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There Is Only So Long Some Investors Will Be Able To Keep Their Investment Going

A report from the Real Deal on Florida. “The co-managing partner of a private equity firm sold his oceanfront condo in The Four Seasons Residences at the Surf Club at a loss, for $12.4 million. Property records show Thompson Dean purchased the condo from the developer in 2017, the same year the building was completed, for $15.9 million. The property hit the market six months after he purchased it, in June 2018, with an asking price of $21.5 million. After multiple price chops, it was most recently listed for $14.5 million in March.”

From OK Magazine. “Singer Kelly Clarkson is saying goodbye to the $10 million home she bought in Encino, Calif., amid her ongoing divorce battle. The hitmaker will evidently take a price cut if the house sells for her asking price — a cool $9 million. The American Idol winner first listed the beautiful mansion back in May 2020 for the original price she bought it for — $10 million — but it seemed as if she hadn’t attracted any buyers since then.”

From KCRW in California. “Ari Chazanas is president of Lotus West Properties in Brentwood and manages more than 500 units mostly in West LA. Due to the pandemic, he’s seen higher vacancy rates, and has dropped his rent 15-20%. He doesn’t see SB-91 as a win for landlords. ‘It’s better than nothing. But ultimately, I don’t know if it’s right for us to take a 20% discount. At times, I wonder why we’re the backstop for the city,’ he says. ‘I don’t know if I want to take a 20% discount for [a] tenant that hasn’t paid rent for, let’s say, 18 months. It really adds up.'”

“Chazanas says he doesn’t want to evict tenants, and he’s willing to make a deal with renters without government intervention. ‘We’re not in the business of having vacant units. And especially now with all the vacancies that we currently have, we would like to just be able to work out some sort of plan with each tenant on a case by case basis … and hopefully come to some sort of solution that doesn’t involve the City of Los Angeles or the state telling us what we can and cannot do,’ he says.”

The Tahoe Daily Tribune. “Nobody likes to talk about the shadow inventory, but that is a big component of the nationwide real estate mess. Banks can’t just put every mortgage in forbearance in perpetuity and eventually the they will come knocking at the door for their owed monies. Should banks begin to foreclose of borrows who have been in forbearance for almost a year, they can’t put properties on the market as soon as they take possession because they risk creating too much inventory for sale and depressing prices and causing fear in the market place.”

“They will need to carefully limit the release of the properties in their inventory. It is likely that the shadow inventory in Nevada will continue to increase as the government continues with eviction moratoriums and a halt on foreclosures. In Incline Village and Crystal Bay, the shadow inventory consists primarily of properties that sellers have pulled off the market when they did not sell for a year or two and put them into the rental pool or it is an owner looking to trade up or trade down but has limited opportunity to do so in today’s marketplace.”

“This additional rental inventory has helped to depress long-term lease rates in our community by approximately 25% during the past two years.”

From Spectrum 1 New York. “It’s been nearly two years since Hudson Yards opened with much fanfare — a massive development of condos, office space and upscale retailers on a huge platform built over a tangle of railroad tracks on Manhattan’s far west side. But many shoppers have vanished and stores have closed because of the pandemic, raising questions about the development’s future.”

“Real estate statistician Jonathan Miller’s data shows about one-third of the condominiums in 15 Hudson Yards are unsold and three-fourths of the condos in 35 Hudson Yards are unsold. ‘They have their work cut out for them,’ he said, explaining that the market started softening years before the pandemic, which only made matters worse.”

The Calgary Herald in Canada. “Choices abound for Calgarians seeking to rent a new apartment as the market saw two new launches in the final three months of 2020, a new report reveals. But at 84 per cent city-wide, occupancy is far below what it was in the third quarter of 2019 at 93 per cent. Renters have a lot of choice in the new market, the report noted. Average rent also fell to $1.91 per square foot in the fourth quarter from $1.97 in the third quarter. By comparison, rents per square foot were at $2.05 at the start of last year.”

“Competition for renters remains strong with many new projects offering incentives like two months free rent, $500 off the first month of rent and a $500 Amazon gift card. Additionally, many new projects offer a variety of amenities typically not seen with older rental stock.”

From ABC Money on the UK. “According to Rightmove and Zoopla, Clapham ranked number three in the list of areas with the highest demand in London for properties over £2 million. There has been a massive price reduction in the costs of real estate in Clapham in the last ten years. Clapham homeowners face a dilemma; either reduce their asking price by a significant amount or risk not selling their properties for a long time. First-time buyers and potential new homeowners make the most of this fall in prices by rushing to invest in property in this posh district.”

“Clapham has become a trendy area among young professionals and first-time buyers due to the fall in average prices of real estate. These new homeowners can now buy spacious homes that they can call their own without paying exorbitant prices for the same. If you’re interested in owning property in Clapham, you should make the most of this reduction in real estate prices before it is too late.”

The Irish Independent. One-bedroom apartments have become a no-go for Dublin Dockland dwellers with renters avoiding them in their droves during the work from home rules. The exodus of workers from the high-rent hub during the pandemic led to a fall in residential rents that could continue during 2021 as uncertainty continues over reopening dates for large employers. Average rents dropped 13pc since last March as workers were sent home, with high-end apartments falling further, but the fall was greatest for one-bedroom apartments.”

