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If Somebody Has To Sell Today, They’re Probably In Panic Mode

A report from the Wall Street Journal on California. “Over a decade ago, Jeff Greene earned a fortune betting against risky mortgages in the last housing market crash. These days, the billionaire is finding himself less lucky in a different real-estate investment—an enormous Los Angeles mansion that he is having trouble selling amid an oversupply of such homes.”

“Mr. Greene said he is planning to once again relist the Beverly Hills home for $129 million, down from its original $195 million asking price when he first listed it in 2014. ‘This house has been a terrible deal for me,’ he said. ‘We’re into this thing for probably $80 million or $90 million at least. We’ll be lucky if we get our money back after years of carrying costs.'”

“Mr. Greene is hardly the only one having trouble selling a big Los Angeles property. Builders of some of the city’s grandest and most ambitiously priced estates have been significantly lowering their price tags in recent months as they contend with high mansion inventory and recession jitters.”

“On the whole, sales of Los Angeles homes priced at $10 million or more have taken a tumble over the past year, said Michael Nourmand of Nourmand & Associates, a luxury brokerage. His firm’s data shows that, in the first three quarters of the year, sales at that price point were down about 16% from the year prior.”

“A few years ago, sellers were pricing far too ambitiously in a bid for attention, Mr. Nourmand said. Now, such properties are sitting on the market. ‘It’s understood that, at the very high end, the price is more of a suggestion than a firm price,’ he said. ‘But days on market are a seller’s enemy.'”

“Mr. Greene and his family have only spent about two weeks there in the past year, he said, noting that he considers the whole project a mistake. ‘I totally regret it, wish I never did it,’ he said, noting that he first saw the property in the newspaper. ‘I thought it was a deal. I’m thinking ‘Wow, this will be cool. Let’s try living in a giant big mansion.’ I don’t even like sleeping in the place. It’s too big.'”

“Mr. Greene noted that the overdevelopment of luxury homes extends across the country to New York, where he is building a high-rise condo project. It’s never been so important to have ‘staying power,’ he said. ‘If somebody has to sell today and they have high end real estate, they’re probably in panic mode and they should be in panic mode,’ he said.”

From Scarsdale 10583 in New York. “How is the real estate market shaping up for 2019? We asked Angela Retelny from Compass Real Estate to give us her analysis of 2019. There was an 8.2% decrease in the median selling price which dropped from $1,525,000 to $1,400,000 in 2019 while the average selling price was down 12.7% from $1,847,329 in the first three quarters of 2018 to $1,611,921.”

“Retelny said, ‘The bottom line is that more transactions took place as buyers took advantage of lower prices and enjoyed great values while many sellers who were ready to move on met the market at the new levels. Some sellers who have been on the market for a while are ready to move on and prepared to make deals at prices they were not entertaining earlier in the year.'”

The Boston Herald in Massachusetts. “Boston is fast becoming New York, one shiny glass luxury building at a time. The South End has been taking on a northern NYC borough feel for years, with high-end condos and stores dotting Harrison Avenue like so many Monopoly hotels.”

“The new kid on the literal block is Related Beal who, as the Herald’s Sean Philip Cotter reported, filed a letter of intent with the Boston Planning & Development Agency on Monday to build on the 5.5-acre parcel it paid $218 million for in May from Gillette. The new residential building would be a stone’s throw from 315 at A and 318 Congress — two very snazzy, modern, amenity-enhanced luxe apartment buildings. What’s the incentive to spend all that money on construction, and not recoup it with competitive rents?”

“Southie officials are rightly worried — where there’s development, there’s usually ritzy rents. ‘We don’t need any more luxury condo units — that’s for sure,’ said at-large City Councilor Michael Flaherty, who’s from Southie.”

This Post Has 147 Comments
  1. ‘I’m thinking ‘Wow, this will be cool. Let’s try living in a giant big mansion.’ I don’t even like sleeping in the place. It’s too big’

    It’s a white elephant Jeff. Always was you fool.

    ‘Mr. Greene noted that the overdevelopment of luxury homes extends across the country to New York’

    Wa? All, and I mean all real estate is local? How could any trend play out across the entire US (global actually) unless there was something else going on?

    I was chiding a poster for her crystal ball earlier. Better to understand what’s happening now, IMO. I gotta go. Evaluating pre-foreclosures all day.

