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The Pricing Is Night And Day To What It Was

Two reports from the Times of London. “Tens of thousands of families have seen their inheritances decimated after elderly relatives paid inflated prices for new retirement homes that have collapsed in value, an investigation by The Times has found. Prices of retirement flats in developments built by some of Britain’s biggest housebuilders have plummeted by up to 90 per cent in the face of costly annual management charges and ground rents.”

“‘Sebastian O’Kelly, of betterretirementhousing.com, said: ‘These flats routinely plummet in value and the reason is the leasehold system. The freeholder and property manager still get their ground rent and service fees irrespective of price. It’s deplorable that families are pouring money into these purchases, often in desperation, only to see their value evaporate.'”

“The choice is simple for wealthy French couples looking to buy a house — a city apartment or a historic château. The young people are now choosing London or Shanghai before life in Aquitaine. In one case, the aristocratic De Robien family have been trying to sell their château in Brittany for six years.”

“Despite halving the €4.2 million asking price they are still waiting for a buyer, Le Figaro said. A survey found that 1,500 châteaux were on sale and prices have fallen by 50 per cent. Eight years ago, 800 were on the market.”

The Globe and Mail on Canada. “This two-storey house near the Toronto Cricket Skating and Curling Club was given a new roof, fencing and interior makeover based on buyers’ feedback when it was listed for about $3.7-million last fall. A previous visitor took notice once it was relisted at about $3.4-million and returned to strike a deal in September. Selling price: $3,284,000.”

“‘There’s a bit more inventory and the mindset of buyers had shifted, so they were less inclined to bid up prices and overpay,’ agent Nigel Denham said. ‘You have to be refined in your pricing nowadays, especially in North Toronto.'”

The Calgary Herald in Canada. “Developers and builders turned their sights largely on Calgary’s rental market last month with starts driven by the purpose-built multi-family rental segment. Heather Boyer, senior analyst for economics at CMHC, adds this points to builders and developers adjusting to the current over-supply conditions in the apartment condominium side of the market.”

“‘We are still seeing overbuilding in the new home market, particularly among condominiums, but we when look at the rental market, we are seeing low over-building, so this is again why we’re seeing a boost to rental construction in Calgary,’ she says.”

“Calgary realtor Joel Gwillim notes condominiums he pre-sold before the downturn in energy prices in late 2014 are now selling 20 to 30 per cent below their original price — albeit these units are more limited in choice. ‘The pricing is night and day to what it was, so the value you’re getting is incredible,’ Gwillim says.”

The Tri-City News in Canada. “Coquitlam is getting high marks for the number of rental units in the pipeline from The Goodman Report and the city’s manager of planning says incentives for developers are working. With 3,632 units in 19 buildings going through city approvals or under construction, the city has the highest number of units on the horizon after Vancouver, which has 8,433 so far this year.”

“But with the condo sales market softening, Andrew Merrill, Coquitlam’s manager of community planning acknowledged that some rental units may be stalled. ‘We need the condo sales in order to have the developer build the non-market rental,’ Merrill told The Tri-City News.”

From Domain News in Australia. “Chinese shipping magnate Shannian Huang has copped a multimillion-dollar loss on his penthouse atop The Residence at Hyde Park after he sold it on Saturday morning for $14.5 million to a developer. The two-storey ‘Sulman’ penthouse set a record for the building when the founder of shipbuilding giant Shanghai Zhouji bought it new at the start of the property boom in 2013 for $17 million, making it the second most expensive apartment sale recorded in Sydney.”

“Mr Huang’s level 23 apartment was listed last year with bullish $26 million hopes but it never sold, and the listing was handed to Pillinger’s Brad Pillinger in more recent months with buyers told it carried $21 million hopes. Pillinger declined to comment when approached, but multiple independent sources say it sold for $14.5 million to a local developer.”

“On Saturday, property records revealed Pilot Energy chairman Wilson Hui Xiong Xue, the self-described “shoe king” of China, had taken a 15 per cent loss on his Mosman trophy home after he quietly offloaded it on Friday for $20 million. Mr Xue bought the seven-bedroom mansion last year for $23,733,800 after it had spent only three weeks on the market.”

