thehousingbubble@gmail.com
Blog

Why Can’t This Dream Home Sell?

A report from ABC 7 in California. “Walking through San Francisco’s South of Market and Financial District feels like a ghost town. 90-percent of the city’s workforce is working from home and people are leaving the city. One pocket hit the hardest? South Beach. According to an ABC7 data analysis of real estate data, there are 147 luxury condos on the market in South Beach. Real estate agents Neil and Daryll Canlas of The Canlas Brothers explain it varies depending on where you look in San Francisco. ‘Comparing it to the last 5 years, it’s really unheard of… it’s so rare for any to come up,’ Canlas said.”

“In just the last two days, 25 people posted on the Rincon Hill (South Beach) Nextdoor feed stating they are moving out of South Beach citing everything from, ‘work from home,’ ‘high costs,’ and ‘there’s nothing to do.’ There’s plenty of supply in Soma, South Beach, and Mission Bay. Of the more than 1,300 active listings in San Francisco, nearly one-third are in those areas. With inventory high, prices are taking a slight dip.”

“‘We’ll continue to see a vacancy rate, because people don’t need to live in the city,’ Canlas said. No need to live or work in the city, especially as some companies are gone for good. We know that from San Francisco’s building vacancy rate. ABC7’s data analysis shows at the end of last year, vacancy rates were 5.4 percent. Now, vacancy rates are nearly 10 percent.”

From Heavy Entertainment on California. “Josh Altman of Million Dollar Listing Los Angeles is one of the most successful real estate agents in the business. But sometimes even he can be caught off-guard, especially when a client is willing to consider an offer that is significantly lower than the list price. According to a preview of tonight’s episode, Altman lists a property in the famous Bird Streets neighborhood in the Hollywood Hills.”

“The property at Oriole Way, despite its opulence and stunning views, has a history of sitting on the market. According to Redfin, the property was sold in March 2008 for $4.45 million. Those owners must have completed major renovations because when the house was listed again more than six years later, the price had multiplied by eight. According to Fortune, the Oriole Way house was listed for $32 million. The magazine described the property as perfect for a ‘young Hugh Hefner-wannabe’ but questioned in the article title, ‘Why can’t this $32 million Hollywood dream home sell?'”

“The Altman Brothers appear to have signed on to represent 9133 Oriole Way in January 2019. The house was listed for $29 million but did not sell. It was taken off the market in late May 2019. Altman relisted the house the following month with a dramatic price drop. The new price was $21.995 million. He sold the house in August 2019, but for a steep discount. As noted on the Altman Brothers website, the home was sold for $16.515 million in August 2019.”

“The Real Deal reported in October 2019 that the Bird Streets contained several extravagant homes that were sitting on the market. The outlet appears to have been referencing the Oriole Way property when it reported that a mansion on Oriole was purchased for $16.5 million in late August 2019. The Real Deal noted that the price was nearly 40 percent less than what the previous owner had paid for it.”

From 6 Sq Ft in New York. “Anyone who follows the NYC real estate market knows that there are deals to be had right now. CityRealty compared sale listings in January to those last week and found that the overall listing price among Manhattan condo, co-op, condop, and townhouse listings has fallen an average of 11 percent to $2,175,000 in the past seven months. And when it comes to specific neighborhoods, Lincoln Center, the Upper West Side neighborhood mainly centered around the 60s, saw prices fall the most at 32 percent. Murray Hill was next at 26 percent, followed by Beekman/Sutton Place at 22 percent.”

“CityRealty found that there are 26 percent more sales listings now than there were at the beginning of the year. Despite the uptick in listings, the 11 percent drop in listing price comes after months of buyers being unable to view homes in person, along with general uncertainty about the market. According to CityRealty’s data, there are 14 neighborhoods and sub-neighborhoods that have seen above-average listing price drops since January 4, 2020. They are as follows.”

The Real Deal on New York. “HNA Group has sold a third condo unit at One57 at a significant loss, the latest in a long-running series of trophy dispositions for the once high-flying Chinese conglomerate. An entity affiliated with the firm sold a 67th-floor unit at Extell Development’s Billionaires’ Row tower for $17.2 million, property records show. That’s a 43 percent loss from the $30 million the company paid for the 4,500-square-foot pad in 2015.”

“HNA grabbed the spotlight with splashy purchases of trophy towers including 245 Park Avenue and spent a reported $45 billion from 2014 to 2017 on real estate and other assets. In 2018, HNA began selling off its holdings outside of China amid pressure from the Chinese government, which was cracking down on debt-laden companies making big plays abroad with capital controls.”

“HNA picked up at least four condos at Extell’s 93-story tower during its buying spree, and the sale of unit 67A is its third for well under the purchase price. In May, HNA’s New York-based subsidiary Pacific American Corporation sold a unit on the 88th floor for $19.4 million less than it paid in 2015. Earlier that month, another affiliate sold a unit on the 66th floor for $12.3 million less than it paid in 2014.”

“‘It doesn’t represent the real-world price,’ Extell’s Gary Barnett said, though he admitted feeling frustrated about the deals, given that Extell is still trying to sell sponsor units. ‘We’ve already taken the damage in the market.'”

From The Stranger in Washington. “A report from Apartment List says that rent’s dropped .4 percent over the last month — so a unit that was $2,000 is now $1,992, what a steal! A Zillow report looks back a bit further, noting that median rent has dipped a whopping $18 since March. But a quick check of Zillow’s apartment listings, which note when rent has declined, shows that some units have dropped by as much as a couple hundred dollars after sitting unoccupied for months.”

“One reason for Seattle’s drop could be that rent was always way overpriced here, so we’re seeing a slow collapse of a bubble that was too ridiculous to sustain. Other overpriced cities are seeing similar declines: Rent is down by about 4% in San Francisco, and 3% in New York and Boston.”

Related Posts

Just Because You Can Doesn’t Mean You Should

https://www.youtube.com/watch?v=pZf-cNJPvlg https://www.youtube.com/watch?v=ZIaMKt9MAOw https://www.youtube.com/watch?v=f4tiz2Qie2w https://www.youtube.com/watch?v=NyWfj84sDp4 https://www.youtube.com/watch?v=r7HE_JXtElE

This Post Has 177 Comments

    1. Pshaw, Ben Jones. I’ve been scouring the MSM headlines and find no evidence whatsoever to support such alarmism. On the contrary, noted housing experts are lining up to tell me that there’s never been a better time to buy. Suzanne’s research confirms this.

