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The Tables Turned

A report from 6 Sq Ft in New York. “While some of Donald Trump’s family businesses have managed to profit from his presidency, his condo buildings in New York City continue to see significant price drops. From 2016 to 2020, overall closing sales prices at nine Trump-branded condos dropped by 25 percent, according to CityRealty. Some of the biggest price cuts include a studio at The Dominick, the Spring Street building formerly named Trump Soho, which is listed for $399,000, a 51.6 percent drop from the closing price in 2012, at $824,200. At Trump Parc in Midtown West, a three-bedroom apartment is now asking $6,975,000, a nearly 41 percent cut from the closing price of $11,800,000 in 2014.”

From Mansion Global on New York. “Manhattan’s rental market continued to soften amid the Covid-19 pandemic, with the vacancy rate exceeding 5% in August for the first time in 14 years. More than half (54.2%) of the new leases signed in August came with landlord concessions, the largest market share in nearly a decade, according to the report. Listing inventory soared 166% year-over-year to 15,025 in August, the highest level in more than14 years and third straight monthly record, according to the report.”

“‘The vacancy rate was unusually high, and the trajectory was steep,’ said Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel and author of the Douglas Elliman report. ‘We saw weakness in the starter market, with studios and one-bedrooms registering 10.5% and 8.4% declines in median rent, respectively.’ This was largely due to the fact that unemployment was skewered to lower wage-earners, he added.”

From Curbed New York. “Fernando Urdapilleta always wanted to live on the Upper West Side of Manhattan but could never afford the rent — that is, until now. When his then landlord offered Urdapilleta a free month of rent if he renewed his existing lease in Lenox Hill, he sensed the market was finally shifting in his favor. Rather than take the deal, Urdapilleta looked for Upper West Side apartments and found a two-bedroom right off Central Park for almost $200 less than it rented for pre-pandemic. After negotiating, he got a month and a half of free rent.”

“‘I saw a ton of great options, better than what I had and for less money,’ he said. The shake-up began in March when a number of Manhattanites did leave the city, leading to a rise in vacant apartments and once-unthinkable rent drops. Since the real-estate market opened back up in June, people chasing deals are moving within New York City — leaving new vacancies (and declining rents) behind them.”

“‘The tables turned,’ Urdapilleta said. ‘Before, I had a rough time trying to secure an apartment. Now, landlords and brokers were fighting over me and throwing in months for free. Some New Yorkers are just taking advantage of that right now.'”

From Housing Wire. “Mortgage credit in August was the tightest in more than six years as a weak economy prompted lenders to tighten standards, the Mortgage Bankers Association said in a report. The group’s Mortgage Credit Availability Index fell 4.7% to 120.9 last month, the lowest since March 2014, indicating stricter requirements to get loans. The index plunged from record highs seen in late 2019 after the COVID-19 pandemic caused the worst economic contraction since the Great Depression.”

“The drop in the availability of credit was ‘driven by a reduction in supply from both conventional and government segments of the market,’ said Joel Kan, an MBA associate vice president. ‘Credit continues to tighten because of uncertainty still looming around the health of the job market. A further reduction in loan programs with low credit scores, high LTVs, and reduced documentation requirements also continued to drive the overall decline in credit availability.'”

From CNBC. “As of this week, 3.7 million borrowers are still in government and private sector mortgage forbearance programs. That’s about 7% of all active mortgages, according to Black Knight. About three-quarters of those still in bailout plans, delaying their payments and sinking deeper into debt, are now in renewals. They have extended their plans by another three months. These borrowers are likely unemployed or receiving reduced income due to the pandemic.”

“The serious mortgage delinquency rate in June was triple what it was in March and is expected to move much higher, but not all of those borrowers are destined to lose their homes in foreclosure. ‘While some would go into foreclosure proceedings, many would sell rather than lose all the home equity that they had gained through appreciation over the last several years,’ said Frank Nothaft, chief economist at CoreLogic.”

From Nevada Public Radio. “Although the housing market is doing well overall, some landlords with just a few properties are struggling because of the eviction moratorium. Jillian Batchelor, a board member of the Nevada Association of Realtors, pointed out that some landlords have only one or two properties to rent out. Sometimes landlords are families who are moving out of state because of work or they’re in the military but don’t have the equity to sell just yet.”

“Batchelor is also a homeowner and rental property owner. She believes the extension is really just putting off the problem. ‘We need to find a solution to the problem and extending this is not the solution,'” she said, ‘Because all it is going to do is push off the problem and you have a lot of landlords who maybe haven’t been able to collect rent since February, March, April, May… they still have to pay these mortgages if they owe money on these properties.'”

“Batchelor also believes a large jump in foreclosures is not likely. She points out that because the housing market is so healthy right now, and houses are appreciating rapidly, people can stay in their homes because of forbearance gain equity, and then sell. ‘Now, what might have been a foreclosure may not be a foreclosure,’ she said.”

From Seattle PI in Washington. “Fortunately, or unfortunately, depending on if you’re a buyer or a seller, Seattle’s condo inventory continued to rise with 892 units for sale in August. That reflected a hefty 36.4% additional condos for sale compared to a year ago and 20.4% more than the prior month. This number only reflected Seattle condos listed for sale in the NWMLS, which isn’t the true number the condo inventory. Seattle still has hundreds of under-construction or nearly completed condos that are available for pre-sale purchase but are not included in the NWMLS database.”

