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For Investors, Negative Equity Is Just One Part Of The Problem

A report from WTMJ in Wisconsin. “Shorewest realtor Essam Elsafy is counseling his clients through this frenzied housing market. He says acting fast is a necessity. He shared a conversation he recently had with house hunters. ‘We saw a house that we liked. They were in the house for 15 minutes and the conversation went like this: ‘You have been here for 15 minutes. You have to decide right now whether you’re going to spend several hundred thousand of dollars and they looked at me and said, ‘Essam, we spend more time picking out a pair of shoes,’ he said.”

The Denver Channel. “Bozeman is experiencing a real estate boom. Many of the locals are trying to make sure they’re not left out in the cold on the real estate run. It’s been an issue for local Sean Hawksford and his wife. ‘$300,000 turns into $400,000, turns into $500,000, turns into $700,000, turns into ordinary looking properties selling for nearly $1 million. The first house that we made an offer on in August has increased in value over $100,000 since we made an offer on it,’ said Hawksford.”

“So, Hawksford got desperate and did something a little different. He made a sign out of cardboard and got on the side of the road and begged anyone to sell him a home.”

From KOIN. “When the pandemic began, the Oregon Employment Department was shocked to see the average wage going up. Soon, they realized that the occupations most impacted by layoffs were low-wage jobs. ‘When you cut low-wage workers out of the calculation for the average wage, it actually artificially boosted the average wage,’ said economist Damon Runberg. Runberg also pointed out that a lot of people received government financial assistance during the pandemic, whether through increased unemployment benefits or stimulus payments, and said that may have allowed people to still be able to afford to buy a home.”

From Fort Myers Florida Weekly. “When Randy Thibaut described the real estate market now emerging from that seemingly otherworldly place people call 2020, he used the word ‘hallucinogenic.’ ‘We have some factors on our side: expect booming tourism for the remainder of the 2021 season,’ Mr. Thibaut said. ‘And we have some great dynamics fueling our real estate market now, particularly fear. COVID fears come from everywhere. Will I get a house? What’s going to happen with taxes?'”

“‘Am I an optimist?’ asks Mr. Thibaut. ‘No, I’m not. I’m a practicalist, if there is such a word (there is, now). I love to be enthusiastic but I’ve also had my teeth kicked in by the (recessionary) downtown. We’re exuberant that we’ve experienced this run. But we’re still cautious about sustainability through 2021, and beyond.'”

From CBS Bay Area in California. “The real estate selling season is off to a hot start this year and the San Francisco condo market has significantly strengthened since last summer. February’s San Francisco condo sales were up about 48% from last year. And year-over-year, the median condo sales price was down 8%, according to Compass. ‘We have never been busier working with people trying to help them find homes. So yes, there’s an exodus but there’s still a very strong number of people moving here and relocating within here,’ said broker Gregg Lynn.”

The San Francisco Examiner in California. “As San Francisco continues to grapple with the lack of affordable housing, Supervisor Dean Preston is putting a spotlight on vacant units. ‘Tens of thousands of units, and we don’t know how many, sit vacant,’ Preston said. ‘How do we activate them?’ Among the questions Preston wants to answer is if the higher vacancy rate is due to landlords being unable to find tenants because people are leaving or if they are ‘unwilling to lower the rents to new market levels.'”

From Bisnow on Georgia. “Atlanta’s second-largest architectural firm is suing the developer of a long-planned Midtown luxury condominium tower for nearly $800K in unpaid work. Perkins&Will filed a lawsuit in Fulton County Superior Court last month against Olympia Heights Management, seeking payment on two separate invoices for its work on No2 Opus Place, a project that would be the tallest residential tower in Atlanta. Last July, OHM obtained a loan for $25.7M with New York-based SKW Funding, refinancing $22M in debt on the property at 98th 14th St. held by The Ardent Cos., the latest in a string of short-term loans taken by OHM on the property. SKW Funding describes itself as a private lending and distressed debt platform.”

From News 1130 in Canada. “Some experts say it’s time for the government to step in and do something about the severe supply constraint on the Lower Mainland as the housing market heats up once again. Some properties in Metro Vancouver are being relisted for hundreds of thousands of dollars more within a short timeframe. In East Vancouver, realtor Kit Sorongon had a house listed at 1.39 million, which sold in days for 1.408 million. Sorongon says the final price was market value, and he didn’t underprice it.”

