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Left Holding The Bag, They May Walk Away Or File Bankruptcy

It’s Friday desk clearing time for this blogger. “Channing Tatum and Jenna Dewan have finally listed their Beverly Hills marital home for $6 million, setting themselves up to face a monetary loss. The former couple initially purchased the home back in 2015 for the same price they are now asking. Taking into consideration six years of carrying costs, realtor commissions and renovation fees, that means they will not see a profit.”

“Axonic Properties bought more than half of the condos at Breezes at Palm-Aire in Pompano Beach for $25.4 million. New York-based Axonic, an owner-operator and manager of residential properties, bought 153 units at the 288-unit property from three groups, according to a news release. Axonic plans to rent out the condos. The purchase breaks down to $166,000 per unit. This is at least Axonic’s second South Florida fractured condo purchase this year. In January, it bought 170 units at a 310-unit complex in Doral for $37.3 million.”

“In other recent fractured condo deals, a partnership between KAR Properties and Fortune International Group last week bought 81 units of the 780-unit Reach and Rise condo towers at Brickell City Centre in Miami, with plans to resell the units. And in March, Corinthian Real Estate bought 39 of the 44 units at Eden House in Hollywood for $5.8 million.”

“‘The landlord is just being asked too much at this point,’ said Jaime Michelle Cain, a Buffalo area real estate attorney. ‘As a lawyer who practices, I see more contracts for sale coming across my desk for multifamily than ever before. These landlords are needing to make money from the rent to support the foundation of this housing industry.'”

“New York State Senate Minority Leader Robert Ortt said it is doing more harm than good. ‘You’re going to have tenants potentially walking away never paying rent that is owed. You’re going to have landlords left holding the bag. They may walk away or file bankruptcy.'”

“BMO Financial Group says recent changes to mortgage stress test rules and the cooling of prices and sales in some regions may moderate the country’s housing market. The change is aimed at taking the heat off real estate markets like Toronto and Vancouver, where bidding wars, soaring prices and a flurry of sales were the norm during the COVID-19 pandemic. While real estate boards in hot markets have reported sales are slowing and prices are coming down, many prospective homebuyers remain priced out of popular markets.”

“BMO is already preparing for what might happen with the new test, BMO’s chief risk officer said. ‘We’re routing more mortgages to manual adjudication particularly where…we’ve seen rapid house price appreciation, just to make sure that we’re comfortable,’ Patrick Cronin said.”

“With house prices up 24 per cent in a year and nearly a third of all mortgage debt now carried by highly-leveraged buyers who took out loans in the last two years, key players are concerned any interest rate rises could damage the housing market and have flow-on effects to the whole economy. ANZ non-executive director John Key told Stuff the one thing saving some mortgage holders were record-low interest rates, and if they rose to combat inflation recent buyers may struggle to afford repayments.”

“Property Investors Federation president Andrew King sums up his concerns like this: ‘You can get a fixed rate for 2.5 or 3 per cent. If say you have a 2.5 per cent rate at the moment, if they go up to 3 per cent, that’s a 20 per cent increase in your costs. So tiny margins now have a huge effect.'”

“The Reserve Bank has its own estimate for this situation: for a typical recent buyer an increase in the one-year mortgage rate to 5 per cent would increase the proportion of that buyer’s income required to service debt from 30 per cent to over 40 per cent. The Reserve Bank states increases in mortgage payments could cost the economy, as highly indebted households reduce their consumption and distressed borrowers could default on their loans.”

“‘The Reserve Bank has reinstated LVR restrictions to reduce the risk that large declines in house prices amplify a wider economic downturn,’ The Reserve Bank’s FSR states. The prospect of negative equity – which could occur if a home sold for less than an owner bought it for – was limited ‘unless a house price decline is very severe,’ the report states.”

“In March, ANZ chief economist Sharon Zollner warned mortgage lending had ‘gone bananas,’ and a 1 per cent rise in mortgage rates would slash 5 per cent off the disposable income of Aucklanders. When asked what level interest rates could rise by before they became damaging to the housing market, King answered: ‘Not much, actually.’ And the Reserve Bank may not have the option to keep interest rates so low, he said. ‘If the consequences of rampant inflation are greater than the consequences of house prices going down – they will do it.'”

