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You Have No Way Out, I Don’t Know If I’m Going To Lose Everything I’ve Worked So Hard For

A report from the Denver Post in Colorado. “It is unlikely that Denver Metro will experience a bursting housing bubble this year. The steady stream of demand from homebuyers should keep home prices within a healthy range. It is also important to consider that this lack of inventory will not plague Denver forever. New construction projects around town will aid in the leveling of the marketplace. These factors, in conjunction with COVID-19 eventually becoming more manageable on a large scale, should be the medicine the market needs to make a full recovery.”

“The available inventory also varies by neighborhood. For example, the LoDo market has more than six months of inventory, which creates more opportunities for buyers than sellers. ‘Clients are looking for clear direction on strategy in today’s real estate market. Any data or speculation based on a macro-level analysis grossly underestimates the tremendous amount of opportunity that exists in an inventory starved market,’ said Shannel Ryan, President of LIV Sotheby’s International Realty, Metro Denver.”

From Socket Site in California. “The number of homes on the market in San Francisco, net of new sales and contract activity, ticked up another 4 percent over the past week to 1,420, representing 120 percent more inventory than there was at the same last year and a 10-year seasonal high. The number of single-family homes on the market in San Francisco (370) is now running 68 percent higher than at the same time last year while the number of condos (1,050), which tends to be a leading indicator for the market as a whole, is now up by nearly 150 percent having tallied over a thousand for the first time since the fourth quarter of 2010 last week.”

“And there are now over 200 percent more listings on the MLS with an asking price that has been reduced at least once than at the same time last year, over seven times (7x) more reduced listings than there were in July of 2015, and the most reduced listings in the absolute since the fourth quarter of 2011.”

From 7 News in California. “Zumper said in its July report that rents in San Francisco fell nearly 12% from the year before. Mountain View and Cupertino each saw year to year rents plummet 15%. In San Jose, rents dropped 8%. Two months ago, Mary Ann began looking for a new apartment. She flirted with putting down a deposit for an apartment in this high rise near the Embarcadero. ‘We were going to immerse ourselves into a higher rent, but then we talked ourselves out of it,’ she said.”

“But the landlord suggested she keep checking back. The rent ended up dropping $550 to $3,200 in two months. She took it. Her apartment on the 19th floor will have views of the Bay Bridge and the Embarcadero. Her landlord even threw in free parking. Tenants right attorney Jackie Ravenscroft says some developments are offering one to three months free rent.”

The Boston Globe in Massachusetts. “Marie Baptiste owns a rental property in Randolph. A nurse at a hospital in Fall River, she kept her old house when she moved to a newer one several years ago, figuring the rent would help her pay the bills when she retires. Lately, though, she’s had to pull money out of her retirement savings to cover the mortgage, property taxes, and insurance because her tenant stopped paying rent last fall, Baptiste said, well before the COVID-19 pandemic.”

“She says the tenant owes her nearly $19,000, but because of a freeze on evictions during the pandemic, there’s nothing she can do about it now. Baptiste’s tenant, who asked that her name not be used, said she stopped paying rent in November because the house had fallen into serious disrepair, including water damage and an infestation of rats. Baptiste disputes those claims, saying the tenant is to blame for most of the problems.”

“No matter what the reason for the lack of payments, the bills keep piling up. ‘It’s all backwards,’ Baptiste said. ‘You have no way out. I don’t know if I’m going to lose everything I’ve worked so hard for.'”

“‘Landlords are getting squeezed,’ said Mike Hoefling, who owns a pair of three-family buildings in Worcester and has several tenants who are out of work. ‘They’re not getting rent on one side, and on the other, banks are asking for their money.’ In her more frustrated moments, Baptiste said, she’d just as soon let the place go ― hand it over to her tenants and walk away. ‘It would be the best thing,’ she said. ‘I wouldn’t have to pay the mortgage and the taxes. I could move on with my life. But I can’t.'”

From The City on New York. “Since the pandemic struck the city, mover Dan Menchini has picked up the belongings of 200 New Yorkers and put them in storage as they left town. The customers, he said, either allowed their leases to lapse or talked their landlords into terminating their leases — but weren’t ready to decide on a permanent place to live. ‘This has never happened before,’ said Menchini, the owner of U Santini Inc., a 90-year-old moving company in Brooklyn. ‘They send me their keys and say, ‘Pack it up and put it in storage and we’ll figure it out later.’ There are so many people in flux.'”

“With thousands or more leaving New York, rents are dropping for the first time in years, and residential housing experts say the decline will continue for the rest of 2020. What happens after that is unclear to even the experts. ‘“I view the summer as the spring market that never took off because of the shutdown,’ said Jonathan Miller, chief executive of Miller Samuel and the author for decades of the Elliman reports that track the region’s residential markets. ‘Then after Labor Day all bets are off. I think the rental market hasn’t found its level yet.'”

From Bisnow on New York. “New York City apartment rent collections improved in July, but they are still lagging behind the national average. Nearly 18% of apartment dwellers failed to pay their rent as of July 20, down from roughly 25% each month since April, according to a survey Community Housing Improvement Program conducted of 100,000 units of largely rent-stabilized apartments and some market-rate units.”

“‘The majority of property owners in New York City cannot operate their buildings at a loss for very long,’ CHIP Executive Director Jay Martin said. ‘They will be forced to sell their property to corporate landlords or vulture hedge funds unless action is taken by elected officials now.'”

“As of July 20, 15% of renters — or about 300,000 units — are at least a month behind on their rent payments and only 5% to 10% have begun to pay back rent they missed in months prior, CHIP’s survey found. While rent collections remain low, demand for New York City apartments has plummeted since March. Joy Construction principal Eli Weiss, who owns thousands of units, told Bisnow last week that he has seen a 30% to 40% decrease in demand.”