    1. ‘A marble-mining stock crashed 98% in a morning, shedding $5.7 billion of market value, after MSCI Inc. dropped plans to add the Hong Kong-listed company to its indexes. Thursday’s implosion at ArtGo Holdings Ltd. is the latest in a series of boom-and-bust episodes involving smaller listed Hong Kong stocks. It came a day after The Wall Street Journal published a column highlighting the shares’ nearly 40-fold increase in 2019.’

      https://www.wsj.com/articles/investors-lose-their-marbles-as-msci-u-turn-spurs-98-stock-plunge-11574329092

      1. True price discovery comes to a single Ponzi stock. Now imagine what it’s going to look like when it comes to every Ponzi market and asset bubble created by ten years of Keynesian monetary policy. Trillions in ficticious Yellen Bux valuations wiped out as if they’d never existed.

        Oh dear….

    2. I cleaned the windows on a huge SF mansion back in the day, lots of high ladder work on sloping uneven ground, and the impression I got was that it was a place for entertaining Big Shots during special events. The rest of the time the residents live a much smaller adjacent unit.

  2. ‘A few years ago, sellers were pricing far too ambitiously in a bid for attention, Mr. Nourmand said. Now, such properties are sitting on the market. ‘It’s understood that, at the very high end, the price is more of a suggestion than a firm price’

    Eat yer crowz Thornberg.

    1. Here’s a counter-suggestion, greedheads: Get to sawin’ and slashin’ unless you want to chase the market down.

  3. “‘We’ll be lucky if we get our money back after years of carrying costs.’”

    This is a shocking statement that illustrates RE wrongthink across the price spectrum.

    You expect buyers to reimburse you for the property taxes, utilities and upkeep that you paid for the privilege of living in the home?

    You expect to live for free and walk with a profit?

    We know the answer is yes, and it is implicit in every wishing price we see and discuss here.

    But it is ahistorical.

    1. “‘We’ll be lucky if we get our money back after years of carrying costs.’”

      Well, if it makes Jeff Greene feel any better, carry [holding] costs are going to destroy any profit of thousands of speculators who can’t sell their absurdly priced McCrackerBoxes.

      HBB readers have been red flag warning about holding costs for years.

      I have never even once seen a article/video from the REIC or MSM discussing holding costs of R/E.

      1. if it makes Jeff Greene feel any better

        What’s ironic is that this guy won fame and fortune betting the housing [mortgage] market would crash and he apparently understands little about housing.

          1. it wasn’t his idea. Look at his wikipedia page, it was a friend’s idea, he just rode the coat tails, all the way to the Forbes 400 list.

      2. I gotta wonder what all those Chinese and Brazilian money launderers say when they open up the bill from the property management company, listing all the utilities and taxes that they owe on their airbox.

  4. In the past some posters here have said that losses don’t matter to “rich” people.
    I think it is fair to say that Mr. Greene would disagree with those people.

    1. It depends on how big the loss and how rich the zillionaire are. If Bill Gates or Larry Ellison lost 10 million on a shack they would be annoyed for a moment, but I that’s as far as it would go. Now, if some dude with a net worth of say 50 million (like a retired sportsball player) lost 10 million on a shack, he would probably need a rage cage.

      1. Ellison paid about $500 million for 99% of the island Lanai. I’ve heard that he’s planning on building some super exclusive resorts there, though I haven’t heard of any ground breaking work. If that purchase ends up being a bust, I could see him becoming angry, though he might console himself with the ego boost of owning his own Hawaiian island.

        1. I’ve heard that he’s planning on building some super exclusive resorts there

          Doesn’t the Four Seasons have a resort on Lanai?

      2. I don’t know why people focus on how much money these gamblers have. This article mentions several debacles in LA. Why did people buy them? Cuz they expected to sell for a lot more. And there’s your bubble, which is something the WSJ will apparently never touch.

        Jeff rarely stayed there. Didn’t like it much. Why buy it then? Expected a greater fool, same as all the other bag-holders. Expensive shacks are discretionary, therefore speculative. It’s cheaper to stay in a hotel. Same with second shacks. The more important issue is the speculation in the market, and the motivation behind it.

          1. It’s worth noting that Ellison collects about $1 billion a year in Oracle dividends. That’s what I call “rich”, not some orthopedic surgeon who owns an overpriced shack.

        1. “Over a decade ago, Jeff Greene earned a fortune betting against risky mortgages in the last housing market crash. These days, the billionaire is finding himself less lucky in a different real-estate investment—an enormous Los Angeles mansion that he is having trouble selling amid an oversupply of such homes.”

