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With So Much Construction Saturating The Market, We Were Bound To See Prices Start To Sink At Record Paces

It’s Friday desk clearing time for this blogger. “San Diego County’s median home price was $575,000 in December, a slight decrease from the previous month but still near record highs. Rich Toscano, who predicted the housing crash in November 2005 on his housing blog Professor Piggington’s Econo-Almanac, said low interest rates have made home prices feasible when compared to wages and rent. That is unlike before the Great Recession, he said, when homes were overvalued when looking at rent and income. ‘With rates at this level, assuming they stay at this level, these (home) prices are reasonable,’ Toscano said, ‘because the monthly financing cost is reasonable compared to rent that people pay, and what they are earning. You really can’t make a case that it is a bubble.'”

“Here’s how the different home types fared in December: Resale single-family homes: Median of $627,500, down from a peak of $649,000 in June. Resale condos: Median of $432,500, down from a peak of $440,000 in August. Newly built: Median of $626,500, down from a peak of $812,500 in October 2018.”

“Embattled Chinese developer Oceanwide Holdings has sold its flagship San Francisco development for $1 billion, taking a substantial loss on what was slated to be the city’s second-tallest tower. Oceanwide is the same firm behind the Downtown Los Angeles megaproject Oceanwide Plaza, a $1 billion-plus condominium, hotel and retail project which has been stalled for about a year, as well as 80 South Street in Lower Manhattan, whose status is also uncertain.”

“The buyer for the San Francisco site was an entity associated with SPF Capital International Ltd., Oceanwide announced in a regulatory filing on the Shenzhen stock exchange. That entity is associated with Beijing-based asset manager SPF Group. Oceanwide said it expects to take a $276 million loss on the project, or a haircut of about 28 percent.Oceanwide was one of several firms from China that bet big on the U.S. development market from 2015 onwards, spending billions on large-scale projects in L.A., New York and beyond. However, after the Chinese government tightened capital controls beginning in late 2016, many of these efforts have fizzled out or been mired in uncertainty. Dalian Wanda Group, for example, sold a large Beverly Hills site to Beny Alagem, while Anbang Insurance Group is looking to sell an office condo on Manhattan’s Fifth Avenue for a substantial loss.”

“Changes in the annual median sales price were less dramatic last year, said Rick Laws of Compass real estate brokerage in Santa Rosa. With the exception of Oakmont, where the median dropped from $700,000 in 2018 to $613,750 in 2019, fluctuations in median price in other cities and towns in the county were under 10%. ‘For most of the year, it was hairy in Windsor,’ said real estate agent David Rendino. ‘We were having to make reductions on properties and they were sitting for a while.'”

“Lisa Sheppard, a real estate agent with Sotheby’s International Realty in Sonoma, said the local market for high-priced homes has softened. Sheppard who specializes in pricey estates and vineyard and winery sales, said the average price paid countywide in 2018 for homes priced above $1 million was $1.65 million. Last year, it was $1.58 million. In 2018, similar data showed there was a total of 770 such homes sold for $1.27 billion overall. Last year, there were 664 homes priced at $1 million or more sold for a total value of $1.05 billion. ‘What that tells me is, we’ve had a decline in the market,’ she said.”

“Over 25 percent of Manhattan’s newly built luxury condos remain unsold, and prices may have finally begun to adjust to that glut of units. According to a new StreetEasy report, luxury home prices, which constitute 20 percent of Manhattan real estate, dropped to their lowest levels since 2013 in the last quarter of 2019. But, even as prices dropped, adjusting to a widely known surplus, more units continue to be added to the market: StreetEasy’s report shows that luxury inventory increased 12.2 percent over the last year, that is more than 4,000 homes over the $3.816 million threshold.”

“‘With so much new construction saturating the Manhattan real estate market, we were bound to see prices start to sink at record paces,’ StreetEasy economist Nancy Wu said. ‘This is happening across all price points and boroughs, as prospective buyers wait out the market from the comfort of their rentals. Market dynamics in 2020 will continue to favor the buyer across all price tiers, and many sellers will have to face the fact that if they want to sell, it may very well be for less than their initial asking price.'”

