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Pointing To A Glut Of Unsold Properties On The Market

A report from the Wall Street Journal on New York. “A penthouse at 220 Central Park South has sold for $100 million, making it the third New York City residence ever to close for $100 million or more, according to people familiar with the deal. Luxury agents said this particular sale has little relationship with today’s market, which is more sluggish for luxury homes. The contract for the home was likely signed a couple of years ago and is closing now that the tower is nearing completion, according to people familiar with the building.”

“‘I don’t think this is a barometer for what’s happening right now,’ said Frances Katzen of Douglas Elliman, who wasn’t involved in the deal. ‘It’s a deal predicated on a different market.'”

“Ms. Katzen pointed to the new mansion tax in New York, which increased taxes for purchasers of ultrahigh-end real estate, as well as an oversupply of luxury condos as reasons why the market has slowed. ‘The pricing you’re seeing now is much more measured,’ she said.”

The Independent on New York. “Welcome to East End real estate, 2019. Municipalities have lots of things they want to buy, and usually have a nice stash of cash to purchase with. That’s because the Community Preservation Fund is like an allowance, only better: every time a property sells, the fund is injected with cash thanks to a two-percent tax.”

“But the ‘allowance’ is shrinking. The Peconic Bay Preservation Fund hit a new low, it was announced last week. Revenues are down 22 percent when compared to the first 10 months of 2018. Worse still, monthly CPF revenues for 2019 have been lower than the same month for 2018 every month thus far. It’s a trend, folks. Real estate pundits are sending mixed signals. Some think the market has finally bottomed, and others, pointing to a glut of unsold properties on the market, think there is still room to sink.”

From Mansion Global on Florida. “Recently retired basketball star Dwyane Wade lightened the ask of his waterfront Miami mansion, bringing its price tag down to $29 million. That’s a $3.5 million discount from the $32.5 million the sprawling estate had been asking since September, listing records show.”

The Herald Mail in Maryland. “There has been growing concern about vacant and abandoned houses in Hagerstown and owners of the homes being delinquent on property taxes. The properties repeatedly show up on the tax sale list, but often the houses are not sold because of their mounting tax bills.”

“The Hagerstown City Council and the Washington County Board of Commissioners have been considering a plan that would involve the county forgiving property taxes due on the properties to make them more attractive to new owners. Jonathan Kerns, the city’s community development manager said the city will seek housing-based nonprofit groups that might be interested in taking over the properties. A property could perhaps be sold to a nonprofit for a dollar, he said.”

From Celebrity Net Worth. “American Idol alum and The Voice coach Kelly Clarkson is trying to sell a beautiful 20,000-square-foot lakeside mansion in the hills of Hendersonville, TN, but she’s evidently been unable to find a buyer. As a result, TMZ reports that the asking price of the house has been slashed by more than a million dollars, bringing it down to $7.5 million. That’s $1.25 million less than the house’s original asking price when it was listed in March 2017.”

From USA Today on California. “While Gavin Newsom campaigned last fall on the enduring attraction of the mythic and potent California dream — egalitarianism, upward mobility, natural beauty — that postcard image has taken a hit. Homelessness is soaring; 25% of the nation’s 600,000 homeless live in California. In San Francisco alone, apps have sprouted up to track human waste on sidewalks, people with mental illnesses have attacked other residents, and some companies have canceled downtown convention plans.”

“But what would he say to someone who has given up on California’s golden dream and isn’t willing to wait for Newsom to polish it? ‘I would tell those folks I have a sensitivity to that. They’re not wrong: The median price of home is comically high in California,’ he says, veering off into details on his team’s ‘deep dives’ on housing solutions with city officials in Vancouver and Singapore. ‘I’m empathetic and sympathetic, and it’s disturbing to me,’ he says. ‘But that said, I feel for them. You’re missing the opportunities this state can provide. We had a historic decade in venture capital investment, a historic decade of job creation. There is no Trump economy without California’s success. This is Florence in its golden age.'”

From The Motley Fool. “Good morning, and welcome to the Toll Brothers Fourth Quarter and Fiscal Year and Conference Call. Martin P. Connor — Chief Financial Officer: Looking forward, we are projecting first quarter deliveries of between 1,650 units and 1,850 units, with an average price of between $800,000 and $820,000. The drop in average price from $863,000 a year ago is strategic and reflects changes in the mix as we execute on our geographic and product diversification strategy. It also reflects our increased focus on the affordable luxury segment and a reduction in the number and mix of homes being delivered in California to more lower-priced and attached homes.”

