 mins ago

    1. No link here, so I went to their Twitter feed.

      Holy crap, you would not need to have to pay me anything to leave there.

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