          What goes around, comes around.

      3. Jeff Greene’s net worth according to Bing is $3.88 Billion
        Would it then be fair to say that people worth less than $4.00 Billion don’t like losing money?
        Would You agree with that?

        1. Look at it this way, the amount a new car depreciates has a bigger impact on the average Joe than Green’s loss on his shack. Perhaps the rest of Green’s portfolio isn’t doing so well, which might be why he is trying to unload his mansion. A 70 million dollar loss is 1.75% of his net worth, assuming it really is $4B.

          I could see him being displeased with the loss, more for ego reasons than anything else.

          1. “A 70 million dollar loss is 1.75% of his net worth, assuming it really is $4B.”

            Like a bad day on the stock market for the typical HODLer…

    2. All losses aren’t equal though. A loss on a primary residence is not deductible. A loss on a farm or ranch is for the most part. So if you’re in the 37% bracket, those losses save some taxes, i.e. $500k becomes a $315k loss. Especially if the loss is generated by capital expenditures which are bonus depreciated / §179’d.

      I came across an interesting scenario recently. Apparently, in the 2010’s BofA had a special lending unit that marketed to medical professionals, dr’s, dentists, etc. What could go wrong?

      Their underwriting was so terrible that when a particular borrower defaulted on a $1.5M loan, BofA’s opening offer was to write off 1/2 the loan, and let the borrower repay the other half without interest over 8 years. Its like they’re playing with monopoly money.

  5. OT: I wonder how many electrical car owners in the Golden State have a portable Honda generator in the garage, to charge the car when there is a prolonged black out?

    1. I don’t know about charging the car but a ton of my coworkers bought generators this year just to deal with the day to day problems of dealing with the PG&E blackouts.

      On a related note I started thinking recently and now I see other people are thinking too about pull charging an electric car with a gas/diesel vehicle utilizing the regenerative braking. Looks like it actually works pretty well in an emergency assuming you realize you’ll use a lot of fuel doing it. The latest story I saw looked like you could charge about 1% per kilometer you pulled it.

      1. Fire and Utility service trucks designed for work in the field come fitted with a large alternator and GFI/AC outlets. These are commercial- industrial grade kits that can be added to 3/4 and 1-ton pickup trucks. They’re not cheap, but they’re available.

        1. I’ve seen TV ads for Chevy pickups with 120 VAC outlets built into them. Don’t know if there is an option for a built in generator or if that’s just running off the truck’s alternator.

          1. Sure. There are vehicles with outlets or you can use an inverter. But it’s impressive to me how much faster you could pull charge an electric car than charging it from the outlet/inverter.

          2. Rivian is going to have 3 110-volt outlets in them. I suspect that Tesla’s Cybertruck, being unveiled tonight, will probably have something similar.

            I think Vehicle to Grid makes a lot of sense if you could limit that grid just to your own personal energy usage (e.g. not sending the electricity back to the utility). It would then be possible to arbitrage your power needs if you in a Time Of Use (TOA) electricity scheme.

  6. I wonder is Mr Greene still owns the heritage house on the Mendocino coast anymore. He rolled into this quiet part of the world and want to make huge changes to the long establish hotel. Funny thing is he didn’t realize that locals were not impressed with his wealth. Workers who showed up for a week never came back after dealing with him. Suppliers stopped shipping construction materials, because he would not pay. Construction supervisors would come and go after meeting him and decide he was difficult and not living in reality. I knew a construction manager who lasted the longest on this project and he say that he was rude, arrogant and was living in a false world. Best of luck on that wonderful mansion.

  7. “Mr. Greene said he is planning to once again relist the Beverly Hills home for $129 million, down from its original $195 million asking price when he first listed it in 2014. ‘This house has been a terrible deal for me,’ he said. ‘We’re into this thing for probably $80 million or $90 million at least. We’ll be lucky if we get our money back after years of carrying costs.’”

    This statement is dripping with greed and entitlement. He’s already gone into “woe is me” mode and yet he’s still looking for a $40 million profit. The world does not need people like Jeff Greene.

    1. “…The world does not need people like Jeff Greene….”

      Darwin works in mysterious ways..

      You gotta wonder how many people on planet earth could actually afford a place like this. At most a few hundred?. And of those few hundred who would even care about a purchase?

      Seems to me that a savvy billionaire who would actually want a monstrosity like this would realize that since practically no one has the wealth or desire to own he could negotiate a really good deal.