“Owen Reilly, an estate agent specialising in the area, said couples were shunning smaller apartments as there was no space for them to work. Mr Reilly said that landlords would have to be aware that the market was more competitive and consider inducements to attract tenants.”

The Sydney Morning Herald in Australia. “A record price gap has opened between Sydney’s detached houses and units during the last three months of 2020. The median price of a Sydney unit remains $20,000 lower than before the onset of the coronavirus pandemic last March and 7.5 per cent below the median unit value in mid-2017 when property prices last peaked. Domain’s senior research analyst, Dr Nicola Powell, said unit prices could be under further pressure this year.”

“Dr Powell said weak population growth due to international border closures meant there was a risk of further distressed selling by investors in segments of the home unit market that rely on rental demand from new migrants and international students. ‘There is only so long some investors will be able to keep their investment going if they are unable to get a tenant,’ she said.”

The South China Morning Post. “China Evergrande Group saw a weak response from homebuyers to its third round of sales at its Emerald Bay Phase 2 project on Sunday, failing to replicate the upbeat sales recorded by competing developers over the weekend. The developer sold 30 of the 253 units on offer in the Tuen Mun project in the New Territories, according to property agencies.”

“Oversupply in the district and general caution amid the worsening Covid-19 pandemic may have affected the take-up rate, some agencies said. Since the second phase of the Emerald Bay was launched last year, the Guangdong-based developer sold only one-third of the units at the first round in March, and another 18 in the second round a month later, based on previous reports.”

“‘This is an old project that was put onto the market a while ago, so there’s not much fresh interest in it,’ said Sammy Po Siu-ming, chief executive of the residential division at Midland Realty. ‘A new project nearby will be launched soon, so that is also keeping some buyers away.'”

“There may be bigger reasons at play too. Investors may be concerned about the financial health of China Evergrande, the world’s most indebted developer and once a standard bearer of China’s private companies that were seen as too big to fail. It also underscores selective investment in the world’s most expensive real-estate market as Hongkongers are presented with many choices in recent months as home prices slipped amid an economic slump.”

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This Post Has 129 Comments

  1. ‘The hitmaker will evidently take a price cut if the house sells for her asking price — a cool $9 million. The American Idol winner first listed the beautiful mansion back in May 2020 for the original price she bought it for — $10 million’

    Eat yer crowz Thornberg.

    2. The American Idol winner first listed the beautiful mansion back in May 2020 for the original price she bought it for — $10 million’

      Once upon a time, not so long ago, a $10 million mansion was in Bel Air or Beverly Hills, not in freaking Encino.

      I looked at Encino’s entry in wikipedia, and I found this tidbit:

      The neighborhood was considered “not especially diverse” ethnically within Los Angeles, with a high percentage of white residents.

      So that’s all it takes in LA for a community to have mega buck shacks?

      1. “Once upon a time, not so long ago, a $10 million mansion was in Bel Air or Beverly Hills, not in freaking Encino.”

        I am a val, I know
        (Valley girl)
        But I live in, like
        In a really good part of Encino
        So it’s okay
        (Valley girl)
        (Valley girl)

  2. ‘Should banks begin to foreclose of borrows who have been in forbearance for almost a year, they can’t put properties on the market as soon as they take possession because they risk creating too much inventory for sale and depressing prices and causing fear in the market place’

    ‘They will need to carefully limit the release of the properties in their inventory. It is likely that the shadow inventory in Nevada will continue to increase as the government continues with eviction moratoriums and a halt on foreclosures’

    Open discussion of market manipulation – check!

    1. Fake elections…

      Fake housing supply…

      Among a plethora of fake in current times.

      Wanna buy some Gamestop stock?

      You can’t!!!!

  3. ‘about one-third of the condominiums in 15 Hudson Yards are unsold and three-fourths of the condos in 35 Hudson Yards are unsold’

    After two years! BTW, I have to decide each day to go international or US only, but the crater is all over the place. I’ll try to catch up tomorrow.

    There’s plenty of Toronto crater, but I like to go back to Alberta from time to time.

  4. ‘There has been a massive price reduction in the costs of real estate in Clapham in the last ten years’

    Ten years? Once the most expensive RE: London, Manhattan, Hong Kong, Sydney. How the mighty have fallen.

  5. You voted and supported the democrat marxists for years. Probably have a BLM sign on your front lawn too.

    “At times, I wonder why we’re the backstop for the city…”

    1. You voted and supported the democrat marxists for years.

      FWIW, we don’t know that. There are Republicans in California.

      That said, I wonder why any ersatz Republican landlords didn’t unload their properties when they could and get the heck out of Dodge? I suppose that answer was that they were expecting their Clownifornia properties to continue appreciating, and thought that selling and leaving meant leaving money on the table.

      Also, as much as Clownifornia Republicans like to complain, as long as they are making money they don’t really want to leave. They’ll bloviate about the weather, the beach, “the family is all here”, Disneyland, etc.