“A deal has been struck to partially repay 654 investors in a mortgage registered to a failed downtown Toronto condominium. The larger group of non-registered investors, often smaller-dollar investors, will share $22,684,580, which adds up to 64.86 per cent of the amount of their principal investments, but virtually none of the interest accrued, which drops their total repayment down to 47 per cent of what they are owed.”

“Meanwhile, another group of investors in the other failed Neilas project appear to be in far worse straits. What was to be the OpArts condos in Oakville, Ont., has gone from being merely an open pit to a dangerous hazard. In November, 2019 the city ordered the excavated basement partially filled back in as the shoring work that was done has been judged to be on the brink of collapse. The land is up for sale for $1, compared to the millions investors claim Mr. Neilas promised it would be worth.”

“London-based Tristan Capital came up with its own index to try and counter what it said is backward-looking information provided by real estate brokers. ‘This index is designed to help us cut through the bias, noise, data deficiencies and headline-grabbing hype that surrounds real estate,’ Tristan Capital Head of Research Simon Martin said in a note emailed to clients. ‘Given it was designed to cut through the bias, we originally thought of it as a ‘Broker Bias Index’ but some of my more colourful colleagues have subsequently nicknamed it ‘Broker Bullshit Index’ (sorry to our friends in the broker community)!'”

“In 2015, financial services provider Stanlib Kenya launched its much-awaited Real Estate Investment Trust (Reit), a first for the Nairobi Securities Exchange. The Reit was targeted at individuals seeking to invest in the property sector, even with limited funds, and was introduced at the price of Sh20 per share. It came at the peak of the sector when developers were raking in billions of shillings from buying, developing and flipping residential and commercial property in Nairobi’s sprouting suburbs.”

“The Reit promised ordinary Kenyans that they would have a chance to own a piece of the real estate billions. This did not happen. Five years later the story has taken a gloomy turn. With Fahari iReit yesterday retailing at Sh9.60 per unit at the NSE, the sale means shareholders will be losing more than Sh1.6 billion on paper value of their original investment. The disappointing performance of Kenya’s first real estate investment trust highlights the distortions in Kenya’s real estate market that have left developers and investors with billions in losses.”

“Dubai and Abu Dhabi posted two of the highest property price declines in the world, according to Knight Frank’s latest Global Residential Cities Index. The index showed that average Abu Dhabi prices fell by 7.7 percent. Knight Frank ranked it 149th out of 150 cities, with Jerusalem the only worst performing market (-13.6 percent) compared to the year-earlier period. The report comes as Dubai property prices continue to fall by around 30 percent compared to their peak five years ago. A recent report from consultants Core said that 2019 was the fourth consecutive year of price softening across all asset classes.”

“Nang, a real estate broker in Ho Chi Minh City, said salaries and bonuses at his company were the lowest point in the past half-a-decade since he entered the industry, so he and his family are embracing austerity for this Lunar New Year. ‘I’m not sure whether I can survive in this sector next year with forecasting continued difficulties for the market in 2020,’ he added.”

“Competition is tough in the real estate market in the Kingdom and the market is limited, some developers allow potential buyers to make installment payments on properties, especially houses, directly with the developers without asking for a down payment. In some cases homes are repossessed and buyers lose a lot of money. ‘Because it is so easy to borrow, some customers can buy one or two houses. Therefore there could be a housing bubble,’ said investment specialist Ngeth Chou. ‘Some customers expect that when they buy a house they can sell it on at a profit or make money renting it out. But, if that expectation is not met, the customer may suffer a problem with financial flow. He or she may then put the property up for auction, which has an impact on the market as a whole.'”

“‘In Klang Valley, if there is no major correction of prices in serviced apartment /Soho/ Sovo, it would take over the next five years to be cleared (the overhang units),’ CBRE-WTW managing director Foo Gee Jen said. With this, he suggested for Malaysians to emulate the Europeans such as those living in London where they bargain property prices even in the primary market, reported Bernama. ‘You (Malaysians) should also earn your rights, it is your own money and you decide what you want to pay for and do not follow the herd mentality.'”