“One neighborhood outlier swayed the citywide average…downtown. With a 6.9-month inventory supply rate, downtown Seattle is markedly in a buyer’s market. And, that’s just NWMLS listed inventory. The downtown market is worse off when contemplating the new condo buildings under construction. As the downtown market slows, it’s not unforeseeable that we’ll may have a year’s worth of inventory, or more, in the near future as those buildings complete. In fact, one of the new condo buildings recently reduced their prices, and there may be more on the horizon.”

The Chicago Tribune in Illinois. “Six months after the COVID-19 pandemic first shook Chicago, the city’s once-mighty downtown — with its towering skyscrapers, glamorous shops and glittering public spaces — is a humbled giant, taking only tentative steps toward recovery. At the city’s tallest building, Willis Tower, 15,000 office workers poured through the lobby on a typical day before the pandemic. On Thursday, between 8 and 9 a.m., Tribune reporters counted 75 people passing through its main entrance.”

“Depressed by two waves of looting that stunned Chicago, foot traffic on and around the Magnificent Mile shopping district was less than half what it usually is. Occupancy rates for downtown apartments are the lowest they’ve been in 18 years. In Chicago, as in other American cities hammered by the pandemic, the stakes are enormous. Largely due to the COVID-19 slowdown, which has cut deeply into tax revenues from hotels, restaurants, retailers and ride-sharing companies, Chicago is projecting the largest budget deficit in its history, $1.2 billion, for fiscal 2021.”

“On a typical pre-pandemic September weekday last year, Metra’s 11 commuter railroad lines had a ridership of almost 275,000, according to the rail agency. On Sept. 3, that figure stood at about 25,000, 9% of normal — up just slightly from the 3% low point of April 10. Absent downtown’s magnetic pull, suburban train stations sit empty, as do their once-coveted parking spaces. At a Lake Forest station, ‘people were fighting to get a spot at 9 in the morning. Now there’s three cars there,’ said Michael H. Ebner, professor emeritus of history at Lake Forest College.”

“At The Shops at North Bridge indoor mall along North Michigan, the owners of the Giuseppa Collection, which sells Italian-inspired women’s clothing, said sales were down about 75% compared with last summer in June and July. After the second round of looting, it got even quieter. ‘Last year there were so many tourists, so many local people,’ said owner Grace Krynski. ‘It’s a completely empty street.'”

From The Real Deal on Florida. “The condo association for a Miami River project is suing a group of developers and subcontractors, alleging $10 million in design and construction defects. Terrazas Riverpark Village Condominium Association filed suit last month in Miami-Dade Circuit Court against more than 80 parties. The association alleges that unit owners only discovered the defects in the 328-unit project, at 1861 Northwest South River Drive, after buying their condos.”

“The report notes the ‘generally poor conditions’ of the roofing system, water leaks in some of the units, cooling towers ‘in a state of abandonment and [that] require significant repairs and maintenance’ and a smell of gas and fuel in the boiler room that ‘may present a life safety issue since such gas may be flammable.'”

“The Miami River towers aren’t the only project entangled in legal woes tied to alleged construction defects. Unit owners at the ultra-luxury condo development Glass in South Beach filed suit in June, alleging the development group failed to build the 10-unit, 18-story condo development in accordance with building codes, manufacturers recommendations and permitted plans. Meanwhile, the condo association for Aria on the Bay filed suit in August, alleging a litany of construction defects at the 53-story luxury tower near Edgewater.”

The San Francisco Chronicle in California. “It’s finally a renters’ market in San Francisco (maybe), and large apartment buildings are doing whatever they can to find new tenants without decreasing the value of the property. In this case, that means two-months free rent and a free Peloton bike including the membership fee. It might even be three-months free rent? The title of the listing says “three months free,” while the listing itself says two months free. My guess is if you take the Peloton offer you only get two months free, as we’ve seen something similar in other listings.”

“It goes for … drumroll … $1,995/month! Zumper reported the median rent of a studio in Nob Hill is $2,125.”

From Mansion Global on California. “San Francisco’s high-end condo market was the only luxury segment to record year-over-year declines, falling 19%. The city has a wealth of active apartment listings, accounting for 73% of the overall properties on the market. Housing stock in San Francisco has ‘risen dramatically over the last few months,’ said Patrick Carlisle, chief market analyst for the San Francisco Bay Area at Compass. The number of homes on the market in San Francisco jumped 75% year over year during the four weeks ending Aug. 23, according to a separate report last month from Redfin. The increase in inventory has pushed almost a quarter of sellers in the city to cut their asking prices to remain competitive.”

From Bakersfield.com in California. “An uptick in home mortgage defaults and trustee sales in Kern County since April may suggest foreclosures stemming from the COVID-19 economic slowdown could slow an otherwise strong local single-family housing market. The rebound in local foreclosure-related activity has been modest and totals remain well below levels reported just a year earlier. It’s likely the situation would be worse if not for a moratorium on certain foreclosures.”

“‘The (projected) increase in foreclosures will increase the (local home) supply and drive down prices,’ Bakersfield appraiser and market observer Gary Crabtree said by email. But, he added, ‘This (jump) should be ‘mild’ compared to ‘The Bubble’ that led to a jump in foreclosures in 2008 and 2009.”

“Bakersfield real estate agent Jeanne Radsick noted that not all homeowners who exercised their right under the CARES Act to delay making mortgage payments necessarily needed the extra time. That means the situation, though challenging, may not be as bad as it looks, she said. Radsick, who serves as president of the California Association of Realtors, added that the association has projected that 60,000 California homeowners could be foreclosed on.”