“Douglas C. Yearley — Chairman and Chief Executive Officer: Sure. So just to give a bit of an update, Southern Cal was pretty flat to last year. Northern Cal was down year-over-year and that was primarily driven by a number of cancellations that we had that came through in Q4 from a large community outside of San Francisco called Metro Crossing. Overall, we’re encouraged by what we see in California. It feels a lot better. Our mix is a bit different as we mentioned where the prices down a bit.”

“Christina Chiu — Barclays — Analyst: And then on the California margin differential versus the remainder of your home building business, how does the differential this quarter given the mix down in California that you mentioned earlier compared to what you’ve previously seen? Martin P. Connor — Chief Financial Officer: I think the California marketplace a year ago was hit a bit harder than many of the others and so the margin there is down a couple of 100 points compared to where it has been in the past.”

“Kenneth Zener — KeyBanc — Analyst: So I hear you about the asset turns and stuff. I just want to start with California where you — Doug seem to be saying 25 units came out of the Metro Crossing, and that would put California down about 7% year-over-year adjusted for that. Is that correct? I assume Southern California flat, Northern California was still weaker. Martin P. Connor — Chief Financial Officer: Maybe — the improvement maybe is not as dramatic, but yes, somewhere in that ballpark, yes.”

This Post Has 86 Comments
  1. ‘I would tell those folks I have a sensitivity to that. They’re not wrong: The median price of home is comically high in California,’ he says, veering off into details on his team’s ‘deep dives’ on housing solutions with city officials in Vancouver and Singapore. ‘I’m empathetic and sympathetic, and it’s disturbing to me,’ he says. ‘But that said, I feel for them. You’re missing the opportunities this state can provide. We had a historic decade in venture capital investment, a historic decade of job creation. There is no Trump economy without California’s success. This is Florence in its golden age.’

    Too many drugs out there.

  2. ‘So I hear you about the asset turns and stuff. I just want to start with California where you — Doug seem to be saying 25 units came out of the Metro Crossing, and that would put California down about 7% year-over-year adjusted for that. Is that correct? I assume Southern California flat, Northern California was still weaker. Martin P. Connor — Chief Financial Officer: Maybe — the improvement maybe is not as dramatic’

    In the past week I’ve posted links to reports of bay aryan shacks not getting 2014 prices.

    1. It also reflects our increased focus on the affordable luxury segment and a reduction in the number and mix of homes being delivered in California to more lower-priced and attached homes.

      Its a mix problem! Selling to the 1% less and more to the 2%! Whats the big horror here???!!!???

      1. Nailed it! Major mix issue here. Stop marketing to the wrong FBs and always be closing. Its not a lie if you believe its true! To the moon alice, suzanne researched this, invest in guaranteed, END OF STORY, money making stawks and sell them to buy overpriced RE (evens out). Dont pay taxes, use realtor tricks to funnel money into ponzy markets. Realtors deserve 6% for baking cookies, tell the stupid FBs its normally 50% commision and give them a “deal” of their lifetime of 6% but then take all 6% and charge another 6% for other side agent and make them use you as a dual agent to get 12%!!!! Many great tools to lure in the less wealthy FBs and take every last penny they have and then get them to go beyond their means and slap the loan shackles around there ankles! couple years later resale their foreclosed dream home, rinse, repeat!

    1. If interest rates (aka the price of money) can go negative, then why not home prices? Is housing some kind of special asset class that is not subject to the economic law of gravity?

      1. “….If interest rates (aka the price of money) can go negative, then why not home prices? …”

        In abstract, holding costs (Property taxes, local taxes, insurance, maintenance costs, HOA dues, etc) are negative “interest”.

        A very simplified example: if annual holding costs for a particular property is 2% of market (not unrealistic), then after 50 years, a property is “worth” zero. (Note: I am ignoring compounding, utility from use of property, etc).

        I believe that in certain areas (ie. Detroit) some properties are so worthless that they are quitclaimed to the city. (Perhaps other HBB readers have better information / examples)

        1. ‘In abstract, holding costs (Property taxes, local taxes, insurance, maintenance costs, HOA dues, etc) are negative “interest”.’

          Exactly.

          Except unlike a sovereign bond, where more negative interest makes the value of the asset increase, the effect in the case of housing is to lower market value, to possibly below zero.