“Rahim & Co International Sdn Bhd said property developers should have been cautious and done more research before they embarked on new housing projects in the country. Executive chairman Tan Sri Abdul Rahim Abdul Rahman said there should have been more research on the demand, pricing and cost structure. Some developers launched landed and high-rise residential units at prices that most Malaysians couldn’t afford to buy. He said, property overhang in Malaysia has been on an upward trend but he expects the situation may improve as developers continue to give discounts and other incentives.”

“‘We should not be overly concerned to the extent of having to set up a special body just to acquire these units given that developers are now reducing their prices,’ he said.”

“An apartment at 42 Wyandra Street in Newstead, 3 kilometres north of Brisbane’s CBD, was sold for $115,000 below the purchase price, five years after the owner bought it as new. The two-bedroom, one-bath, one-car space apartment was purchased for $610,000 in March 2014 and was sold for $495,000 in July last year, inflicting an 18.85 per cent loss on the vendor.”

“Brisbane-based buyer’s agent Zoran Solano said Newstead has been struggling with the oversupply of new apartments, which contributed to the lower sale price of this unit. ‘This particular pocket of Newstead has had a significant amount of new units and apartments, which would have subdued the price point,’ he said. ‘If the owner purchased it brand new, there’s also a built-in premium and it wouldn’t be unrealistic to think that the owner overpaid for this apartment in the first place. Basically they’re taking a 20 per cent loss, which means they’ve lost all the deposit. That’s a lot of money.”

“Another Brisbane property that was sold below the purchase price was an older unit in Boundary Street, Spring Hill, located 2 kilometres north of the CBD. The two-bedroom, one-bathroom, one-car space unit was sold for $323,944 around July last year – $31,056 lower than the purchase price. The owner paid $355,000 in September 2009 and despite the long hold period, the property failed to grow in value.”

“‘Spring Hill has a lot of new apartments so an older unit like this will struggle to compete, especially if it’s not well-maintained,’ said Mr Solano. ‘Although the apartment market was very poor for the last 10 years because of the oversupply, investor-owned older units need to keep the maintenance and presentation up as high as they can, because they’re competing with brand new property.'”

This Post Has 83 Comments
  1. ‘Resale single-family homes: Median of $627,500, down from a peak of $649,000 in June. ..Newly built: Median of $626,500, down from a peak of $812,500 in October 2018’

    Annnnd you’re fooked.

    1. But…but…that relentlessly upbeat “housing analyst” on CNBC assured me that shack ownership is the surest way to build wealth. That looks like the opposite of building wealth.

    2. “Resale single-family homes: Median of $627,500…”

      For a working stiff’s 3br/2ba spec in parched Arizona?

  2. ‘With rates at this level, assuming they stay at this level, these (home) prices are reasonable,’ Toscano said, ‘because the monthly financing cost is reasonable compared to rent that people pay, and what they are earning. You really can’t make a case that it is a bubble’

    ‘Embattled Chinese developer Oceanwide Holdings has sold its flagship San Francisco development for $1 billion, taking a substantial loss on what was slated to be the city’s second-tallest tower. Oceanwide is the same firm behind the Downtown Los Angeles megaproject Oceanwide Plaza, a $1 billion-plus condominium, hotel and retail project which has been stalled for about a year, as well as 80 South Street in Lower Manhattan, whose status is also uncertain’

    ‘Oceanwide said it expects to take a $276 million loss on the project, or a haircut of about 28 percent’

    Is that a lot? Just what constitutes a bubble anymore?

    1. Rich has gone from honest commentator to highly compensated bubble deniar, similar to Chris Thornberg’s progression. It’s sad.

      It will be interesting to see how their stories evolve as interest rates revert to historic norms and the crater gains force.

    2. I think one overlooked aspect of this bubble and how it was even possible is the extraordinary wealth of the top 1% searching for yield and gobbling up every asset class that matters. They have amassed so much wealth and pricing power that they now dictate what people pay for shelter, regardless of incomes. We don’t need to worry about the oligarchs owning everything, we’re already there, for all intents and purposes.