“That’s a lot, she said by email, ‘but many of those in forbearance (delaying paying their mortgage) won’t be ultimately foreclosed on. Our current project is for less than 10% of sales next year to be foreclosures compared with 30-40% back in 2008,’ she wrote.”

This Post Has 126 Comments
  1. ‘Before, I had a rough time trying to secure an apartment. Now, landlords and brokers were fighting over me and throwing in months for free. Some New Yorkers are just taking advantage of that right now’

    That’s the spirit!

    1. Hmm maybe I should just find a deal on a massive 2 bedroom condo apartment instead of chasing overpriced Sacramento homes that have bidding wars?

      1. I keep saying this to you again and again, but it doesn’t seem to be sinking in:

        Unless this time is different, your best buying options won’t materialize until 2025 or so. My suggestions are:

        1) Save in a way that your savings don’t disappear.

        2) Rent until prices drop by at least 30% and everyone you know says you would be crazy to even think about buying a place.

        1. How to best save in a way the savings don’t disappear? Just a mix of cash, bonds, and stocks? Precious metals are a little hard to store in a one-bedroom apartment!

          1. 1) Diversify across asset classes and countries.
            2) Avoid chasing retail investing fads (e.g. FANG+, cryptocurrencies, Barstool Dave daytrading activity, etc.).
            3) Dollar cost average your investments over time.
            4) Include inflation hedges in your asset mix.
            5) Pick a conservative allocation and periodically rebalance.
            6) Consider using tax deferred savings vehicles if available to you.

          2. PS Leveraging up to concentrate your life savings into a single lumpy asset (namely purchasing a sfr) is fundamentally one of the worst possible diversification strategies. Buying a home will only remain an effective investment strategy so long as preferential government subsidies and Fed support continue to make it so.

        2. Rent until prices drop by at least 30%

          30% off isn’t even remotely enough given the insane increase in prices. 60% off doesn’t even bring back historic affordability in places like Bend, Oregon.

        3. Why buy a house when you can rent one for half the monthly cost?

          Buy it later after prices crater for 70% less.

          Raleigh, NC Housing Prices Crater 14% YOY On Plunging Housing Demand

          https://www.zillow.com/raleigh-nc-27613/home-values/

          *Select price from dropdown menu on first chart

          As one Raleigh broker bemoaned, “I’ve never seen such disinterest in housing in my 20 years in this business.”

          1. @Mafia Blocks,

            Hate to break it for you but renting a house now in Sacramento at least in a decent safe area is very expensive rents 2-3k for a 3 bedroom home. Same as buying now due to crazy low interest rates.

          2. I am with you at heart, but have to wonder if we will live long enough to see the Fed’s de facto housing price support program fail sufficiently to get us to 70% off.

            I acknowledge that Ben has offered numerous recent anecdotes about 50% off real estate sales, so perhaps I am being overly pessimistic.

          3. They quietly moved out a week ago.

            Houses in my Nabe are selling at record high prices. Houses in nabes closer to the interstate sell even more briskly. There are few quality employers in the area, and none are hiring, so I don’t get it. Is everyone buying WFH with an office in Denver?

  2. ‘Our current project is for less than 10% of sales next year to be foreclosures’

    You are so fooked Jeanne.

  3. ‘The Miami River towers aren’t the only project entangled in legal woes tied to alleged construction defects’

    Well, it was cheaper than renting.

  4. ‘This number only reflected Seattle condos listed for sale in the NWMLS, which isn’t the true number the condo inventory. Seattle still has hundreds of under-construction or nearly completed condos that are available for pre-sale purchase but are not included in the NWMLS database’

    Openly discussing market manipulation – check!

    ‘large apartment buildings are doing whatever they can to find new tenants without decreasing the value of the property’

    Double check!

    1. ‘large apartment buildings are doing whatever they can to find new tenants without decreasing the value of the property’

      They’re trying to hide reality. Craigslist and apartment guides are chalk full of overpriced listings that nobody even considers renting. The gimmicks aren’t working. They need to lower the asking prices, and when they do it “decreases the value of the property.” There’s no way to avoid it.

      1. chock-full

        It will self correct in time. Hide the true rents to avoid a margin call from the bank. Reality will cause default. The price will reset.

  5. ‘A further reduction in loan programs with low credit scores, high LTVs, and reduced documentation requirements’

    Wa?

  6. ‘She points out that because the housing market is so healthy right now, and houses are appreciating rapidly, people can stay in their homes because of forbearance gain equity, and then sell. ‘Now, what might have been a foreclosure may not be a foreclosure’

    I think this line of horse-sh$t just might be the cake taker.

    1. ‘Sometimes landlords are families who are moving out of state because of work or they’re in the military but don’t have the equity to sell just yet’

      Don’t have equity? Why that would mean they are underwater. Which would mean prices fell after they snapped up?

      sa·cré bleu
      /ˌsäkrā ˈblə/
      exclamation: sacré bleu

      -a French expression of surprise, exasperation, or dismay.

    2. Hopefully she’s lying. If not, it’s time to call out the orderlies with butterfly nets and a straight jacket.

      1. What a great marketing ploy! “… people can stay in their homes because of forbearance gain equity”.

        Because people can stay in their homes instead of being forced to sell there arises a shortage of houses being put up for sale. This shortage puts upward pressure on prices, hence instead if dying out as it should FOMO is given new life.

        “Hopefully she’s lying.”

        Probably so (after all, she is a realtor), but … you use what works.