      Thus, Jeff Greene has done a masterful job of painting himself into a corner.

      Keep your 10 gallon hats at the ready, ’cause it going to be real interesting to see how this one plays out. (along with thousands of other speculators who thought they would become instant R/E mega-millionaires)

      1. The more expensive something is in life, the harder it is to sell. It doesn’t matter if it’s a house, a car, a painting, an RV, a piece of clothing or a meal at a restaurant.

        1. That’s why he should keep sawing and slashing his ask price until someone bites. Otherwise he risks losing much more by slow-motion chasing the market down.

        1. Not sure that I can agree about tasteful… it’s a horror show of design / style all mishmashed together. Like someone flipped through a bunch of magazines and just started randomly pointing at pictures of rooms to copy for this house. The sky scenes painted on the ceilings (going for that Vegas Casino look?) is the icing.

      1. So, he bought for $35M and had to complete the construction. That’s where a good chunk of the $80-90 million came from. TBH, the house itself actually looks pretty nice. Ostentatious perhaps, but still rather tasteful.

        1. “Ostentatious perhaps, but still rather tasteful.”

          Jesus should change his return itinerary from the Mount of Olives to this Beverly Hills mansion where he could lord over mankind in style.

  8. We’re into this thing for probably $80 million or $90 million at least. We’ll be lucky if we get our money back after years of carrying costs.’”

    My dad always told me ‘never buy the most expensive house on the street’.

  9. Boston is definitely a bubble.

    The door knocking with cash offers stopped about a year ago and now everything is fairly stagnant.

    People bought 1/3 of an old triple decker for 1M last year. Irrational exuberance is starting to fade. Buyers remorse beginning to set in.

  10. Kinda off-topic, but Tesla is going to unveil their new truck this evening:

    Tesla ‘Blade Runner’ pickup truck could be so futuristic that it leaves buyers cold
    Published: Nov 21, 2019 12:09 p.m. ET (Claudia Assis)

    “Chief Executive Elon Musk has called the all-electric truck a “‘Blade Runner’ pickup truck,” “out of a sci-fi movie” and unrecognizable from the pickups that have been sold in the past decades. Tesla TSLA, +1.71% is scheduled to reveal it Thursday night in the Los Angeles area.”

    https://www.marketwatch.com/story/tesla-blade-runner-pickup-truck-could-be-so-futuristic-that-it-leaves-buyers-cold-2019-11-18?mod=home-page

      1. Maybe. But “the pickup crowd” aren’t the only ones who buy pickups. It will be interesting to see.

        1. Ford unveils Mustang EV, now GM just announced their new EV truck for 2021. Ford says they will do electric F-150 before 2022. Things are coming fast now.

          GM announces electric pickup truck to go on sale in 2021
          Electrek
          11/21/2019
          Fred Lambert

          As part of its negotiations with the Union of Auto Workers during a month-long strike in September and October, GM revealed its plans to build an electric pickup at its Detroit-Hamtramck assembly plant.

          Speaking at an investor conference today, GM CEO Mary Barra said that the company’s first electric pickup truck will “go on sale” in “the fall of 2021.”

          1. My guess is they will be in the hole about 15k for every one of these they build.

            GM never committed to it, so of course they can’t make it profitable. No marketing, no manufacturing in sufficient quantities to get economies of scale in parts, no dealership push (which is really the crux of the issue since dealers make most of their money in service, and EVs have very little required maintenance, if any). The Bolt was a compliance car that can’t compete against model 3.

            VW, on the other hand, is going to do it right and make EVs in significant volume.

          2. So a money losing bolt costs twice as much as a money making compact conventionally powered vehicle with similar function because of bad marketing? I’ve got to stop replying to these EV posts. It reminds of the arguments I had as a kid with the commie nerds in Harvard Square handing out Mao pamphlets.

          3. because of bad marketing?

            Probably not solely because of marketing. My post didn’t mention just marketing. But it makes sense though, why would you market a product you can’t produce profitably and which dealerships are not going to push to sell.

            True story, I went into try and test drive a Bolt and the dealership here didn’t even have one. No one knew much about them. This was about 1 year before I got my model 3. We needed a 2nd car (sold my eBike when I stopped working at the hospital) and we ended up getting a Chevy Spark, the cheapest car we could. It’s just a matter of time before we get a 2nd model 3 or a model Y, can’t decide yet.