      1. Problem is, once the oligarchs have bought up and inflated the prices of everything, there are no new buyers to drive it up to a higher level. Unless there is a lot more money printing…

        1. “Problem is, once the oligarchs have bought up and inflated the prices of everything, there are no new buyers to drive it up to a higher level. Unless there is a lot more money printing…”

          Yes but once the oligarchs own everything they have a vested interest in keeping the price of everything up and they control the politicians. People like the Koch brothers own the Republicans and people like Soros own the Democrats. The American people for years wanted border control but they did not so guess what no border control. Trump is not controlled by them but looked what he has gone through. The real corruption is Hunter Biden and the fact that both Joe and Obama covered for him. However, whom did the deep state go after? Now what is Joe Biden’s border policy? Actually, not all asset classes are in a bubble, one is the exception and that is most precious metals. The price of gold and silver should have moved like palladium but they have suppressed by the same people who have inflated the other asset classes. As long at the PTB still can suppress gold and silver, they still are controlling the bubbles. When they start driving those up by selling the inflated assets and buying them, then the major reset is under way. Some signs that it beginning to happen but by their price action the reset does not seem imminent.

  3. ‘If the owner purchased it brand new, there’s also a built-in premium and it wouldn’t be unrealistic to think that the owner overpaid for this apartment in the first place. Basically they’re taking a 20 per cent loss, which means they’ve lost all the deposit. That’s a lot of money’

    Wa? But we’ve been told Australia is to the moon Alice! Somebody is a lion.

          1. Im amazed i haven’t seen either Of those episodes. The banker one is too notch SP comedy. Thanks for sharing

  4. ‘That is unlike before the Great Recession, he said, when homes were overvalued when looking at rent and income. ‘With rates at this level, assuming they stay at this level, these (home) prices are reasonable,’ Toscano said, ‘because the monthly financing cost is reasonable compared to rent that people pay, and what they are earning. You really can’t make a case that it is a bubble’

    One of these things is not like the other:

    ‘In some cases homes are repossessed and buyers lose a lot of money. ‘Because it is so easy to borrow, some customers can buy one or two houses. Therefore there could be a housing bubble…Some customers expect that when they buy a house they can sell it on at a profit or make money renting it out. But, if that expectation is not met, the customer may suffer a problem with financial flow. He or she may then put the property up for auction, which has an impact on the market as a whole’

    It seems this easy borrowing might have a different outcome than Rich thinks.

  5. ‘The Chinese government isolated more cities Friday, an unprecedented move to contain the coronavirus, which has spread to several other countries. In China, at least 10 cities, and at least 33 million people, have been put on lockdown — Wuhan, Huanggang, Ezhou, Chibi, Qianjiang, Zhijiang; Jingmen, Xiantao, Xiaogan and Huangshi — all in central China’s Hubei province, on the eve of the Lunar New Year, when millions of Chinese traditionally travel.’

    https://www.voanews.com/science-health/least-10-chinese-cities-lockdown-830-confirmed-coronavirus-cases-across-country

    1. Talking heads

      “Heard of a van that is loaded with weapons,
      Packed up and ready to go
      Heard of some grave sites, out by the highway,
      A place where nobody knows
      The sound of gunfire, off in the distance,
      I’m getting used to it now
      Lived in a brownstone, lived in the ghetto,
      I’ve lived all over this town
      This ain’t no party, this ain’t no disco,
      This ain’t no fooling around
      No time for dancing, or lovey dovey,
      I ain’t got time for that now
      Transmit the message, to the receiver,
      Hope for an answer some day
      I got three passports, a couple of visas,
      You don’t even know my real name
      High on a hillside, the trucks are loading,
      Everything’s ready to roll
      I sleep in the daytime, I work in the nighttime,
      I might not ever get home
      This ain’t no party, this ain’t no disco,
      This ain’t no fooling around
      This ain’t no Mudd Club, or C. B. G. B.,
      I ain’t got time for that now
      Heard about Houston? Heard about Detroit?
      Heard about Pittsburgh, P. A.?
      You oughta know not to stand by the window
      Somebody might see you up there
      I got some groceries, some peanut butter,
      To last a couple of days
      But I ain’t got no speakers, ain’t got no
      Headphones, ain’t got no records to play
      Why stay in college? Why go to night school?
      Gonna be different this time
      Can’t write a letter, can’t send a postcard,
      I can’t write nothing at all
      This ain’t no party, this ain’t no disco,
      This ain’t no fooling around
      I’d like to kiss you, I’d love you hold you
      I ain’t got no time for that now
      Trouble in transit, got through the roadblock,
      We blended with the crowd
      We got computer, we’re tapping phone lines,
      I know that ain’t allowed
      We dress like students, we dress like housewives,
      Or in a suit and a tie
      I changed my hairstyle, so many times now,
      I don’t know what I look like!
      You make me shiver, I feel so tender,
      We make a pretty good team
      Don’t get exhausted, I’ll do some driving,
      You ought to get some sleep
      Get you instructions, follow directions,
      Then you should change your address
      Maybe tomorrow, maybe the next day,
      Whatever you think is best
      Burned all my notebooks, what good are notebooks?
      They won’t help me survive
      My chest is aching, burns like a furnace,
      The burning keeps me alive
      Try to stay healthy, physical fitness,
      Don’t want to catch no disease
      Try to be careful, don’t take no chances,
      You better watch what you say