“China’s youngest female billionaire ‘Nancy’ Zetian Zhang sold her penthouse near The Rocks in the Stamford Residences for $13.5 million early this year, pocketing $2.7 million less than she paid for it new in 2015. Ms Zhang had paid $16.2 million six months before she married China’s e-commerce billionaire Richard Qiangdong Liu, incurring more than $1 million in stamp duty charges.”

“Early this year updated settlement records on the Bayview house sold by high-profile property developer Richard Mingfeng Gu, revealed he had sold it for a $1 million loss. The modernist landmark Walker House was bought by Mr Gu’s AXF Group in 2017 for $7.95 million and resold for $6.95 million.
Mr Gu is best known in trophy home circles for defaulting on the $19.8 million purchase of Cate Blanchett’s Hunters Hill mansion Bulwarra in 2015 due to capital controls out of China.”

“Prestige agents have pointed to capital controls coming from China and stricter lending criteria by the Australian banks to explain a drop-off in foreign buyer numbers in recent years. In the most recently released Foreign Investment Review Board annual report, figures show foreign buyer real estate approvals totalled $12.5 billion in the 2018 financial year – a drop of $17.5 billion from the 12 months prior.”

From Newstalk ZB on New Zealand. “A woman behind the $300 million development of New Zealand’s second-tallest building has had her assets frozen in Australia by a court order. The Federal Court froze more than A$100 million in assets belonging to Chinese businesswoman Min Wang, whose company is developing Auckland’s new 57-level Pacifica apartment tower, now more than half-way finished.”

“The court decision referred to evidence that Min Wang had ‘made false statements in her income tax returns for the 2014 and 2015 income years about her interests in China by representing that she did not have assets located outside Australia with a total value of more than $50,000 and did not have an interest in any controlled foreign company, when information obtained by the Australian Taxation Office.”

“The decision also referred to further evidence she ‘gave misleading information to the Australian Taxation Office concerning the funding of the purchase and development of the property at 199 William Street, Melbourne by Hengyi Australia Pty Ltd, a company of which Ms Wang is a sole director and shareholder.'”

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This Post Has 90 Comments

  1. ‘Zhouji bought it new at the start of the property boom in 2013 for $17 million, making it the second most expensive apartment sale recorded in Sydney’

    Winner winner chicken dinner!

    BTW, I can show you hundreds of articles saying Sydney is to the moon Alice! There has never been a more coordinated effort to gin up a bubble than Australia since the election. The government, central bank, the REIC media have gone on a ridiculous no-holds barred effort to stampede the public into a FOMO frenzy. Will it work, I don’t know, but it didn’t keep these Chinese shack gamblers from taking an a$$-pounding.

  2. ‘The Federal Court froze more than A$100 million in assets belonging to Chinese businesswoman Min Wang, whose company is developing Auckland’s new 57-level Pacifica apartment tower, now more than half-way finished’

    They got one of those in downtown LA too. Get used to looking at it Auckland.

  3. ‘The pricing is night and day to what it was, so the value you’re getting is incredible,’ Gwillim says.”

    Think I’ll wait for the cascading defaults and mass foreclosure auctions, Gwillim. Anyone who buys before the bursting of the Everything Bubble and resultant financial carnage is a fool.

    1. “Anyone who buys before the bursting of the Everything Bubble and resultant financial carnage is a fool.”

      I’m starting to wonder if the Everything Bubble will outlast the Boomers. Any thoughts on when ongoing efforts to prop it up may finally expire?

      I will say that most if not all the folks in my circle to whom I have offered similar sage advice to yours have dismissed me as a stopped clock housing market crank by now.

      1. I’ve given up on anything resembling a free market and price discovery ever taking place. It’s obvious that the FED has decided that they didn’t start QE fast enough last time, so now QE has been re-instilled at the bubble peak to try to bigger it – a jaw-dropping strategy. With the power of the printing press and an unlimited balance sheet free from audit, there is no limit to how high prices can go.

        1. The Fed and other CBs can “print” (fiat) money (and do). This is counterfeiting BTW.

          The Fed balance sheet and the U.S. “budget” are apparently unlimited (liabilities column). So, in theory, they can keep markets/asset prices inflated effectively forever. This works until it doesn’t.

          However, “consumers” have finite limits on actual, real world budgets. No $ printing press (illegal for the peasants) and actual debt limits. This is the real economy. The markets and the real economy are (still) bigger than the Fed. The Fed can’t (yet) purchase outright houses or stocks.