“‘When people see a 200, 300 thousand sale over asking, that doesn’t mean it went up by 200 in just a month — they priced it a little lower to create a lot of activity and bidding, and realtors know the real value of the market,’ Sorongon explains.”

From Gulf News. “Prime Dubai properties have been snapped up in the past few months by buyers taking advantage of decade-low prices, easy financing and an economy open for business. Still, while prices of high-end villas have stabilised, apartment prices as a whole in the emirate were mostly still falling in February, a price index shows. S&P credit analyst Sapna Jagtiani does not expect Dubai’s real estate market to recover to pre-pandemic levels until some time next year. ‘Prices are down by 40%-50% from the last peak (2014)…this is why we think a recovery in prices to similar levels will be slow and long,’ she said.”

From Saigon Online. “Vietnamese tourism before 2020 was growing by 30 percent in the domestic segment and 15 percent in the foreigner segment year-on-year, leading to rapid construction of resorts, hotels and the birth of new forms of real estate like condotels (a mix between a condo and hotel). Since the world was hit by Covid-19, however, project investors had to deal with massive profit loss, some failing to maintain contract deals with clients and secondary contractors.”

“The tourism segment of real estate is facing an oversupply and a lack of concrete regulations which points towards unsustainable development, according to the chairman of the HCMC Real Estate Association. Specifically, there are no guidelines on the conditions for raising capital, promoting planned projects for sales, nor is there a definitive contract form regarding condotels and other new forms of vacation homes, which could spell legal doom for future buyers. Despite all that, investors since March have decided to resume construction on many coastal projects.”

The Hong Kong Standard. “Thirty three out of 123 units on offer at Grand Victoria phase one in West Kowloon have been sold, the developers say. Five buyers have forfeited deposits of about HK$3.53 million after walking away from the purchases of five flats at LP6 in Tseung Kwan O. The five units, measuring between 307 square feet and 522 sq ft, were offered at between HK$5.56 million and HK$8.7 million.”

From Market Watch. “The recent surge in Australia’s home prices and rising evidence of deterioration in the quality of mortgage lending may force the hand of the country’s banking regulator before the end of the year. ‘We are starting to see some increase in risky lending, albeit from a low base. I’m expecting macro prudential tightening from later this year but given the speed with which lending and the property market is hotting up, it could come earlier,’ said Shane Oliver, chief economist at AMP Capital.”

“Interest-only home loans picked up to a 19.3% share in the fourth quarter from 18.7% in the third quarter, the highest ratio since mid-2019. Felicity Emmett, senior economist at ANZ Bank, said lending standards are definitely on the decline. ‘Given that house prices and finance have continued to rise strongly into the first quarter, I expect that there will be a further rise in the share of these higher risk loans,’ she said.”

The Australian Financial Review. “Tens of thousands of property owners face the risk of a credit crunch as they struggle to hold properties that are worth less than their loan, despite the recent record-breaking rise in house prices in Sydney and other capitals. The most exposed are property owners in inner-city Sydney and Parramatta, areas dominated by high-rise apartments.”

“More than one in six households (18.2 per cent) in the city and inner south are underwater or in negative equity, analysis by Digital Finance Analytics shows. This means that out of 30,076 mortgaged properties, 5414 apartments and 48 houses were valued lower than the current loan amount as of March 9, 2021.”

“Owners of such properties would find it difficult to refinance their loans to take advantage of the ultra-low interest rates, as the lower valuations would limit the amount they could borrow. If they are forced to sell, they might need to tap their other assets to plug the shortfall. ‘High-rise apartments are on the nose, with values falling in many of these areas, thanks to oversupply, flammable cladding, and defects,’ said DFA director Martin North.”

“For apartment investors, negative equity is just one part of the problem. They are also losing thousands of dollars in rents each month amid widespread apartment rental vacancies. Sydney inner-city landlords were the hardest hit, losing an average of $2653 each in February alone. Investors in the Strathfield, Burwood and Ashfield areas lost $2133 each during the month, and each Parramatta apartment landlord lost an average of $1877. Overall, Melbourne city investors lost a total of $11.78 million in rents during February, which works out to an average of $1954 in lost rent for each landlord.”