      (Shakes head) Silly conspiracy theorists and wing-nuts and their fringe blogs…this is why people should just listen to Real Journalists.

      1. The media isn’t very honest anymore, but I’m reading it in the MSM. You do have to look past the headline and dig through the articles. It’s there. I am trying to keep up with posting, but most days I can barely get through initial searches in the morning and have to finish searching in the afternoon.

        I don’t know if this is planned. Somebody or something is driving us toward depression, at least for global real estate. These bubbles are bad enough, but the carnage in business is as bad as anything I’ve ever seen. Back in the 80’s, every time something bad came out in Texas, we’d ask ourselves, it can’t get worse, can it? And then it would. I hope we aren’t going down that route. A lot of poor choices are being exposed very fast and all at the same time.

        1. A lot of poor choices are being exposed very fast and all at the same time.

          Yet they continue to do THE SAME THING. You cannot solve a problem without identifying the cause, and simply doing the same thing over and over is certainly not the answer. They are trying to sold a debt bubble with more debt.

          1. “You cannot solve a problem without identifying the cause …”

            Problem? I don’t see a problem. What I see is an easy way to make a living.

            I like it, I love it, I want some more of it.

            😁

        2. They certainly seem to be reluctant to report falling housing prices.

          That’s where I come in.

          Agoura Hills, CA Housing Prices Crater 24% YOY As Foreclosures Rot Southern California Housing Market

          https://www.zillow.com/agoura-hills-ca/home-values/

          *Select price from dropdown menu on first chart

          em>As one Los Angeles broker reported, “Housing prices were tanking fast before Corona.”

        3. I don’t know if this is planned. Somebody or something is driving us toward depression, at least for global real estate.

          The parallels with what is happening to America today, and what happened during the run-up to the 1917 Bolshevik Revolution, are uncanny. It’s like the same playbook has been dusted off and is being implemented, with the Democrats playing the role of the Bolsheviks and the New York financier oligarchy bankrolling, once again, the termites in the foundation, just like the banking houses of Schiff and Loeb financed Lenin, Trotsky, and their “Russian” revolution.

          2. The parallels with what is happening to America today, and what happened during the run-up to the 1917 Bolshevik Revolution, are uncanny.

            Yet all my lefty relatives can see is Hitler on the right. Zero recognition of what antifa looks like through the lens of history.

        4. I dealt with the oil collapse in the 80s and it was ugly.
          And as you say, just when you thought “it can’t get any worse “ it got worse.
          Hopefully this doesn’t get that bad.

        5. Get Trump out of office, then implement UBI to save the day. It’s really simple…they’ve told us the plan all along if you look back. UBI and MMT was being “floated out” for a couple years before Covey.

        6. “I don’t know if this is planned. Somebody or something is driving us toward depression, at least for global real estate.”

          Meanwhile, you have people like my wife’s friend, practically imploring us to buy because…all-time low interest rates. We looked at each other and lol’d. To the extent that a depression in global real estate reverses that mindset, I’m all in.

          2. Clearly, though it’s an astonishingly ubiquitous attitude. The search continues…

  2. ‘It doesn’t represent the real-world price’

    You’re right about that Gary. These sword catchers will take an a$$-pounding too.

  3. ‘the price was nearly 40 percent less than what the previous owner had paid for it’

    Still no bubble California? Thornberg?

    Bueller?

    1. The thing is, Ben, this is what a mix market looks like. It looks just like a bursting housing bubble, but it’s different because…um…Thornberg says it is.

      I got nuthin’….

  6. 90-percent of the city’s workforce is working from home and people are leaving the city.

    News flash: the honest, productive portion of the population have seen the writing on the wall, and are going to be leaving EVERY urban center run by corrupt, incompetent Democrat administrations. The demands of the “community organizers” and Gimme Dats are only going to get more extortionate and unreasonable from here on out.

    1. In which case you’re going to see a lot of city dwellers moving to red states and turning them just barely blue enough to drive Republicans out of office forever. That’s what happened in Virginia and Colorado. North Carolina is not far behind. The electoral college won’t save the Republicans again.

      2024 is going to be a very different landscape than 2020. By 2024, this pandemic will be over, one way or another. The economy will stabilize, one way or another. Also by then, w@h will be worked out, i.e. relocations and office adjustements will be completed.

      At that point I expect the political landscape to change. Right now, I think the Dems are pulling into two factions: the working man faction, and the free sh!t army faction. They are united only in their hatred of Trump. Once he’s gone, one way or another, there will be little to hold them together. At that point I expect the party to fracture. The middle ground will either join the struggling Republicans, or form a new centrist party and isolated republicans will join them. Then let the fun and games begin.

      2. That’s what happened in Virginia and Colorado.

        The Establishment GOP worked hand in glove with its globalist oligarch patrons and string-pullers to facilitate open borders and unrestricted Third World immigration. The change in demographics benefits only the collectivists, by design. Don’t confuse the traitors and cucks of the GOPe for Republicans.

      3. In which case you’re going to see a lot of city dwellers moving to red states and turning them just barely blue enough to drive Republicans out of office forever.

        If historical trends continue, sure. But things have a funny way of changing. I wouldn’t be surprised if now or in the near future blocks of reliably left voters suddenly decide to never vote D again based on the D embrace of destructive chaos lately. Lots of people don’t say anything but really don’t like it.

        1. Carl, I agree. A few Ds already broke off, as I did. But I think those blocks of current Ds will stay in the party for now because their hatred of Trump trumps their hatred of the current culture of cancel and protest. They won’t break until 2024. But who will they vote for? They can’t stay home.

          There’s the question of demographics too. By 2024, the Millenials will be middle-aged, and there are enough successful Millenials to resent their stuff being taken away. Gen Z will be old enough to vote, as will many anchor babies. Which way will they all go? I don’t know yet, but I am positive that there are highly-paid consultants working on that right now.

          I think we’re eventually going to get a moderate R — perhaps a Kasich or Romney type, who will pull the middles together.