    3. Don’t pay mortgage.

      Delay, delay, delay.

      Take profit on that sweet equity that builds up in that time period.

      What could go wrong….?

    4. “Mortgage credit in August was the tightest in more than six years as a weak economy prompted lenders to tighten standards, the Mortgage Bankers Association said in a report. The group’s Mortgage Credit Availability Index fell 4.7% to 120.9 last month, the lowest since March 2014, indicating stricter requirements to get loans. The index plunged from record highs seen in late 2019 after the COVID-19 pandemic caused the worst economic contraction since the Great Depression.”

      Any idea of the lag time between a tightening of credit standards and a bottoming of home sale prices? It seems like it has taken around five years or so for prices to reach the bottom of the crater in past real estate busts, but I’m wondering if this time will be different for some reason.

  7. ‘At a Lake Forest station, ‘people were fighting to get a spot at 9 in the morning. Now there’s three cars there’

    ‘sales were down about 75% compared with last summer in June and July. After the second round of looting, it got even quieter. ‘Last year there were so many tourists, so many local people…It’s a completely empty street’

    But are you safe? Cases? Ventilators, mouth hankey! Looks like somebody shot themselves in the fook.

    1. Friend in the healthcare industry told me of one small clinic that got @ 8 million for covid and has yet to see a single case. Another got many multiples of that, has seen only 1 case and they sent the person to the main hospital in the state.

      But state needs lockdown, no sitting on the beach, golfing, hiking on trails, etc. Intentionally committing financial suicide.

      1. Can Larry Ellison visit his near private island?

        And how do the locals feel about a Silicon Valley billionaire owning almost the entire island?

      2. He owns most of the island, pretty sure everyone’s paycheck depends on him so he can do whatever he wants.

        Interesting to note that a descendant of the big sugar families had partnered up with another big landowner in 2012 to buy vacation rentals they’re now trying to unload.

    1. Biden supporters again.

      When you demonize the police and call them the enemy…what you think will happen?

      And FYI.

      BLM most peaceful demonstrators showed up at the hospital where these two deputies are on life support. Threaten their families, threatened other police there and shouted that they hoped they die.

    2. ‘We Hope They Die!’ Protesters Gather Outside Hospital Treating 2 California Deputies Shot in Ambush

      Chris Menahan
      InformationLiberation
      Sep. 13, 2020

      Two Los Angeles County sheriff’s deputies were shot repeatedly at point-blank range in an ambush on Saturday and Black Power protesters responded by gathering outside the hospital where they were being treated to shout “we hope they die” and threaten officers that “you’re next.”

      https://twitter.com/infolibnews?lang=en

        1. But if you are on the “other side” and use a wrong adjective or meme…

          You are doxxed, fired and shunned.

          1. All Lives Matter has been deemed racist by the Narrative. It was in the “bad” column in the Goodyear indoctrination slides that were leaked.

          2. It can get you fired by the woke appeasers.

            ‘A University of Massachusetts-Lowell dean was fired after sources say she wrote “everyone’s life matters” in an email’

            https://campusreform.org/?id=15157

            ‘NBA announcer Grant Napear fired over ‘All Lives Matter’ comment’

            https://nypost.com/2020/06/02/nba-announcer-grant-napear-fired-over-all-live-matter-comment/

            ‘“Black lives don’t matter. All lives matter,” one worker wrote in the comments during one of the virtual all-hands meetings, according to screen shots obtained by Bloomberg. Another said the phrase Black Lives Matter “reinforces racism” because it singles out one ethnic group.’

            Read Newsmax: Cisco Fires Workers for Racial Comments During Diversity Forum | Newsmax.com

        2. Wow, these thugs are just such nice people, wouldn’t everyone want these animals to take over the Country. Pretty insane that this group talks equity , fairness and Justice when they attack innocent people.
          These people aren’t nice.

          The mob protestors making the demands they are making. We are coming for your house, we wish you were dead, kneel to us, death to America as they burn the flag.
          The protestors in the 60’s where not like this. You had some extremists that set off bombs here and there, but they were small in number.

          1. Funny how these event NEVER make the evening news.

            It’s because the media is now an anti-American terrorist outfit.

      1. Try that line of BLM’ing with soldiers and see how the reactions go when you say you hope they die. I don’t think the media wants to have it go that way.

  8. No mention of power mad marxist mayors and govenors.

    No mention of the BLM looting, rioting, anarchy and surging crime.

    “The Chicago Tribune in Illinois. “Six months after the COVID-19 pandemic first shook Chicago, the city’s once-mighty downtown — with its towering skyscrapers, glamorous shops and glittering public spaces — is a humbled giant, taking only tentative steps toward recovery.”

    1. Actually, the Tribune article included this statement (and Ben quoted it): Depressed by two waves of looting that stunned Chicago, foot traffic on and around the Magnificent Mile shopping district was less than half what it usually is.

  9. ‘Eviction moratoriums have prevented more San Francisco businesses from folding, but the city’s commercial eviction moratorium ends on Sept. 14. That means commercial tenants will have until Monday to pay back missed rent payments – which for many add up to six months rent – or else landlords can start evicting them as early as October. Locals fear that once commercial evictions begin, those who depend on the businesses for jobs, culture and community will be displaced, and the cultural landscape of San Francisco will be irreparably harmed.’