  6. CNBC — San Francisco businesses teeter on the brink after a year of lockdowns, fires and other hurdles (1/30/2021):

    “The financial distress is particularly acute in the San Francisco Bay Area. Since the first shelter-in-place order took effect in San Francisco in mid-March, the city has seen a 45% drop in the number of open small businesses, according to new data compiled by the San Francisco Chamber of Commerce.

    During the first few weeks of 2021, persistently high virus counts and a slow vaccine rollout have further tested the endurance of companies already battered by the pandemic. The state of California has begun to relax restrictions as infection rates finally begin to drop. Still, with entire sections of the U.S. economy still frozen in amber and lingering uncertainty around additional fiscal relief under President Asterisk’s new administration, small business owners in the Bay Area and across the country are increasingly anxious about their future.”

    https://www.cnbc.com/2021/01/30/san-francisco-businesses-on-the-brink-after-lockdowns-fires.html

    45 percent is that a lot?

    1. I luv it when people who support and vote for democrat marxists get slapped in the face with marxism.

      Stupid should hurt as fools will learn no other way.

      1. In my experience, small business owners tend to vote Republican, as they understand what it takes to make payroll. It’s their employees who vote Democrat.

    2. The state of California has begun to relax restrictions as infection rates finally begin to drop.’

      Relaxing restrictions because all the important people like Newsom got vaccinated and need money now after wrecking the place.

    3. “The state of California has begun to relax restrictions as infection rates finally begin to drop.”

      The state of California has begun to relax restrictions now that the Orange Man is out of the White House.

      1. Too late, the damage is done. These guys seem to think that they can flip a switch and everything will be back normal overnight.

      2. And they’re going to be hit HARD with the UK and/or South African variant. Meanwhile, Ivermectin is languishing.

  7. How much space do you need for a laptop and a cup of overpriced coffee?

    “said couples were shunning smaller apartments as there was no space for them to work.”

    1. said couples were shunning smaller apartments

      More likely they are getting cabin fever and are afraid of going outside.

    2. actually in our circumstance, we tend to need quiet (to concentrate).
      I am not sure how couples can work remotely without being in 2 different rooms – and the kitchen does not count.

      1. It works for Mrs Spiffy and I, but likely because we have converted one of the living rooms into our office, about 18’x16′ and our desk don’t face each other. Combine that with Bluetooth noise cancelling headsets and work gets done. Helps that we’re both software developers.

          1. The treehouse office!

            Ah true. I had forgotten I once shared a pic here. 🙂 The view is still the same, but a lot more grey, wet and colder today.

            It helped that we decided on this house back in 2015, WFH capability was already on our ‘must have’ list. Even then, my long term goals had a lot of scenarios were we’d be WFH for years if not permanently.

            Suddenly having the need to Work From Home (and maybe also have the kids Learn From Home) come up after and the house or apartment has been chosen, paid for and moved into…and then finding they don’t have the space is a real big ouch. Nobody really saw the 2020/corona situation coming, or the scramble for places remote and/or larger that it would trigger.

  8. I just read something interesting re: China RE. First you have to not look at the micro – i.e. entire ghost cities built where people dont want to move, and that some cannot afford asking rents in big cities. But on aggregate – China currently has built enough housing to accommodate their entire population (esp given that their population is actually slightly falling due to the 1-child policy). So all these ‘investors’ that were hoping for rapid appreciation (even to the point of not even renting out their house) will run in the figurative great wall at some point.

    Aside – when i was last in Beijing 6 years ago, the construction workers (from the country side i was told) actually sleep on the construction site in temporary housing.

    “There may be bigger reasons at play too. Investors may be concerned about the financial health of China Evergrande, the world’s most indebted developer and once a standard bearer of China’s private companies that were seen as too big to fail.

  10. “So all these ‘investors’ that were hoping for rapid appreciation (even to the point of not even renting out their house) will run in the figurative great wall at some point.”

    https://www.bloomberg.com/opinion/articles/2021-01-25/the-stocks-bubble-o-meter-is-flashing-bright-red
    Markets
    The Stocks Bubble-O-Meter Is Flashing Bright Red
    Easy money? Check. Exciting narratives? Check. Excessive valuations? It depends where you look.
    By John Authers | January 24, 2021, 11:13 PM MST

    “What exactly is a bubble, as opposed to an expensive market? Charles Kindleberger, in his classic Manias, Panics, and Crashes, gave the necessary conditions: easy money, and an exciting narrative that will encourage people to invest. A bubble results when valuations become excessive, and investor behavior is dominated solely by attempts to sell to someone else for a higher price [“greater fool”], rather than any rational assessment of value. This is what economist Hyman Minsky called the “Ponzi phase.” At this point, the slightest interruption to easy money can bring the party to an end.”