“‘For individual landlords, if they own a property in one of the areas with a high rental loss index, they are at risk of vacancy and there would likely be downward pressure on rents,’ said MCG managing director Mike Mortlock.”

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This Post Has 91 Comments

  1. ‘Five buyers have forfeited deposits of about HK$3.53 million after walking away from the purchases’

    Well it was cheaper than renting…

    1. I guess that’s what you call a sunk cost. A very sunk cost.

      Also known as not throwing good money after bad.

  2. ‘a lot of people received government financial assistance during the pandemic, whether through increased unemployment benefits or stimulus payments, and said that may have allowed people to still be able to afford to buy a home’

    I’ll just let that hang out there.

    2. From Bloomberg: Biden Wants Corporate Tax Hike, Help for Families Making $110K,

      Helping people making “6 Fig” should definitely fire up the housing markets and subsequently taxes for the Govt.!

      1. Never mind the unemployable, they want the six figure crowd to become dependent on the government. And once you’re dependent, you will obey, otherwise you will lose the free sh!t.

        1. Democrats’ political plan, in a nutshell: Use race-based criteria to pick winners and losers, and turn everyone into a government dependent in order to gain complete control over the masses…

        2. Loading people down with massive debt burdens is a great way to implement de facto slavery in the post-slavery era.

          1. “Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.”

  3. ‘‘When people see a 200, 300 thousand sale over asking, that doesn’t mean it went up by 200 in just a month — they priced it a little lower to create a lot of activity and bidding, and realtors know the real value of the market’

    Openly discussing market manipulation – check!

  4. ‘And we have some great dynamics fueling our real estate market now, particularly fear. COVID fears come from everywhere’

    Yes, the CCP virus is CAUSING shack prices to skyrocket! It must be the closed businesses or something.

    1. I was thinking perhaps the foreclosure and eviction moratoriums were allowing people who aren’t paying their mortgages or rents to continue occupying the homes they live in “for free”. This would naturally tend to reduce inventory of homes for sale or rent, dry up liquidity in the home purchase and rental markets, and drive up sale prices and rents.

      Government sponsored market manipulation matters!

  6. ‘We are starting to see some increase in risky lending, albeit from a low base’

    Click!

    I could do an entire post right now on the subprime scam in Australia. This is all on purpose. The media down there expects us to forget the guberment and central bank went hammer and tong at driving up shack speculation. Same with Canadia. Count the interest rate cuts. They abandoned multiple loan restrictions, pretty much through it all out the window in a very short time. We know how that ends. But note they don’t care.

    1. The median home price in my hood is well over 700k for a 1400sq ft 3/2 on a 5600 sq ft lot and built the 1970s. I walk around my hood and I don’t see any 200k+ income families. I doubt there is anyone within a 10 block radius of me who could afford to buy the house they are living in using 20% down and 3x times annual income for principal. EVERYTHING here is risky lending, they’ve just lowered the bar for what is officially considered risk.

      4. I’ve been off junk food for over a year but last night I was low on groceries and didn’t want to cook so I hit popeye’s down the street. After tax, it was 11.39$ for two pieces of fried chicken with one side and a drink. I left without it. I would have still been hungry after it. Since when does a small meal in a fast food place cost more than 10$? I’m beginning to sound like my dad.

        1. I haven’t had a real job in a decade but I can’t remember when lunch was under $10.

  7. ‘Sydney inner-city landlords were the hardest hit, losing an average of $2653 each in February alone. Investors in the Strathfield, Burwood and Ashfield areas lost $2133 each during the month, and each Parramatta apartment landlord lost an average of $1877. Overall, Melbourne city investors lost a total of $11.78 million in rents during February, which works out to an average of $1954 in lost rent for each landlord’

    How do those 5% cap rates look now?

  9. Does this shock anyone else?

    “About a third of all Salvadorans now live in the United States, many of them illegally. Many more appear to be coming soon.”

    By Tucker Carlson | Fox News
    8 hours ago

    If you’re from Long Island or suburban Virginia, you know all about MS-13. You’ve read the stories about human trafficking and beheadings. MS-13 is, at this point, El Salvador’s most famous export, along with millions of low-wage workers. About a third of all Salvadorans now live in the United States, many of them illegally. Many more appear to be coming soon.

    https://www.foxnews.com/opinion/tucker-carlson-bidens-border-crisis-has-shown-he-doesnt-value-american-citizenship

    1. I guess not for a country that according to Wikipedia only had a population of 6.42 million in 2018.

      1. El Salvador is tiny, the epitome of a Banana Republic. Compared to them, Mexico is the wealthy colossus of the north.

  11. more of this coming i think. From anecdotal stories, looks like a [significant as 10%?] source of downtown Seattle buying is from Asia.