          The Fed didn’t stop 2000, or 2008-9 meltdowns (nor The Great Depression, but rather caused it!).

          Not different this time. Just taking longer due to QE, ZIRP, etc.; much bigger numbers blowing even bigger bubbles. “The Everything Bubble.” End the Fed!

          BTW, housing bubble 2.0 is already deflating. Stocks already in a bear market. Patience is a virtue…

          1. “The Fed can’t (yet) purchase outright houses or stocks.”

            Sure they can, and do. They hoovered up all the toxic mortgage-backed securities (MBS). They probably still are. In fact, I’d not be surprised to see actual deeds on their balance sheet.

        2. discovery ever taking place

          It’s a big crime, but the thieves are not that smart and all powerful. Debt has to continue to grow for the credit expansion to work obviously. When even the principle cannot be repayed, individuals, companies and countries collapse. Always has anyway.

        3. We’ll have price discovery, but in a different way. I don’t expect house prices to drop in nominal dollars. Instead, wages may inflate to meet prices. Or we’ll have negative interest rates which would drop PITI if prices stay the same. Or, the gov will just print money and give it to consumers. Or the gov will just buy the houses directly and give them to consumers, soviet-style.

          Maybe that lady who said “Obama’s gonna buy me a house” was right, just 30 years early.

          2. Your opinion about nominal prices was the same as mine in 2010 hence the reason I bought and took the tax credit in 2010. Outside the real bubble areas I still believe that houses will probably just decline in real not nominal terms over the next ten years. SALT deductibility is not a big deal in NM

          3. I don’t expect house prices to drop in nominal dollars.

            Keep in mind that what works out well for you and me is not of the slightest concern to the policy makers.

          4. “Maybe that lady who said “Obama’s gonna buy me a house” was right, just 30 years early.”

            Didn’t she say, “No ‘mo mortgage payments?”

        4. and when the gop fcks up as they always do- an admin coming w egs and higher biz taxes
          weeeeeeeeeeeeeeeeeeeeee

          2. The boom was 1947 to 1964, starting when the GI’s had a chance to come back from WWII and start procreating, ending when less procreative generations to follow took their place in young adulthood.

            Some call the smaller the generation between them, born 1930 to 1946, the “Silent Generation” compared with the noise the boomers made.

            Those at the back end of the Baby Boom ended up somewhat disadvantaged, like the Gen X that came after. Their children are even more disadvantaged, on average.

            So the richest generations in U.S. history were born 1930 to 1958 or so. The youngest among them are hitting about to hit age 62, with the oldest at age 90. So these are the people who will be selling — everything — to support their lifestyle. Poorer generations to follow will be renting from the Chinese, Arabs, Europeans, etc.

          3. Nope. The ramp up in US births began accelerating in 1940.

            Further to the point…. Boomers are dying off at a rate of 10,000 per day.

            And as usual, the REIC fraud machine cranks out another whopper of a lie regarding the number of houses in the hands of boomers. The fact is they “own” 35 million houses….. that doesn’t include the 25 million excess, empty and defaulted houses already out there.

            Why do you think the REIC would do that?

            And why would a couple loudmouthed liars on the internet stand by it?

          4. “The youngest among them are hitting about to hit age 62, with the oldest at age 90. So these are the people who will be selling — everything — to support their lifestyle. ”

            This is what Raoul Pal at Real Vision Finance believes. He felt that trailer parks would be a good play, especially for those poor boomers for whom “everything” isn’t much of anything. (A wealthy retired international bond trader trafficking in trailer parks? I’m not sure he was entirely serious.)

          2. “The boom was 1947 to 1964, starting when the GI’s had a chance to come back from WWII and start procreating,”

            1965 The Supreme Court (in Griswold v. Connecticut) gave married couples the right to use birth control, ruling that it was protected in the Constitution as a right to privacy. However, millions of unmarried women in 26 states were still denied birth control.

            https://www.ourbodiesourselves.org/book-excerpts/health-article/a-brief-history-of-birth-control/

          3. My county assessment hasn’t gone up much, but maybe because there are homestead provisions and stuff. I don’t really have it figured out.