          Without falling below the zero (asset price) bound, many underwater homes may stay unsold until they crumble into dust.

      2. “Is housing some kind of special asset class that is not subject to the economic law of gravity?”

        – There are too many special interests now that benefit from higher prices.
        – Price discovery is so 20th century.
        – Free markets are also a thing of the past.
        – The Fed sets the value of currency, interest rates, and level of moral hazard.
        – All “markets” today are simply manipulated indices via centrally-planned, command economics through government/central bank/corporate machinations.
        – 1) The system will need to break/reset for reassertion of healthy market activity. The current system is FUBAR.
        – 2) Centrally-planned command economies always fail and asset bubbles always pop. Timing is somewhat nebulous to me, but, based on history, the results are always the same.
        – 3) Current “growth” is debt-based. Not organic. Debt levels now approaching “ludicrous speed”. Totally unsustainable.

        1. The FED has already shown they prefer to go Weimar Republic rather than allow an asset price crash.

        2. You forgot “you have to live somewhere.” That’s the main reason housing keeps a value compared to, say, tulip bulbs. Add in a short commute to a high-pay job, and yeah, there goes the law of gravity.

          Even if you removed the value of location location location — for example — if everyone could work at home from anywhere — there’s probably still some housing locations that would be valuable because it’s near the “vibrant” city centers. (or near a Wal-Mart, or near church or near grandchildren.)

          1. You forgot “you have to live somewhere.”

            Sure, but the choices people made in this bubble weren’t so much that. When this current bubble was younger, in the early ’80s, I housed my family of six in a 1200 ft2 house. I knew more than a few DINKs who went for 3000 ft2 houses, grand and practically unfurnished. Real Estate was going to move them up in the world and they went for it to their limit. Choices, people have choices.

          2. You forgot “you have to live somewhere.” That’s the main reason housing keeps a value compared to, say, tulip bulbs.

            – The cost of “you have to live somewhere” didn’t used to cost an arm and a leg, except maybe the last time in housing bubble 1.0.
            – Yes, the situation today is completely normal. Nothing to see here. Move along. /s

          3. “you have to live somewhere.”

            The phrase that went along with this here a decade ago was something about living under a bridge. Excuse for taking out a multi decade loan to buy an overpriced house. The irony was that I actually was living under a bridge on a yacht. Saved a ton of money and had lots of fun too.

            If you have to borrow money for 20 or 30 years to buy something, you can’t afford it.

          4. “you have to live somewhere.”

            Evidently this includes living under a bridge. And also residing in less expensive locales than DC or San Diego.

            It’s the existence of so many other housing options (including homelessness) that obviates the ‘you have to live somewhere’ preowned-home peddler sales pitch.

          5. That doesn’t me you have to buy it at a grossly inflated price. Rent it for half the monthly cost. Buy it later after prices crater for 70% less.

            Charlotte, NC Housing Prices Crater 16% YOY As Excess, Empty Housing Inventory Floods US Housing Market

            https://www.zillow.com/charlotte-nc-28217/home-values/

            https://snag.gy/m5EzRB.jpg

            As one noted economist advises, “Mortgage debt is the most toxic and damaging debt of all. Avoid it at all costs.”

          6. Prof, I understand. But then, why are you still living in/near San Diego? As you say, there are less expensive locales. Taking it further, why aren’t YOU living homeless on the streets? You listed it as one of many options that you could exercise.

          7. Apparently our household income is sufficient to pay the monthly, especially since we avoid HODLing costs by renting!

      3. Negative value

        In a TBTF BAnk around 2011-2013
        I had to get forecasting information on REO properties and would meet with the REO Managers monthly.
        More than once during discussions the manager stated that he wouldn’t take a property if it was given to him.
        They actually had a negative value to someone who disposed of REO properties for a living.
        The properties were not broken down shacks in bad neighborhoods. They were usually plots of land in upscale developments that had restrictions on them, like High HOA fees, minimum purchases at the clubhouse and/ or time and minimum home size requirements or condos with high fees.

        1. “…discussions the manager stated that he wouldn’t take a property if it was given to him….”

          “…upscale developments that had restrictions on them…”

          Were all looking at the 21st century financial equivalent of the LaBrea tar pits. (Easy to get in, impossible to get out alive)

          FB’s are the new Pleistocene Mammoth.
          (commonly found at the La Brea pits).