    —
    “US real estate is once again the top spot for Asian buyers, according to China’s largest foreign property portal. Juwai crunched the numbers on the top destinations for Asia’s buyers, in its annual report. The US claimed the number one spot in 2020, after falling behind countries like Thailand in prior years. Canada managed to hold its fourth spot for a second year, with the bulk of buyers looking at just two cities.

    Second-Homes, And FOMO Driving Overseas Buyers
    There’s some common themes amongst top markets, according to Juwai. “Monetary stimulus around the world has pushed interest rates to historical lows, and helped drive prices upwards,” said the firm. This has created two major trends – bargain hunters of hard hit economies, like Thailand, and FOMO. Juwai’s report states the latter has “… driven some Asian buyers to a near frenzy.”

    High-net worth home buyers are looking at traditional “gateway cities.” New York, Los Angeles, and Miami top the list, and have always been popular, being hubs for immigration. The firm’s clients are largely buying part-time residences, or investment properties.

    1. High-net worth home buyers are looking at traditional “gateway cities.” New York, Los Angeles, and Miami top the list

      You’d think that after witnessing the delights of Burn, Loot, Murder that they would stay away from those sh!tholes.

    2. It wouldn’t bother me at all to see foreign speculators washed away by rising interest rates. Not one bit.

  13. Pronounced in this pandemic housing bubble – although many boomers are in deep debt, many have paid off their mortgage (aside from HELOCs etc). It seems that they are helping their kids purchasing home especially during the lockdowns.

    So the generational wealth transfer is happening well before the parents are passing on. It will be hard for folks in their 20’s and 30’s to catch up if their parents were poorer or renters.

    —

    It’s no secret baby boomers (now between the ages of 57 and 74) are sitting on a pile of money. In the U.S., they are expected to transfer as much as US$30-trillion in wealth to younger generations over the next few decades.

    The share of mortgage-free equity held by those 55-74 increased to 55 per cent in 2021, up from only 46 per cent in 2006. Boomers are paying off their home and now have a lot of money to play with.

    Some of Canada’s banks have estimated that 50 to 60 per cent of young people applying for mortgages today have received assistance from parents. However, Mr. Ramlo said mortgage brokers he’s talked to suggest the number is much higher, probably closer to 90 per cent.

    1. ‘It’s no secret baby boomers (now between the ages of 57 and 74) are sitting on a pile of money. ‘

      It’s no secret to Wall Street and TPTB. They’s going to steal every penny of it that they possibly can. ‘generational wealth transfer’ indeed.

    2. Explains my lame neighbors

      “Pronounced in this pandemic housing bubble – although many boomers are in deep debt, many have paid off their mortgage (aside from HELOCs etc). It seems that they are helping their kids purchasing home especially during the lockdowns.

      So the generational wealth transfer is happening well before the parents are passing on. It will be hard for folks in their 20’s and 30’s to catch up if their parents were poorer or renters.

    1. Daily new US cases has dropped from a January 8 high of 300K, to about 40K, and continues to drop.

      It’s over. The fear porn peddlers (and consumers) just don’t want to accept it.

      Was chatting with an Irish colleague on Slack this morning. They’re still 100% locked down. Even though they only had 347 new cases yesterday.

      1. I don’t know how this got published in the Washington Post but it did.

        Opinion: The Biden administration’s restrictions on vaccinated Americans are ridiculous. Get your shot. Live your life. (3/16/2021):

        “This is ridiculous. I asked Marty Makary, a physician and professor at Johns Hopkins Bloomberg School of Public Health, what the guidance should be. “After you have a first dose, give it four weeks for the vaccine to kick in, and then live a normal life,” he told me. “It’s that simple.”