            Honestly, GM is so far behind in the battery game that it would be very difficult for them to become profitable selling EVs.

        2. they will be in the hole about 15k for every one

          They’re in the hole more than that for every one of their sedans and this thing is priced even lower. Probably weighs a ton more.

      2. Let me know when they have charging stations in the middle of the Mojave. Then maybe I’ll give it a look.

        1. Speaking of that, there is a gigantic Tesla charging station in Baker, California. Along I-15 between SoCal and Las Vegas.

        1. It’s a DeLorean… It’s the APC from Aliens… It’s post-apocalyptic.

          Actually I really liked the ATV. If the ATV has some payload capacity it would work well on a small farm or just riding out in the fields. Charge in the barn at night.

        2. I watched it last night. Those broken windows were extremely awkward. It was obvious that Musk was flustered.

          My first reaction is that this looks military. I’ve never owned a truck nor do I plan to, so this isn’t marketed to me. My wife said, “it looks hideous.” I don’t know, I think it looks like something out of Halo. I’d like to see it on the road and the specs look amazing, so it does look functional.

          But that broken glass though…

          1. But that broken glass though…

            As a guy who works with a lot of prototype products my guess is that at some point a few weeks or months ago they had to get that thing on the road for whatever reason and put normal glass in it. And then somebody forgot to replace it before yesterday.

          2. I’m assuming they do some kind of rehearsal or run-through before the presentation. If it was supposed to be unbreakable why wouldn’t they test the glass before going on live?

          3. “And then somebody forgot to replace it before yesterday.”

            I was thinking the same thing. Whoever is at fault for that may be updating THEIR resume today.

            Was still good for a giggle, though.

          4. If it was supposed to be unbreakable why wouldn’t they test the glass before going on live?

            I definitely want to know the backstory on that too. Because they did that test out on the side where the dropped that huge shot put from super high onto the glass and nothing happened. I am wondering if throwing the shotput at the window was improvised without Elon knowing that the real glass was in the truck.

          5. I noticed that the “test glass” that they dropped the ball bearing on was mounted on springs. The truck windows of course were not. Might explain something.

          6. The truck windows of course were not. Might explain something.

            Here seems to be the answer:

            Six strikes and you’re out: the Tesla CyberTruck window shattering
            Charles Benoit
            Nov 22, 2019

            “Reddit user WhiskeySauer, a moderator of the Tesla subreddit, was at the Tesla CyberTruck unveil last night. He also happens to be a blast and ballistics research engineer who previously tested blast-proof glass for US embassies. Last night he had the chance to speak with a senior Tesla reliability engineer after the glass shattering incident, and even hold the 1kg steel ball Franz von Holzhausen, Tesla Chief Designer, threw at the CyberTruck windows.”

            “According to WhiskeySauer, the Tesla reliability engineer told him that he and his team had thrown the ball against the windows five times the night before with no visible damage. Those previous throws most likely resulted in micro-fractures, and it was a mistake to not replace the window before the unveil with the spares on site. That being said, according to what WhiskeySauer was told, the team had also advised CEO Elon Musk to not attempt the ball toss, and instead stick with the ball drop demonstration. WhiskeySauer says the Tesla reliability engineer was a bit shaken up by the ordeal, but still in good spirits considering.”

    1. “Tesla ‘Blade Runner’ pickup truck could be so futuristic that it leaves buyers cold”

      I wouldn’t get my hopes up after sister of Prius, the Ford Mustang ED the futuristic ‘Blade Runner’ may end up looking like a VW Bus.

        1. Maybe not, they’ve toned down the reservations to only $100 now, but don’t let you cancel and get a refund like before. So I think it’s less of a cash grab now and more of an attempt to coerce people into actually taking delivery.

          1. Yeah, the reservations aren’t really a thing at $100 since that is peanuts. It is small enough that it would signal what interest there is for such a Cybertruck, but I am sure it has nothing to do with cash because it’s too small. Also, losing a $100 deposit probably isn’t going to coerce anyone into taking delivery of a $40k vehicle.

  11. Archeologists exploring a cave near where the Dead Sea Scrolls were discovered recently uncovered a single scroll, predating the previous find, with a single verse: Realtors are liars.

  12. The PPT came in right on cue at 3:30 EST to try to juice their Ponzi markets into a green close, but failed. Tomorrow might be ugly.