“Vacancy rates among those surveyed went from 3% to 4% in February to 8% to 10% in June, the CHIP survey found. Excess supply has driven rents down: Since February, rent prices have dropped 6.4% in Manhattan and 5.7% in Brooklyn, while the Bronx and Queens saw modest dips. For landlords with rent-stabilized apartments, ground-floor commercial rent collection, which makes up on average 30% of their overall operating income, is down even more: 62.8% of those commercial tenants didn’t pay rent in July, according to CHIP.”

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This Post Has 156 Comments

  1. ‘They will be forced to sell their property to corporate landlords or vulture hedge funds unless action is taken by elected officials now’

    I’ve read this a few dozen times. “Oh the vulture hedge funds, save me baby jeebus!” It was all fun til somebody loses an eye.

  3. I thought I had caught up on the crater and this morning I can’t even get through the initial searches. Something big is happening IMO.

    ‘The number of homes on the market in San Francisco, net of new sales and contract activity, ticked up another 4 percent over the past week to 1,420, representing 120 percent more inventory than there was at the same last year and a 10-year seasonal high’

    Yet the UHS can only talk about shortages. Urgency and scarcity is the oldest snake oil trick in the book. I’ve been doing this a long time. You know you are reading horse-sh$t when they use words like skyrocket, hit it out of the park (sports analogies are the worst) etc. The fact remains, housing should never be looked at like some can’t lose bet. The shameless REIC and their media poodles are now (again) responsible for millions of foreclosures.

  4. “It is unlikely that Denver Metro will experience a bursting housing bubble this year. The steady stream of demand from homebuyers should keep home prices within a healthy range.

    Oh my. Somebody is whistling past the graveyard, while gobbling Xanax by the handful.

    1. This is probably a paid piece in the Post. You know last decade the Post was a pretty objective newspaper. Now it’s “never is heard a discouraging word” about shacks.

      ‘The steady stream of demand’

      Horsesh$t alert!

      ‘should keep home prices within a healthy range’

      Good thing everybody is putting 20% down.

    2. Why even bring up a discussion of bursting bubbles unless you are pretty sure one is already underway?

    3. Attended a birthday party in Dumver over the weekend. The young renters were all talking about the imminent housing crash. The Post isn’t fooling anyone.

      1. “The young renters were all talking about the imminent housing crash.”

        There may be a selection process going on here in that the people doing the talking were renters. Ask a group of homebuyers and the consensus of an imminent housing crash may be a bit different.

        Nobody likes to be wrong.

        1. I know of people who believe the stock market will go up because they own stocks.

          This is not quite the same as owning stocks because they believe the stock market will go up.

        3. “The young renters were all talking about the imminent housing crash.”

          From what I can tell society is dividing into two groups. You have a small but rapidly growing number of the red-pilled who see through the lies and propaganda being fed to them by the Oligopoly media, and who are taking action to mitigate the risks and dangers of what lies ahead. Then you have a majority of herd creatures with a kind of passivity and bovine stupidity who refuse to believe they’ve been lied to and sold down the river by The Powers that Be. Both groups seem to seek out their own kind. However, when the Fed can no longer defer the financial reckoning day, the red pilled cohort is going to grow exponentially, despite the oligarchy and their media lapdogs going all out to keep the sheeple diverted and distracted with their various fictitious narratives and talking points like Orange Man Bad.

          1. …However, when the Fed can no longer defer the financial reckoning day…

            They’ve been doing it more than 20 years. What’s to say that, with Unlimited QE, they can’t do it for another 100 or more?

          2. One thing the Fed can’t control is prices. Especially housing prices.

            Indian Shores, FL Housing Prices Crater 12% YOY As Gulf Coast Housing Market Shrinks On Rampant Mortgage And Appraisal Fraud

            https://www.movoto.com/indian-shores-fl/market-trends/

            As one Tampa area broker conceded, “If you’re a buyer, the broker is lying to you. I know a liar when I hear one. I’ve been lying my entire life.”

    4. upper middle housing is still strong – but they probably think that their jobs are super safe at the same prices

      For instance Lowry and Cherry Creek are maintaining

      however, as the article mentioned condo’s in LoDo, smaller townhouses through Dev metro, and the outer areas —- might be time to take what you can and run

  5. ‘Landlords are getting squeezed…They’re not getting rent on one side, and on the other, banks are asking for their money’

    Wa? But interest rates? Nobody has to pay anything, right?

    ‘she’d just as soon let the place go ― hand it over to her tenants and walk away. ‘It would be the best thing,’ she said. ‘I wouldn’t have to pay the mortgage and the taxes. I could move on with my life. But I can’t’

    So much for the golden ticket to retirement Marie. Lot’s of people in this boat.

    1. “So much for the golden ticket to retirement Marie.”

      I can muster an ounce of sympathy for some of these small time landlords looking to supplement income; mostly those who have owned for decades. I’ve considered it myself until last year with new punitive taxes from the city, conjured up under the guise of “affordable housing.”

      But you best be well capitalized to do so these days, ie 25-50% down and multiple years of cash reserves, but then the opportunity cost in addition to other headaches likely aren’t worth it.

      1. “But you best be well capitalized to do so these days, ie 25-50% down and multiple years of cash reserves,”

        This dude’s in.

        Florida Man Uses PPP Money to Purchase a New Lamborghini

        His four businesses and their employee ranks were exaggerations. The Lambo was real.