    ‘Real estate attorney Allan Low is working pro bono to assist small business owners in the city’s Asian cultural districts. He says without immediate steps on both the federal and local level to address the threat of permanent closures, “We’re going to be faced with a tidal wave of evictions, bankruptcies and retail landscapes that are just going to be completely obliterated.”

    https://www.kqed.org/news/11837511/whats-lost-in-bay-area-asian-culture-when-sf-eviction-moratorium-ends

    1. The former cultural landscape of SF was irreparably destroyed by the ever-increasing rents over the last decade. Funny thing about culture — it tends to thrive when things go sideways. All that empty commercial real estate space is a grand cultural opportunity.

  10. Thanks Ben for ongoing, objective coverage an comments about the continuing slow-motion train wreck called the U.S. housing market.

    – My observations & comments (for what they’re worth):
    1) CRE/Rental market in major metros, MSAs:
    a) Much lower demand, esp. in leftist city-states.
    – CCP virus pandemic
    – Socialism-in-practice policies:
    – homeless enabled & encouraged
    – drug use & theft now misdemeanors and so encouraged
    – human waste “piling” up
    – leftist local government support for “peaceful protests.”
    – “peaceful protests” to include riots, arson, assault, murder
    – “defunding” police departments
    – Due to (a), a sudden desire by (former) residents to “bug out”
    – Get me out of here!
    – To the suburbs, small towns and hinterlands!
    – Socialism is Western Civilization in retrograde
    – Civility vs. Barbarism: Tough choices /s
    b) Econ. 101: Supply and Demand.
    – Demand evaporating
    – Supply commensurately soaring.
    – Apparently Socialists are ignorant of basic economics
    c) Econ 101: CRE investors and builders
    – paid too much
    – overbuilt (due to market distortions by the Fed)
    – Cap. rates of 5% or less were the norm leading up to this
    – The Fed distorting markets with ultra-low rates
    – Drives speculative, yield-seeking behavior
    – Causes malinvestment, overbuilding
    – Lack of accurate market signals (i.e. interest rates)
    – Price discovery? Eventually, but we’re just getting started
    – Lower prices: It’s clear for CRE that the direction is down
    2) RRE/Homeowners/Loanowners
    a) Two-tier market
    – Upper-tier doing fine
    – Record low mortgage rates continue apace
    – Employed and so not credit limited
    – Bugging out of major (blue) metros (see (1)).
    – Lower-tier & subprime not doing fine
    – Credit tightening
    – High LTV, low FICO, low down, GSE support declining
    – Forclosures deferred: Forbearance, aka “extend and pretend”
    – “Everything is fine” until 11/3/20 elections, or by 01/21
    – The Fed distorting markets with ultra-low mortgage rates
    – Lack of accurate market signals (i.e. interest rates)
    – Price discovery? Eventually, but when?
    – Lower prices:
    – Bubbles always pop
    – Price inversely proportional to mortgage rate
    – Prices up, but hitting affordability limit again
    – It’s all about the “nut”; the mortgage payment
    3) Summary
    – It’s complicated. It doesn’t have to be, but
    – the Fed, crony capitalism, oligarchy
    – Socialism: State ownership of the means of production
    – In this case it’s the captured FIRE sector
    – Market forces used to win out, but the Fed is now the market
    – CRE was a bubble and is now clearly doomed
    – RRE is still a bubble due to record low rates
    – Employment drives mortgage demand for conventional buyer
    – Employment is weakening due to Main St. economy weak
    – Expansion was artificially extended, but not permanently so
    – “Extend and pretend” continues until 11/3 elections
    – Economic stimulus in the $T’s can go on forever (MMT=lie)
    – There should be a change in character by Jan., 2021
    – Long Au (gold), Pb (lead), and of course, popcorn! 🙂

    1. red pill,
      You got all the variables for sure in your post. So, does that mean your predicting Depression, major housing crash and a Stock Market crash for next year?

      1. “…does that mean your predicting Depression, major housing crash and a Stock Market crash for next year?”

        – No one knows the future, but history is a guide, since human behavior is a constant.

        – Economic/Business/Credit cycles are still the norm. The Fed has extended/delayed, but hasn’t prevented the cycle:
        – The Panic of 1907: DJIA -49% (pre-Fed)
        – The Panic of 2008-9: DJIA -53% (Fed)

        – The stock “markets’ market cap. is approx. $35-40T. The Fed balance sheet went from ~$4T to ~$7T (incr. by $3T, so far). This reflects desperation, but can’t stop the selling when it happens in earnest. Wall St. (earnings) is still based on Main St. Consumer = ~70% of economy. The Fed can’t (yet) buy stocks directly.
        – The Fed is supporting stock asset prices, but can’t do so indefinitely.
        – We’ve been in a bear market since Aug., 2018.
        – The economy and employment are weakening again now that stimulus is being withdrawn.
        – Small to medium enterprises (SMEs), aka small businesses, are the driver of jobs and innovation, but now in serious trouble due to bailouts of the banks, large corps., Wall St. vs. Main St.
        – I don’t think “it’s different this time.” Ref.: 2000 dot com crash, 2008-9 housing bubble 1.0 + GFC crash.
        – This artificially stimulated economic cycle was the longest on record, but ended with the CCP virus. Weakest expansion, now in contraction.
        – I do expect stocks to crater (more) soon. The bear market ain’t over by a long shot.

        – CRE bubble is bursting. That’s obvious to me. CRE is already cratering.
        – RRE is still in a bubble due to upper-tier demand + record low rates. I don’t think it’s cratering yet, but soon, due to weakening employment.
        – Employment drives demand for conventional, shelter-buyer, which is the primary market cohort now, and employment is weakening, even for upper-tier.
        – The Fed is trying to maintain RRE bubble 2.0 as asset prices are all that matters to them, but the real economy is weakening. Lowest rates ever won’t matter if you lose your job. Recall that credit is tightening. I think we’ll see some major shift by early next year.