    1. ““It’s a great way for him to phase out,” said one top staffer who recently left. “Now he doesn’t have to deliver on all the crazy things he promised. ”

      Among Neumann’s reported wildest dreams was creating WeWork Mars — an office space on the red planet. And at a company event in 2018, he said, “There are 150 million orphans in the world. We want to solve this problem and give them a new family: the WeWork family.”

      According to a New York magazine story from June, Neumann recently told a person close to the company, “When countries are shooting at each other, I want them to come to me.””

          1. Not a bad idea if you ask me, they just have to be built outside of city centers so they don’t get push back. Personally, I think the idea of safe parking lots patrolled with port-a-potties seems more feasible. But why not try this and see if it works.

          2. Big the biggest joke of all here is that at a recent briefing in Tokyo, SoftBank’s billionaire founder Masayoshi Son acknowledged that this month’s financial results were “a mess” and that overvaluing WeWork was a judgment error.

            I don’t understand why people that are so good at math make such terrible investment blunders.

    1. I simply can’t trend my nabe that way… the prices are all skewed by whether the house has been fixed up with Minimalist Millenial Gray.

      But I was surprised to see that one home that I had mocked here on HBB is pending. It was bought cheap and reno’d. I thought it was $75K overpriced, but went pending after a $25K drop. So if the sale goes through, it will sell $50K over what I think it’s worth. That’s going to set the standard for other renovated homes.

      1. it will sell $50K over what I think it’s worth

        There’s probably another price drop you won’t see until close of escrow (assuming that happens).

    1. “Los Angeles has more vacant homes than homeless people.”

      +1 The result of a bureaucracy. Look at the public schools, three nutritious squares served despite SNAP given to the parents, nurses on campus for healthcare and physical abuse prevention, participation trophies for everyone, LGBTQ and gender identity intervention, etc., and when they graduate they’re not ready for employment. Besides, a job takes up too much of your day.

      1. The proposal is as follows:

        “Report authors recommend lawmakers pursue a tax on vacant homes. They say such a penalty would discourage the practice of investing in vacant housing stock purely for financial gain.”

        Seems like a good idea to me. Now do it and implement it in a way that is unlikely to be gamed!

    1. The fish rots from the head first. With the DoJ and FBI riddled with corruption from the Clinton- and Obama-era partisan political hacks, it’s not surprising that the “win at any cost” mentality, to include willingness to falsify or fabricate evidence, has taken root in state and local as well as federal judiciaries and law enforcement.

      https://www.zerohedge.com/political/fbi-official-under-criminal-investigation-fabricating-evidence-russiagate-probe

    1. “However, Williams left provision for his third wife Schneider to be able to continue to live in the marital home although it would be inherited by his children. Schneider and the three Williams children ended up in a bitter legal dispute over her demand for more money to cover the expenses of living in the home ”

      Without knowing much about the case, I can’t really blame Third Wife Schneider for asking for money. The carrying costs of living in such a house in high-tax California could very well have exceeded whatever money/income Robin left her.

    1. The Financial Times
      Chinese economy
      China’s skyscraper boom comes down to earth
      Construction of tall buildings hit as slowing economy trims credit supply
      TRK438 Wuhan skyline and Yangtze river with supertall skyscraper under construction in 2019 in Wuhan Hubei China
      The super tall skyscraper project in Wuhan on which construction has stopped due to a default on a payment © Keitma/Alamy
      Sun Yu in Beijing yesterday

      A subsidiary of China’s largest construction group has suspended work on one of the nation’s tallest skyscrapers after the developer became the latest in a string of companies to default on a payment.

      The default highlights the growing challenges faced by China’s construction groups as the slowing economy trims credit supply, putting the once runaway mega-tower building boom under stress.

      In an October 30 letter seen by the Financial Times, China Construction Third Engineering Bureau Co said it would halt construction on a 475m-high skyscraper in the central city of Wuhan. It said Greenland Group, one of the nation’s largest property companies, had failed to make “a significant” project payment.

      “Unfinished super tall skyscrapers, which cost a huge amount of funds to build, are a typical sign of economic recession,” said Yan Yuejin, an analyst at Shanghai-based E-house China Research and Development Institution. “They are financed by credit and will run into trouble when lenders begin to scale back.”

      1. I wonder how many highrise construction projects are abandoned, never to be completed, when an economic crisis interrupts the construction process. I am personally aware of some from the 1930s that stand as monuments to greed and financial overreach.