        Alexander Stoklosa
        Jul 28, 2020

        When the proverbial feces hit the air distributor early in 2020, with the health crisis metastasizing into an economic one as businesses were forced to shutter to halt the spread of COVID-19, the United States government kicked out the Paycheck Protection Program (PPP) as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. This massive low-interest loan program was aimed at small businesses, with the stipulation that if at least 60 percent of the funds were used to keep payroll (even for employees not presently working due to health restrictions) and pay rent or mortgages, the loan would be forgiven entirely. One Florida applicant, however, used his PPP funds to purchase a $318,000 Lamborghini.

        If you’re thinking the Lambo was covered by the PPP money, well, you’re wrong—and for a variety of reasons. First, David T. Hines, the accused, wasn’t supposed to have received PPP loan money in the first place (or, at least, not as much as he tried to nab). He allegedly submitted applications for four businesses, inflating or making up his payroll expenses on each application. As a result, he qualified under false pretenses for millions of dollars in loans. It seems shortly after he began receiving those funds ($3.9 million of the $13.5 million he sought) he began spending the money on luxury goods in Miami Beach, stuffing the ol’ mattress with cash (a cool $3.4 million) and dropping six figures on a 2020 Lamborghini Huracan sports car.

        https://www.motortrend.com/news/lamborghini-huracan-ppp-florida-fraud/

    2. There’s that pesky principle, Ben. Governments and central banks don’t have to pay principle back, but we peons do.

      1. The central bankers can use printing press money to transfer principle to their balance sheet. I’m not sure what constrains their choice of debt to bury indefinitely in their virtual vault.

  7. These factors, in conjunction with COVID-19 eventually becoming more manageable on a large scale, should be the medicine the market needs to make a full recovery.”

    These REIC shills’ shamelessness is exceeded only by their utter lack of credibility. The tools who mindlessly swallow such drek deserve the financial wipeout that’s going to overtake anyone buying into a housing bubble.

  8. Any data or speculation based on a macro-level analysis grossly underestimates the tremendous amount of opportunity that exists in an inventory starved market,’ said Shannel Ryan, President of LIV Sotheby’s International Realty, Metro Denver.”

    Realtors are liars.

    1. “…Any data or speculation based on a macro-level analysis grossly underestimates…….” …… Shannel Ryan

      I am going to do my very best to parse this statement.

      I *think* what Shannel is trying to say is that in a bar all women start to look good at 2am.

      1. To me it sounded more like “location location location.” Which is all well and good until your boss can call you up on Skype.

  9. “Zumper said in its July report that rents in San Francisco fell nearly 12% from the year before. Mountain View and Cupertino each saw year to year rents plummet 15%. In San Jose, rents dropped 8%.

    Is that a lot?

    2. Consider that rents had been going up 10-20% year over year until now. That means the drop from the trendline for 2020 is 20% to 30% (or more) off of the values landlords, builders and investors have been using to make decisions. And that’s just so far for the first half of the year.

  10. ‘We were going to immerse ourselves into a higher rent, but then we talked ourselves out of it,’ she said.”

    Are you mentally retarded, Mary Ann?

  11. ‘It’s all backwards,’ Baptiste said. ‘You have no way out. I don’t know if I’m going to lose everything I’ve worked so hard for.’”

    That sweet appreciation was supposed to be baked into the cake, wasn’t it, Baptiste.

    1. Didn’t Trump publicly hound Powell to lower interest rates?

      And maybe I missed something, but I don’t think he’s been criticizing the Fed’s recent actions.

      1. Well … closing the spigot before election day is a sure fire way of handing victory to the opposition. It does seem kind of hopeless.

        1. Every politician wants to juice the economy (more specifically, the headline indicators), once every two years. It doesn’t matter if it’s improving quality of life (it’s extremely difficult for the citizenry to pin economic problems in their daily lives to monetary policy) it just needs to be good political advertisement. Asset inflation is trumpeted to be a Good Thing.

          Understanding the politics of interest rates and monetary policy is critical.

      2. Nope he hasn’t. It must mean that stock market must be doing all right. What a dotard of a man!

  14. Does this help explain the high end crater?

    Finance
    Jumbo Mortgage Rates Are No Longer the Cheapest Around
    Banks now offer lower rates on smaller mortgages—a sign of investors clamoring for safe assets amid the coronavirus recession
    How Fannie and Freddie Prop Up America’s Favorite Mortgage
    By Orla McCaffrey
    July 27, 2020 5:30 am ET

    Record-low interest rates are helping home buyers lock in years of savings on future mortgage payments. But those searching for larger homes or in expensive markets aren’t reaping the same rewards.

    The average rate on a 30-year jumbo mortgage was 3.77% in mid-July, more than 0.4 percentage point above the average rate on smaller, conforming loans, according to Bankrate.com, a personal-finance website. From mid-2015 until this spring, jumbo rates had been consistently lower than or equal to the rates on conforming loans.
    …

    2. Seems like an outcome the Fed will most certainly try to avoid. However, they have many other obstacles in their path.

      1. Gold was up another $22 today. More and more sheeple are belatedly figuring out that a gang of counterfeiters and racketeers beholden only to a corrupt financier oligarchy is in charge of our money issuance.

        1. But still, they have to be wondering at this point how far to let the spike in gold and cryptocurrency prices run before tugging on the reins.

          Falling on their sword probably isn’t the Fed’s gameplan.

      2. Will the personal drives of the leadership (the desire for wealth and power and other appetites) inexorably push monetary and economic policy over the cliff?

        I wonder sometimes about people doing things “in spite of themselves”. The top of government and industry has a lot of power, are typically smart and foresighted, but they’re also driving human bodies – they poop, have sex, love prestige, and they like satisfying their appetites.

        I wonder if these drives and foibles will drive us over a cliff.