        He’s right. Studies show that the Pfizer vaccine has a 94.8 percent efficacy in preventing covid infection after the second dose. But writing in the New England Journal of Medicine, Canadian researchers found that “even before the second dose, [the Pfizer vaccine] was highly efficacious, with a vaccine efficacy of 92.6%, a finding similar to the first-dose efficacy of 92.1% reported for the [Moderna] vaccine.” And that is the efficacy rate in preventing any covid infection whatsoever. “It’s 100 percent effective in preventing death after four weeks,” Makary says. The booster shot is essential for longer-term immunity, but “you get incredible protection from the first dose in the short term.” If you’re around unvaccinated people at risk of bad outcomes, use precautions.

        As more Americans get their shots, the combination of vaccinated immunity with natural immunity from prior infection will help us reach herd immunity this spring. “We’ve already hit herd immunity for health-care workers,” he says, because so many have either been vaccinated, infected or both. The same will soon be true in nursing homes, and then in the general population. Suzanne Judd, an epidemiologist in the School of Public Health at the University of Alabama at Birmingham, agrees that based on the vaccination rates and the number of people already infected, the nation may reach herd immunity by May.

        https://archive.is/zjiac

        1. We’ve gone from one extreme to the other in terms of COVID-19 precaution at the top. It’s a testament to the extreme political instability inherent in our creaky two party duopoly system.

      2. The fear porn peddlers will soon be the subject of mass ridicule, at which point we’ll start collectively moving on as a society.

        However, I may continue my pandemic era habit of wearing a mask on airplanes. It’s nice to not have to recover from whatever respiratory virus is going around after a trip.

        1. The wearing masks while driving alone is the most cultish behavior to come out of this. It’s literally become a religion to these people.

        2. It’s nice to not have to recover from whatever respiratory virus is going around after a trip.

          Especially on international flights. Once at Heathrow an Indian woman sitting behind me at a waiting area (not the gate) began to cough up a storm. I moved as far away from her as I could.

          Wearing a mask in a flying tube during flu season might not be a bad idea.

          1. My BIL is a medical doctor. He’s stated that he plans to mask in flight for future travel, and he’s not exactly a risk averse person by nature.

        3. ‘The fear porn peddlers will soon be the subject of mass ridicule’

          ‘Useful idiots become useless mouths’

  15. From the Bozeman piece: “$300,000 turns into $400,000, turns into $500,000, turns into $700,000, turns into ordinary looking properties selling for nearly $1 million.”

    What happens with the property taxes; do they have financing for that too? What’s a “local yokel” to do?

    1. That’s the amazing power of mortgage and appraisal fraud. It’s there to make you poor, by design.

    2. “We’re going to make an offer, we’re going to buy a house, and we’re going to move in and it will be great,” Hawksford recalled.

      Like Oedipus, Sean is writing his own tragedy and blind to the consequences. His moment of clarity won’t happen until his wife is riding someone else’s pony, and he is homeless.

      1. His moment of clarity won’t happen until his wife is riding someone else’s pony, and he is homeless.

        It was only his turn.

        1. You guys talk as if there isn’t an entire MGTOW movement dedicated solely to ending “her turn” the moment she turns 34 or makes noises about wanting a family, whichever comes first.

  16. It was one thing for big tech and investment banks – but now that traditional companies like Ford are going to let white collar folks work from home and only have to come in for big meetings … They can live anywhere in a 2-3 hr commute from their office.


    “The “flexible hybrid work model” unveiled Wednesday lets employees choose to stay home for “heads-down work,” while coming to the office for meetings and team-building activities. The system will debut as soon as July and apply mostly to salaried office staff, not factory workers.”

    “Technology firms have long given employees the option to work remotely. Now, companies in other corners of corporate America are loosening the reins after seeing workers were just as productive — if not more so — while working from home.”
    https://ca.finance.yahoo.com/news/ford-let-30-000-employees-141820262.html

    1. “…traditional companies like Ford…”

      Ford’s bonds are “junk rated.” The Democrats will see to it that Ford’s capital expenditures are frittered on diversity hiring and the EV craze, and the fed will be their bond buyer of last resort.

          1. Scotty Kilmer recommends Ford trucks, and he usually doesn’t like anything that isn’t a Toyota.

    2. coming to the office for meetings

      Are they even going to come in for meetings? At my office, if a meeting happened on a w@h day for a staff member, he wouldn’t be arsed to come in and he would call in from home. That was happening a decade ago.