    2. Don’t find fault$, find $olution$!

      In 2019, 33% of U$ farmers net income will bee provided bye U$taxpayer$:

      ‘A property could perhaps be sold to a nonprofit for a dollar’

      $ubsistence Home$teads Divi$ion

      The Subsistence Homesteads Division of the US Department of the Interior (DSH or SHD) was a New Deal agency that was intended to give safe residences to urban poor in small plots of land that would allow them to sustain themselves. Unlike subsistence farming, subsistence homesteading is based on a family member or members having part-time, paid employment.

      A subsistence homestead denotes a house and out buildings located upon a plot of land on which can be grown a large portion of foodstuffs required by the homestead family. It signifies production for home consumption and not for commercial sale. In that it provides for subsistence alone, it carries with it the corollary that cash income must be drawn from some outside source. The central motive of the subsistence homestead program, therefore, is to demonstrate the economic value of a livelihood which combines part-time wage work and part-time gardening or farming.

      DSH projects “would be initiated at the state level and administered through a nonprofit corporation. Successful applicants would offer a combination of part-time employment opportunities, fertile soil for part-time farming, and locations connected to the services of established cities.”

      Philosophy:

      The Subsistence Homesteading Program was based on an agrarian, “back-to-the-land” philosophy which meant a partial return to the simpler, farming life of the past. Eleanor and Franklin Roosevelt both endorsed the idea that for poor people, rural life could be healthier than city life.

      Cooperation, community socialization, and community work were also emphasized. However, going “back-to-the-land” did not always sit well with people stuck in outlying “stranded communities” without jobs. According to Liz Straw of the Tennessee Historical Commission, the most controversial were those rural communities of long-unemployed miners or timber workers whom opponents of subsistence homesteading thought unlikely to thrive without better job opportunities.

      History

      Some of the subsistence homesteading communities included African Americans DSH Assistant Supervisor John P. Murchison wrote to W. E. B. Du Bois in April 1934 for advice on racial integration and how to incorporate African Americans into the program. Eleanor Roosevelt took a personal interest in the project, and became involved in setting up the first community, Arthurdale, WV after a visit to the stranded miners of Scotts Run.

      There was strong opposition to the idea of subsistence homesteads, as undercutting agricultural prices, unions, and the labor supply for manufacturing. Nonetheless, as of 2011, some communities, such as Arthurdale, West Virginia, in which Eleanor Roosevelt was personally involved, maintain an active memory of the program.[10]

      List of D$H $ubsistence home$teading communitie$:

    3. “But half off is unrealistic.”

      Sounds like a tax cheat. Value the property at bubble prices, “give” it to a non-profit for a buck, and obtain a charitable tax deduction possibly worth as much or more than the loss from selling the property on the open market. Plus it avoids price discovery, which keeps the comps on other properties high. A couple months later, repeat the same trick.

  3. ‘The Peconic Bay Preservation Fund hit a new low, it was announced last week. Revenues are down 22 percent when compared to the first 10 months of 2018. Worse still, monthly CPF revenues for 2019 have been lower than the same month for 2018 every month thus far. It’s a trend, folks’

    Worser and worser.

    ‘A white elephant is an investment whose cost of upkeep is not in line with how useful or valuable the item is. From an investment perspective, it refers to an investment, property or business that is so expensive to operate and maintain that it is extremely difficult to actually make a profit.’

  4. You are right Ben in covering the growing herd of white elephants. A 6850 sf house in the woods sits unsold at a fraction of what it cost to build. You can add on to a house but cutting it in half and then some is not an option I know of. The County wants the taxes to remain high, more and more insurance companies are exiting the biz of gambling on places surrounded by timber. The aging owner has moved on to a sunny Utah senior community. Maybe the local environs will take the site back and it will be re-discovered like a Mayan ruin down the line.

    1. And Toll is building even more. They talk about cutting the “mix”, around numbers like $1,000 to $2,000 per square foot in California and the north east. What kind of annual tax bill are these people buying?

    2. cutting it in half and then some is not an option I know of

      On HBB October 8, 2019:

      https://californiaglobe.com/section-2/the-housing-crisis-part-iii-fullerton/

      Mary Jo noted a small but growing trend – making “McRanches”.

      “These McMansion they couldn’t sell, they’ll saw off the top of the house, the entire second floor. With permits of course. Then they’ll re-roof it and suddenly it’s a very large single floor house. It goes for less too.”