    2. “You said Ebola? We got you covered. Another trillion dollar right off the printing press.”

    3. Disney has closed Shanghai Disneyland until further notice. No doubt this was done under government orders. Meanwhile the Chinese government insists that everything is under control.

      I read that there was a huge mass banquet (like 100,000 people) that was held just a few miles from Corona virus ground zero. And keep in mind that in China you just dip your saliva drenched chopsticks directly into the serving platters.

      1. I was reading an article last night that showed the “wet markets” in Wuhan. It was deeply disturbing – men gutting and cleaning fish right on the ground where people walk and animals relieve themselves. Every kind of animal you could think of gutted, bleeding, hanging, etc. Dogs in cages, exotic reptiles, chickens stuffed in pens with a man laying on top of them on a piece of cardboard, smoking. These people are filthy with no regard for decency or respect for the earth and its creatures.

        1. I was reading an article last night that showed the “wet markets” in Wuhan.

          Yeah the bats and snakes are particularly nasty.

      2. Meanwhile the Chinese government insists that everything is under control.

        Some of the top Wuhan city politicians are now in jail as of today. Not sure exactly what the charges are but it has to do with not being 100% honest in their reports to HQ.

        Medical workers are posting some crazy videos on wechat and implying that the bodies are piling up and nobody has enough to eat but the WHO official counts stay low because they just don’t officially confirm the cause of death. Rumors are circulating that the WHO is part of a group that actually patented the coronavirus in 2015…sound like tin foil but…

        1. Not sure what to believe but there are reports that one of the morgues in the area was receiving 50 bodies a day as a result of the virus. Deaths are probably in the thousands already, we’re just not being told. There’s no way China would have quarantined nearly 50 million people if it weren’t extremely serious.

        2. The 2019-new coronavirus epidemic: evidence for virus evolution

          Abstract
          There is concern about a new coronavirus, the 2019-nCoV, as a global public health threat. In this article, we provide a preliminary evolutionary and molecular epidemiological analysis of this new virus. A phylogenetic tree has been built using the 15 available whole genome sequence of
          2019-nCoV and 12 whole genome sequences highly similar sequences available in gene bank (5 from SARS, 2 from MERS and 5 from Bat SARS-like Coronavirus). FUBAR analysis shows that the Nucleocapsid and the Spike Glycoprotein has some sites under positive pressure while homology modelling helped to explain some molecular and structural differences between the viruses. The phylogenetic tree showed that 2019.nCoV significantly clustered with Bat SARS-like
          Coronavirus sequence isolated in 2015, whereas structural analysis revealed mutation in S and nucleocapsid proteins. From these results, 2019nCoV could be considered a coronavirus distinct from SARS virus, probably transmitted from bats or another host where mutations conferred upon it
          the ability to infect humans.

          1. I had an interesting conversation with an infectious disease physician yesterday. If WHO declares a global emergency, planes are re-routed to specific cities; Chicago is one. I joked that would be one way to clean up the city. He said he couldn’t imagine living there and that living “here” (presumably San Diego and working in La Jolla) was bad enough. He’s had undocumented immigrants brought to the hospital as patients and given nice rooms with guards at the door.

        3. Some of the top Wuhan city politicians are now in jail as of today. Not sure exactly what the charges are but it has to do with not being 100% honest in their reports to HQ.