      2-3 hour commute — well yes, that would be why there are red-hotcake house prices in the outer-outer burbs. Which is ironic, isn’t it? Before this pandemic, we were predicting that it was the outer outer burbs that would suffer most from a housing bust. Now, those honkin’ McMansions might all be little commune homesteads.

    3. The rent gradient moving away from industrial hubs should flatten out if working from home continues after the pandemic restrictions end. Other favorable effects include a reduction in traffic and greenhouse gas emissions.

  17. “For apartment investors, negative equity is just one part of the problem. They are also losing thousands of dollars in rents each month amid widespread apartment rental vacancies. Sydney inner-city landlords were the hardest hit, losing an average of $2653 each in February alone. Investors in the Strathfield, Burwood and Ashfield areas lost $2133 each during the month, and each Parramatta apartment landlord lost an average of $1877. Overall, Melbourne city investors lost a total of $11.78 million in rents during February, which works out to an average of $1954 in lost rent for each landlord.”

    Earlier record-high home prices! I think they overpaid a tiny bit. Well, it was still cheaper than renting.

  18. Interesting paper which confirms many observations especially things like price to income ratios.


    Only four markets are rated affordable (with median multiples of 3.0 or less) — Pittsburgh, Rochester, Buffalo, and St. Louis (all in the United States).

    At the other end of the scale, there are 36 severely unaffordable major housing markets. The least affordable are Hong Kong (20.7), Vancouver (13.0), Sydney (11.8), Auckland (10.0), Toronto (9.9),
    Melbourne (9.7), San Jose (9.6), San Francisco (9.6), Honolulu (9.1), London (8.6) and San Diego
    (8.0).

    Historically, housing affordability had been similar between nations until a few decades ago. For example, national price-to-income ratios were 3.0 or less in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States until the late 1980s or
    1990s,. However since that time, housing affordability has deteriorated significantly and by 2019 national median multiples had increased to 4.0 in the United States and Canada, nearly 6.0 in Australia and 7.0 in New Zealand.

    In a report entitled Under Pressure: The Squeezed Middle-Class, the OECD found that: “…, the cost of essential parts of the middle-class lifestyle have increased faster than inflation; house prices
    have been growing three times faster than household median income over the last two decades.” Further OECD found that “Housing has been the main driver of rising middle-class expenditure,” with the largest increases in the costs of ownership (or housing affordability), rather than rents.

    http://demographia.com/dhi.pdf

    1. Connecting the dots, these country’s “home prices to income disconnect” coincides with their manufacturing being off-shored to China. Ergo, the little people are forced to purchase over-priced shelter with service sector incomes. Since the 90s as the debt has become unserviceable the fed has steadily lowered interest rates with Treasury purchases. Heck of a job!

    3. The Financial Times
      US economy
      Fed sharply upgrades US growth forecast to 6.5% for 2021
      Central bank signals no rate rise until at least 2024 despite offering more optimistic outlook
      Jay Powell, the Fed chair, says there is little concern among the central bank’s top brass over rising debt yields or inflation in the context of an improving economy
      James Politi in Washington and Colby Smith in New York
      2 hours ago

      Federal Reserve officials sharply upgraded their growth forecasts for the world’s largest economy but signalled that they expected to keep interest rates close to zero until at least 2024.

      The median estimate from Fed officials now predicts that the US will grow by 6.5 per cent this year, compared with 4.2 per cent in its December forecast.

      The rosier projections from the Fed came at the end of a two-day meeting of the Federal Open Market Committee on Wednesday. It was held against a backdrop of growing optimism about the US economy in the wake of Joe Biden’s $1.9tn fiscal stimulus and the country’s swift vaccination rollout.

      Core inflation is expected to rise to 2.2 per cent — above the central bank’s 2 per cent target — compared with a smaller rise to 1.8 per cent predicted in December. The unemployment rate is now forecast to fall to 4.5 per cent by the end of the year instead of 5 per cent.

      “Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak,” the FOMC said.

      The FOMC made no changes to its ultra-loose monetary policy on Wednesday, pledging to maintain rock-bottom interest rates until the economy reached full employment, with inflation hitting 2 per cent and on track to exceed that target.