  11. “So all these ‘investors’ that were hoping for rapid appreciation (even to the point of not even renting out their house) will run in the figurative great wall at some point.”

    https://www.bloomberg.com/opinion/articles/2021-01-25/the-stocks-bubble-o-meter-is-flashing-bright-red
    Markets
    The Stocks Bubble-O-Meter Is Flashing Bright Red
    Easy money? Check. Exciting narratives? Check. Excessive valuations? It depends where you look.
    By John Authers | January 24, 2021, 11:13 PM MST

    “What exactly is a bubble, as opposed to an expensive market? Charles Kindleberger, in his classic Manias, Panics, and Crashes, gave the necessary conditions: easy money, and an exciting narrative that will encourage people to invest. A bubble results when valuations become excessive, and investor behavior is dominated solely by attempts to sell to someone else for a higher price, rather than any rational assessment of value. This is what economist Hyman Minsky called the “Ponzi phase.” At this point, the slightest interruption to easy money can bring the party to an end.”

    1. This is what I don’t get about the vampire squid thing going on. You read a lot about “stickin’ it to the man!” But they are not mentioning the flip side: stuffing large amounts of free money in yer pocket. Yeah, that’s never blown up.

      So who are you gonna sell to? Other neo-occupy wall street people? They’ve got the same plan. It’s not like some “fat cat” really wants to own some dog of a stock long term.

      On to the next ponzi – silver! That’ll show em! Just how does it matter to anyone how much shiny metal you have in yer bunker?

      Lastly, it wasn’t until I read the Globe and Mail articles yesterday that I became aware these people are using stock options. There’s a reason why this was (formerly) reserved for high net worth individuals: you can get yer faced ripped off in 5 minutes and end up owing way more than you gambled.

      Any time I read a “narrative” I am skeptical. Narratives pushed by beanie boy wafflers and dry food salespeople especially so.

      1. “beanie boy wafflers”

        Today is Sunday, January 31st and Joe Biden was not elected president of the United States, and Tim Pool is still bald.

      2. So who are you gonna sell to?

        That’s the trick, to not be greedy and sell before the bubble pops. But people have this fear of selling too soon and leaving money on the table, and hang on until it’s too late.

        1. One of the dry food sites yesterday had a bit: “Hold the Line!”

          Like it’s a football game or trench warfare. The shorts are gone. There’s no one on the other side. Look at yer fellow gamblers: are you gonna get out at their expense? Cuz that’s the only option, except to ride a game stock down to where it belongs.

          Which brings up a point: yer magical profits don’t happen til you bail. These people rubbing their mitts about all the money they’ve made, haven’t – until they sell.

          1. The GME retail muppet longs are going to get their heads handed to them. Ditto for those in AMC, BB, and the rest of these Reddit-pumped stocks. I’ve checked out the WallStreetBets subreddits, and they’re “investing” based on emotion and a blind hatred of Wall Street. Which is a recipe for disaster. Coldly dispassionate is the only way to invest. Still, this saga is providing lots of free (for me) entertainment.

          5. Also don’t forget it was Gamestop. Not only did Reddit want to stick it to the man, they wanted to stick it to the man who was angling to profit from rifling the corpse of a once-beloved video game store. I don’t think the little guys would have been so enthusiastic for, say, Sears or Monsanto.

          6. @oxide: If there was a company that could do something, if only it could shrug off its vampire management, its SEE. The stock price doesn’t have much short room though.

          8. Eventually many who used leverage to gamble on risk assets will have their assets handed to them.

      3. “You read a lot about “stickin’ it to the man!” But they are not mentioning the flip side:”

        Nonetheless, the rabbit managed to pull a gun on elitist pricks like Bill Ackman and cost them $19 billion while managing to expose frauds like Elizabeth Warren (who to the best of my knowledge never mentioned Ackman or his CNBC Hilton scheme) and others at the same time.

        TUCKER CARLSON TONIGHT Published 2 days ago

        Last March, as the country began to panic about the arrival of the coronavirus from China, a billionaire called Bill Ackman went on television and attempted to make America even more afraid than it already was.

        “Hell is coming …” Ackman said during an appearance on CNBC. “There’s a tsunami coming, right? A tsunami’s coming and you feel it in the air, right? The tide starts to roll out, OK? And on the beach, people are playing and having fun like there’s nothing going on. And that is the feeling I’ve had for the last two months … We need to shut it down now … America will end as we know it, I’m sorry to say so, unless we take this option.”

        Ackman was especially frightened for the future of Hilton Hotels. Hilton Hotels, he proclaimed, is “going to zero along with every other hotel company in the world.” Not long after that appearance, we learned that Ackman’s firm had made more than $2 billion from trading in the stocks, including Hilton Hotels, that many people believed he had pushed down with such historically dire predictions.

        https://www.foxnews.com/opinion/tucker-carlson-robinhood-gamestop-and-wall-streets-rigged-game

        Elizabeth Warren enters the GameStop fracas with open letter to SEC

        by Avery Cooper January 30, 2021 in Business

        The Massachusetts Democrat raised the possibility that the stock rally, described as a populist rebellion against Wall Street, actually could be driven by “scam artists executing a ‘pump-and-dump’ stock scheme.”

        https://www.jaxdaily.com/2021/01/30/elizabeth-warren-enters-the-gamestop-fracas-with-open-letter-to-sec/

        1. Yellen the Felon collected $800,000 in “speaking fees” from Citadel, one of the hedge funds caught in a wrong-way bet on Gamestop. In total, she’s raked in $7M in “speaking fees” not bribes, mind you, from her speeches to hedge funds. The real scam artists are policymakers in the Biden administration.