            I wouldn’t say it “booming” in my area. It seems there are only two types of houses for sale: trashed foreclosures which sell for $75K under average, and houses renovated to the hilt in Minimalist Millenial Gray, which are going pending for $75K over average. There aren’t any average houses in the middle — it’s all pre- and post-flip.

      3. Dollar bubble. Too many easy dollars out there backed up by ? If that cracks you’ll get your correction. Probably followed by chaos and God knows what . Won’t be a soft landing because there is no will to rein it in and fix it.

      4. I’m starting to wonder if the Everything Bubble will outlast the Boomers. Any thoughts on when ongoing efforts to prop it up may finally expire?

        You may have noticed that social unrest against the elites is going viral all around the world. You may also have noticed this social unrest is being driven by widening wealth inequality and the destruction of the standard of living for the bottom 90%. Last but not least, you may have noticed that central banks and their “No Billionaire Left Behind” monetary policies have enriched a corrupt and venal oligarchy at the expense of everything else.

        So here’s the real question: at what point is social unrest going to reach the point that the central bankers and corrupt elites correctly perceive the pitchforks and torches are going to be coming for them, and will they be forced to dial back their swindles against the 99% as a matter of self-preservation?

        1. The answer is never, because fat toads covered in tats and ogling iPhones all day long, strung out on Oxy, don’t grab pitchforks.

  4. ‘There’s a bit more inventory and the mindset of buyers had shifted, so they were less inclined to bid up prices and overpay…You have to be refined in your pricing nowadays, especially in North Toronto’

    Another red hot market where they are sawin’ and a slashin’.

        1. Nobody wants to live here now.

          It’s just another West Coast dump full of tent cities and needles and feces. Get out while you still can, loanowners!

  6. – Oh, Canada!

    – Classic mania. Bubble meet pin.

    “There’s a bit more inventory and the mindset of buyers had shifted, so they were less inclined to bid up prices and overpay,’ agent Nigel Denham said.”

    – Builders gotta build, but financing may be a problem… At this point it’s “game over”. Where are all those Chinese buyers? (crickets)…

    The Calgary Herald in Canada. “Developers and builders turned their sights largely on Calgary’s rental market last month with starts driven by the purpose-built multi-family rental segment. Heather Boyer, senior analyst for economics at CMHC, adds this points to builders and developers adjusting to the current over-supply conditions in the apartment condominium side of the market.”

    – However, they’re pretty much screwed…

    “We need the condo sales in order to have the developer build the non-market rental,’ Merrill told The Tri-City News.”

        1. He is still killing the only industry which once was profitable oil extraction. With China putting the screws on capital flight the whole economy is about to crash. Particularly since Nancy will not pass the new trade agreement.

  7. I can’t read it, because it is behind a paywall, but this article’s title points to something I’ve talked about extensively — how there can be a housing surplus and shortage at the same time.

    https://www.wsj.com/articles/ok-boomer-whos-going-to-buy-your-21-million-homes-11574485201?mod=trending_now_pos1

    “Baby boomers are getting ready to sell one quarter of America’s homes over the next two decades. The problem is many of these properties are in places where younger people no longer want to live.”

    And at prices that Millennials, who paid on average 25 percent less than the Boomers were at the same age, can’t afford. And these places require lots of square feet per person, by limiting development to one family homes, and one car per adult, because you have to drive somewhere to take a walk. Poorer Millennials can’t afford that either, especially given all the burdens Boomers are leaving for them.

    The Boomers, by the way, are also going to be selling stock. And are also expecting their federal government to keep the price high enough that younger buyers will never, ever get a decent return on their investments.

    1. “And are also expecting their federal government to keep the price high enough that younger buyers will never, ever get a decent return on their investments.”

      Like it says on our paper money, In Fed We Trust.

      1. Better Fed than dead say the speculators. Look at the Japanese, how much GDP did to they really lose, someday their ever increasing debt must end but the levels are multiple times are present debt. I am 60 and may not really see the collapse if the Fed wants to keep the game going.

      1. I have a Cruze for paved roads and Hyundai Santa Fe when I am spending some serious time on dirt roads especially during rain or snow events. However the cost of the new Cruze combined with my used 2015 Hyundai bought in 2018 was less than a model 3 by at least ten thousand but with most model 3s probably more like $20,000. The Cruze gets around 45 miles to the gallon and has a range over 600 miles a take and I can be refueled in a matter of minutes, obsolete? Yea like a .50 caliber machine gun. Meanwhile where are those Star trek phasers? I am still waiting.