      It also reiterated that it would continue to buy bonds at a rate of $120bn per month until “substantial further progress” was made towards its goals.
      …

      1. People in Debt like inflation

        Jay Powell, the Fed chair, says there is little concern among the central bank’s top brass over rising debt yields or inflation in the context of an improving economy

        1. Economists assume that wages will inflate along with prices, making it easier to pay off fixed-rate debt. Of course, we all know wages don’t rise with inflation, but rent and food prices will.

  22. Speaking of negative equity, there’s a lot more of that ahead with rising long-term interest rates, including mortgage rates.

    1. Trading Nation
      As Fed gets ready to deliver its interest rate decision, Wells Fargo predicts the 10-year yield could reach 2.25% this year
      Published Tue, Mar 16 2021 7:24 PM EDT
      Updated Tue, Mar 16 20218:48 PM EDT
      Stephanie Landsman
      Wells Fargo’s Michael Schumacher: 10-year yield could exceed 2% this year

      Don’t rule out a 10-year Treasury Note yield as high as 2.25% this year.

      That’s the message from Wells Fargo Securities’ Michael Schumacher, ahead of Wednesday’s Federal Reserve interest rate decision.

      “The fiscal stimulus is enormous, and the vaccine rollout seems to be accelerating quite a bit — not just here in the U.S.,” the firm’s head of macro strategy told CNBC’s “Trading Nation” on Tuesday. “A lot of things are coming together to push yields up.” …

    1. We’re trying to nudge my ex-BIL to sell the lakefront property before the next wave of housing collapse. It looks alot like 2006 at the moment, suggesting we might be about two years out.

    1. Breaking windows and spraying graffiti at the main branch of the Denver Public Library last year told us they’re not sending their best. Downtown Denver is a toilet.

  28. “So, Hawksford got desperate and did something a little different. He made a sign out of cardboard and got on the side of the road and begged anyone to sell him a home.”

    You can’t make this stuff up.

    1. As this intensifies, don’t expect the MSM to report it. You will, of course, see it in your town., and maybe your out of town family and friends will tell you it’s the same where they live. But the MSM will be shouting from the rooftops that unemployment is low and the economy is gangbusters.

    1. “Critical Race Theory rejects concepts such as objective truth, arguing that the way humans perceive reality is through a series of power structures which inform how we think and act. According to proponents of Critical Race Theory, all white people are racist by definition because they have been raised under the power structure of white supremacy.”

      So, deductive reasoning is racist? 🙂

      1. Oh, so Fat Cat Elite Globalist Corporations with nut looters like Bill Gates, Soros, and Klaus Schwab should run the World? They should own everything and dictate what populations get and control people by fake narratives and Medical Tyranny.
        This is just a power grab attempt to destroy democracy and freedoms and attack hierarchies by creation of a enemy called the Constitution and all Western Civilization advancement in the last thousand years.
        And the big lie that these forces that corrupted Government will create equity and create a fair World when they are nothing but Monopolist looters and haters of self rule by the people. The first and second Amendment can’t exist in the insane World they propose and our enemies want our demise so they can destroy any freedoms populations had for self rule.
        The Medical Cartel Monopoly has created a hoax to loot and destroy freedoms turning people into lab rats for their experiments with the human race they want to enforce on humans, which they have no liability for the harm that results, that will be censored.
        As they show their true colors and the old Puppet nuts they put in put everyone at risk , I predict a rejection of insanity will take place .

  31. Star-Tribune — Minneapolis police vow to bring safety back to George Floyd Square (3/17/2021):

    “The area, now known as George Floyd Square, became a spot for mourning and reflection after Floyd died in an encounter with Minneapolis police last summer. Concrete barriers have kept the intersection closed to traffic.

    Recently, violence in the area has increased, disturbing the once-peaceful memorial as well as the residents and businesses surrounding it.

    “We cannot allow groups of individuals to feel that they’re emboldened,” Arradondo said. “They have to be held accountable. Period … Yes, I’m putting them on notice. Enough’s enough.”

    https://www.startribune.com/minneapolis-police-vow-to-bring-safety-back-to-george-floyd-square/600035496/

    1. They have to be held accountable. Period … Yes, I’m putting them on notice. Enough’s enough.”

      And if they don’t behave, the cops will barricade themselves in their HQ until things settle down.

  33. Democrats love a good war it keeps the population under control and fearful.

    “Biden believes Putin is a killer, vows Russian leader ‘will pay a price’ for trying to help Trump win the election’

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