        – The Fed’s real “dual mandate” is to support 1) stock and 2) housing asset prices for the wealthy, and because, hey, those are the only positive economic indicators left, even if they don’t reflect Main St. or reality.
        – Bubbles always pop, and a command-and-control, centrally-planned economic system always fails. That’s why it’s the (former) USSR, for example.
        – Time will tell. Patience is a virtue.

      2. I long ago predicted I would someday see things that would make WWII and the Holocaust look like a tea party. The world seems to be moving in that direction. I’m only 54 so plenty of time for TSTHTF in my expected lifespan.

  11. ‘Four individuals — two in Washington, one in Oregon, and another in California — have been arrested for arson as firefighters battle dozens of blazes across the West Coast. One of the arrestees is reportedly a “regular attendee” of anti-police rallies in Seattle.’

    ‘One of the suspects, Jeffrey Alan Acord, has been accused of setting a fire along Highway 167. He live-streamed himself on the scene of the fire and reported it to police, claiming that he “literally pulled over to call it in.”

    “Other drivers, however, told police they watched the 36-year-old Puyallup man walk into a field carrying a lighter and cardboard,” KIRO 7 reported.’

    ‘The outlet added that Acord is a “regular attendee at Seattle ‘defund police’ rallies.” He is also facing charges for allegedly breaking into a gas station.’

    ‘Jacob Altona, 28, has also been arrested in connection to arson. Additionally, Anita Esquivel, 37, has been arrested for deliberately setting fires in California, according to the California Highway Patrol.’

    ‘The news comes as Democrat politicians continue to blame the fires across the region on climate change. Politicians, such as Sen. Bernie Sanders (I-VT), are largely using the devastation to push for a Green New Deal but continue to ignore the reality of poor forest management and environmentalist policies that contribute to the massive wildfires, such as putting an emphasis on “fire suppression” rather than prescribed burning.’

    ‘Despite that, Gov. Gavin Newsom (D) has used the tragedy to declare the debate around climate change over for good. “The debate is over around climate change. Just come to the state of California, observe it with your own eyes,” Newsom said with a grin. “It’s not an intellectual debate, it’s not even debatable”

    https://www.breitbart.com/politics/2020/09/12/four-arrested-for-arson-on-the-west-coast-one-a-regular-attendee-of-anti-cop-rallies-in-seattle/

    But FBI said unpossible?

          1. #ClownWorld gets more ludicrous by the day. A hot woman models an orange dress. Bravo Foxtrot Delta. Don’t people have better things to get upset about?

          2. #ClownWorld gets more ludicrous by the day.

            And they don’t care that we mock them for their insanity. They’re winning and they know it.

          3. And they don’t care that we mock them for their insanity. They’re winning and they know it.

            I don’t think they’re winning, I think they’re losing. The media can give the appearance of something that’s not true.

          1. We need to be able to legally moon “our” elected officials. Sure, it’s a futile gesture, but so is writing a letter to our worthless captured “representatives.”

          2. Was supposed to embed the image, unless Ben has it locked down

            I don’t believe us normal folks can inline images/use <img> tags

      1. FOUR ARRESTED FOR ARSON ON THE WEST COAST, ONE A ‘REGULAR ATTENDEE’ OF ANTI-COP RALLIES IN SEATTLE

        “Drivers told police they watched a 36-year-old Puyallup man walk into a field carrying a lighter and cardboard.”

        Breitbart – SEPTEMBER 13, 2020

        Four individuals — two in Washington, one in Oregon, and another in California — have been arrested for arson as firefighters battle dozens of blazes across the West Coast. One of the arrestees is reportedly a “regular attendee” of anti-police rallies in Seattle.

        The Jackson County Sheriff’s Office said in a news release Friday afternoon that on Tuesday evening, a resident of Phoenix saw a person, later identified as Bakkela, lighting a fire behind their house on Quail Lane. Because there was an impending blaze, the residents who saw him set the fire had to flee their home.

        Elsewhere, authorities arrested two individuals in connection with the fires in Washington. One of the suspects, Jeffrey Alan Acord, has been accused of setting a fire along Highway 167. He live-streamed himself on the scene of the fire and reported it to police, claiming that he “literally pulled over to call it in.”

        “Other drivers, however, told police they watched the 36-year-old Puyallup man walk into a field carrying a lighter and cardboard,” KIRO 7 reported.

        https://www.infowars.com/four-arrested-for-arson-on-the-west-coast-one-a-regular-attendee-of-anti-cop-rallies-in-seattle/

      2. Nuisance sez California fires are soon to hit every corner of the U.S., if climate change isn’t stopped in its tracks.

        I have the feeling that he hasn’t been away from California much, to visit places that either have regular rainfall or very little vegetation that can fuel a raging inferno…that is, almost anywhere else in the U.S.

    1. Arsonist start scores of fires in the west every year. That’s nothing new. What is new is how hot and dry forests and scrub (chaparral) are.

      1. Don’t fret, my dear. The moment that Trump is out of office, global warming will magically go away and things will be all better.

        1. I was expecting quite the opposite: The moment Biden-Harris take over, Global Warming and Climate Change will suddenly ascend to the greatest societal challenge in the history of mankind, and will trump all other issues (no pun intended!).