    3. It’s not just the aging of the population that’ll affect certain locations, but climate change. The West will become so much hotter and drier, large parts will become basically inhabitable as the scarcity of water and high electric demand for cooling makes areas too expensive to work and live in. As the businesses relocate, so will most of the residents.

      The jockeying over water rights now is nothing compared to what it will be a decade from now. As it is, we already had one company recently announce plans to drill wells in Minnesota and begin shipping tanker cars of water out West. Public reaction to that news pretty much guarantees that they won’t get permission to do that.

      The central and northern parts of the US will become much more attractive, especially the Great Lakes region, simply because that’s where the water will be, and where the temperatures won’t be quite as extreme. It’s an easy bet that the Rust Belt will see a revitalization.

      On a sideways note, something I find annoying is the claim that Millennials want tiny homes, yet are uninterested in the millions of tiny post-WWII-era homes in inner ring suburbs. These homes, most of which are 2 or 3 bedrooms, single bathroom, are very affordable. If they’re really into going smaller and being more fiscally prudent with their housing dollars, that’s a very reasonable option. But the reality is, Millennials, like the generations before them, want to upgrade, not downgrade, from what they grew up in. IOW, bigger and better, not smaller and lesser. Instead, these home are purchased by immigrants and refugees, many of whom learn to do their own remodeling and repairs out of necessity, same as we/our parents did.

      1. And those are the parts that don’t light up into a towering inferno.

        I agree about the Millenials and their tiny house obsession. It’s clear they are in it to virtue signal, not to actually live. Those inner-ring suburbs is where the immigrants live, each house accommodating 7-10 people and 4-6 cars. And they wonder why the traffic is so bad.

      2. Or we could go into an ice age. We stopped significantly warming 20 years ago, co2 levels still soaring but temperatures pretty flat. Kind of makes you question the connection if you are using your brain cells.

      3. Reminds me of the tiny house movement and the lie that said the reason people were building and buying them was because they wanted something small. The reality was that people were/are doing that because they can’t afford a real house due to the housing bubble. And of course, tiny houses went all LUGGSURY and expensive on top of it all (not to mention illegal). Disgusting.

      4. “…and where the temperatures won’t be quite as extreme.”

        I’m in eastern Washington’s Columbia Basin, and the weather here really is too hot or too cold. Currently, freezing fog! There was ice on the windshield an hour ago when I went to the grocery store. We have roughly 6-weeks of “California weather” every Autumn, and that’s pushing it.

      5. On a sideways note, something I find annoying is the claim that Millennials want tiny homes, yet are uninterested in the millions of tiny post-WWII-era homes in inner ring suburbs.

        Valid point. Anybody who wants a tiny house should be happy with a small old house. IF they were in the same location with the same land costs and tax burden and general security. Big “if”.

    1. I really believe that digital coins have been promoted as another means of suppressing gold. The great fear of the federal reserve is that people will prefer gold over federal reserve notes. Then the fraud ends.

  9. Stock market is dancing around 28K on optimism about the US-China trade deal, AGAIN. I’m not sure why the market would go up for any China deal. Wouldn’t any deal be anti-China and therefore *worse* for US companies? If the deal favored China, Trump wouldn’t approve it.

    1. Further, why would the stock market even react to trade news anymore? It’s been nothing but a load of BS every time. In my opinion, no trade deal is a win for the US. We should just keep increasing tariffs. The real problem is that the US corporations are just spreading across Asia rather than coming home.

      1. Trade war news is just an absolute joke by now. How many times have we been told a deal is close or imminent?

  10. ‘The ripple effects of the malfunctioning discount window show how a thicket of postcrisis banking regulation has combined with a decade of Fed intervention to reshape the financial system’s plumbing in ways even regulators and central bankers struggle to understand.’

    ‘JPMorgan Chase & Co., for example, keeps about $120 billion in reserves at the Fed and won’t let it dip below $60 billion on any given day, Chief Executive James Dimon said at a conference last month. Doing so gives the bank a big buffer over its regulatory requirements—before the crisis, the bank’s Fed balance would routinely slip into negative territory—but it also deprives the market of $60 billion in daily liquidity.’