“The end of a $200 billion emergency Reserve Bank funding scheme put in place to mitigate the impact of the coronavirus crisis is expected to lift fixed mortgage rates from ultra low levels and dampen soaring demand for housing. The country’s banks have about six weeks to draw down on $90 billion in cheap credit being provided under a central bank program that was designed to soften the blow from the coronavirus pandemic. The end of the program comes amid a broader economy recovery and surging real estate prices that have sparked concerns the property market is overheating.”

“Credit market expert Phil Bayley, principal of ADCM services, estimated that if banks were instead raising three-year funding on the domestic market, they would need to pay about 0.25 percentage points over the 90-day bank bill rate of 0.04 per cent. ‘It may not look like much but it would be an effective tripling of the current cost,’ Dr Bayley said. ‘I think we can expect to see mortgage rates moving up gradually after the 30th of June.'”

“Evans and Partners analyst Matthew Wilson said the RBA’s term funding facility had contributed to the proportion of new loans that were on fixed rates more than doubling to about 35 per cent of all new mortgages. Mr Wilson said that once the scheme ends next month, banks would remove their cheapest fixed-rate deals from the market. Mr Wilson said the average home loan had surged from $366,000 in 2010 to $575,000 today. This jump in household indebtedness meant any eventual increases in the cash rate would need to be very gradual, potentially even by 0.125 percentage point increments. ‘If the cash rate goes to 100 basis points, you could start to see some real pain,’ he said.”

“Imagine setting out to build your dream home or renovate your existing one knowing you were getting a financial leg up from the Government – only for it to be taken from you. That’s exactly what’s happened to a growing number of HomeBuilder applicants who say a problem with the online portal is to blame for them missing out on a grant of up to $25,000. ‘As a young dad really struggling to get into the property market, it feels like I’ve had a kick in the gut,’ said Jack Hage.”

“‘We’ve made this whole plan and now it feels like we are in a sinking ship,’ said Daniele Fitzsimons. They’re the heartbroken Aussie families, couples and young singles who fear their dream of owning a new home or renovating an existing one could be in tatters. ‘I was shattered because I knew I had done everything right,’ said Clint Calman.”

“The State and Federal Governments HomeBuilder scheme was designed not only to provide cash grants to people to renovate their properties or build new homes but also help stimulate activity in the building and construction sector in the midst of the COVID-19 pandemic. Now almost 12 months on, many who applied and thought they were eligible for the one-off $25,000 payment have missed out.”

“Danielle Fitzsimons and her fiancé Samuel Ross are expecting their first baby and made the decision to renovate their home in Sydney’s Western Suburbs. ‘We were relying on that money to finish it off,’ said Mr Ross. ‘We don’t know what we were supposed to do from here. If it’s not resolved, there’s going to be a lot of people out there that are going to struggle financially,’ Miss Fitzsimons told A Current Affair.”

“Jack Hage is a Melbourne IT worker who recently bought his first block of land for his young family. He says the $25,000 grant was a huge incentive and played a big part in the decision process of buying the new block of land to build on. ‘People talk about having this gigantic knot in your stomach, and there could be no truer words spoken, I was in shock. I just continuously thinking I’ve just lost 25 grand,’ Mr Hage told A Current Affair.”

“Mr Hage complained to Victoria’s State Revenue Office which said there was nothing it could do. ‘The answers from the State Revenue Office, they felt rehearsed. They felt like I was the 50th person that morning,’ he said.”

This Post Has 108 Comments
  1. ‘real estate boards in hot markets have reported sales are slowing and prices are coming down’

    WA?

    ‘BMO is already preparing for what might happen with the new test…‘We’re routing more mortgages to manual adjudication particularly where…we’ve seen rapid house price appreciation, just to make sure that we’re comfortable’

    Yep, at the first sign of crater the lenders bail. Which will cause great a$$ poundings to follow.

    ‘particularly where…we’ve seen rapid house price appreciation’

  2. ‘The Reserve Bank has reinstated LVR restrictions to reduce the risk that large declines in house prices amplify a wider economic downturn’

    So they are breaking it off in the a$$ of recent buyers. They just want to goose the economy and don’t care who gets their face ripped off.

    ‘The Reserve Bank states increases in mortgage payments could cost the economy, as highly indebted households reduce their consumption and distressed borrowers could default on their loans’

    And prices going up 24% in one year (we’re talking about 1 million NZ pesos here) doesn’t reduce consumption and increase the chance of default?