        1. I wonder if these drives and foibles will drive us over a cliff.

          Of course they will. Greed knows no bounds.

    3. the dollar is in danger of losing its status as the world’s reserve currency

      Once that happens inflation will soar.

      1. “Once that happens inflation will soar.”

        If we believe we don’t have inflation right now, what would an actual inflation will look like? Don’t think I wanna know.

    4. Newsflash – all currencies are weak right now. Its a global depression and money printers everywhere are running 24/7 to keep the masses from losing it more than they already have.

      1. I don’t think anyone is doing it like we are. Even the EU has been struggling to put together a much smaller bailout than the one we passed 3 months ago.

        I saw an article the other day about the UK’s budget deficit, which is tiny compared to ours.

  16. after all these years it’s finally good to be a renter
    3/2020 to 8/2020
    otherwise not

    22151 still on the pajama jimmy jam

  17. Dumb to buy now, to many risks.
    I think real estate is going to crash , but who knows.

    I’m just so sick of the rigged economy .

  19. Look, this isn’t government for the people and this isn’t capitalism. This is how much that needs to be corrected.

    These powerful forces already took over the Government. It’s like how dare Trump want to mess with the takeover.
    It was worse than a Swamp.

    1. When I was growing up I got most of my clothes from JCP. Over the past 10 years their inventory was sadly lacking, so Belks became the default choice for me.

      I can think of at least 2 malls in my market that have both Belks and JCP. It makes me wonder what a Belks/JCP merger would look like.

    2. I honestly can’t remember ever even hearing of Belk, let alone shopping in one. Though I see they have a store in Little Rock, where I lived for a few years.

      FWIW, when I was a kid, my mom made most of my clothes. Things she couldn’t make generally came from K mart.

    3. Talbots went to crap about 10 years ago. They used to sell extremely classy business suits and dresses. Then they went yacht-party casual. Capris and cutesy sweaters. No way. If I was going to pay Talbot’s prices, I better be able to wear it to a business meeting.

  22. My peeps,

    When you consider the Oligopoly media’s near-stranglehold on news and information, it’s imperative that those who value truth give their active support for those like Mr. Ben Jones who are putting in the hard work and effort of giving us this blog. If you benefit from the news and perspectives presented here, and value the HBB as a bastion of free speech amidst the narrative-purveyors and globalist censorship, then I invite you to dig deep and show your appreciation and support in tangible form by making a donation today, and continuing to provide financial support to keep the HBB going.

  25. From Zero Hedge:

    The eviction moratorium expired last Friday nearly four months after the US economy effectively shutdown due to the covid pandemic, and more than 12 million renters – all behind on rent payments because of the virus-induced recession – are now at imminent risk of getting booted to the curb.

    This Friday, some 25 million Americans will no longer receive their weekly $600 federal unemployment checks, and the next round of government handouts, currently discussed by Republicans and Democrats, could see benefits slashed from $600 to $200 (or be nothing at all if no deal is reached in Congress). This would crush household finances across middle-class America, resulting in an even higher number of households unable to pay their rent bill in the months ahead.

    That said, Trump’s top economic advisor Larry Kudlow, who has religiously pumped stocks with meaningless headlines any time the S&P is even barely in the red, recently said an extension for the eviction moratorium program could be seen. But what if there isn’t one?

    In late July, more than 31 million Americans collected unemployment benefits of some form. The economic recovery reversed in late June, as the next crisis among households looms.

    “It’s like nothing we’ve ever seen,” said John Pollock, coordinator of the National Coalition for a Civil Right to Counsel.

  27. I got 3×5 Trump 2020 flags and lawn signs delivered today. Cheap, quick shipping on ebay. 5 flags for $24 delivered.

    DonK.

    1. The non-seasonally adjusted S and P CoreLogic Case-Shiller home price index (20 cities – although only 19 cities this month) year-over-year rate of home price growth declined from 3.9 % to 3.7 %.

      Wow, they’re really going out on a limb. That’s almost statistical noise.

  29. Coeur d’Alene, ID Housing Prices Crater 16% YOY As Sellers Flood Market And Slash Prices Double Digits

    http://www.zillow.com/coeur-dalene-id-83814/home-values/

    *Select price from dropdown menu on first chart

    As a noted economist said so eloquently, “liquidate whatever you’ve got to eliminate all debt and hold onto every dollar you’ve got…. You’re going to need every last one of them.”

  30. Another day, another new record number of daily COVID-19 deaths in Florida…

    Coronavirus outbreak
    Covid-19: Florida reports record one-day deaths as concerns grow for other states
    – 191 people died in Florida in 24 hours and Texas cases rise
    – Pressure on Congress to pass another huge stimulus package
    Nurses protest in St Petersburg, Florida. Florida has had 191 coronavirus deaths in the last 24 hours, the highest single-day rise since the start of the epidemic, the state health department said.
    Guardian staff and agencies
    Published on Tue 28 Jul 2020 18.22 EDT

    Florida reported another record one-day rise in coronavirus deaths on Tuesday, and cases in Texas passed the 400,000 mark, fueling fear that the United States is still not taking control of the outbreak and adding pressure on Congress to pass another massive economic aid package.
    …

      1. Coronavirus
        Latin America leads world in coronavirus cases
        The quickly growing number of cases make Latin America the region most impacted by the pandemic globally, with 26.83 percent of worldwide cases.
        Gravediggers work digging several graves at the same time due to high demand during the pandemic at the San Miguel Xico cementery in Valle de Chalco, Mexico, on July 13, 2020.Hector Vivas / Getty Images
        July 27, 2020, 8:44 AM PDT
        By Reuters
        ASUNCION/SANTIAGO – Coronavirus cases in Latin America for the first time have surpassed the combined infections in the United States and Canada, a Reuters tally showed on Sunday, amid a surge of infections in Brazil, Mexico, Peru, Colombia and Argentina.