          Central planning + “socialist morality” encourages endemic dishonesty and statistical fakery. We’re headed down down the same road.

  6. ‘The larger group of non-registered investors, often smaller-dollar investors, will share $22,684,580, which adds up to 64.86 per cent of the amount of their principal investments, but virtually none of the interest accrued, which drops their total repayment down to 47 per cent of what they are owed’

    ‘Meanwhile, another group of investors in the other failed Neilas project appear to be in far worse straits. What was to be the OpArts condos in Oakville, Ont., has gone from being merely an open pit to a dangerous hazard. In November, 2019 the city ordered the excavated basement partially filled back in as the shoring work that was done has been judged to be on the brink of collapse. The land is up for sale for $1, compared to the millions investors claim Mr. Neilas promised it would be worth’

    Another country the REIC would have us believe is to the moon.

    1. The land is up for sale for $1, compared to the millions investors claim Mr. Neilas promised it would be worth’

      God gave you those little feet for a reason, bagholders.

    2. ‘…which drops their total repayment down to 47 per cent of what they are owed’

      In other words, they lost over 50 percent of what they are owed.

    3. “…In November, 2019 the city ordered the excavated basement partially filled back in as the shoring work that was done has been judged to be on the brink of collapse. The land is up for sale for $1, compared to the millions investors claim Mr. Neilas promised it would be worth…”

      It’s worth less than zero. It’s a white elephant.

    4. The first time I saw branches of OZK Bank was in Florida this week. I didn’t know they had actual bank branches, I thought they were just another subprime lender LOLZ

      1. If I had the cojones to short stock, Tesla and Bank of the Ozarks would be tops on my list. Bank of the Ozarks is going to fail when this is all said and done.

        1. Bank of the Ozarks is going to fail when this is all said and done.

          Depends on who the real owners are. Perhaps we’ll all chip in to save them.

  7. Here is an example as to why reading this blog is so much fun …

    “… low interest rates have made home prices feasible when compared to wages and rent.”

    Check. Low interest rates make high home prices feasable.

    Feasable: “possible to do easily or conveniently.” Note: There is no mention of logical or prudent or intelligent in this definition. In the definition “easily” and “convienlently” are mentioned, but that is all.

    Moving on …

    “‘With rates at this level, assuming they stay at this level, these (home) prices are reasonable,’ Toscano said, ‘because the monthly financing cost is reasonable compared to rent that people pay, and what they are earning. You really can’t make a case that it is a bubble.’”

    High home rices are reasonable compared to rents and what people are earning because borrowing interest rates are low. These low borrowing rates allow the otherwise unaffordable to magically become affordable. Wages do not need to rise for this miracle to happen, the only magic that is needed is for interest rates to fall, thus you cannot make a case that there is a bubble.

    The stupidity, it burns.

    1. “When you combine ignorance and leverage, you get some pretty interesting results.” – Warren Buffett

      Interesting results in the housing market often means bubble prices. These bubble prices are bid up – IOW they are voted up. They are often voted up by ignorant pukes who have somehow gained access to money.

      The more ignorant the puke and the greater their access to money the greater grows the interesting results.

      1. Here’s a repost of a post I made yesterday. I am reposting it today to drive home my point concerning ignorance and borrowed money …

        Banks Are Handing Out Beefed-Up Credit Lines No One Asked For
        https://finance.yahoo.com/news/banks-raising-credit-card-limits-110000952.html

        (snip)

        It might sound like a risky strategy at a time when millions of Americans are drowning in debt: keep raising the limit on people’s credit cards, even if they don’t ask.

        But that’s exactly what big banks have been doing lately to turbocharge their profits, leaving customers with the potential to rack up even bigger monthly bills.

        For years after the financial crisis, Capital One Financial Corp. resisted that step for customers who looked vulnerable to getting in over their heads. In internal conversations, Chief Executive Officer Richard Fairbank characterized the restraint as a radical theology, in part because it went beyond post-crisis requirements, according to a person with direct knowledge of the discussions.

        But then Capital One — known for its “What’s in Your Wallet?” slogan — reversed course in 2018, after the bank came under pressure to keep revenue growing. The company’s revenue reached a record last year.