          1. There’s a disconnect here. Just how is getting ones face ripped off gonna change Janet’s fees?

            It’s not. Talk about a pump and dump.

        2. Hotels are going to zero. I’ve got a bunch of links that I haven’t had time to post. Sure, there are schemers out there. Let’s hear from the populist dumb-sh$ts that piled into Blackberry.

          ‘These stocks were in a group that has triggered viral discussion on social media, even though companies like BlackBerry and Nokia say there were no recent business changes that would explain the new-found interest.’

          ‘While Reddit users touted these companies’ business models, Ivey Business School finance professor Stephen Foerster said that stocks such as GameStop are priced well beyond the normal range based on their earnings. GameStop lost US$1.6 billion over the last 12 quarters, and its stock fell for six straight years before rebounding in 2020.’

          ‘Foerster also said that while the ownership of the stocks has changed hands, the trading activity likely won’t give these companies extra money to transform their business models.’

          “What we are observing is very similar to what was observed a couple of decades ago, during the so-called dot-com bubble. Stocks were not being traded based on their realistic future prospects — in terms of generating future cash flows, profitability,” says Foerster.’

          “Rather, they were traded for other reasons that one, in retrospect, could say were not based on fundamentals.”

          ‘One explanation for the sudden stock swings is a long-established pattern called a short squeeze, said Foerster. Short sellers will borrow a stock for a high price and sell it, said Foerster. Then, ideally, the short-seller would buy it back later at a lower price to keep the difference.’

          ‘But if a stock goes up instead of down, Foerster said, short-sellers must set aside more and more money. Eventually, they may need to buy the stock back at a higher price to cover losses, he said, further bumping up the price of the stock. GameStop is one of the most shorted stocks on Wall Street.’

          “It does involve some outlay of cash for those who are the short-sellers, because short-selling is such a risky strategy. If I short-sell a stock, my potential losses are unlimited — because if the stock price keeps going up, then that means I’m going to lose out. This seems to be playing out, in particular, with GameStop stock.”

          ‘While it’s still unclear who exactly is bidding up some of these shorted stocks, Foerster said this week’s trading activity has highlighted generational investing differences. Discussing investments on social media and trading on commission-free mobile apps is much different than the behaviour of previous generations. who participated in the markets through investment managers, said Foerster. Wealthsimple Trade, one such app, said last month its average investor is 30 years old, and that new users increased by 80 per cent to 380,000 between July and December.’

          ‘Foerster said he doesn’t necessarily see a need for regulators to intervene in the current activity, but said that it may end up being a wake-up call or learning experience for the investors involved. While some online forums tout the recent rally as revenge against Wall Street, Foerster said investors might find themselves “winning the current battle” but losing the war. If the stock falls, he said, someone will be left holding the bag.’

          “I’m not one to make predictions of stock prices,” said Foerster. “This is a case of a stock currently being so out of whack relative to its fundamentals — inevitably, something almost always has to give.”

          https://www.ctvnews.ca/business/banks-report-disruptions-as-traders-pile-into-blackberry-gamestop-shares-1.5285931

          1. “What we are observing is very similar to what was observed a couple of decades ago, during the so-called dot-com bubble. Stocks were not being traded based on their realistic future prospects — in terms of generating future cash flows, profitability,” says Foerster.’

            Point taken.

      4. So who are you gonna sell to? Other neo-occupy wall street people? They’ve got the same plan.

        From a ZH article:

        I have been monitoring the WSB threads, and while the WSB veterans know that they’re making a suicide charge for the memes, they have brought thousands of naive, new investors with them – who predominantly think that they’re going to somehow come out on top, not realizing that they’re cannon fodder for the more savvy WSB users to exit with gains.

        Redditors never seem to stop and think about why the WSB guys know so much about derivatives trading.

        Or how they seem to know how to access and read from a Bloomberg Terminal.

        Or why there are so many users there that can seemingly drop tens or hundreds of thousands of dollars on complicated meme plays.

        How do you think that WSB knew that GME was open to a short squeeze and a gamma squeeze play?

        WSB’s power users are younger finance bros. It’s 30-something investment bankers and portfolio managers memeing with each other a. cosplaying as “autists.”

        If you didn’t know what a gamma squeeze was 48 hours ago, you are their exit strategy and the down payment on their next Porsche.

        1. It’s beyond crazy that novice retail investor muppets are allowed to lever up and place big bets using options. These fools are playing way out of their depth, creating systemic risks to the markets and financial system in the process. Well-regulated markets would never allow this level of recklessness and greed by “investors” who are in way over their heads.

          1. It looks like Robinhood and SoFi have teamed up with “the suits” to fleece the remain sheep under the guise of “democratizing investing.”