      1. saw off the top of the house

        They do this in Louisiana in order to move houses to a new location story by story, so they can drag it up the road without taking down power lines. Helps that the old houses are on pylons, no foundation.

    3. “but cutting it in half and then some is not an option I know of.”

      Sure it is. Just rent it out to two families and voila, you’ve cut it in half. Or, if you live in a sanctuary state, cut it in quarters. That’s assuming the house is in a location with semi-skilled jobs. Behemoth cabins in the woods, not so much.

  5. ‘The contract for the home was likely signed a couple of years ago and is closing now that the tower is nearing completion, according to people familiar with the building…I don’t think this is a barometer for what’s happening right now…It’s a deal predicated on a different market’

    We’ve seen statements like this in New York for some time. Referring to that mythical era when un-built airboxes were “safe deposit boxes in the sky” worth all sorts of crazy numbers. They never use the word mania though.

  6. when your home price reaches the 2005 peak
    you have to adjust for 21% inflation and int rates of 5.75% then vs. 3.8% today. Another 20% -easily

  7. In the Breaking News on this site is the only place I can find video of the long, long lines.

    ILLEGAL ALIENS PACK NEW YORK DMVS AFTER STATE ALLOWS DRIVER’S LICENSES FOR ALL

    ‘This is all a power grab for the ballot box in New York, trying to give illegals the right to vote,’ says NY clerk

    Jamie White | Infowars.com – DECEMBER 16, 2019

    https://www.infowars.com/

      1. The number of representative and therefore the number of electors per state are set based on the census, correct? And the census counts EVERYONE, correct? That sounds like the backdoor around the electoral college favoring the small states to me. Just make the big states really illegal-friendly. You don’t need them to vote…you just need them to be counted. Thus increasing the power of the People Who Matter who DO vote by get extra representation from those who can’t legally.

        Am I missing something?

        1. Yes, you’re missing that their children will be able to vote. I saw my first illegal immigrant (I believe) in 1998-1999. Their kids would be 20 and voters.

          As I said the other day, it’s going to depend on whether these anchor kids believe in merit and the rule of law, or freebies to provide for their family. My guess is the latter.

    1. It’s hard to take that seriously after looking at historical voting demographics. Basically, the younger, the poorer, and the non-whites are traditionally politically apathetic when it comes to actually showing up to vote. And when some of them do, it’s a mistake to think they all vote Democratic. Hispanic and Islamic voters trend socially conservative, so the GOP is a better fit for them. And yes, a not-insignificant number of them voted for Trump.

      The GOP understands this. They’d done studies back during the Obama administration that indicated a real recruitment opportunity in these segments of the immigrant population, who approve of traditional values. In fact, the GOP’s future rides on expanding their base to include these immigrant groups. But the anti-Muslim fringe made it difficult for them to persuade their base that they’d be stronger with outreach, so they’ve tabled their plans for that. . . for the time being, at least. But Democrats who assume that all minorities and all immigrants are just naturally gonna vote Dem are in for a shock when they actually bother to talk to those groups.

      Tl;dr: it’s silly to think mobs of illegals are going to risk getting caught and prosecuted just to cast a ballot, especially when the majority of legal citizens eligible to vote don’t bother.

      1. “especially when the majority of legal citizens eligible to vote don’t bother.”

        Being someone who has had two vehicles hit and run by undocumented and under the influence drivers (the one who was caught had no drivers licence or insurance) with bodily harm to one of my family members I would be much more concerned about the numbers of people in those lines who are going out to celebrate their new licence by drinking and driving this weekend.

        1. I have been fortunate in that the Mexodus, for some odd reason, has mostly passed over my little burg. Nearby El Longmonto hasn’t been so lucky.

      2. With vote harvesting voters do not have to make any effort. Bloomberg, the Koch brothers, and George Soros all paid for vote harvesting swinging many districts. It is why the laws were changed. Now the billionaires can increase or decrease the votes of the FSA at will.

  8. “Tl;dr: it’s silly to think mobs of illegals are going to risk getting caught and prosecuted just to cast a ballot, especially when the majority of legal citizens eligible to vote don’t bother.”

    In the 19th century city bosses would hand out beer and goodies to people for voting.

    In the 21st century if you’re in a Sanctuary City you cannot be deported. Thus, zero risk to vote illegally, and likely something of value in return — beer, food, etc.