        The same reversal is playing out across U.S. banking, as more customers get unsolicited access to additional credit, in what’s becoming a new golden age of plastic. The goal: to get consumers to borrow more. The question, just like in the heady 2000s, is how it will end for lenders and borrowers alike. Research shows many consumers turn higher limits into debt. And the greater the debt, the harder it is to dig out.

        “It’s like putting a sandwich in front of me and I haven’t eaten all day,” said D’Ante Jones, a 27-year-old rapper known as D. Maivia in Houston who was close to hitting the ceiling on his Chase Freedom card when JPMorgan Chase & Co. nearly doubled his spending limit a year ago without consulting him. He soon borrowed much more. “How can I not take a bite out of it?”

        Truly, a nation of dummies.

        1. I feel left out, I haven’t had an unsolicited credit limit increase on any of my cards. 🙁

          Maybe because I don’t carry a balance on any of them? And there’s only two of them that I actually use regularly.

          1. “….I haven’t had an unsolicited credit limit…”

            Ditto. Haven’t had any sort of service charge in perhaps 10 years. I am probably VISA’s worst customer.

            I am half-expecting this robo-call from BofA

            ‘How dare you pay off charges in a timely manner! Get out there and spend some money you deadbeat!’

          2. My 2 experiences with CC company chicanery: (1) Back in the 1980s a CC company of mine deposited my written check of about $1700 into the WRONG CC account (not one I owned). I only discovered this by calling their 800 number a week later & discovering the payment had never been applied even though the check had cleared the bank. I wrote a 2nd $1700 check to cover the account. This SNAFU was not corrected for 6 months. Another part of this problem was the loss of the original $1700 check on the part of the bank it was written on. When the dust settled I canceled both my CC account and the bank checking account, since both org’s had proven themselves to incompetent for me to tolerate. (2) I had a BoA CC account with the option to create a one-time only CC # for a very low amount, to cover a short-term news suscription. I figured that if I was unable to cancel the scheduled automatic renewal of the subscription at a much-higher rate, the charge could not go through, since the allowable balance would not cover the future charge. BofA screwed up, applied the future charge to my REAL CC account and it went through despite my efforts to prevent that. After a couple of months BofA corrected this mistake. Then I canceled that BofA CC account.

        2. “It’s like putting a sandwich in front of me and I haven’t eaten all day,” said D’Ante Jones, a 27-year-old rapper known as D. Maivia in Houston who was close to hitting the ceiling on his Chase Freedom card when JPMorgan Chase & Co. nearly doubled his spending limit a year ago without consulting him. He soon borrowed much more. “How can I not take a bite out of it?”

          D’Ante will soon be self-identifying as a victim of predatory lending.

        3. They did that to ME 10 years ago citibank increased my credit limit $1000 and discover $3000 i was surprised

    2. “…assuming they stay at this level…”

      Assuming

      historically

      low interest rates last forever, history may prove him correct. However…

      If something cannot go on forever, it will stop.

      Herbert Stein’s Law

      1. Interest rates have to stay artificially low, that’ how the bubble was re-inflated and how it continues to stay inflated. The Fed can never normalize rates, the Gov would not be able to service the debt. We are going on 10 years of ZIRP, even Trump through a fit when the Fed raised rates .5%

        I don’t think we will see mortgage rates above 4.5% for the foreseeable future.

        Of course, you are correct if it can’t go on forever it won’t. And ZIRP can’t go on forever, though it will certainly feel like it……

  8. “An apartment at 42 Wyandra Street in Newstead, 3 kilometres north of Brisbane’s CBD, was sold for $115,000 below the purchase price, five years after the owner bought it as new. ”

    Well, at least they weren’t throwing away money on rent! 🙂

  9. “According to a new StreetEasy report, luxury home prices, which constitute 20 percent of Manhattan real estate, dropped to their lowest levels since 2013 in the last quarter of 2019.”

    6 years of bubble gains wipe out.

    “‘With so much new construction saturating the Manhattan real estate market, we were bound to see prices start to sink at record paces,’ StreetEasy economist Nancy Wu said.

    Great insights! This is why Nancy-girl gets paid the BIG BUX.