    “Remember, these were very healthy markets that had that repo issue,” Mr. Dimon said. “In a tough market, that will be harder and more disruptive.”

    ‘Truly distressed banks can’t access the window; borrowers have to be solvent and post collateral for the loans. But banks have long feared that a visit to the discount window could raise doubts about their liquidity and stability, which could spur a run on even a healthy institution.’

    ‘While banks largely have been flush with cash in recent years and haven’t especially needed the discount window, the stigma attached to it has only worsened. Bank executives are also worried that borrowing money from the Fed, even on a short-term basis, could look to the public like one of the widely criticized bailouts of the crisis.’

    ‘In an August survey, the Fed asked senior bank officials about the likelihood for their respective institutions using the discount window. “Very unlikely” was the unanimous answer.’

    ‘The Fed continues to pump money into the repo market on an ad hoc basis. It also has discussed making the injections more permanent to give banks a palatable alternative to the discount window, hoping to spur them to free up some reserves. Some bankers aren’t convinced it would work. Borrowing from the Fed, even without an interest-rate penalty, conjures too many memories of the crisis.’

    “The discount window is option E,” said the treasurer of a big U.S. bank. “This would be maybe option D.”

    https://www.wsj.com/articles/how-the-discount-window-became-a-pain-in-the-repo-market-11574337601

    1. ‘The Fed continues to pump money into the repo market on an ad hoc basis. It also has discussed making the injections more permanent to give banks a palatable alternative to the discount window, hoping to spur them to free up some reserves…’

      The last thing we need at this time is more liquidity in the marketplace. Debt is at an all-time high. Alas, a banker is like a drug pusher who can never have too many addicted customers.

  11. The deal would be better for many multi national countries than the scheduled December tariffs. Of course many smaller companies in the US may benefit from restrictions on Chinese goods. Finally farmers will be the main beneficiaries of the deal. Companies selling Farmers goods will do well.

  12. The duration of this housing bubble price spike dwarfs the last. When I consider the markets I pay attention to, the notable price increases started in 2002, but by 2007 it was all over with and completely falling apart with massive price drops. The timeline was less than 5 years. This time around, prices took off like a rocket in 2012 and have increased ever since, and it’s going on 8 years. Stunning.

      1. Yes. Globalism and inflated housing prices go hand and hand, when China received WTO status, companies flocked there to manufacture goods for ten cents an hour but sell close to American prices here. They needed a way for Americans to keep buying as their good paying jobs left. It has been bubbles in the stock market and real estate ever since sometimes the heavy lifting done by one or another but always at least one bubble being created.

      2. Whether it’s classified as the same bubble, a different one or otherwise is immaterial. I’m simply talking from a price perspective and the duration of said price spikes.

        1. There’s only one consideration that would make it relevant IMO. If it’s the same bubble the lows should get taken out, like US stocks in 1931 and afterward.

          1. That would be awesome from a housing perspective. Affordable shelter is important for a healthy economy.

          2. What stock market pundits conveniently overlook is that the central bankers are entering the end of this business cycle with perhaps the least ammunition on record. Has there ever been a business cycle peak reached with such a tremendous overhang of fiscal debt, or lower sovereign debt yields that never came back after the Great Recession?

      3. I recall, during the 80s -era real estate bubble, when homes in my neighborhood broke the $100,000 ceiling for the first time. We neighbors all solemnly congratulated each other for actually living in mansions. (Neighborhood home values in the late 70s ranged from the upper $20Ks to the middle $30Ks, hence our reaction). Prices dropped 30% after that bubble burst.

        We did it again during the 2000s bubble when home values broke the $200K ceiling for the first time. We thought prices went back to sanity after 2008, when they dropped 40%-50% in price…but only for a little while. A home two doors down from me just sold for $258K, and it doesn’t even have central a/c. The home three doors up from me sold for $230K in August, and it’s essentially unchanged since my dad and uncle built it in 1952, with the exception of new shingles on the roof.

    2. I just sat in on the monthly AEI housing report, which is detail on the GSE’s lending. It’s tightening. But the big change is Mel Watt is long gone and the current guy is set to rein them in. Watt literally forced the spigot wide open after DeMarco left. That and what the central banks did ran prices up in the exact time frame we are all aware of.