    Here’s the title for that link:

    ‘Fears Reserve Bank faces choice between recent house buyers and economy’

    1. “And prices going up 24% in one year (we’re talking about 1 million NZ pesos here) doesn’t reduce consumption and increase the chance of default?”

      It increases the chance of default but it does not reduce consumption. Remember, in this stupid economy Price equals Value which means “wealth” is automatically created for owners of the comps when a dumbed-down ignorant puke is able to get hold of the money needed to overpay for a house. This wealth is something that can be cashed out and spent, thus increasing consumption.

      1. ‘it does not reduce consumption’

        Yes it does. If I spend money on X I can’t spend it on Y.

          1. “The future is right after you sign on the dotted line. We’re not talking about 10 years, we’re talking when the first payment is due.”

            This is only true for the buyer of the house. Let’s go back to the statement that I was addressing:

            “And prices going up 24% in one year (we’re talking about 1 million NZ pesos here) doesn’t reduce consumption and increase the chance of default?”

            Prices going up 24% in one year produces a lot of equity for the comps. This equity can be cashed out and spent. Thus consumption is increased, not reduced.

          2. Mr.Banker: Prices going up 24% in one year produces a lot of equity for the comps. This equity can be cashed out and spent. Thus consumption is increased, not reduced.

            You get a debt-based boom. But even debt-based booms end. Debt-based booms have a common trajectory: first only good borrowers take part, then to keep the economic activity going, they let in bad borrowers. And eventually the market implodes.

            Imagine if lots of people are continuously going into debt i.e. borrowing money they do not have. The “debt-indifferent” are vast in number. However, they are finite. After they’ve been juicing the economy for a few years, buying things, but also servicing the debt.

            I know the FIRE-gov complex loves this concept as I’ve heard it advocated from those quarters extensively. However, after a national policy like this, I think there is also a concept that follows called “debt-saturation” where all the finite debt-indifferent are maximally indebted.

            The Fed always ignores the logical conclusions of these systems. Well… they always said that we push debt, inject cash and yadda yadda, prosperity. However, they don’t know the yadda yadda. What winds up happening is the economy grows around their debt and stimulus faucets.

            The yadda yadda implied for sustained prosperity: lawful society, smart active, go-getting people, friendly business climate – these are chaotic and out of the control of the Fed.

        1. “You are spending your future earnings today. That reduces future consumption.”

          This is true but we are not talking here about future consumption.

          Future consumption brought forward to the present increases current consumption.

          1. The future is right after you sign on the dotted line. We’re not talking about 10 years, we’re talking when the first payment is due.

        2. There is no decrease in consumption due to bubble comps and cash outs.

          Oh sure, theoretically, there’s supposed to be a decrease is consumption. That is, somebody needs to pay back that bubble-comp cash-out money. It could be the homeowner who cashed out. Or it could be a buyer who buys the house at the inflated price. Or it could be the bank who has to foreclose and sell at a loss. Or the investors (Fannie/Freddie) who bought the toxic paper. Or it could be the Fed bailing out the investment bank and putting “our children and grandchildren” on the hook. The hole went the way up the chain with no decrease in consumption. Maybe the real victim will be China who will likely never get their 30-year Treasuries paid back.

          1. Incorrect.

            Not only is consumption pulled forward leaving a gaping hole but it’s done by subprime mortgages.

          2. Debt always reduces consumption. Unless you’re talking about being eaten yourself by the debt service.

          3. Why wouldn’t they get their 30-year Treasurys repaid? The US has a very good track record of repaying sovereign debt, and countries that go into default typically have to pay dearly in terms of future borrowing opportunities. And the Fed still owns a printing press technology.

            What may be a more relevant question is what the dollars used to repay long-term Treasurys will be worth. More inflation over the thirty year term reduces the value of repayment. This is also pertinent to Social Security and other “entitlements”, to the degree that COLAs don’t fully reflect inflation.

      2. cashed out

        Deceptive marketing by Mr. Banker. It has to be paid back with interest.

        1. “Deceptive marketing by Mr. Banker. It has to be paid back with interest.”

          It’s only deceptive to those dummies who are bad at math and lack common sense.

        2. I remember in Bubble-1, there was some commercial about “cash being in the walls of your house and you can shake it out and use it!”