    1. Oh, they most certainly can be deported. It’s not the cities who do, but the Feds. The only thing that “sanctuary city” means is that the local law enforcement will not proactively work with the feds on identifying and rounding up illegals. But the Feds will come a-knockin’ on doors looking for illegals when it’s on their agenda.

      And realistically, voter fraud in modern times is a tiny fraction of a percent, and most of those caught committing it turn out to be political partisans actively engaged in the political process. Motive; means; opportunity.

      1. It goes beyond not cooperating with ICE. Many sanctuary cities have been known to tip off illegals that a raid is imminent.

    1. “White House officials warned lawmakers that if they tried to expand the electric vehicle credit as part of a compromise spending bill, it could tank the measure, according to two people familiar with the matter. The issue is particularly heated in the West Wing and among conservatives who view the credit as mainly benefiting rich Californians and Tesla.”

      1. Stop subsidizing the damn cars! I would give a tax break to gas stations for putting a charger at the station. The cars aren’t worth a tax break. Alleviating range anxiety, and expanding the infrastructure, is.

        1. Before Te$la, there was U$ $25,000+ $ub$idie$ of $tatus $ymbol vehicle$ for the pooooor Richie$ known as “Hummer$”. $ad

          Bill Takes Aim at ‘Hummer$ Tax Loophole’
          June 18, 2007

          Some people buying very large $UVs have been getting more than just a ga$-guzzling, eye-turning luxury $ymbol: They’ve been getting a federal tax break.

          The so-called “Hummer tax loophole” was created in 1984, when Congress tried to crack down on how much money could be written off for luxury vehicles used for businesses. The law excluded vehicles with a weight of more than 6,000 pounds, in an effort to keep expensive, heavy-duty equipment affordable for businesses that depend on them.

          But many SUVs top out at well over the weight limit. That has allowed small-business owners and the self-employed to claim tax deductions of upwards of $25,000 for large luxury vehicles that may not have been a necessity for their businesses.

      2. “…who view the credit as mainly benefiting rich Californians and Tesla.”

        Is this a point of controversy, or obvious fact?

        1. https://cei.org/blog/congress-racing-extend-and-expand-electric-vehicle-wind-and-solar-tax-credits

          “This week 33 nonprofit groups led by the American Energy Alliance (and including CEI) sent a letter urging the Senate not to expand the EV credit. The letter notes that:
          A recent study found that 79 percent of electric vehicle tax credits were claimed by households with an adjusted gross income of more than $100,000 a year. Further, in 2018, 46 percent of credit eligibility flowed to one state, California, despite it making up just 12 percent of the national market for automobiles…. The fact of the matter is that wealthy coastal new car buyers and companies like Tesla are the primary beneficiaries, while the average American taxpayer is left on the hook.”

  9. One of the most fascinating things about loons is their haunting and variable voice. Loons are most vocal from mid-May to mid-June. They have four distinct calls which they use to communicate with their families and other loons; these are the tremolo, wail, yodel and hoot. Which is to say, they have four ways to warn their fellow loons that realtors are liars.

      1. Spectacular. But don’t underestimate Dre. I had no use for him or his peers until I saw the new release Do The Right Thing in the theater with a bunch of black infantrymen who had come from the streets not so long before. At the end when Fight The Power came on I finally “got” the art form, even though it’s not a sound I appreciate.

      2. “Dr” ………………of what, specifically?

        Makes me think of the overpriced earbuds and headphones he sells, which are probably designed and manufactured in China.

  10. Is this the end for Labour?

    BY PAUL EMBERY
    December 13, 2019

    So there we have it. It turns out that the British working-class was not, in the end, willing to throw its weight behind a London-centric, youth-obsessed, middle-class party that preached the gospels of liberal cosmopolitanism and class war. Who’d have thought it?

    Well, me for a start. And plenty of others who had been loyal to the party over many years and desperately wanted to see a Labour government, only to be dismissed as ‘reactionaries’ who held a ‘nostalgic’ view of the working-class.

    We sounded the alarm bells again earlier this year when, in the local and European elections, Labour haemorrhaged support in several working-class communities across the north and Midlands.

    But the woke liberals and Toytown revolutionaries who now dominate the party didn’t listen to us. They truly thought that ‘one more heave’ would bring victory. They believed that constantly hammering on about economic inequality would be enough to get Labour over the line. In doing so, they made a major miscalculation: they failed to grasp that working-class voters desire something more than just economic security; they want cultural security too.