        The quickly growing number of cases make Latin America the region most impacted by the pandemic globally, with 26.83% of worldwide cases.

        Latin America now has 4,327,160 total cases of the novel coronavirus compared to 4,308,495 infections in United States and Canada, according to the count based on data provided by the governments of each country.

        The United States continues to be the individual country with the highest number of infections and deaths from COVID-19, the respiratory disease caused by the virus, with more than 4.2 million cases and roughly 146,000 deaths, followed by Brazil, with 2.4 million cases and nearly 87,000 dead.

        Mexico, Peru and Chile also are among the top 10 nations in COVID-19 cases.

        According to the Reuters count, the number of people known to have been infected worldwide exceeds 16.1 million.
        …

    2. Florida has had 191 coronavirus deaths in the last 24 hours, the highest single-day rise since the start

      Ironically, only 13 of those reported deaths occurred on July 27 according to the Florida Dept of Health website. The rest were from previous days. It will be a week before we’ll know how many “with a positive covid test” died on July 27. Apparently the Guardian gets their BS the same place as the US media.

      Deaths by day occurred looks like it might have peaked at 120/day two weeks ago. We’ll know something in two weeks, as always.

  31. This is rich (from the Dumver Post):

    Arrest of Wheat Ridge man who shot two protesters deepens distrust of police

    The Wheat Ridge man who unintentionally shot two fellow protesters during a demonstration on Interstate 225 in Aurora Saturday seemed to be in shock and fell to the ground after he shot at a Jeep that sped into the crowd, witnesses told Aurora police.

    So, he’s supposed to get a pass because he’s Antifa? Recklessly discharging a firearm in a crowd is what “peaceful protesters” do?

    He was charged with attempted homicide. Good.

    1. It’s also illegal to discharge a firearm within city limits except in literal self-defense. Blazing away at vehicles trying to use public roadways doesn’t count.

  32. oftwominds-Charles Hugh Smith: The Nation Is Falling Into the Abyss Between Wall Street and Main Street
    http://charleshughsmith.blogspot.com/2020/07/the-nation-is-falling-into-abyss.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+google%2FRzFQ+%28oftwominds%29

    The abyss between the Fed’s illusion of phantom wealth for Wall Street and the collapse of Main Street is bottomless, and our descent into the abyss is accelerating.
    I know this runs counter to every dominant narrative, but a vaccine doesn’t really matter, opening up doesn’t really matter, and the size of the “free money” stimulus checks doesn’t matter.
    What matters is that the nation is falling into the abyss that’s opened between Wall Street and Main Street, and nothing will stave off the collapse of the social order other than a fundamental re-ordering of the way we create and distribute money and political power, as money buys political influence.
    The last economic tide with widespread benefits to Main Street was 30 years ago. Since then, the Federal Reserve and other central banks have incentivized globalization and financialization, two dynamics that favor mobile capital and financier skims amd scams.
    There are a number of factors behind the widening canyon of economic inequality, but the primary driver is financialization. Financialization has given those with access to central bank credit ways to skim great wealth from the system without creating any value whatsoever.
    Financialization isn’t a consequence of having capital: it’s the consequence of having access to unlimited central bank credit, leverage and low-risk, low-tax skimming operations (for example, tax codes enable hedge funds to declare income as low-tax long-term capital gains).
    Leveraging phantom collateral is another feature of financialization. Commoners were allowed a taste of this when subprime lenders were offering no-document, no-down payment mortgages back in 2004-2007. Phantom income was posted as collateral for the nothing-but-leverage loan.
    Financialization is not about investing in productive enterprises; it’s all about skimming wealth while providing no value to the real economy or society.
    The hidden toxin in financialization is the resulting concentration of wealth can buy concentrations of political power. Financialization is thus self-perpetuating: once the skimming operations generate billions of dollars in profit, it only takes a relatively small piece of these profits to buy/influence the political class. Once the politicos are in your pocket, the regulators and judiciary fall into line or are marginalized by new statutes or gutted budgets.
    Financialization is the disease eating away what’s left of democracy.
    Financialization is the exploitation of assets/income that were previously safe from predation by central bank funded financiers. While definitions vary, mine is:
    Financialization is the commoditization of debt collaterized by previously unsecuritized assets, a pyramiding of risk and speculation that is only possible in a massive expansion of low-cost credit and leverage for those at the top of the wealth-power pyramid: financiers, banks and corporations.
    One example is the student loan “industry,” which prior to financialization did not exist. A previously safe from predation asset/source of income–college degrees–has been securitized so that loans issued to students for largely worthless diplomas can be sold globally as “secure assets with guaranteed yields.”
    That the exploited class of students have little to no income and no guarantee of income doesn’t matter. What matters is a previously unexploited asset can be turned into debt that can be sold at an immense profit.
    And so student loan debt has skyrocketed from near-zero to $1.6 trillion in less than a generation. This rapacious, ruthless exploitation would not have been possible without the central bank (Federal Reserve) and federal government enabling and enforcing the supremacy of private capital and the predation of the higher-education cartel.