    1. luxury home prices, which constitute 20 percent of Manhattan real estate

      What percentage of potential buyers can afford one of those airboxes?

      Oh, silly me, they were never meant for the “little people”

      I read that Larry Ellison’s investment in Tesla has appreciated $1.6B. He needs to sell it and go buy a whole bunch of Manhattan airboxes with the proceeds!

      The Brave New World: Where megabuck airboxes, whose owners never set a foot inside, are empty, while the ranks of the homeless swell. And some people insist that this is the free market in action.

      I didn’t envision the 21st century being like this when I was a kid.

      1. “I read that Larry Ellison’s investment in Tesla has appreciated $1.6B. He needs to sell it and go buy a whole bunch of Manhattan airboxes with the proceeds!”

        He’s probably got something to do with the questionable run-up in the price. There’s some fraud going on somewhere.

  10. Pentagon Now Says 34 US Soldiers Suffered Traumatic Brain Injuries In Iran Attack

    34 brains fried? Was it worth it?

      1. Our middle-east think tanks are sabre-rattling in the hopes that the U.S. bombs Iran’s nuclear facilities. I’d wait a week and read about it in The Economist or some other periodical published off-shore.

    1. Don’t worry, the PPT came in late today to paint the tape. Sure, it was down 170, but it had been down 300.

  11. ‘What that tells me is, we’ve had a decline in the market,’ she said.”

    I bet Lisa looks fetching in her Captain Obvious costume.

  12. But, even as prices dropped, adjusting to a widely known surplus, more units continue to be added to the market: StreetEasy’s report shows that luxury inventory increased 12.2 percent over the last year, that is more than 4,000 homes over the $3.816 million threshold.”

    Rising inventory, sales and prices dropping. Hmm. So my grasp of supply and demand fundamentals is hazy, but I’m thinking the we’re going to lay on a few more express trains to Schlongville.

    1. The battle lines are being drawn. I’ll put my money on the armed-to-the-teeth set as compared to the #metoos and the trans soyboys.

    1. Think of the moral hazard of forgiving student loans and Keeping your college degrees. I’m for repossessing your degrees and wiping out your debt that’s fair to me.

      1. Think of the moral hazard of forgiving student loans

        Moral hazard…and total unfairness to everyone who paid and everyone who didn’t go because they couldn’t pay. And everyone who worked hard to get scholarships so they wouldn’t have to pay…

        1. easy…….think of it as an asset….if your job requires a degree you cant apply or keep it….think unions, HR departments writing up the education requirements, professional certificates, can you be licensed as a lawyer doctor dentist social worker etc. without the valid degrees on the wall??? Its really meant for those who throw in the towel, i give up. If you have the knowledge you start your own business. But with a major ding on your credit that’s going to be very hard. What will google say if you apply and cant prove a valid degree because you returned it to be debt free?

        2. “How do you repossess human capital acquisition?”

          I do not think it can be done. But what can be done is exploit a human capital acquisition, something that is done all of the time, something that I do all of the time.

          If a puke gets a degree and becomes a high earner then it is up to the exploiter to make sure that huge chunks of the puke’s earnings end up in the pocket of the exploiter. This task usually involves convincing the puke that the offer by you of a dotted line should be readily signed. Once this task is performed the easy ride for the exploiter is set.

          For this reason I am for the forgiving of all student debts; The less money that he is forced to send to others the more money he gets to send to me.

          😁

      2. College degrees are so 20th century, and are mostly worthless. Employers really only care about experience anyway.

        Repo what? If the bank repos a car, it can sell it. If it repos a degree, what do they do with it? Sell that MD degree to the highest bidder and he becomes a physician? It has no intrinsic value, it’s worthless, so it isn’t worth the expense of repossessing.

        You keep yammering over this. It isn’t done for a reason.

        1. Degrees are so 20th century. So let student loan debts be discharge or restructured like any other debt. My guess more people would go after bankruptcy instead of mortgage. All of gov student repayment plans just help to support the subprime mortgages.

        2. You are missing the point the student will have limited employment options without that degree. Especially with limited or no experience, If we the taxpayers have to pay off tens or hundreds of billions i want something in return, you can start your life over at starbuxx debt free.

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