          I always thought that was the most amusing way to say “taking out a loan and putting your house up as collateral.” Apparently though, there were people who took the advertisement at face value. I knew a guy who, based on the commercial or those like it, thought it was wisdom to keep taking out loans against the built up equity in his house.

          What people fail to see is that while doing something like this might be wisdom for a business – which is merely a logical construct, a virtual object – doing this for an actual physical person is exceptionally unwise. With the stroke of a pen, a business can disappear and so can its debts and the people who were running it can walk away with profits. But the person who is the physical thing engaging in personal finances like this cannot walk away quite as unscathed.

          Also people see the zany accounting that businesses and the donor-class wealthy engage in, and what they don’t realize is you need lots of money and lawyers to keep the various tiers of government off your case if you choose to engage in these kinds of efforts.

    1. That is REALLY interesting in Arlington. Also Fairfax, another desirable, close-in area to DC is showing a significant increase in listings. Alexandria, another close-in area (to DC) is flat YOY. Huh. I thought, ‘perhaps these numbers are wrong’. But then I checked my local zip codes on the site and they are still redhot cakes, reflecting what the house websites shows. Even Falls Church and McClean are showing some pullback (McClean’s median sales price is in the 1.X million range so it’s in a different tier).

      Surprising, worth keeping an eye on. This is the redhot cakes season too, spring. I guess the next question would be, what will the next injection of public resources by the FIRE-Gov Complex, into the real estate market, look like? Right now it’s 3pct mortgage rates, 0pct FFR, 1.6pct 10 year, 480 billion in MBS purchases each year, a myriad programs at all levels of government in “affordability aid”. I don’t doubt they’ll come up with some new unvoted-on resource extraction.

      1. Why is it surprising. The price of the house not on the market has been falling for years. At least in the DC area.

      2. Increase in inventory sounds like people who are quick fixing up rentals or even their own homes, and cashing in on the frenzy before it ends. I’ve seen it in my nabe.

        1. You can click on “single family” or “condo/townhome” at that link. Single family was absolutely flat YOY (124 listings last year, 123 this year, prices down 5pct, but median price is 1.x million). But condo/townhome exploded, 115 listings last year, 395 today, with a 15pct price drop.

          I don’t know what the implications for the wider market are. Lots of investors in condos trying to unload them before the end of the covid frenzy certainly. I’d heard condos are the leading indicator for the market, first to rise, first to fall. Covid was a singular event, once in a century (one hopes), so who knows.

  3. From the last link:

    ‘He bought his $600,000 Gold Coast townhouse off the plan in December last year. With the contract signed just in time to be eligible for the grant Mr Calman immediately began the process of applying through the online portal.’

    Just in time, a winnah!

    “I uploaded what information I had at the time, there were some questions about how you qualified, I met all that,” he told A Current Affair. The father-of-two says he logged in and out of the portal twice just to make sure his account was working.

    ‘Each time, he was sent a security code to his email to log in. Confident his application was underway, it wasn’t until last week when Clint logged back in. “That’s when I stumbled across, I just didn’t have a profile and all of my information had disappeared,” he said.’

    A 600k shack and he’s butt hurt over 25 grand? It was free cheese Clint, and now yer fooked.

  4. ‘have finally listed their Beverly Hills marital home for $6 million, setting themselves up to face a monetary loss’

    Where’s my red hotcakes dammit?

    1. “And the estate gives off an eerie vibe after photos of the listing show how their furniture and belongings have been completely cleared out, with just empty rooms sitting idle.”

      Should’ve abandoned the old schitt since they’re both starting anew.

  5. ‘You’re going to have tenants potentially walking away never paying rent that is owed. You’re going to have landlords left holding the bag. They may walk away or file bankruptcy.’”

    Gosh, this Robert Ortt fellow is like Nostradamus with his uncanny ability to foresee the future. How does he do it?

    1. Citizen Comrade,

      We may have $3 gas and $20 2x4s. But no more mean tweets. And that is what matters.

      1. Glad I bought the dip on energy stocks last year just before oil cratered to negative…

    1. Ever start digging hard into these guys pimping CrimeCoin all over the net? It either leads to a dead end where the person doesnt exist or they have some sort of connection to a bankrupt washed out “capital management” outfit that no longer exists.