    Globalization and financialization have been the two engines of soaring wealth inequality. Globalization can mean many things, but its beating heart is the arbitraging of the labor of the powerless and commodity, environmental and tax costs by the powerful to increase their profits and wealth.
    In other words, globalization is the result of those at the top of the wealth-power pyramid shifting borrowed capital around the world to exploit lower costs of labor, commodities, environmental regulations and taxes.
    This manifests as offshoring of jobs, the stripmining of forests, minerals, etc., the degradation of local ecosystems, the decline of tax revenues derived from capital and the explosive rise in stock market valuations as wages stagnate or decline.
    A key element in globalization is the transfer of risk from the owners of capital to the workers and public resources. Examples of this transfer of risk abound: rather than pay workers benefits, corporations game part-time/full-time labor laws so workers’ health insurance is paid by taxpayers (Medicaid). Corporations pay wages too low to survive so workers depend on public-sector assistance (food stamps, etc.)
    Alas, all good predations end when the prey has been dragged to the ground and consumed. All the fruit of financialization and globalization have been plucked by the powerful, and now both the engines of “growth” are sputtering as the hollowed-out Main Street economy implodes.
    Central bank free money for financiers doesn’t create collateral or creditworthy borrowers, and without those foundations, the decayed, rotted shack of debt will collapse.
    If we set aside the proximate causes of social disorder, we discern the salient cause: the socio-economic political system no longer works for anyone but those skimming wealth from globalization and financialization.
    Main Street has been in slow-motion collapse for a generation, but this terminal decay was masked by hyper-financialization and debt-fueled spending by consumers who became accustomed to filling the widening gap between their income (stagnant) and the costs of their lifestyle (rising), as they chased the top 5% who benefited from globalization and financialization.
    Debt creates the warm and fuzzy illusion of wealth, but at a cost: debt payments never disappear, but income and profits can slide effortlessly to zero.
    We come now to the key dynamic of this era: socio-economic psychosis, as most people are incapable of making sense of the contradictory messages being given by the status quo. The next result is madness, as every attempt to reconcile the contradictory messages veers further way from reality.
    The relentless rise of Wall Street is constantly presented as “proof” the status quo is “creating wealth” and is enormously successful. It is impossible to reconcile this claim with the decay and collapse visible in Main Street, and so people lash out at whatever they can identify as the proximate cause of their suffering and poor prospects.
    Ask yourself these questions: What kind of system will we get if the vast majority of the trillions created out of thin air by central banks goes to financiers and corporations?
    What kind of system will we get if these financiers and corporations use some of this free money to buy political influence?
    What kind of system will we get if the really big money is skimmed by financial games that generate no goods or services, no jobs, and no productivity–in essence, they are completely worthless to the real economy and society?
    What kind of system will we get if the stock market bubble is touted as “proof” the system is working splendidly and wealth is bubbling up without any limit thanks to the Fed’s magic money machine?
    The answer is a system that’s crazy-making and doomed by its internal contradictions. The Fed can create dollars out of thin air and sluice it to the super-wealthy to feed their skims and scams, but it can’t create jobs, oil, tools, collateral or productivity out of thin air,
    The abyss between the Fed’s illusion of phantom wealth for Wall Street and the collapse of Main Street is bottomless, and our descent into the abyss is accelerating.

      1. Agreed. Solid wall of text is off-putting. Could’ve stopped reading at this, which says everything there is to say:

        “The abyss between the Fed’s illusion of phantom wealth for Wall Street and the collapse of Main Street is bottomless, and our descent into the abyss is accelerating.”

        1. And the looting of America that was extreme for at least 2 decades has brought out the Commie Mob Looters.

          The only thing I can think of is that we become a productive Nation again
          The Politicians have to deal with this rigged wealth extraction by any means.

          And they would like you to believe that racism is the problem , when these wealth extractors and parasites have gutted the USA with their fake Ponzi Schemes.
          I blame the bought off Politicians that sold America out, and those Vipers need to be taken out. The Commie wing of Washington DC isn’t the answer, but they would like the government to pay for their wealth extraction and rigged markets.
          I think Trump was trying to make us a productive Nation again but he was dealing with the takeover that already took place. The Resistance came out in all their horror to reveal the extent of their highjacking of the USA.
          There is no compromise with half of American voters, and the only choice is to take back America unless you believe that these Traitors will give you something better.

        2. Hamilton’s vision has borne its poisonous fruit, which impoverishes the many to enrich a shrinking minority.

          1. I don’t see how this could have happened without the many embracing a lifetime of debt service.

          2. They were strongly encouraged to do so by the PTB. And in an era where real estate always goes up in value at a rapid pace, why not? What do you have to lose?

      2. “Too wordy.”

        I wanted to cut it down but to do so would subtract too much from the essence.

        IMO there is a lot of valuable meat here.

        And thank you for allowing the post to remain.

        1. I’m not criticizing what he said. We know all this. I read a lot of articles every day. When I see abyss I start scanning. When you own a website, you can type all day. And that’s what some people do.

        2. IMHO, this is a keeper, something I can share with others. Though most people these days don’t have the attention span to read more than a few sentences. :/

          A very depressing read over breakfast. And it’s depressing because it is so accurate. I’m currently listening to the audio book version of “The Spider Network” which covers the LIBOR scandal. Plenty of details there about people doing nothing of any use to society or humanity, yet being paid 100K’s or millions to do it.

    2. Charles Hugh Smith has been talking about a collapse for years and years. While I appreciate his insight, at a certain point he’s going to have to admit he was wrong. I hate the FED, and the system, but let’s be realistic – what they’re doing has essentially been working for decades, and there’s nothing to say it won’t last many more decades.

      1. what they’re doing has essentially been working for decades, and there’s nothing to say it won’t last many more decades

        I get your point but to me Portland is a good indication that we’re no longer decades away from a reckoning.

        1. And, unfortunately, there is no guarantee that the reckoning will involve patriots with tricorn hats and guns taking the country back. At this point the future appears to belong to the Bolsheviks.