    They want politicians to respect their way of life, and their sense of place and belonging; to elevate real-world concepts such as work, family and community over nebulous constructs like ‘diversity’, ‘equality’ and ‘inclusivity’. By immersing itself in the destructive creed of identity politics and championing policies such as open borders, Labour placed itself on a completely different wavelength to millions across provincial Britain without whose support it simply could not win power. In the end, Labour was losing a cultural war that it didn’t even realise it was fighting.

    https://unherd.com/2019/12/is-this-the-end-for-labour/

    1. They want politicians to respect their way of life, and their sense of place and belonging; to elevate real-world concepts such as work, family and community over nebulous constructs like ‘diversity’, ‘equality’ and ‘inclusivity’.

      Britain is an island with a history and heritage unique among the nations. The globalists may not get that, or care, but the heritage population being inundated with Third World benefits seekers certainly does.

      1. population being inundated

        It was the end of the world way back. The early in inhabitants of Ireland were overrun by the Scotti, who came from the middle east via Greece and centuries of military service to the Pharohs of Egypt, are gone. The Scotti became known as Irish. The Picts in Scotland became Scots because when they came from Europe they didn’t bring any women. They became Scots by marrying women from Ireland, a gift of peace.

    2. In the end, Labour was losing a cultural war that it didn’t even realise it was fighting.

      Yet they started said war.

      Now the question is what will the Tories do with their victory? Will they merely hold the line until the Left regroups and strikes back? Or will they actually push the Left back?

    1. The Most Momentous Rate Decision This Month Isn’t Fed or ECB
      By Catherine Bosley
      and Niclas Rolander
      December 14, 2019, 11:00 PM PST
      Updated on December 16, 2019, 12:34 AM PST
      – Riksbank set to end negative repo rate after five years
      – Benchmarks are still negative for ECB, SNB, BOJ and Denmark

      Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.

      The world’s oldest central bank stands to be the most significant this month as it pioneers a shift away from negative interest rates.

      Sweden was among the handful of economies that reduced key interest rates half a decade ago below zero. Now officials at the Riksbank — founded in 1668 — insist the policy has done its stimulus work, so their so-called repo rate can stop being negative.

      That puts the rich Nordic country in the spotlight of global monetary policy as counterparts watch nervously to see how easy it is for the experiment of subzero rates to be unwound. While the Federal Reserve has firmly resisted U.S. President Donald Trump’s calls to venture into negative territory, officials in the euro zone, as well as Switzerland, Denmark and Japan, all find themselves in the same boat as Sweden.

      “A Riksbank hike in December would be a signal that central banks admit that there’s a downside to too-low interest rates,” said Thomas Elofsson, a portfolio manager at Catella in Sweden. “It will be interesting to follow how the SNB and the ECB communicates and acts with this new mindset.”

      The Riksbank decision on Dec. 19 promises more monetary action than central banks in the U.S. and the euro zone delivered last week. All 18 economists surveyed by Bloomberg predict a quarter-point increase in Sweden’s main policy rate from the current minus 0.25%.

      The Fed on Dec. 11 signaled an extended pause, while the next day, Christine Lagarde, at her first press conference as European Central Bank president, emphasized an upcoming review of the institution’s strategy rather than any impending policy moves.

      Sweden’s shift is taking place against a global backdrop of worries about the harmful effects of subzero policy. Complaints by banks about profit margins have grown louder, while both the Riksbank and the ECB were among central banks warning last month about the financial stability risks.

      1. Speaking of $weden: ($5 $tocking $uffer item!)

        Technology
        Swedish Bamboo Toothbrush Shows Allure of Su$tainable Inve$ting

        By Love Liman and Hanna Hoikkala
        Bloomberg, December 14, 2019,

        The Humble Co., which is headquartered in Stockholm, started making environmentally-friendly oral hygiene products after its founder, then 22-year-old dentist student Noel Abdayem, saw a way of addressing two of his biggest concerns: how to help poor children look after their teeth and how to reduce plastic waste.

        Its bamboo toothbrush is now one of the world’s best selling.

        Growing Market
        Established in 2013, Humble now sells about 2.5 million toothbrushes per month in 20 countries, including in European and U.S. chains like Target and Walgreens. Revenue is set to almost double this year, to about 120 million kronor ($13 million).

        It has grabbed 7% of the toothbrush market in Norway and says it has pushed competitors in the environmentally-conscious Nordic region to launch greener alternatives.