        ‘“The most rational choice for us is to construct at a slow pace until the market recovers,” said an official at Zhongnan Group, developer of the Suzhou project.

        An official at Greenland, which has developed dozens of skyscrapers across the country, told the FT that the company had worked out a plan with CCTEBC and construction would resume soon.’

    2. Is there really a link between the end of skyscraper construction booms and economic crashes?

      There is indeed, my scholarly friend. Keynesian dogma notwithstanding, “booms” fueled by limitless borrowed money always end up going bust, leaving skylines littered with half-finished skyscrapers and silent rusting cranes. That’s doubly true when trillions in central bank funny money are being funneled into speculative malinvestment by greedy banks with all risks assumed by taxpayers. I give you Exhibit A:

      https://www.theguardian.com/cities/2018/aug/23/how-turkeys-lira-crisis-was-written-in-istanbuls-skyline

      1. Yes very odd. Also, not only is China building more coal plants it is cutting down by 45% the number of new PV plants it is building. Greta where are you? Are you time traveling again? How dare you not protest China’s actions?

        1. ABQDan, do you see China as doing the right thing here in building more coal plants? Or just that Greta has the wrong target?

          I see China’s backpeddling as seriously problematic. I think it would be a mistake to follow their lead, and the US is not when it comes to coal plants (because nat gas/wind/solar is so much cheaper). But then again, I suppose that if China can massively overinvest in air boxes, I guess they could overshoot in coal plants too. Time will tell.

  13. Bay Aryans are seeing their shack valuations slumping even with Tech Bubble 2.0 at all-time highs thanks to the Fed’s frantic mainlining of financial crack cocaine into the repo markets to fend off true price discovery. What’s going to happen when the Everything Bubble finally collapses under the weight of its own debt, fraud, and mark-to-fantasy valuations?

    https://www.salon.com/2019/11/15/housing-price-slump-in-the-expensive-bay-area-could-signify-economic-shift-ahead/

  14. Oh dear…Bitcoin and other cryptocurrencies are cratering after a Chinese crackdown on these scam currencies. I suspect the only reason central banker and central planners have tolerated the existence of rival counterfeiters for as long as they have was that well-connected gold collar fraudsters in the financial sector were making bank off the Bitcoin fanboys with their incessant pump & dump operations.

    https://cointelegraph.com/news/markets-crash-after-reports-that-binances-shangai-office-closed-in-crypto-crackdown

    1. Yea it’s getting hammered. I told a friend (he has money) that if he really wanted to play with Bitcoin, then wait for the price to drop below $4K, the rough electricity cost of the mining. I see $4K as a soft floor. I’m not going to put a penny into BTC, but if you have money to play with…

      1. I told a friend

        Might be just as well to wait until the price is less than a 20 year old beanie baby. Then forget about it.

    1. “PacLease adheres to an aggressive preventive maintenance program,” Barnhart said. Both long-haul and medium-duty trucks coming off lease “have plenty of low-maintenance life left,” he said.

      Never, ever put your trust in maintenance performed by companies that are all about “shareholder value.”

    2. This is good news 🙂

      I may be in the market for a truck soon and definitely no longer entertaining owning the recently unveiled “bullet proof” tesla cyber truck. Elon went sideways with design on that one…

        1. I’m pretty sure if you showed up at a construction site driving one of those, an ass kicking would be assured.

        2. Yeah i made an assumption without looking at the fleet, coffee’d up now :). I would still take one of these over the new tesla though 😉

        1. market research

          It strikes me as something designed by people who never had a pickup truck. Built like an airplane, with no frame. There sure are a lot of sharp angles

  15. San Jose update: friend and wife sold for $860k, a far cry from the $1M “value” they were expecting. Less $12k in tesla solar buyout, less $48k commission, less $7k mortgage payments while selling and they received $793k (but I think there were more costs they didnt disclose). I know they cash-out refied at least two times since they bought in 2014, so my guess is they cleared $50k. They expect to buy for a mill+ in Walnut Creek this summer. Probably gonna have to hope mom dies and they can sell the big San Jose house to get the down payment since, despite a $300k income, they dont have savings.

    Pure schadenfreude if she lives for years and long-term care milks the estate for all it’s worth.

  16. The Guardian
    ‘They barely mentioned us’: Atlanta’s black voters
    frustrated by …
    yelled an attendee at a Democratic primary debate watch party at Atlanta Technical … We’ve gotten rid of public housing, the city is becoming less black, the …’

    We want lip service dammit!

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