          1. “Global Warming and Climate Change will suddenly ascend to the greatest societal challenge in the history of mankind,”

            That would be my guess also.

            The moment that Trump is out of office, COVID19 will magically go away and things will be all better.

        2. “Don’t fret, my dear.”

          fjm’s not wrong though. Arson, legal and illegal campfires not extinguished properly, lightning, sparks from vehicles, cigarette butts thrown out car windows (see this one all the time), etc.

          That said, 10+ years ago I’d assume deep forest fires were only the result of lightning or campfire mismanagement. These days, given this country’s politics, it wouldn’t surprise me to find out an anarcho-environmentalist or other paid ne’er-do-well would set fires in the name of “proving” climate change. But even then, fire forensics tends to flush out the cause.

          There are 34 fires in Oregon alone right now. IDK, maybe we pump the brakes and let law enforcement do their jobs instead of fanning more flames?

      2. Arsonist start scores of fires in the west every year.

        People shoot guns all the time your honor, what’s really the cause here is that the (dead) guy was in a vulnerable position.

      3. Arsonist start scores of fires in the west every year. That’s nothing new. What is new is how hot and dry forests and scrub (chaparral) are.

        Bullsh!t.

        1. Total bullsh!t. I’ve lived in SoCal most of my life. We’ve had so many fires in those 45+ years, their names and years are a complete blur.

          1. I grew up in SoCal, wildfires are not new. But the population has skyrocketed. And of course the dollar value of any houses, etc. burned is much higher.

  12. Listing inventory soared 166% year-over-year to 15,025 in August, the highest level in more than14 years and third straight monthly record, according to the report.

    Is that a lot?

  13. Now, landlords and brokers were fighting over me and throwing in months for free.

    I want to be wooed, landlords. Whisper sweet nothings about sawin’ and slashin’.

  14. In Chicago, as in other American cities hammered by the pandemic, the stakes are enormous. Largely due to the COVID-19 slowdown, which has cut deeply into tax revenues from hotels, restaurants, retailers and ride-sharing companies, Chicago is projecting the largest budget deficit in its history, $1.2 billion, for fiscal 2021.”

    A criminal element emboldened by a corrupt, incompetent Democrat municipal administration and a Soros-installed Attorney General had nothing to do with the exodus of taxpayers and job creators out of the city. This was purely COVID related. #KnowYourNarrative.

  15. The association alleges that unit owners only discovered the defects in the 328-unit project, at 1861 Northwest South River Drive, after buying their condos.”

    As usual, the REIC-captured regulators and code enforcers were criminally negligent if not complicit with the corner-cutting.

  16. Unit owners at the ultra-luxury condo development Glass in South Beach filed suit in June, alleging the development group failed to build the 10-unit, 18-story condo development in accordance with building codes, manufacturers recommendations and permitted plans.

    I am shocked, shocked! to learn that “ultra-luxury” skyboxes built by corner-cutting developers and cowboy contractors, and “inspected” by regulators and enforcers on the take, could ever be riddled with defects. Democrat DAs will move swiftly to hold the guilty accountable and ensure justice is done.

  17. Oxford, AstraZeneca resume coronavirus vaccine trial

    “LONDON — Oxford University announced Saturday it was resuming a trial for a coronavirus vaccine it is developing with pharmaceutical company AstraZeneca, a move that comes days after the study was suspended following a reported side-effect in a U.K. patient.

    Although Oxford would not disclose information about the patient’s illness due to participant confidentiality, an AstraZeneca spokesman said earlier this week that a woman had developed severe neurological symptoms that prompted the pause.”

    https://www.foxbusiness.com/markets/oxford-astrazeneca-resume-coronavirus-vaccine-trial

    I’m a bit bothered that the reason for resuming the trial hasn’t been disclosed; that is, why they think the illness wasn’t related to the vaccine. “Patient privacy” is not a good enough answer.

    1. oxide,

      I always thought that no vaccine that they have developed had been risk free. I have read about a lot of damage to people.
      So, my point is ,are they going to have higher standards on this one because everyone is watching , or what.

  18. “‘While some would go into foreclosure proceedings, many would sell rather than lose all the home equity that they had gained through appreciation over the last several years,’ said Frank Nothaft, chief economist at CoreLogic.”

    This logic is a primary motivation for the Fed to support housing prices, as the alternative to redistributing wealth effects to mortgage HODLers is mass underwaterness, defaults, walkaways, and foreclosures.

  19. Ya’ll can hullaboo that covid is nothing But those elevators in any/all tall buildings are enclosed virus spreaders even before covid. Now add covid on top of the cold/influenza/flu viruses and you have 4+ persons on a 20+ floor ride in an enclosed box and your cellmates are all coughing flem…………..

    1. Nobody in their right mind would choose to live in an elevator-dependent high rise condo tower during a respiratory-borne pandemic disease outbreak.

  20. The Republicrat duopoly Establishment is clutching its pearls after Lauren Boebert, the restaurant owner who told Comrade Beto not to even think about coming for her AR-15, beat a 5-term corporate stooge in the primary. What an astonishing turn of events if the screwed-over proles stop voting for career politicians who serve only their oligarch patrons, and instead start voting for political novices who are fed up with our current corrupt political class.

    https://www.politico.com/news/magazine/2020/09/13/lauren-boebert-congress-409983

    1. I saw that video a few weeks ago. The comments were a blast.

      Did you see the part about the “brown” fruits and veggies. Well lady, here’s what happened:

      1. Activists demand that the store stocks fresh fruits and veggies.
      2. store stocks fresh fruits and veggies
      3. urban customers buy potato chips and Coke
      4. Fresh fruits and veggies “turn brown”
      5. Store stops stocking fresh fruits and veggies.
      6. Activists cry r*c!s.
      7. CNBC glosses over this, calling it “customer choice.”