        2. A couple of shares in GME at $250/each is not a suicide charge. The memes were worth the money.

          But now the Reddit retails are taking on silver, which is a much bigger market with much bigger sharks. That will be a suicide charge. So suicidal, that I think the big boyz planted a mole in WSB to goad the Reddit retailers into it.

      5. I got an email(spam) from a dealer. $19 and change for silver.

        Sounds to me silver prices have a long way to fall.

      7. “Lastly, it wasn’t until I read the Globe and Mail articles yesterday that I became aware these people are using stock options.”

        Yep, shorting means you owe those shares to someone else, and when the shares rise in price rather than fall then you have to pay more, sometimes a whole lot more for those shares. It’s too bad that pension funds are in bed with these hedge funds these days. Indeed, that Vanity Fair piece by Bethany McLean that you posted months ago was an eye opener.

  12. The Tahoe Daily Tribune. “Nobody likes to talk about the shadow inventory, but that is a big component of the nationwide real estate mess. Banks can’t just put every mortgage in forbearance in perpetuity and eventually the they will come knocking at the door for their owed monies.”

    Not often seen in such a candid RE article, esp. when discussing the “conspiracy theory” of “shadow inventory.”

    Sabrina Belleci is the owner/broker of North Lake RE/MAX

    Key excerpt:
    “Should banks begin to foreclose of borrows who have been in forbearance for almost a year, they can’t put properties on the market as soon as they take possession because they risk creating too much inventory for sale and depressing prices and causing fear in the market place.”

    – You don’t say? Shadow inventory is not a conspiracy theory then? /s

    – Just like for this 6 mo. extension for rent deferral, LAT article below, I’m expecting the same actions for mortgage forbearance.

    – I’ll repeat my previous comment here: Deferrals, moratoriums, and forbearance aren’t forgiveness. All of the missed rent and mortgage payments are due at the end of the period. It’s extremely unlikely that those affected will have the resources (i.e. thousands of $) to pay in full. So, we’re seeing more extend and pretend as the pain of the property owners and lenders continues to mount, and even when these grace periods expire, they aren’t likely to recoup their losses. The pain will have to be dealt with eventually. Politicians like the “kick the can” policy, since it attempts to push out serious problems until after their term is up. At that point it’s “somebody else’s problem.” A lot of the rent deferral and moratoria are largely pandering to the political base + outright Socialism, esp. in Clownifornia.

    https://www.latimes.com/california/story/2021-01-29/newsom-extend-covid-eviction-moratorium-june
    California
    Gov. Gavin Newsom signs bill to extend COVID-19 eviction protections through June

    By Patrick McGreevyStaff Writer
    Jan. 29, 2021 10:31 AM PT
    SACRAMENTO —

    “Gov. Gavin Newsom on Friday signed an emergency bill that will extend through June eviction protections for Californians suffering financial hardship because of the COVID-19 pandemic, acting just days before an earlier moratorium was set to expire.”

    1. Alternative headline:

      “Government-mandated California economic collapse to continue through June”

  13. A Las Vegas Mall Became Nearly Worthless in Six Months. It’s Probably Not the Last.
    Bloomberg, January 28, 2021
    The Prizm Outlets mall, about a 40-minute drive south of Las Vegas on the California border, lost 95 percent of its value in six months.
    …auctioned off on Wednesday at a final price of $1.525 million, compared with a $28.2 million appraisal in July

      1. 40 miles south of LV is the middle of nowhere in the desert.

        Built solely for LA traffic heading to LV on I-15.

        Not much of a business plan.

        I would buy it and sell everything banned or highly taxed in California and make it a destination.

        Cigarettes
        Guns
        Liquor
        Freedom of speech
        Books on US History
        Homeless be gone spray

        Etc.

          1. “Si Homeless be gone habla español.”

            Come to think of it, I don’t ever remember seeing any Hispanic homeless people.

          2. 😀 There were steps to a side door to another business next to our business’s entrance and it attracted bums so we’d wet them down (the steps, not the bums) while saying “Bums Away!” Corny, but we found it amusing.

      1. That looks grim.
        We’ve been here since 2006 and I never went down there; I heard that for a place calling itself an outlet, there were no bargains to be had. Just yesterday I was wondering if the hotels in Primm (adjacent to the outlet, as I recall) are still open, don’t care enough to look it up.
        We used to drive over from NYC to Secaucus, NJ to (real) outlets in the 70’s – just racks of stuff inside warehouses, real bargains.

        2. Most of the stuff in the outlet malls are not bargains; they are lines of clothing designed and manufactured especially for the outlet store. May as well be the store brand of Cheerios. Once in a while, I’ve found a clearance rack which does contain some items which had been returned.

          1. they are lines of clothing designed and manufactured especially for the outlet store

            Agreed. In the beginning, outlets were clearinghouses for unsold inventory from department or flagship stores. Over time, outlets became stores for often inferior secondary lines of a given brand.

          2. I worked p/t for Hoffritz for Cutlery (OOB long ago) in the main office. That’s what they did. The sale stuff was inferior to their regular line.

          3. In the beginning, outlets were

            Real factory outlets were where there were actual factories, as in the fabric mills of Reading PA.