      And these are the guys who are also pimping housing everywhere.

        1. Sure. I also have a moldy banana peel that I am going to list for $600,000. Any takers?

          1. Duct-taped banana art was listed for $120K so you might be pricing your peel a bit too high. 🍌

          2. If you can turn the moldy banana peel into art, then only offer it on the internet for a fee to be paid with other people’s money, I might become interested.

      1. Dogecoin exposed all crypto for what it really is – a PONZI with no intrinsic value whatsoever. The Dogecoin creator literally made it up as a joke in 2 hours, yet its market cap at one point was almost $300 billion – nearly 4x General Motors.

        1. “Just imagine traveling 10 years back in time and trying to explain this to someone; just imagine what an idiot you’d feel like! “There’s going to be this online currency that people think is a form of digital gold, and then there’s going to be a different online currency that is a parody of the first one based on a meme about a talking Shiba Inu, and that one will have a market capitalization bigger than 80% of the companies in the S&P 500, and its value will fluctuate based on things like who is hosting ‘Saturday Night Live’ and whether people tweet a hashtag about it on the pot-joke holiday, and Bloomberg will write articles and banks will write research notes about those sorts of catalysts, and it will remain a perfectly ridiculous content-free parody even as people properly take it completely seriously because there are billions of dollars at stake.”

          1. If you live near a college, rents are much higher than they used to be, due to the government pumping so much money into education via student loans, and it flows into the surrounding areas.

            With the Fed, the face of the FIRE-Gov Complex, pumping so much printed cash into the government and Wall Street, the people best able to capture that money are doing so, similar to what happens when aid goes to a banana republic – much if not most goes to the leaders. And here, what do they do with a decent chunk of it? Gamble in stonks and crypto.

          2. It’s going to be hard to explain after the final blow up as well, along with many other Ponzi assets we presently take for granted during this historically frothy period in financial history.

  6. The globalist billionaires who have amassed huge fortunes in these rigged, Fed-juiced “markets” have bought and paid for the Democratic Party – now they get to reap what they voted. Talk about poetic justice.

    NYC’s Billionaire’s Row gets new neighbors: De Blasio plans to build a homeless shelter in elite Manhattan neighborhood near luxury Plaza Hotel is given the green light after court dismisses protest lawsuit by residents and business

    https://www.dailymail.co.uk/news/article-9627427/NYCs-Billionaires-Row-gets-new-neighbors-Homeless-shelter-given-green-light-lawsuit-dismissed.html

    A homeless shelter is to be created on one of New York City’s most expensive streets, after a legal battle to prevent its opening ended in defeat.

    A New York state appeals court on Thursday dismissed the concerns voiced by a coalition of residents and businesses from the Manhattan neighborhood by Central Park, nicknamed Billionaire’s Row.

    1. Transport the ills of Society to all areas, so the equity of all areas will be crime infested shit holes .

      Communist playbook on how to divide and conquer and create constant warfare, whereby the concept of equity is make all areas under terror equally.
      These Entities that are trying to bring on this One World Order where they rule , with their Puppets by rigged elections, are invading the US. So just because they aren’t a Country , however they are in collusion with corrupted Governments, doesn’t means it isn’t a invasion by a enemy force on the heading of Private Company Monopolies.

    1. You will eat the bugs and you will live in the pod. It’s what Saint Greta knows is best for you.

  7. Govt: Hey let’s make a rule that nobody has to pay rent anymore.

    Also Govt: weird that there are thousands and thousands of empty homes in every city that are not rented out huh?

  8. Dallas Federal Reserve President Robert Kaplan cited potential excesses in the housing market and other inflation signs as an indication that the central bank should start slowly pulling back on its asset purchase program.

  9. “With house prices up 24 per cent in a year and nearly a third of all mortgage debt now carried by highly-leveraged buyers who took out loans in the last two years, key players are concerned any interest rate rises could damage the housing market and have flow-on effects to the whole economy.”

    – Leverage cuts both ways. It was OK to lever-up and blow a tremendous global housing bubble, but somehow the inevitable bursting of the housing bubble was ignored. A highly indebted and levered economy “can’t handle the truth” of higher interest rates. House prices are set at the margins. Once price turns lower, it drags the comps down, which collapses the entire house of cards. Therefore, there will be tremendous effort to keep house prices inflated at all costs, else risk systemic collapse, since so much of the global OECD economy is based on housing and debt.