        2. On another note, yesterday you asked if single women can turn into bitter Karens without the help of a man. IMO: As a spinster myself, yes, we can. But it’s for different reasons, and so I think it would manifest in a slightly different way. You’ll see bitterness, but with an air of resignation. You’ll also see pride (ha, they made it on their own). But single Karens will have a much less severe case of entitlement.

      4. Right now, I think the Dems are pulling into two factions: the working man faction, and the free sh!t army faction.

        I see zero evidence of any “working man faction” remaining in the Democrat Party. They are wholly beholden to their globalist oligarch mega-donors, just like the Establishment GOP, and are pursuing the agenda being dictated to them by their ultra-wealthy .1% patrons. The only “working men” still voting D are imbeciles who are too stoopid to realize that “their” party was hijacked back in the ’60s.

        1. “The only “working men” still voting D”

          Unions? (those doing blue collar work)

      5. “city dwellers moving”

        We’ve been considering this even before events of the past 5 months.

        In Portland there’s been this weird uptick in activity/prices, primarily in the $500K – $1M space, in outer-close-in Portland.

        We suspect it could really be any combo of:

        1. Pent-up Covid demand locally. (most houses during March/April were listed $50K below Zestimate, almost invariably, whereas now they’re usually right at Zestimate.)
        2. Higher population centers moving to lower ones, especially in the era of WFH. (Higher prices, more Covid in CA -> OR)
        3. People moving from Portland inner city condos to houses in outlying areas. (Escape Covid carriers and tear gas)

        1. We’ve been considering this even before events of the past 5 months.

          There may be a lot of people saying the same thing, this year was just the trigger to push them into action.

      6. At that point I expect the political landscape to change. Right now, I think the Dems are pulling into two factions: the working man faction, and the free sh!t army faction. They are united only in their hatred of Trump. Once he’s gone, one way or another, there will be little to hold them together. At that point I expect the party to fracture. The middle ground will either join the struggling Republicans, or form a new centrist party and isolated republicans will join them.

        Interesting take on the situation. I definitely agree that the only thing all Dem’s have in common is being anti-Trump. As for the rest, we’ll see what happens.

        Both parties seem to be playing “divide and conquer.” But divided we fall. Perhaps that is what TPTB want. Or at least think they want. As mom used to say, “be careful what you wish for.”

    2. “going to be leaving EVERY urban center”

      This is the comment second from the top on a Denver Reddit thread about homeless with over 300 comments:

      “I f*d up (badly) and bought a house in Five Points one year ago. It was a very bad decision. My neighborhood is a literal homeless camp.”

      If this can get voted to second from the top, you know it’s bad. It’s really, really bad when the NPC population of Reddit are upvoting a post saying that buying a house in Denver was a mistake.

  7. “‘We’ll continue to see a vacancy rate, because people don’t need to live in the city,’ Canlas said.

    Okay, so how ’bout if progressive tech oligarchs come up with an app that matches the homeless with vacant investor-owned housing?

    Crickets….

  8. “The Real Deal reported in October 2019 that the Bird Streets contained several extravagant homes that were sitting on the market.

    If the super-wealthy who have been the exclusive beneficiaries of the Fed’s “No Billionaire Left Behind” monetary policies are balking at overpaying for opulent mansions, imagine what the carnage is going to look like in flyover country USA, where the oligarch looting and asset-stripping has been in full swing since the ’70s?

  9. An entity affiliated with the firm sold a 67th-floor unit at Extell Development’s Billionaires’ Row tower for $17.2 million, property records show. That’s a 43 percent loss from the $30 million the company paid for the 4,500-square-foot pad in 2015.”

    Now extrapolate that by tens of thousands of lesser skybox “investments”, and the Yellen Bux wipeout is reaching Biblical proportions.

  10. Atlanta, GA Housing Prices Crater 20% YOY As US Housing Demand Plummets To 20 Year Low

    *Select price from dropdown menu on first chart

    As one suburban Atlanta broker said, “Inventory is soaring and prices are cratering.”

  11. But a quick check of Zillow’s apartment listings, which note when rent has declined, shows that some units have dropped by as much as a couple hundred dollars after sitting unoccupied for months.”

    Oh my. How the worm has turned. Credit-worthy renters, you’re in the catbird seat. Bargain accordingly.

    1. Credit-worthy renters, you’re in the catbird seat.

      That’s what’s so funny – it’s more difficult to qualify for a rental than to buy a house.

      1. “more difficult to qualify for a rental”

        And that is a good thing. Subprime trash are not welcome in my building. Take that sh*t back to Denver.

        1. From the time I first signed a lease several years ago with my current landlord, we’ve had an excellent business relationship. I pay my rent on time, treat his place like it’s my own, and don’t bug him about nickel and dime stuff. In return, he’s kept the rent at least $200 below what he could probably get, but he doesn’t have to worry about getting stiffed on rent or ending up with a deadbeat squatter. It’s a mutually beneficial arrangement, which is how things are supposed to be.

          1. We’re similarly blessed.

            Landlord is quick to assist on the big stuff, we don’t annoy him with the small stuff, and we pay our rent on time. It’s a win-win situation.

      2. “… it’s more difficult to qualify for a rental than to buy a house.”

        You can package up a bunch of mortgages and sell them off to gullible investors but you can`t (yet) do that with rental agreements.

        Since the person who agrees to float the rental agreement has to keep the rental agreement he has an incentive to make sure the terms of the agreement are adhered to. This incentive would vanish if the risks were passed off such as what happens when mortgages are passed off.

        1. I thought they’ve already worked out the RBS, rental-backed securities, and they price them based on 5% rent increase each year. I remember commenting that 5% rent increase can’t be maintained long-term.

          1. “But buying houses cheap and then waiting for them to appreciate isn’t the only way Blackstone is making money on these deals. It wants your rent check, too. In November, after many months of hype, the firm released the first-ever rated bond backed by securitized rental payments. Joining forces with Credit Suisse, Deutsche Bank, and JPMorgan (which recently paid a record $13 billion fine to settle accusations of ripping off mortgage investors), Blackstone has bundled the rental payments from more than 3,200 single-family houses, offering investors its mortgages on the underlying properties as collateral. After investors tripped over themselves to buy into the $479 million bond, Blackstone’s competitors announced that they, too, would develop similar securities.”

            https://www.motherjones.com/politics/2014/02/blackstone-rental-homes-bundled-derivatives/

    1. U.S. disposable incomes soar in second quarter, thanks to government aid, despite onset of steep recession

      Look no further for the reason why car prices are the highest ever.