        2. I get your point but to me Portland is a good indication that we’re no longer decades away from a reckoning.

          As one Portlander on this blog has indicated, what is happening in Portland is on one street during a few hours each day. It’s a tiny percentage of the people.

          1. It’s a tiny percentage of the people.

            That may be true. But they are being allowed to do things that in the past would not have been allowed in a rule of law society. To me that’s a bad sign.

          2. To me that’s a bad sign.

            This.

            What if it spreads to other cities? The protesters on I-225 later tried to burn down the courthouse in Aurora, but were repelled by police.

        3. “But they are being allowed to do things that in the past would not have been allowed in a rule of law society.”

          “They” really aren’t though, as there have been many arrests made throughout July, I think 22 on Monday. However, I think it’s reasonable to assume that many more arrests could have been made that weren’t.

          Portland is probably an exception as we have had these dust-ups for years but, to your point, it may be different from the standpoint that it is ramping up again in places that haven’t seen much of it since the 90s.

          1. Yes there has been stuff like Seattle WTO in 99 IIRC for over 20 years. But I’ve never seen people get away with trying to burn down the same Federal building every night for months and no sign that they will ever be stopped.

          2. “get away with”

            I don’t understand. The people with intent to burn down the building (or harm the Feds) are the people being arrested. I mean, to the extent you can arrest all of the bad actors; presumably there are going to be some lob-a-cocktail-and-flee types. The fallacy is that 1,000 people are showing up to burn down the building…which is why the vast majority aren’t being arrested or worse.

          3. …also, if these people wanted it burned down, it would have been so. Protests in whatever form were going on for 30ish days before the Feds showed up.

          4. The people with intent to burn down the building (or harm the Feds) are the people being arrested.

            Only a few at a time and until the Feds starting doing the arresting, immediately being released to do it again.

    1. The MSM has recently had a field day conjecturing whether the Fed might soon adopt yield curve control.

      Wouldn’t they have to announce this in order to do it?

    2. “’Don’t fight the Fed’ is a mantra for a reason,” said Atul Bhatia, a portfolio strategist at RBC Wealth Management, in an interview.

      Exactly. Fighting the printing press is an exercise in futility. The FED stands at the ready, and with even the slightest hint of a major stock selloff, will goose prices back up into the stratosphere. They’re living every day with the DOW ticker right in front of their faces.

    1. The loan is only part of the story. Most of the magic propelling the rise has to do with Kodak getting into the Covid drug manufacturing business.

      Today the term “Covid” works to move the price of stocks in the same way “dot.com” moved them twenty years ago.

      “Total insanity …” Agreed.

      Kodak shares soar, halted repeatedly on Trump deal to make drug ingredients
      https://www.cnbc.com/2020/07/28/kodak-soars-another-40percent-after-trump-announces-deal-to-manufacture-generic-drug-ingredients.html

  35. ‘A pullback on FHA purchase demand could be a red flag in the housing recovery. These buyers made up a strong 35% of closed sales in June, according to the National Association of Realtors, but that was before the pandemic…This trend, along with the fact that average loan sizes are increasing, indicate that prospective first-time buyers are being impacted more by the rising economic stress caused by the resurgence in Covid-19 cases, as well as the uncertainty on how the next round of government support will take shape,” said Mike Fratantoni, chief economist for the MBA.’

    https://www.cnbc.com/2020/07/29/lower-weekly-mortgage-demand-hints-at-pullback-by-first-time-homebuyers.html

    ‘average loan sizes are increasing’

    First timers dropping out, loan amounts grow, what would that do to the median price Mike?

    Nobody is talking about the median statistic effect.

    1. ‘Their press release stated that many of New York’s so-called zombie properties are the result of the housing crisis of 2008. In the New York metro 8.9% of properties in foreclosure are zombie properties, meaning the owner has left the property while the home remains in the foreclosure process, according to the latest zombie foreclosure data from ATTOM Data solutions.’

      https://dsnews.com/daily-dose/07-28-2020/the-fight-against-zombie-properties

      Shadow inventory is a conspiracy theory. Zombie shacks are a REIC statistic.

      1. ‘All of these inconsistencies and ambiguities create substantial risk for all stakeholders involved. A servicer acting on their “best interpretation” of these regulations is squeezed between foreclosing too quickly, hurting borrowers and subjecting the servicer to significant regulatory exposure, and foreclosing too slowly, jeopardizing any guarantees or insurance on the loan creating a different type of regulatory exposure.’

        ‘As we saw in the financial crisis, these risks are heightened by the likelihood that the servicers’ decisions may be questioned years later —when the crisis is a distant memory, but the financial losses are a present reality.’

        https://www.housingwire.com/articles/pulse-in-the-midst-of-crisis-servicers-need-to-communicate-early-and-often/

        1. ‘The BoC is pumping billions into the market to flood it with cheap money, and keep it floating. Despite stimulus, prices are starting to slip in cities like Toronto and Vancouver. Even worse, this stimulus is so large, it creates an overhang the government will have to deal with later. Combine this with the payment deferral cliff, and the market is increasingly lining up issues that will require even bigger stimulus to prevent a disaster.’

          https://betterdwelling.com/bank-of-canada-pumping-billions-into-mortgage-liquidity-to-prop-up-real-estate/#_

          On yahoo finance, 3 top line articles on Bill Gates and the CCP virus. I thought he was a computer guy?

          1. prices are starting to slip in cities like Toronto

            Prices in smaller cities in Ontario are still going up. Someone close to me is interested in a small war era house in Sarnia. 33 ft wide lot. $260,000, and there is a bidding war.