    – Questions:
    1) Who approved LTVs exceeding historically accepted ratios and relaxed lending standards? Where were the regulators? Asset bubbles require easy credit and the liquidity taps were opened wide.
    2) Is there even a smidgen of moral hazard, or was that the primary driver of the boom?
    3) If the answer to (2) is “yes,” then who bears the counterparty risk? This one’s rhetorical, since everyone knows it’s the public debt; the taxpayer. “Other people’s money” (OPM).

    “We’re essentially continuing a system where profits are privatized and…losses socialized,” – Nouriel Roubini

    4) Why were interest rates allowed to be manipulated lower, when everyone knows that the price of money (interest rates) are the primary signal for the economy? Did anyone make poor choices (mal-investments) because the natural rate was repressed lower? Did everyone put 20% down?

    https://www.youtube.com/watch?v=VA7J0KkanzM
    Indiana Jones and the Last Crusade (10/10) Movie CLIP – He Chose Poorly (1989) HD
    2,310,323 views • Jun 1, 2016

    5) Why are these questions being asked largely by fringe bloggers and tinfoil hat conspiracy theorists instead of the MSM, governments, bankers, and financial regulators? Could it be that they’re all complicit in the global scam?

    https://www.stuff.co.nz/life-style/homed/housing-affordability/300316220/fears-reserve-bank-faces-choice-between-recent-house-buyers-and-economy

    Fears Reserve Bank faces choice between recent house buyers and economy
    Geraden Cann05:00, May 26 2021

    “Property Investors Federation president Andrew King sums up his concerns like this: “You can get a fixed rate for 2.5 or 3 per cent. If say you have a 2.5 per cent rate at the moment, if they go up to 3 per cent, that’s a 20 per cent increase in your costs. So tiny margins now have a huge effect.””

    “The Reserve Bank states increases in mortgage payments could cost the economy, as highly indebted households reduce their consumption and distressed borrowers could default on their loans.”

    When asked what level interest rates could rise by before they became damaging to the housing market, King answered: “Not much, actually.””

    “And the Reserve Bank may not have the option to keep interest rates so low, he said.”

    If the consequences of rampant inflation are greater than the consequences of house prices going down – they will do it.

    – Central banks and governments own this. Everyone was sold a bill of goods with Keynesian economics, MMT, and other BS, but the bill is coming due.

    “John Key had similar concerns. During an interview after the Auckland’s Future, Now event, he said housing was “clearly very very expensive” and “the one thing saving people at the moment is that interest rates are very low”.”

    “So you are seeing – and we see this at ANZ bank – first home buyers borrowing what have hitherto been very high levels of debt for the first home buyer, but it’s affordable because interest rates are at levels we haven’t seen in 30 years.”

    – Central banks: “The smartest guy in the room.” Wile E. Coyote, super genius, and yet, they’re in control of the global economy. Got gold?

    “Sooner or later everyone sits down to a banquet of consequences.” – Robert Louis Stevenson

    “There are no rewards or punishments — only consequences.” – W. R. [William Ralph] Inge

    “It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.” – Sir Josiah Stamp

  10. “Never was so much owed by so many to so few.” – Winston Churchill

    Bahahahahahaha … a copy of this statement should be posted in my bank.

  11. – Subprime never ended apparently…

    https://themarket.ch/interview/tad-rivelle-inflation-is-already-all-around-us-ld.4359

    Meanwhile, a boom is taking place in the American housing market. How sustainable is this trend?

    In the FHA mortgage program, which basically is the government version of subprime lending since the financial crisis, the delinquency on FHA loans is running at about 11%. That’s pretty elevated, and it’s illustrative about the level of stress that exists particularly in the lower rungs of the economy. But even in the Fannie Mae and Freddie Mac world of middle-class type mortgages something like 3% of loans are currently delinquent. That’s very high, since that space typically runs at fractions of 1% delinquencies. So there is a lot to work through there.”

    “Nevertheless, optimism seems to prevail. On Wall Street, the S&P 500 is almost back at its record high from earlier this month.”

    There is a lot of complacency. Even the European Central Bank made reference to it in a recent report. Critics have said for a long time that the central banks will support asset prices, and then they criticize capital markets for pricing in a speculative structure and warn about the risks. One pundit called it quite accurately: Central banks simultaneously play the role of arsonist and firefighter.”