          4. Factories went overseas, but there are (were?) still outlets attached to distribution warehouse, especially for catalog companies. That’s where all the unsold leftovers in unpopular sizes/colors, one-off items, and returns end up. So they sell the merch on site.

          5. Agreed. In the beginning, outlets were clearinghouses for unsold inventory from department or flagship stores.’

            that’s what Costco is for

          7. They just razed the Huntley Premium Outlet mall in the far exurbs of Chicago. The place never caught on. Was always empty. Surprised it lasted the 2 decades it did. The Eddie Bauer did have some great deals right before the shutdown. And you are correct, the names of the clothing in the outlet mall stores never corresponded with the names in the retail or online stores. Always found that odd.

  15. But ultimately, I don’t know if it’s right for us to take a 20% discount.

    It has nothing to do with right or wrong, Ari. It has everything to do with socialist morality, since you choose to live under a Bolshevik uni-party regime.

  16. Should banks begin to foreclose of borrows who have been in forbearance for almost a year, they can’t put properties on the market as soon as they take possession because they risk creating too much inventory for sale and depressing prices and causing fear in the market place.”

    In other words, if FBs knew the true state of the housing market, they’d be walking away from their underwater shacks in their millions. Guess we’d better keep ’em in the dark for as long as we can, since we wouldn’t want to spook the herd now, would we.

  17. Clapham homeowners face a dilemma; either reduce their asking price by a significant amount or risk not selling their properties for a long time.

    Gosh, that sounds like a real quandary. Me, I’ll just sit tight here in my comfy rental and watch the carnage play out from afar, while trying mightily to remember that we’re all in this together.

      1. I refuse to buy into a bubble. Sanity will eventually return, along with true price discovery. There will be bargains galore on that fine day.

        1. “I refuse to buy into a bubble”

          It’s a nice feeling knowing that I may never pay interest to a bank again for the rest of my life.

    2. I hear ya, and as a renter, feel the same way (that looks dangerous) but I keep remembering this video.
      jerry seinfeld – cabs in manhattan
      64,887 views • Jun 18, 2009
      youtube.com/watch?v=MtbdctQIqYw

      The “professionals” really care and are only doing/saying this stuff for your own good /s (preaching to the choir here); they’ll eventually get us all.

      Just as an aside, you’d expect this in NYC cabs, but on one bus ride I levitated a couple of inches off the seat (more than once) with a lunatic driver at the wheel. I also remember a gypsy cab accident where the driver didn’t even try to help his injured passenger. He got out, removed the plates and walked away.

    1. 129 percent of the GME float is still shorted. Don’t even understand how that’s possible, or legal.

      1. I don’t know if even Yellen could extricate Citadel from their wrong-way bets on GME. Melvin Capital threw in the towel and covered their shorts for a loss of $7B, but I don’t know what kind of paper or realized losses Citadel is sitting on. Like Ben said, you don’t win or lose until you sell. I think a lot of options had to be covered on Friday, but it looks like both longs and shorts are holding firm, for now. Next week could be a different story, especially if there’s a broad-market selloff.

        1. a different story

          One thing that will not be different is that the rich players make the rules, and change them as it suits.

        2. “I think a lot of options had to be covered on Friday, but it looks like both longs and shorts are holding firm, for now.”

          Put options and shorting are vastly different.

  19. How Donald J. Trump Lost The White House

    by Patrick Byrne | Deep Capture
    January 31st 2021, 10:39 am

    Former Overstock CEO breaks down the voter fraud, the inside baseball in Trump’s White House, foreign election interference, and more.

    In this chapter I will follow that principle. I shall start with an analysis of the packet traffic on Election Day 2020. As packets travel through the Internet they leave a trail, and dolphin-speakers using the right tools can, in a sense, “shine a light” and reveal those packet trails in the cyber-fog. Here is a video of only 1 minute which shows hundreds of foreign entities (many in China) who, on November 3, 2020, were hitting voting machines across Pennsylvania, Michigan, Wisconsin, Arizona, Nevada, and Georgia.

    https://www.infowars.com/

  20. How DJT Lost the White House, Introduction: Why I Was Involved Before November 3 & What I Learned Because I Was (1.3)

    January 24, 2021 14 min read

    On the last day of July, 2020 a dear friend of mine from Montana, a stolid, Native American fellow several years my junior, visited me at my home in Utah to check on my health. Weeks earlier I had had surgery on my spinal chord, as one of my legs had gone paralyzed over the months of the pandemic. He told me that there was a group of people, some ex-federal some not, some cyber-experts and some of various other expertise, who were organizing on the subject of election fraud. My friend was adamant that I get involved and help them. My friend was quite a squared-away individual, and I always took his advice and requests seriously.

    The next day, August 1, my friend died in a plane crash. As the coincidence was troubling, I looked into it personally (I am a multi-engine instrument land and seaplane pilot). It does seem to me to have been the error of his instructor, who flew the plane into a Montana box canyon without the power to climb out.