        Sales still only represent a fraction of the $52 billion global oral care market, however, and big players like Colgate have now jumped onto the bamboo bandwagon.

        Abdayem is pleased with the development.

    2. Has there ever been this much string pushing in the history of banking?

      Quicktake
      Negative Interest Rates
      By Jana Randow
      and Yuko Takeo
      Updated on November 1, 2019, 6:57 AM PDT

      Imagine a bank that pays negative interest. In this upside-down world, savers are penalized and borrowers get paid to borrow money. Crazy as it sounds, the 2008 financial crisis created a lingering economic slump that drove the European Central Bank to experiment by cutting benchmark lending rates below zero in 2014. Then Japan followed. Some 500 million people in a quarter of the world’s economies ended up living with rates in the red. The idea is to jolt lending, spur inflation and reinvigorate economic growth by pushing through the floor after other options are exhausted. Half a decade later, what once seemed unorthodox has become entrenched and hard to shake. The new era of negative rates is now the subject of a debate about whether the policy has distorted financial markets, crippled banks and threatened pensions.

    3. It’s been a few years since I last commented here about the destructive effects of low interest rates on pensions. It’s good to see the MSM is catching up.

      Analysis
      Negative Interest Rates Are Destroying Our Pensions
      By Mark Gilbert | Bloomberg
      Dec. 17, 2019 at 4:43 a.m. PST

      It’s becoming increasingly apparent that the negative interest rates introduced in several countries in the wake of the global financial crisis are trashing bank profitability. Less obvious, though perhaps more crucial for society as a whole, are their debilitating impact on pension plans. And that’s why the days of sub-zero borrowing costs may be drawing to a close.

      Later this week, Sweden’s central bank is poised to abandon the negative interest rate policy it’s pursued for half a decade by increasing its key policy rate to zero even though inflation is expected to remain stubbornly below target for years to come.

      Riksbank Governor Stefan Ingves has said negative rates were always meant to be “a temporary measure,” and that the central bank would “most probably” raise borrowing costs when it meets on Thursday. There’s been some pretty stern criticism of the likely move, with former central banker Lars E.O. Svensson condemning the plan for being based on an “irrational fear” of negative rates.

      There’s nothing irrational, however, in fearing the economic consequences of keeping borrowing costs below zero for a sustained period of time. The emergency measures introduced to resuscitate growth, including central banks expanding their balance sheets by embarking on quantitative easing, were supposed to be transient. Instead, they’ve become fixtures of the economic firmament.

      It’s been disastrous for pension plans. A 1% decline in interest rates increases calculated pension liabilities by about 20%. It reduces the funding ratio, which measures a pension provider’s ability to meet its future commitments, by about 10%. Those estimates come from a survey of 153 European pension providers with 1.9 trillion euros ($2.1 trillion) of assets sponsored by Amundi SA, Europe’s biggest asset manager, and published by Create-Research earlier this month.

        1. A pension plan is no more nor less than a bundle of life annuities with a few bells and whistles thrown in (disability benefits, death benefits, etc.).

    4. I have a little secret for you all: Those low-to-negative rates which the world’s central banks collectively introduced half a decade ago don’t just make pension liabilities blow up. They have a similar effect on bonds, stocks, and housing.

      The effects of the great rate unwind on a wide range of financial valuations could get very interesting. And it may not prove to be a pension panacea, as the asset side of the pension balance sheet will predictably shrink in tandem with liabilities when rates normalize.

      History has not dealt kindly with the aftermath of protracted periods of low risk premiums.

      – Alan Greenspan

      1. ” …as the a$$et side of the pen$ion balance $heet will predictably $hrink in tandem with liabilitie$ when rate$ normalize.”I

        T$k, t$k.

        More!, More!, More! … Fa$ter!, Fa$ter, Fa$ter!

    1. Ugghhh. I saw that. People get bored and like to be different but I take no joy in that. A few people do that with guitars too, reversing the direction of the body relative to everything else. I’m amused for less than a second.

  11. Newsom makes me sick. The comparison to Florence is spot on. Because what did the Medici control to their and their cronies’ benefit: the money supply and, as a result, international trade, such as it was. I loathe these vile creatures for their incompetence and pathology, but when you make a comparison to Florence, you probably know your history, and if such an analogy was fully intentional in all its facets, it’s long past time to water the tree of liberty.

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