    – The economy is addicted to cheap credit and debt. The Fed and other Central Banks are the pusher and are trapped in providing an endless supply of financial heroin (or fentanyl, name your poison) to the markets. If they stop, the addict goes into withdrawal. There’s apparently no option for rehab., since the cabal of banksters, like any drug cartel, are making piles of money and know that the house of cards collapses if they do.

    1. “That’s very high, since that space typically runs at fractions of 1% delinquencies.”

      A long known but deliberately obscured fact. I’m surprised to see it in writing.

  12. – Ya think?

    https://www.cnbc.com/2021/05/27/feds-kaplan-cites-real-estate-excesses-as-one-reason-to-start-tapering-purchases.html

    Federal Reserve
    Fed’s Kaplan cites real estate excesses as one reason to start tapering purchases
    Published Thu, May 27 20214:11 PM EDT | Updated Thu, May 27 20215:00 PM EDT
    Jeff Cox

    “Key Points”

    “Dallas Federal Reserve President Robert Kaplan cited potential excesses in the housing market as a reason for the central bank to start easing back on its monthly asset purchases.”

    “Kaplan told CNBC the $120 billion a month in asset purchases may be having “unintended consequences.”

    Article

    “With the Fed still buying at least $120 billion in bonds each month, a total that includes $40 billion in mortgage-backed securities, several officials have said it’s time to at least start discussing easing off the historically aggressive injections into the fixed income market.”

    “Kaplan is not a voting member of the policymaking Federal Open Market Committee, but he does have input into its decisions.”

    “Kaplan noted that homebuyers now have to compete against investors even for single-family homes.”

    “Kaplan cited “crosscurrents” in various parts of the business world that indicate inflation pressures could be more persistent than many of his colleagues have indicated.”

    – The Fed is the arsonist in charge of the fire brigade.

  13. Hilarity always ensues when globalist Quislings like GOPe corporate stooge Paul Ryan stop fellating their Wall Street donors long enough to issue a de rigour condemnation of Orange Man Bad, only to get scorched in return. Globalist media pearl clutching and hyperventilating as they concede defeat with Pravda-like headlines is amusing to say the least.

    The power of Trump drowns out Ryan’s Reaganite call for change

    https://www.cnn.com/2021/05/28/politics/donald-trump-paul-ryan-ronald-reagan-marjorie-taylor-greene-gop/index.html

    1. GOPe corporate stooge Paul Ryan

      He and Debbie resurfacing at the same time. 🤔

  14. Did someone tip off the Hollywood real estate reporters that we think their profit calculations are way off?

    “Taking into consideration six years of carrying costs, realtor commissions and renovation fees, that means they will not see a profit.”

  15. New Fed conundrum?

    – They need to keep rates on the floor to prevent Uncle Sam from going broke servicing the debt.

    – But low rates create moral hazard for political leaders in DC to pile unlimited new debt, to “take advantage of low interest rates.”

    1. A “How much a month” populace governed by a “How much a month” Congress. What could be a better match?

      1. With the proposed higher taxes, lower wages because of higher corporate taxes and inflation, the populace’s “how much a month” is going to go a lot less further.

        1. “…“how much a month” is going to go a lot less further….”

          New Mantra “how much a week?”

  16. It’s good to see falling housing prices getting posted everywhere on utube comments section.

    They seem to be wildly popular there.

      1. “Ms Cullors said that she is going to focus on the upcoming release of her second book and a multi-year TV development deal, highlighting Black stories with Warner Bros.”

    1. Woodathunk a sitting US President would attempt to take pedophilia mainstream. Once is a gaff…PedoJoe is virtue signaling the Biden family history and penchant for pedophilia.

    1. I recently saw a PBS documentary on the COVID-19 outbreak and the initial response, but I was shocked that they didn’t explain that while Wuhan was closed-off from the rest of China that the busy Wuhan International airport remained open serving flights to and from the world’s major airports. And this was vestal PBS! WTF?!

      1. Wuhan International airport remained open serving flights to and from the world’s major airports

        Justifying Trump’s travel ban. Can’t have any reporting favoring DJT.

  17. In the interest of racial justice and equity, does Warner Bros have similar plans for a White stories TV development deal?