    At my friend’s funeral I met some of the people he had described. A sober, quiet man with a FEMA background and a deep knowledge of biowarfare; a retired Army Colonel with a background in Military Intelligence including psyops; other men and women with backgrounds in everything from law enforcement to cyber operations in military contexts and in support of law enforcement (such as, most recently, operating against human trafficking rings in the Southwest) to the study of reverse-engineering mass election fraud. For it had turned out that there were some irregularities in the Dallas 2018 election that had spawned a network of cyber-enthusiasts on election fraud. They were convinced that industrial scale election fraud was possible, and on its way. Soon some key players were dropping through and seeing me in Utah, and I, still recovering from surgery, was driving around to meet them in other cities.

    https://www.deepcapture.com/2021/01/draft-1-0-the-inside-story-of-the-steal/

    1. I had the five Sunday morning political talk shows streaming on C-SPAN Radio while I was cooking and doing some cleaning today (that’s noon to 5pm Eastern every Sunday, without commercials, for those interested).

      Every host and almost every guest agreed that there was no “election fraud” in 2020. There are over seventy million of us, we’re not going away, and we will not be silenced.

      Joe Biden is not the legitimately elected president.

      We are the leaderless resistance.

      1. We are the leaderless resistance.

        But…but I thought you can’t be The Resistance unless the media and desicated libtard Hollywood has-beens are on your side.

  22. Joe Biden has just signed 42 executive orders.

    13 Sep 2019

    Then the subject turned to the matter of race and inequality, and moderator Linsey Davis posed this question to Biden:

    “In a conversation about how to deal with segregation in schools back in 1975, you told a reporter, ‘I don’t feel responsible for the sins of my father and grandfather, I feel responsible for what the situation is today, for the sins of my own generation and I’ll be damned if I feel responsible to pay for what happened 300 years ago.’ You said that some 40 years ago. But as you stand here tonight, what responsibility do you think that Americans need to take to repair the legacy of slavery in our country?”

    There was a smile (some called it a “smirk”) on Biden’s face as he listened to the question. And he answered her this way:

    (I’m gonna cut to the chase)

    “Play the radio, make sure the television—excuse me, make sure you have the record player on at night, the—make sure that kids hear words, a kid coming from a very poor school, a very poor background will hear 4 million words fewer spoken by the time we get there.”

    https://www.politico.com/magazine/story/2019/09/13/joe-biden-record-player-debate-228105

      1. One goober shambling around the Capitol Building with a Confederate flag, and naturally that is all the media fixates on, aside from the whack job with the Auschwitz sweatshirt. A couple of freak shows, hardly representative of the protestors as a whole, but right out of central casting for the role of “far-right villain” as far as The Narrative is concerned.

      1. And now rocketing up…get hedge shorty!!!

        DJIA F 29,978 99 0.33%
        S&P F 3,717.75 12.55 0.34%
        NASDAQ F 12,934.50 23.25 0.18%

    3. Are your stock market investments turning into random number generators? I guess so long as the numbers keep randomly spiraling skyward, it’s all good.

  26. That fuggin idiot saying wear two masks now.

    They was fearin resistance. They’re gonna have a civil war on their hands.

    1. Fauci: “If you have a physical covering with one layer, you put another layer on it just makes common sense that it likely would be more effective.”

      This kind of crap just kills me. This whole pandemic, they’ve been talking to us as if we’re five years old. Common sense? Can’t they at least talk us as if we’re, say, fifteen? Is it really so hoard to say: “There’s a new variant from South Africa. It’s more contagious than the one that’s been going around. One mask might protect you [65%] from the current strain, but one mask only protects you [40%] from the SA strain. But if you wear two masks, you’ll have [70%] protection from the SA strain. If we don’t do this, we’re going to have 1.5 times more spread than we did before.”

      (where [xxx] are made-up percentages, but likely in the ballpark. )

      I’m pretty sure Americans can handle that. Instead we get first-grade BS like “now wash your hands like a good little girl, it’s only common sense.” No wonder people think it’s a plandemic, if scientists talk so stupidly. Makes me so impatient.

    2. “That fuggin idiot saying wear two masks now.”

      Put a pillow over your face, that will stop you from getting something that has a 99.7 percent survival rate.

    3. District AI
      @districtai
      ·
      15h
      Im going to retweet this everytime it comes across my timeline. When you follow everything he says blindly, to put it bluntly, you are not smart.

      Eli Klein
      @TheEliKlein
      · 15h
      Fauci on double masking:

      “There’s no data that indicates that that is going to make a difference”

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

  27. Biden Turns the War Machine Back On

    41,932 views•
    Jan 25, 2021

    608 Comments

    25depleteduranium
    6 days ago

    “The wars aren’t meant to be won, they’re meant to be endless.” George Orwell’s “1984”

    wattage2007
    6 days ago

    Biden’s not actually doing anything though. It’s his handlers. Joe doesn’t even know what day it is.

    https://youtu.be/hlv4Ok1dqo4

    1. “Biden Turns the War Machine Back On”

      The progressives don’t yet realize that the Democrats and Republicans both support the America’s Business Party.

    2. Biden Turns the War Machine Back On

      As long as there isn’t a draft, few will care.

      Now, if the deplorables stopped enlisting, that could change things.

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