      1. Yeah, I was looking to buy a used pickup and discovered prices have soared. People are asking over 10K for 15 year old beaters.

        1. My son wants a dirt bike. Okay, pull up Craigslist…WTF?! The 6 to 8-yr old dirt bikes command $4,000? Financialization has metastasized through every organ of this economy.

      1. lets hope so,what is so necessary today is for a D city to tear gas its own violent destructive demonstrators.

        1. But would they do that? Or simply let the “protestors” run wild, no matter how much they destroy?

          1. its for the effect we will see on TeeVee look back to videos of the civil rights marches, nothing much happened until the fire hoses were turn on the demonstrators and it was shown on national tee vee.

      2. Milwaukee ’20 could be worse than Chicago ’68.

        What was the Rolling Stones concert that tried to use Hell’s Angels for security?

    2. Maybe they can hire the Hells Angels to provide security? Could be as “fun” as Altamont in ’69.

        1. If you slow the playback speed down to .25 then you will see the gun in his hand as it passes in front of his girlfriend’s dress at 3:43 as she is trying to stop him.

        3. To the Hell’s Angels’ credit, nobody except for the crazy guy rushing the stage with a gun in his hand was harmed, and the Stones were untouched.

      2. Maybe they can hire the Hells Angels to provide security? Could be as “fun” as Altamont in ’69.

        Oops, that’s what I was talking about.

    3. “Morales said utilizing the National Guard or enlisting federal assistance was under consideration.”

      Feds providing crowd control during the Dem convention?! Now THAT would become interesting.

  14. “‘Why can’t this $32 million Hollywood dream home sell?’”

    “…As noted on the Altman Brothers website, the home was sold for $16.515 million in August 2019.”

    How many stoopid Rubes have $32 million Powell bux to blow on a ridiculously overpriced white elephant?

    1. How many stoopid Rubes have $32 million Powell bux to blow on a ridiculously overpriced white elephant?

      How many stoopid rubes got fleeced in our rigged system so an oligarch could plunk down $32 million FedBux for such a gaudy monstrosity? That’s the real question.

  16. >>From The Stranger in Washington. “A report from Apartment List says that rent’s dropped .4 percent over the last month — so a unit that was $2,000 is now $1,992, what a steal!

    Hmm, other reports from San Jose say -12% and Mountain View (Google) -15%. Is Seattle really that special? I doubt it. Apartmentlist are liars, probably.

  17. RE people moving out of SF: “…citing everything from, ‘work from home,’ ‘high costs,’ and ‘there’s nothing to do.’ ”

    That third reason sounds more like an excuse, perhaps to avoid admitting they’re worried about the socioeconomic situation in the city. Or maybe they genuinely believe the bars and such will never reopen, even after covid passes.

    1. “… people moving out of SF…”

      How about a 4th reason? Tired of stepping in someone else’s poop and dodging used syringe/needles on the sidewalk.

    2. Or maybe they genuinely believe the bars and such will never reopen, even after covid passes.

      It’s not enough for bars to be open. They have to attract a crowd that the customer wants to be part of. What if that never happens? A slow death as they all turn into Moe’s Tavern.

    3. If there’s one thing I’m not worried about, it’s the ultimate fate of bars. There will always be young people to make bars cool. Bars will be open and hopping 10 minutes after the announcement of a successful vaccine. Or even the announcement of a successful treatment (HCQ and Ivermectin, I’m talking to you).

      And you don’t need to be in a city of 6 million people to open a bar. Every Western country has been building bars and taverns at every crossroad for as long as there have been enough roads to cross.

      1. ” Bars will be open and hopping 10 minutes after the announcement of a successful vaccine.”

        I polled my team what would the first thing they would do if the corona thing goes away. Guess what? 9 out of 10 said, “going to a bar for a cold one.” It didn’t matter millennial or x’er.

  18. “….According to Fortune, the Oriole Way house was listed for $32 million. The magazine described the property as perfect for a ‘young Hugh Hefner-wannabe’ but questioned in the article title, ‘Why can’t this $32 million Hollywood dream home sell?…’”

    To members of the REIConplex, the answer is obvious: There is now a shortage of ‘Young Hugh Hefner-wannabes’.

    What happened? Cold feet? Private Jet repossessed?

      1. Makes you wonder what kind of defensive systems the billionaires are installing on their private islands and yachts.

  19. Totally guessing that much comes down to human psychology. The RE housing prices are skyrocketing in the region I live in and look around at. I am a renter of a sfr with landlord pressure due to a handful of landlord reasons that comes down to he wants to build a shop for his own small biz building cabinetry for upscale new construction sfrs and quit his work doing the same for one of the larger construction companies in the State. He understandably wants to profit from the stupid hot housing market. Fortunately this house we occupy suffers from the not everything having been finished as to aesthetics &/or time to fix some things (24 yo house). So it is not move-in ready. I am going along to see homes to buy with my spouse and fortunately, in some respects, nothing has popped up in our price range that doesn’t have significant drawbacks for one or the other of us. It’s not the most comfortable situation to be in but it is what it is. I do not want to buy in the midst of this craziness. It takes about 2- 3 winters on average for many who buy in the spring and summer to find out if they can stand another. Last week we went to see a place at a hefty price which fortunately didn’t check off all our boxes, though it was too close for my comfort. Received a call from the agent saying 3 offers were coming in, did we want to bid?

  20. Will CLO’s be the CDO’s of this crisis? Who will be the next AIG?

    “A $158 Billion CLO Bet Is Putting the Insurance Industry at Risk

    Collateralized loan obligations — which package and sell leveraged loans into chunks of varying risk and return — promise safety and higher yields.

    And one industry more than any other has gone all in.