            The UHS story is that the boomers are not giving up their houses fast enough and there are droves, literally DROVES of people fleeing Toronto. Sarnia is an border town and in Ontario’s Chemical Valley. High unemployment hasn’t cut the mania.

            https://www.realtor.ca/real-estate/22152570/1285-thistledown-avenue-sarnia

    2. ‘average loan sizes are increasing’

      First timers dropping out, loan amounts grow, what would that do to the median price Mike?

      Nobody is talking about the median statistic effect.

      So who is purchasing all the cheapest properties that go pending immediately when they hit the mls, infestors?

      1. Real estate investors are behaving as though they assume they have a Fed backstop…

        1. Which they do. The FED will do anything and everything to prop up this debt PONZI, and we’re about to see what that is.

      1. It is interesting. Full auto doesn’t scare me any more than semi auto except maybe in a Vegas situation (and when will we learn what really led to that?). My guess would be that somebody wants to train up some useful idiots and give them full auto weapons in hope of really scaring the population. I don’t think that will work with the part of the population most likely to fight back.

        1. Full auto doesn’t scare me any more than semi auto except maybe in a Vegas situation (and when will we learn what really led to that?)

          Never, because the PTB don’t want us to know.

    3. China has been allowed to flood our market with illegal goods for decades while our politicians have sat idly by, collecting their gold-plated paychecks while trying to rig elections, etc.

      In a nation of laws, you don’t allow counterfeiters and the largest corporation in the country (Amazon), to openly sell blatantly fake name-brand merchandise. Yet here we are.

  39. ‘Every year, farmers in the Darwin rural area spend a lot of money and effort to get their trees to fruit early in order to get their green mangoes to market around April or May and capitalise on higher prices. But this year the number of Vietnamese mangoes in Australian markets has more than doubled, driving down the price for that early fruit.’

    ‘Berry Springs mango grower Wayne Quach said the competition from Vietnamese mangoes had a big impact on his and other farmers’ bottom line. “The price dropped around 40 per cent,” he said. “Normally we get around about $80 per tray, but this year we got around $50.”

    ‘Berry Creek Packing Company’s Tim Elliott said his company had been busy packing mangoes this morning destined for the Sydney Markets. He said volumes in July were quite small, and most consumers would still have to wait a few more weeks before they noticed any mangoes in their supermarkets.’

    “I wouldn’t expect [big numbers] until September, and even in early September the prices will be fairly high,” he said. “But you can’t do a lot these days, you can’t go overseas, you can’t go on holidays, so you might as well buy a mango.”

    https://www.abc.net.au/news/rural/2020-07-29/imported-vietnamese-green-mangoes-compete-with-aussie-fruit/12498392

    3. Assemblyman Ting and other CA Democratic legislative leaders released a $100 billion coronavirus stimulus outline. The list of proposals includes a plan to borrow federal money to fill gaps in unemployment insurance, if the $600 payment is cut. It also extends the benefit to undocumented workers who lost jobs.

      So they are expecting the Feds to foot the bill. What if the answer is “no”?

      1. “It also extends the benefit to undocumented workers who lost jobs.”

        President Trump, we need to borrow money from the federal government to pay citizens of another country for losing jobs in our country that they weren’t supposed to have in the first place.

        1. California already has a $50B hole in its budget. Now the want to spend another $100B. Does the Fed also buy California bonds?

          I remember when a $100B Federal deficit was cause for concern.

      2. expecting the Feds to foot the bill

        My thought too. We’ll see how that works out for them/us.

  41. Connecticut man accused of beheading landlord with samurai sword after rent dispute

    By: Michelle Ewing
    Updated: July 29, 2020 – 2:51 AM

    HARTFORD, Conn. — A Connecticut man is facing a murder charge after police said he beheaded his landlord with a samurai sword.

    According to the Hartford Courant, Jerry David Thompson, 42, of Hartford, was arrested Monday, one day after police discovered his landlord, top bridge player Victor King, slashed to death and decapitated in his home on Asylum Avenue.

    In an arrest warrant, police said Thompson had been renting a room from King. Following an argument about payment, Thompson used the sword to threaten King, who reported the incident to police Saturday, the warrant said. The next day, King’s friends couldn’t get in touch with him and alerted police, who found the body, according to the Courant.

    https://www.boston25news.com/news/trending/connecticut-man-accused-beheading-landlord-with-samurai-sword-after-rent-dispute/3PFPMKQAOFFFPK6IZUP6TUWGBU/

    1. Added to the cons column of my “are you sure you want to be a landlord?” checklist.

      People are cray.

  42. The Financial Times
    Coronavirus business update 30 days complimentary
    Federal Reserve
    Fed warns resurgence of virus threatens economic recovery
    US central bank holds rates near zero and extends measures to deal with risk of international shortage of dollars
    Jay Powell, Federal Reserve chairman, made no significant changes to monetary policy but pledged to do more to support the recovery if necessary
    © AFP via Getty Images
    James Politi in Washington and Colby Smith in New York 52 minutes ago

    The Federal Reserve has warned that the fate of the world’s largest economy would “depend significantly on the course of the virus” as the US central bank extended measures to deal with the risk of an international shortage of dollars.

    After a two-day meeting on Wednesday, the Federal Open Market Committee made no significant changes to monetary policy, holding interest rates close to zero and pledging to do more to support the recovery if necessary.

    Jay Powell, the Fed chair, expressed fears that increases in Covid-19 infections across many US states had started to hit the economy, citing “non-standard, high-frequency data” on credit card spending, employment, hotel occupancy, restaurant bookings and consumer surveys.

    “The pace of the recovery looks like it has slowed since the cases began that spike in June,” Mr Powell said at a press conference following the meeting. “It’s too early to tell both how large that is and how sustained it will be. We just don’t know yet,” he added.
    …

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