      The comment section was not fooled.

      1. The comment section was not fooled.

        The people are not being fooled by the media. The media is a joke these days.

        1. Check out some of today’s headline anti-white narratives:

          Frank Reich and Colts execs just sent a powerful message about white privilege

          Naomi Osaka’s hair reveals the burdens carried by Black bodies in white spaces

          Black scientists call out racism in the field and counter it

          And on and on….

    1. With plenty of bond HODLings that will increase further in value if rates go more negative, it works for me.

      Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.

      — Albert Einstein

    1. We’ll see how good these tenant unions are at maintaining the housing they want to confiscate. I expect most of them will be eventually become uninhabitable and many will be burned to the ground.

      Future Detroits in the making.

  21. One of Dora’s comrades recently passed:

    The mathematics of death
    Comrade Duch died on September 2nd
    The supervisor of killings for Cambodia’s murderous Khmers Rouges was 77
    Obituary
    Sep 12th 2020 edition

    AS THE VIETNAMESE army closed in on Phnom Penh in January 1979, Comrade Duch was ordered to kill the prisoners remaining in his charge. He just about had time to supervise that. (Killing was not usually done in his prison, only in the fields he had designated at Choeung Ek, seven kilometres away. Unless someone slipped up.) He also started to destroy his archive, but did not get far. The orders from Brother Number Two, Nuon Chea, had not specifically requested that. Besides, he did not greatly want to.

    The archive was well over 100,000 pages, containing meticulous details of the detainees who had passed to death through his prison, Tuol Sleng, or S-21, over the previous four years. (The most exact figure given later was 15,101, but the archive was by then incomplete.) Prisoners’ weight on entering. Their photographs, with the blank look of people at the end of the line. And their confessions, in as many versions as were needed to condemn them. He kept all the versions, with defective parts crossed out in red. In the margins, neatly, he put comments. “Do not write these words.” “Do not play tricks.” The final acceptable confession was typed and sent to “Angkar”, the high leadership of the Communist Party of Cambodia, to Brother Number Two and Brother Number One, Pol Pot himself. That was the rule. He kept at least two copies. Each carried his decision about the prisoner: “Can be destroyed.” “Take away.” “Keep for medical experiment.” His preferred word was “smash”. That too was the party rule. At once, or later.

    The system he had devised at S-21 was simple, logical and perpetual. It could feed unceasingly Comrade Pol Pot’s hunger (which had become his own hunger) to root out the bourgeois oppressor class and purge the country of traitorous elements. Each prisoner was made to incriminate in writing between eight and 11 others. Those others were arrested. They, in turn, incriminated at least eight people. So it went on at the most important and most feared prison in the country: a sequence relentlessly reproducing.

    He felt proud of this system. It appealed to him as a mathematician. He had been a star in the subject at school, brilliant enough to get to the Lycée Sisowath in Phnom Penh, even though his family was poor and he was mocked as half-Chinese. His graduation marks in the Baccalaureate were the second-highest in the country. He became a maths teacher, quiet but firm, until communist revolution distracted him. And when that failed he returned. He taught maths and English in refugee camps, maths and Khmer in China, and when he emerged from hiding in 1999 presented himself as a maths teacher. As though he had never diverted.

    Teaching, too, was his natural bent. At S-21 he rarely did interrogations himself, but trained the interrogators. Many came with him from the first prison he had ever run, M-13 in the maquis. They were mostly young peasants with a low level of culture, but he trusted them. At S-21 he would telephone them every 20 minutes to check on progress. Most prisoners could be bullied verbally into “confessing” with threats, or “evidence” against them, or even with the steady humiliation of being called “Monsieur”, as if they were colonialists. He kept his usual neat record of what was done to resisters. “About 20 whippings with fine rattan.” “20-30 whippings with electrical wire.” “Stuffing with water.”

    1. Who wants to be a communist?

      Khmer Rouge: Cambodia’s years of brutality
      Published
      16 November 2018
      A woman prays in front of skulls of Khmer Rouge victims at the Killing Fields
      Getty Images

      In the four years that the Khmer Rouge ruled Cambodia, it was responsible for one of the worst mass killings of the 20th Century.
      The brutal regime, in power from 1975-1979, claimed the lives of up to two million people.

      Under the Marxist leader Pol Pot, the Khmer Rouge tried to take Cambodia back to the Middle Ages, forcing millions of people from the cities to work on communal farms in the countryside.

      But this dramatic attempt at social engineering had a terrible cost.

      Whole families died from execution, starvation, disease and overwork.

      Communist philosophy

      The Khmer Rouge had its origins in the 1960s, as the armed wing of the Communist Party of Kampuchea – the name the Communists used for Cambodia.
      Based in remote jungle and mountain areas in the north-east of the country, the group initially made little headway.

      But after a right-wing military coup toppled head of state Prince Norodom Sihanouk in 1970, the Khmer Rouge entered into a political coalition with him and began to attract increasing support.

      In a civil war that continued for nearly five years, it gradually increased its control in the countryside.

      Khmer Rouge forces finally took over the capital, Phnom Penh, and therefore the nation as a whole in 1975.

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