    Insurers have become the biggest U.S. investors in the market, topping banks and hedge funds to amass a third of all domestic holdings, according to data compiled by the Federal Reserve…”

    Don’t worry, nothing to see here. Never mind that lots of toxic crap last time was also rated AAA:

    “To be clear, no one is predicting a repeat of 2008, when collateralized debt obligations — the more dangerous cousins of CLOs — helped bring down what was once the world’s largest insurance company, American International Group Inc., and nearly the entire global financial system along with it.

    This go around, the risk appears to be more idiosyncratic. Some firms, like Prudential Financial Inc. and MetLife Inc., hold large swaths of AAA rated CLO tranches, the safest and least likely to face principal losses should the default cycle worsen. Even in the NAIC’s most draconian scenarios, AAA bonds were unscathed, a big reason why it ultimately concluded that CLOs weren’t a significant risk to the industry as a whole.”

    (Article is prob behind a paywall)
    https://www.bloomberg.com/news/articles/2020-07-30/a-158-billion-clo-bet-is-putting-the-insurance-industry-at-risk?srnd=premium&sref=k23feCm1

  21. Key Words
    The Fed treats investors like ‘foolish children’ by propping up stocks despite ‘dreadful fundamentals,’ hedge-fund heavy Seth Klarman says
    Published: July 30, 2020 at 2:19 p.m. ET
    By Shawn Langlois
    Seth Klarman, founder of the Baupost Groups. Photographer: David Paul Morris/Bloomberg.
    ‘Investors are being infantilized by the relentless Federal Reserve activity. It’s as if the Fed considers them foolish children, unable to rationally set the prices of securities so it must intervene. When the market has a tantrum, the benevolent Fed has a soothing yet enabling response.’
    …

    1. It’s as if the Fed considers them foolish children, unable to rationally set the prices of securities so it must intervene. When the market has a tantrum, the benevolent Fed has a soothing yet enabling response.

      Like a windowless white van full of candy pulling up next to the loneliest kid leaving the schoolyard.

      1. Published on Jan 13, 2016
        Thigh gaps became a sensational topic in 2015, with women everywhere asking themselves if they should have one or not. In the media, we see models, fitness experts and a variety of actresses sporting that U-shape between their legs, but is it the gold standard for being (and feeling) beautiful? Kirbie explains that if you have a thigh gap naturally, it’s great! If you worked hard on your body and have a thigh gap, kudos! But going to unhealthy lengths to get this look? It’s not worth it.

    2. no matter how many thigh gaps you drape over it

      They’re probably for sale or rent too. Gotta love the stereotype of the guy going off to work. It wouldn’t be in a Corvette though.

  26. REALTOR, I have so much money left after “throwing money away on rent every month” that I don’t know where to throw it.

    This isn’t Reddit, this is the HBB.

    1. Nice.

      I first read about that helicopter a year or two. Cool that it’s on the way to Mars along with the rest of the package.

  28. Seattle, WA Housing Prices Crater 22% YOY As Broker Admits “I’ll Go Back To Selling Drugs If This Market Doesn’t Turn Around Soon”

    https://www.zillow.com/seattle-wa-98102/home-values/

    *Select price from dropdown menu on first chart

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

    1. Professional sports is a product for sale. I don’t care who you are, antagonizing your customers is always a bad idea. BLM and Antifa are not going to pay the bills. If the viewership shrinks, so will ticket sales and broadcast right revenue.

      Of course, the problem is that they are cowards. Eff ’em. I never liked the NBA anyway.

    2. “I only regret that I have but one life to lose for my country.”

      Nathan Hale
      September 22, 1776

      jeff
      July 30, 2020

      I only regret that I have but one pro sport to dump for my country.

      Besides the NFL, the rest of the pro sports much like the WNBA players I saw on the news walking off before the National Anthem are like trees falling in the forest that I wasn’t there to see it or hear anyway.

    3. The column also mentions that the NBA is also likely to lose millions when the protests alienate China. The author says too bad, so sad, money is a tactic of the right. Whatever. Hey, if they want to run a low-level league like arena football, where the players make six-figure salaries instead of seven, go for it.

    4. Don’t watch much sports except for occasional european football.
      Even those fookers are doing the kneeling and raising the fists. Boggles my mind….They have noting to do with BLM and their police force is less oppressive than hours. Talk about being a cuck….

      1. Even those fookers are doing the kneeling and raising the fists.

        When the oligarchs who sign your 7 or 8 figure paycheck tell you to kneel, you kneel.

        I was fruitlessly channel surfing last night (of the antenna) and I stumbled on the Mets vs Red Sox game on Fox. It was humorous to see the cutouts in the stands and hear the simulated cheering, but after a few minutes I turned off the TV. I simply didn’t care.

    5. I used to love watching my NFL team, until all that BS started. I gradually quit paying attention to anything except NASCAR. And then they went political too. So now I’m sports-free, LOL.

      Hoping when renewal time comes up, I can get a Sirius-XM package with the music plus news, etc. channels but without any sports. People might be asking for this. Should be a lot cheaper without the sports, that’s for sure.

      BTW, I haven’t had a TV since 2005 so no cable to cut. And I don’t subscribe to any streaming/OTT services either. If I can get rid of the Sirius-XM sports channels, then finally they won’t be getting any of my money.

      Just remember, sports boycotters, if you have satellite or cable TV, and you get any sports channels, you’re still giving them your money. Even if you’re not tuning in. Same with YouTube TV and probably other services as well (I don’t pretend to be on top of all that stuff).

  30. There was more great news today for Wall Street HODLers and millennial day trader than you could shake a stick at:

    1) U.S. COVID-19 deaths continue spiraling up out of control.

    2) U.S. GDP just took its worst ever face plant into the bottom of a deep crater.

    3) New claims for unemployment keep rising.

    All of the above factors suggest that the Fed will keep pumping in the Powell bux to prop up the stock market indefinitely.

    So lay aside your FUD and quench your FOMO by leveraging up and loading up to the gills with FANGMAN stocks!

    1. You forgot to add that this administration is going to continue the free sh!t army extra $600 per week.

      1. “this administration”

        I don’t see how you can reasonably expect otherwise. One of the unheralded results of the Fed’s extraordinary accommodation under Bernanke, Yellen, and Powell is that all politicians now are keenly aware of the Fed’s ability to ease a crisis situation by financing direct liquidity injections through balance sheet expansion.
        No politically unpopular and messy Congressional votes are necessary.