  18. Going back in history the marketers figured out how to get people to buy stuff they don’t need. Many industries developed with this psychological marketing . The Medical Industry/Big Pharmacy was no different in this development of marketing magic pills that never cure the proposed disease, but creates a long term dope like dependence on taking the drug, without regard to side effects.

    Now almost every other commercial is a drug commercial by the industry that owns fake news. We have the President of the United State pimping for Big Pharmacy to take the jab , and tax dollars are paying for this push for a 70% Global vaccine rate over a experimental vaccine.
    Useless lock downs and masks were used for a fake Pandemic , as a method of control and destruction , while fraud news censored any dispute or facts against this Medical fraud to help rig a election and bring on forced Medical Dictorship.
    The Medical Industry was the biggest industry that stood to be pushed back by the Trump Administration’s and the popular movement against Obama Care and the tax mandate, and the 50 % higher costs the US was paying for health care verses other industrial Nations.
    So, I submit that the Collusion of Monopolies and corrupted Government had to stop the peoples movement of rejection of looting and rigged markets becoming a Oligarchy of Communist programs designed to loot the US.
    Every act was timed like a invading army taking back what it accomplished under the Obama Administration.
    So, not surprising that we get attacked by a fake Pandemic with censored news, with outrageous fear mongering , used to take control , while the Monopolies got richer over the assault against the people.
    And the Communist playbook of pitting racial groups against each other and promotion of attack against the White race , attack against law and order , free speech and the second amendment , sovereign borders, is the agenda of the One World Order of Monopolies , along with the fraud of Climate Change. The Monopolies are willing to conspire with any foreign Country but they are like Entities that have no loyalty to any Country.

    Under a normal Communist regime, the Government owns everything and the means of production and passes out resources based on equity. Private Party Monopoly rule of resources, while using Communist Government Programs to loot is a Frankenstein created by these psychopathic power mongers. They rigged the election to put their treasonous Puppets like Biden in, and brought on the mother of all fake and fraudulent Pandemics, that they have no liability for the damage it causes.
    Big Pharmacy took over the Medical Industry a long time ago to the point that Doctors are under threat to comply with these dictates , or risk losing their job.
    So, Trump wanting to lower the gouging Pharmacy costs was a countered with this criminally rigged election and a fraudulent Pandemic with fake news controlling the narratives.
    I harp on the Medical Cartel the most because this is the Monopoly that has been the most powerful in corrupting government. But , all markets are rigged to loot the wealth of the Citizens .
    So, Monopolies controlling all wealth and resources, with obvious fake news, is a Innsurrection by a invading army that is a power without a Country that corrupts governments to do their biding.

  19. Ok , so the Monopolies want to turn the US into a third World Nation with no prosperity , under Communist dictates while the Monopolies control all resources and down down rule the populations.

    What kind of treasonous Government gives away the manufacturing and job based to Global Monopolies , than allows the invasion of sovereignty of borders, while the Citizens are looted by being forced to pay for illegals welfare, where a good amount goes to the Medical Cartel.

    How warped was it to use welfare as a means to get votes and a aberration on the War On Poverty, or a means for Monopolies to loot the tax coffers.

    What business did the Government have in backing loans to create unsusttainable bubbles and looting and price increases like with higher education, that all has destroyed capitalism . And why should the fraudulent lenders of been bailed out by the tax coffers, only to come back and create the same false markets.. And the outrageous increase in homelessness that has invaded every City , that was never occurring before the rein of the Monopolies and Money Changers rigged Casinos.

    And Klaus Schwab and Bill Gates talking about taking away prosperity of Citizens, for a New World Order of Citizens being limited and forced to endure this vision of ultimate Power by these psychopaths. Who knows if they won’t go for murdering millions and millions of people , while they advance the Great reset and 4 th industrial revolution that involves their dream of altering humans as well as Robot and AI take over.

    Just what is good about this agenda for your average human? Take away everything, even your right to be humans. No thinking person would vote for their demise, so that’s why they.
    had to rig the Election.

    So, a great enemy has invaded our Government and our shores, who is now trying to incite Civil Wars and attack on Citizens of the US. by every conceivable means. Biden / Harris is the face of the enemy that has captured the White House , that wants to implement treasonous policies and insanity and destruction based on fraud.

    No sane Government acting on behalf of its Citizens would do what these traitors are doing.

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