      Here’s what remains after Mel’s spree: loan to values, debt to income, credit scores, loans to investors/second shacks have all been pushed into danger zones. And FHFA’s chief just testified to congress that Fannie/Freddie are operating at a 500 to 1 leverage ratio, versus 10 to 1 that banks are held to. He also said if the market goes down they will fail.

      1. How much of that 500 to 1 ratio is due to the fact that profits are going to the treasury to make deficits look smaller instead of being retained by them? It has been going on since Obama and it should stop.

      2. I’d guess the vulture funds with an inside track are piling up cash right now to swoop in and buy up swaths of this stuff for pennies on the dollar. These days it’s hard not to be a conspiracy theorist. Maybe they bankrupt these agencies on purpose so they can funnel the cheap assets to their partners and shift all the risk to taxpayers. Gotta admit it’s a foolproof strategy.

          1. The rich did not have AI killer drones in the past. Going to need more than pitchforks and torches

          2. “Going to need more than pitchforks and torches”

            Assault rifles?

            I sometimes wonder about the “wild card” of a widely and well-armed population, in the context of everything we talk about here.

            I guess the TPTB don’t think these weapons will ever be a danger to them?

            Or… ?

          3. In my opinion, if/when things get really bad, instead of pitchforks and torches you’d likely start to see murders of central figures who the public blamed, like politicians and bankers. If you think about it, that’s really the only way you’d start to get their attention. An angry crowd doesn’t bother them. SEE: Occupy Wall St.

          4. when things get really bad

            My goodness. Things are going to get a lot better when the Ponzi Finance pyramid collapses, and it’s already crumbling at the edges. Get out of debt and live modestly so that you will have something to share with others. The trouble we have isn’t only robber barons who want to mow us down with drones. Their fortunes will be swept away by defaults. The real sorry ones are your neighbors who piled on to buy houses they couldn’t afford, with credit. They will have a few bad days but it’s not the end of the world.

          5. “Get out of debt and live modestly so that you will have something to share with others.”

            I’m already there. I don’t even own a credit card.

          6. Debt is slavery.

            I rent, but I could write a check tomorrow to pay off the rest of my lease, and then move away.

            Loanowners are in their trap for 30 years, so sad. They signed a bunch of papers they didn’t understand and now they’re stuck there, FOREVER.

          7. Assault rifles?
            [snip]
            I guess the TPTB don’t think these weapons will ever be a danger to them?

            Really? Seems to me that they are pretty concerned with trying to get rid of them.

        2. “My goodness. Things are going to get a lot better when the Ponzi Finance pyramid collapses, and it’s already crumbling at the edges.”

          The drama really is over the top isn’t it?

      3. “But the big change is Mel Watt is long gone and the current guy is set to rein them in. Watt literally forced the spigot wide open after DeMarco left.”

        Good riddance, Mel.

  14. The MSM claimed a “low level” FBI lawyer was referred for criminal investigation for falsifying information to get a warrant. They lied. He was central to the investigation into Trump’s supposed ties to Russia. If you were under suspicion – fairly or not – would you want such a biased criminal hack, or a Federal law enforcement agency riddled with similar corrupt and biased partisan hacks, investigating you?

    https://www.theepochtimes.com/fbi-lawyer-referred-for-criminal-prosecution-by-horowitz-was-primary-fbi-attorney-on-trump-russia-case_3155584.html

  15. “In the most recently released Foreign Investment Review Board annual report, figures show foreign buyer real estate approvals totalled $12.5 billion in the 2018 financial year – a drop of $17.5 billion from the 12 months prior.”

    So if foreign buyer real estate approvals totalled $30.0 billion in the the 12 months prior, then they dropped by (1-12.5/30.0)*100% = 58.3% year-on-year.

    There seem to be lots of drops exceeding 50% in play!

    1. There seem to be lots of drops exceeding 50% in play!

      That is simply un-possible, my academic friend. I have this on good authority – that REIC slug, who oozed onto the HBB until Ben put salt on him and made him go away. Said REIC slug informed us a drop of 50% was inconceivable. Although I don’t think that word means what he thinks it means.

  18. A hermit who lived in an abandoned Greek monastery for 40 years has finally broken his oath of silence, informing a team of priests inspecting the site that “Realtors are liars.”

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