        Though messaging will differ, it seems like Modern Monetary Theory is gonna happen from now on, regardless of which party controls the WH.

        1. I personally expect politicians to soon begin furiously plucking the fruits of this recently-discovered magic money tree, right up until the point when it dies.

          Along with it will die another lame, discredited macroeconomic theory.

          Analysis
          Modern Monetary Theory: How MMT is challenging the economic establishment
          By business reporter Gareth Hutchens
          Posted Thursday 16 July 2020 at 11:56am, updated Sunday 19 July 2020 at 6:48pm
          Illustration of a tree with money for leaves and lush flowers on the ground below where the money falls.
          Theresa May famously said there is no “magic money tree”, but MMT theorists say she is wrong. (ABC News: Alistair Kroie)

          We may be on the cusp of a revolution.

          What if everything we thought we knew about public finance over the past 40 years has been wrong?

          A new economic theory has emerged that could rewrite our understanding of how governments create and spend money and what type of society we can afford to build.

          And if it is correct, people may be furious.

          Because it could show that Australia’s political elite can afford to spend far more than they are on public health and education, social housing, scientific research and green energy schemes, while eliminating unemployment.

          And yet they’re not — either from a misunderstanding of government finances or because they don’t want to.

          However, to embrace this radical economic theory you will have to forget what you’ve learned about budget deficits (that they’re bad) and government debt (that it burdens future generations).

          Why?

          Because proponents of the theory say that far from being a problem, budget deficits are often a good thing — they can be the source of healthy economic growth.
          …

        2. It’s the end of the United States. There’s no such thing as “free money” and there will be hell to pay. You can yammer on about MMT and all of that gobbledygook until the cows come home, but it’s nonsense. It can’t work. I really thought this President was going to do a good job. I was wrong. Instead, he has presided over the worst destruction we have ever seen.

          1. President was going to do a good job.

            WOW. You can’t be serious. There was/is nothing about this guy to give anyone that impression.

          2. There was/is nothing

            Does not explain why the opposition has continuously screamed, clawed, pushed, lied, attacked, resisted at a level not seen before in any of our lifetimes.

          3. “Does not explain why the opposition has continuously screamed, clawed, pushed, lied, attacked, resisted…”

            Some people are very easily triggered.

          4. I didn’t vote for him (or anyone, for that matter). But when he won I was willing to give him a chance, based on some of the things he said as a candidate. Such as criticizing the low interest rates and artificial propping-up of asset markets, namely the stock market. But we see how that turned out.

      2. You forgot to add that this administration is going to continue the free sh!t army extra $600 per week.

        It expires today and Congress hasn’t agreed on any extension. I read on CNBC that the Senate has gone home for the weekend, so apparently nothing can happen until next week.

        1. I read that the GOP was offering a bill that was UE benefits only. No bail outs for states or cities. It was DOA on Pelosi’s desk.

  31. The MSM headlines reported a 33 percent drop in U.S. GDP, but much smaller ones in several Eurozone country economies.

    However, if the Eurozone country figures are restated as annualized rates, it turns out they show even worse results than the U.S. contraction.

    1. Coronavirus leads to record drop in German GDP
      30.07.2020
      Bonn business closes (picture-alliance/NurPhoto/Y. Tang)
      Germany’s economic output fell by 10.1% in the second quarter of 2020, the latest economic figures show. More workers in Germany are participating in a furlough program, but the country’s unemployment rate held steady.

      Germany’s gross domestic product (GDP) fell by 10.1% in the second quarter of 2020, according to economic data released on Thursday.

      The data from Germany’s Federal Statistic Office comes amid fears of a second wave of the coronavirus pandemic across Europe.

      “This was the sharpest decline since the quarterly GDP calculations for Germany began in 1970,” the statistics office said.

      Compared with last year, Thursday’s figures were even worse. GDP was down 11.7% for April to June, with an overall collapse of exports and household spending alongside an increase in state spending.
      …

    2. Though COVID-19 is a timely scapegoat, some countries’ economies were already in contraction before the virus piled on layers of woe.

      French economy sees record drop in wake of coronavirus crisis
      Issued on: 31/07/2020 – 08:04
      File photo from April 28, 2020: a woman walks past a closed shop with a “for sale” sign in the city of Nice in southern France on the 43rd day of the country’s Covid-19 lockdown. AFP – VALERY HACHE
      Text by:
      NEWS WIRES
      2 min

      France’s economy contracted by a record 13.8 percent in the second quarter under the impact of coronavirus lockdowns, the national statistics institute INSEE said Friday.

      The seasonally-adjusted quarter-on-quarter drop in gross domestic product (GDP) was better than forecast but worse than the performance of most of its eurozone peers.

      “GDP’s negative developments in first half of 2020 is linked to the shut-down of ‘non-essential’ activities in the context of the implementation of the lockdown between mid-March and the beginning of May,” INSEE said in a statement.

      INSEE also updated the figure for the first quarter — when lockdowns had just begun to be implemented — to a 5.9 percent contraction, from the 5.3 percent it had previously estimated.

      The second quarter figure means the French economy has been shrinking for three consecutive quarters and continues to be in recession.

      France’s second quarter contraction was much sharper than the record 10.1 percent fall in Germany. Austria suffered a 10.7 percent contraction and Belgium 12.2 percent.

      Spain recorded a sharper 18.5 percent plunge in second-quarter GDP, however.
      …

    3. Friday 31 July 2020 9:22 am
      Harry Robertson
      Italy, France and Spain’s economies shrink at record pace amid pandemic
      (via Getty Images)

      The Italian, French and Spanish economies all contracted at a record pace in the second quarter as coronavirus lockdowns caused business activity to shudder to a halt and consumer spending to dry up.

      Spain’s economy fared the worst of the bunch, contracting 18.5 per cent quarter on quarter. It followed a 5.2 per cent drop in the previous quarter and was much worse than the 16.1 per cent contraction analysts had expected.

      Italy suffered a fall in GDP of 17.3 per cent after a drop of 5.4 per cent in the first quarter. It was better than the 18.7 per cent contraction economists predicted.
      …

    4. The Wall Street Journal
      Credit Markets
      U.S., European Yields Drop on Record Economic Downturns
      Sharp contractions in the second quarter in U.S. and Germany weigh heavily on yields
      By Paul J. Davies
      Updated July 30, 2020 3:58 pm ET

      Government bond yields dropped in the U.S. and Europe after fresh data on Thursday showed the worst quarterly economic contractions on record for the U.S. and Germany in the second quarter.
      …

    5. MarketWatch
      Eurozone economy contracts 12.1% in second quarter

      European stocks rise and Nasdaq 100 futures surge after blowout results from big U.S. tech

  32. Still worried about the endless U.S. housing shortage? Between a demographic collapse and a building boom, it should end soon enough, ushering in a golden age of U.S. housing affordability.

    Of course we will first have to work through the economic wreckage of the housing bubble collapse.

      1. …And the U.S. population could reach its lowest growth rate in 100 years.

        Thank God.

        1. Don’t worry, the globalists have a plan to import more 3rd worlders than you could imagine. You know, to pick up the slack.

    2. Here comes the new wave of white flight escaping from the COVID-19 hotspot and BLM riot zones, similar like how they escaped inner cities in the mid-20th century.

      US home construction picks up speed
      by Candyd Mendoza | Jul 20, 2020

      Builders reported increased demand for housing in June – driven by strong single-family production.

      Total housing starts soared 17.3% last month to a seasonally adjusted annual rate of 1.19 million units, according to a report from the US Housing and Urban Development and Commerce Department. If this pace continues, builders will begin 1.19 million units in the next 12 months.

      “Fueled in part by record-low mortgage rates, builders are seeing solid demand for housing despite the challenges of the virus and elevated unemployment,” said Chuck Fowke, chairman of the National Association of Home Builders. “Demand is growing in lower-density markets, including exurbs and small metros.”

      Within the overall June reading, single-family starts were running at an 831,000 seasonally adjusted annual rate, up 17.2% from an upward revision from the May estimate. The multifamily sector, meanwhile, jumped 17.5% to a 355,000 pace.
      …

  33. $o long a$ the $tock market rally continue$, you can $afely ignore the gloomy deficit $torie$. Dealing with that i$ tomorrow’$ problem.

    1. Economy
      U.S. budget deficit hits all-time high of $864 billion in June
      Published Mon, Jul 13 2020 2:28 PM EDT
      The Associated Press
      Key Points
      – The federal government incurred the biggest monthly budget deficit in history in June as spending on programs to combat the coronavirus recession exploded while millions of job losses cut into tax revenues.
      – The Treasury Department reported Monday that the deficit hit $864 billion last month, an amount of red ink that surpasses most annual deficits in the nation’s history and is above the previous monthly deficit record of $738 billion in April.
      – That amount was also tied to the trillions of dollars Congress has provided to cushion the impact of the widespread shutdowns that occurred in an effort to limit the spread of the viral pandemic.
      Treasury Secretary Steve Mnuchin with national debt signage in background.
      Tom Williams | CQ Roll Call | Getty Images

      The federal government incurred the biggest monthly budget deficit in history in June as spending on programs to combat the coronavirus recession exploded while millions of job losses cut into tax revenues.
      The Treasury Department reported Monday that the deficit hit $864 billion last month, an amount of red ink that surpasses most annual deficits in the nation’s history and is above the previous monthly deficit record of $738 billion in April. That amount was also tied to the trillions of dollars Congress has provided to cushion the impact of the widespread shutdowns that occurred in an effort to limit the spread of the viral pandemic.
      …

      1. What does it mean when risk assets (stocks, houses, junk bonds, bitcoin, etc.) and safe haven assets (government bonds, gold, silver, etc.) are all levitating in synch?

        Could there possibly be an excess supply of Powell bux seeking toe tag homes?

        1. The Financial Times
          Coronavirus business update 30 days complimentary
          Markets Briefing US Dollar
          US dollar has worst month since 2010 in ‘relentless’ sell-off
          Clutch of big American tech stocks rally after strong quarterly results
          The dollar’s tumble intensified this week
          © Financial Times
          Harry Dempsey in London and Hudson Lockett in Hong Kong 55 minutes ago

          The US dollar has tumbled the most in a decade this month, propelling sterling and the euro higher amid questions over the recovery of the world’s biggest economy and growing political uncertainty.

          The dollar index, a measure of the greenback against six peers, has shed 4.3 per cent in July, its worst monthly sell-off since September 2010. It sought to close the month out on a high note, however, rising around 0.4 per cent on Friday.

          The Nasdaq 100 index, which is closely tracked by investors and large index funds, jumped 1.7 per cent at the opening bell on Friday after four of the largest US tech companies posted blowout quarterly results late on Thursday.
          …

        3. Could there possibly be an excess supply of Powell bux seeking toe tag homes?

          It’s not just Powellbux. There are tens of millions of people “earning” more by sitting home than they ever have doing and honest day’s work, some of them 2x to 3x more than they were making. $52,000 for doing nothing is despicably atrocious.

  34. ‘Air Canada lost $1.7-billion in the second quarter, as the pandemic and related travel bans forced Canada’s largest airline to ground planes, lay off thousands and slash passenger capacity by 92 per cent.’

    ‘Revenue fell by 89 per cent to $527-million in the three months ending June 30, from $4.7-billion in the year-ago period, Air Canada said on Friday morning.’

    ‘The carrier said it will burn through $15-million to $17-million in cash every day in the third quarter, eroding its liquidity that totaled $9-billion on June 30. Seat capacity will be reduced by 80 per cent, compared with the same period in 2019. Air Canada has raised $5.5-billion amid the pandemic, which has brought the global airline industry to the brink of failure.’

    “As with many other major airlines worldwide, Air Canada’s second quarter results confirm the devastating and unprecedented effects of the COVID-19 pandemic and government-imposed travel and border restrictions and quarantine requirements,” said Calin Rovinescu, chief executive officer of Air Canada. “Canada’s federal and inter-provincial restrictions have been among the most severe in the world, effectively shutting down most commercial aviation in our country, which, together with otherwise fragile demand, resulted in Air Canada carrying less than four per cent of the passengers carried during last year’s second quarter.”

    ‘Air Canada said it increased its cost-cutting target by $500-million to $1.3-billion, by retiring 79 planes, closing regional airport operations and reducing its workforce by 20,000 people – more than half its staff – through layoffs, retirement and leaves. The company has tapped the federal government’s 75-per-cent wage subsidy for idled workers, and will use it through December, 2020.’

    ‘Mr. Rovinescu told analysts the airline will make more cuts as needed, including route deletions and suspensions, and the possible cancellation of orders for Boeing and Airbus planes.’

    https://www.theglobeandmail.com/business/article-air-canada-posts-17-billion-quarterly-loss-as-covid-19-travel-bans/

    Depression here we come. Oh, wear yer mouth hankies!

    2. ‘Air Canada lost $1.7-billion in the second quarter, as the pandemic and related travel bans forced Canada’s largest airline to ground planes, lay off thousands and slash passenger capacity by 92 per cent.’

      In the central bankers’ bizarro world, that should be bullish for airline share prices.

    3. They keep saying Biden is going to win. I can’t think of a more destructive nail in the coffin of America than that corrupt creep Biden.

      The left are Globalist/Commies with a frighting agenda riddled with false narratives for their power grabs. They already took over and the Trump election showed who they were. They are the bribed and they are the bribed and they could care less for about half of America. .
      You didn’t have this division in America before until the Politicians in their treason created this divide and now it’s nothing but false narratives.
      It’s frighting really who are going to be the winners and losers under their Globalist and Commie agendas. The Resistance is evil, creepy and treasonous to the American way. You want those creepy power hungry crooked un-american bribed nuts running your life? They need to be taken out.

      1. It will be interesting to see who gets the VP nod, as I think that will be who the Dems really want to sit in the Oval Office. They will have to choose carefully as someone who on the surface is too radical could scare away moderate swing voters.

        1. Biden needs to be wise and chose a vanilla white guy/gal as his VP. If he chooses a black guy/gal, he will not serve his full 4 years.

          2. “I thought that was already baked in.”

            Don’t think Biden knows it. I doubt he knows a lot…but especially not that one.

          3. Don’t think Biden knows it.

            He might be OK with that if he gets to play prez for a while, before resigning for “health reasons”. That way he gets to be called “Mr. President” until the end of his days, which is a very American thing. For instance, in Mexico former presidents are never addressed that way.

          4. He seems to care a lot about his son(s?) careers as well and if they have difficulty competing on a level playing field maybe that can help tilt it a bit in their favor.

          5. I think his sons are already financially set. Plus they can go with dad to NZ or wherever their bug out bunker is.

        2. I think his sons are already financially set.

          For some there is no such thing as enough.

  35. Gold up another $35 a oz. The Keynesian fraudsters at the Fed and their insider accomplices at the TBTF banks might be able to rig every other market, but precious metals are giving these counterfeiters and racketeers the finger, and showing a vote of no confidence in debauched FedBux backed by nothing but “Faith and Credit.”

  36. Unsealed documents in the Jeffrey Epstein case indicate one minor victim approached the FBI for assistance with a civil suit in 2014. Predictably, the Democrat’s NKVD did nothing, since Names Above Reproof would’ve been revealed as regulars on Epstein’s Pedo Island.

    https://twitter.com/Techno_Fog?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1289021598561980416%7Ctwgr%5E&ref_url=https%3A%2F%2Fwww.zerohedge.com%2Fpolitical%2Fhere-are-top-highlights-ghislaine-maxwells-unsealed-court-records

  37. From Zero Hedge:

    “Just days after the establishment – via its Big Tech partners and liberal media propagandists – entirely disappeared a viral video of a dozen doctors discussing their real-life experiences of treating COVID-19 (and in some cases using the “extremely dangerous” medicine – if mainstream media is to be believed – hydroxchloroquine) and getting children back to school; the founder of “America’s Frontline Doctors” – Dr. Simone Gold – has been fired from her job as an Emergency Medicine Specialist in Los Angeles, CA.”

    1. I don’t think this party serves any purpose. Worked tirelessly doing everything to benefit the rich & corps at the expense of the masses/employees. The rich and the corps don’t need it anymore…and obviously it’s incapable of fighting for the little guys. All it has to offer is war & destruction.

      1. I don’t think our duopolistic Republicrat system serves any useful purpose. It does support the ongoing Kabuki dance performance that distracts the sheeple from oligarch looting activities that are picking over the bones of the U.S. middle class.

          1. +1 Noam (communist) Chomsky has said there’s only one party in the U.S., “The Business Party.”

  39. Unfortunately, for those waiting to buy in the Sacramento area, the market has gone bonkers. Houses are getting multiple offers, often times some offers are all cash offers. Buyers are in a total panic 🙁

    It could be money from SF or other parts of the Bay Area. I don’t know. But it is a completely CRAZY and irrational market, especially considering that the entire US economy has collapsed, with 30+ million unemployed, and likely many more millions to follow in the coming months. I wonder what other dirty tricks the Fed has up its sleeve to keep this insanity going.

    2. Yeah it madness. Hopefully I can work remote into the long term future then I can buy 4 hours away outside of Sacramento where prices are more reasonable.

  41. Politically well-connected Turkish developers went on a speculative building spree funded by Euro-denominated loans from nearly insolvent PIIGS banks, who knew the ECB would backstop any and all gambling losses. Now the Istanbul skyline is dotted with unfinished skyscraper shells, and the Turkish lira’s loss of value makes repayment of loans in dollars and Euros increasingly problematic. Serial loan defaults by Turkish developers could be the catalyst for pushing the PIIGS banks fully into insolvency and re-starting the financial crisis in the Eurozone.

    https://english.alarabiya.net/en/business/economy/2020/07/31/Lira-stumbles-again-as-Turkish-assets-take-a-hit.html

    1. Sure txprs, get something on the vibrant and diverse West Side to be closer to DC. Hint: WBalt was the setting for The Wire.

    2. nobody wants to live in a ghetto. for that matter the whole dc mtro is a huge getto.

  43. Republicans taxing income and Democrat’s want to tax wealth.

    Many Coastal elite Democrats are high earning ( HENRYs) highly educated and Trump torpedoed them with the tax over haul. Democrates fight back wanting to tax hidden wealth that’s been free of income tax . Like farms and big estates.

Comments are closed.