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It Was Always What Nobody Thought Of Or Everybody Figured Couldn’t Possibly Happen

A weekend topic starting with Market Watch. “We all know that house prices are rising at a record pace right now, but few realize just how far from normal this is. For the entire 20th century, the annual average increase in home prices was only 0.2 percentage point more than the rise in the cost of living, according to the Case-Shiller home price index. From 1955 to 1998, home prices increased just 0.1 percentage point per year over the inflation rate.”

“Over shorter periods, home prices are extremely volatile, as anyone who remembers the great housing bubble of the 2000s will recall. From 1998 to 2006 (when prices peaked), nominal house prices more than doubled on average. After factoring in the loss in purchasing power due to inflation, real prices rose at an annual rate of 6.9%. Homeowners lost most of those gains over the next six years as real home prices fell at a 7.1% annual rate.”

“Since 2012, home prices have been on a tear, especially in the 18 months since the coronavirus upended the economy. From February 2012 to February 2020, the real rate of return was 4.3% per year. Since the virus hit, inflation-adjusted home prices are up 11.8% annualized. Which means real house prices have been rising about 100 times faster than they did from 1955 to 1998. This is not sustainable. Over time, home prices can’t grow much faster than household incomes.”

From True Jersey. “The red hot residential real estate market is beginning to cool slightly and is expected to continue that trend for the rest of the year. New Jersey has seen four consecutive months where home buying demand is running at a ‘significantly slower pace than last year,’ said Jeffrey Otteau, a real estate economist and president of the Otteau Group. ‘It’s not that it’s collapsing,’ he said. ‘It’s normalizing.'”

“The reason sales are down, he said, is because home prices have risen so much that they’re becoming unaffordable even with low interest rates. Another factor slowing home sales overall is that home prices rose 12% in 2020 and are on pace to rise 17% this year, Otteau said, adding that prices grew an average of about 3% for each of the prior 7 years.”

“‘House prices can only rise as fast as salaries,’ he said. ‘After a few years of that (faster than salary growth) banks won’t lend buyers enough money to afford a house. Anytime home prices go up faster than salaries there must be a correction to follow.'”

The Globe and Mail in Canada. “There was a bevy of promises made during the federal election to address the housing crisis, but scant few that addressed truly affordable housing, say some housing experts. Tsur Somerville, University of British Columbia professor in real estate finance: ‘I think fundamentally what we are talking about is we’re looking for bogeymen, rather than wanting to make hard choices. Building lots of social housing is an expensive, hard choice. Allowing more supply and changing of neighbourhoods is a hard choice. There isn’t a magic-bullet solution that solves a problem in places with rapidly growing house prices, if that stuff is demand driven. We could … cut all house prices, but you’re not going to get re-elected cutting house prices 25 per cent. It would solve one problem and create a whole bunch of others, such as a major recession … bankruptcy … people all of a sudden not having retirement.'”

From Stuff New Zealand. “Slower house price increases and regional price volatility reflect an uncertain market at a turning point, a property researcher says. CoreLogic head of research Nick Goodall said inconsistent sales prices were being seen across markets and this was reflective of uncertainty. ‘This is what can happen at turning points. Buyers ease back, but vendors won’t budge, so sales activity tends to decline without too much immediate impact on prices.'”

“Stretched affordability, tighter lending conditions and rising interest rates which would impact on the number of potential buyers, he said. ‘Investors are facing a much more regulated market and owner occupiers are about to have loan-to-value restrictions further tightened which will impact first-home buyers the most. Simply put, although people might want to buy, fewer people will be able to borrow the amount of money required and this will further reduce market activity.'”

From Daily Mail Australia. “Australians earning average salaries could soon struggle to get home loan approval to buy a house in Sydney or Melbourne under a looming mortgage crackdown that could drive down property prices. Houses in Australia’s two biggest cities are typically selling for more than $1 million which would put them out of reach for a single borrower earning an average, full-time salary of $90,329. Even Australia’s mid-priced home in smaller capital cities and regional areas is now virtually out of reach for someone earning close to six figures.”

“In just one year the proportion of new loans where borrowers owed the bank six times more than they earned before tax soared from 16 per cent to 21.9 per cent, as of June 2021. At that level, borrowers are more likely to be in mortgage stress where they can barely meet their monthly mortgage repayments after paying their other bills and living costs like food and petrol.”

“APRA, the banking regulator, acts to stop the market from overheating and causing a property bubble. It did this in 2017 following a 68 per cent surge in Sydney property prices over five years but this caused prices to fall 15.3 per cent over two years. Apart from a Covid interruption in early 2020, the market surged again and is at record highs. The 20.3 per cent national annual surge was the fastest since June 1989.”

“The last time APRA cracked down on home loan rules, Sydney house prices fell by 15.3 per cent or $160,000 between July 2017 and May 2019. Median prices dived from just over $1million to $880,000. A 15.3 per cent plunge now would see Sydney’s median house price dive by $198,000.”

“‘There are some people getting loans at eight times income at the moment or more – that really is too high on any measure even with low interest rates,’ Digital Finance Analytics principal Martin North said. ‘Without macroprudential controls, that will allow house prices to continue to bubble higher, people are getting much bigger mortgages than previously. ‘We are close to the limit given the current income profile of households relative to the property prices.'”

“Aussie Home Loans founder John Symond said the banks were more likely to tighten lending rules themselves rather than wait for the regulator with price increases geographically widespread. ‘The last thing a bank wants to do is have a problem account and look at the possibility of having to turf people out of their homes,’ he told Daily Mail Australia.”

From News.com.au. “It’s now clear the Evergrande saga has exposed a massive problem facing China today. Evergrande’s spectacular downfall began as China’s real estate market soared, with demand for homes in cities such as Beijing and Shanghai sending prices skyrocketing. The company took out a string of loans and expanded rapidly, snapping up assets and making the most of China’s thriving economy.”

“But when property prices began to drop in smaller cities, and when the Chinese government rolled out measures to curtail over-the-top property borrowing, it left Evergrande in the lurch, with mountains of debt. Leland Miller, the chief executive officer of the consulting firm China Beige Book, said the Evergrande situation proved China’s previous growth model would not survive.”

“‘This is the beginning of the end of China’s growth model as we know it,’ he said. ‘The term ‘paradigm shift’ is always overused, so people tend to ignore it. But that’s a good way of describing what’s happening right now.'”

“‘Evergrande’s struggles have exposed the flaws of the Chinese financial system — unrestrained borrowing, expansion and corruption,’ a recent New York Times analysis of the nightmare reads. ‘The company’s crisis is testing the resolve of Chinese leaders’ efforts to reform as they chart a new course for the country’s economy. If they save Evergrande, they risk sending a message that some companies are still too big to fail. If they don’t, as many as 1.6 million home buyers waiting for unfinished apartments and hundreds of small businesses, creditors and banks may lose their money.'”

The Post Independent in Colorado. “The nation has seen two banking crises since the Great Depression of the 1930s: the Savings and Loan implosion of the 1980s and the Great Meltdown, which hit fast and hard in 2008. In each case, Congress, as well as state and federal regulators responded with new laws and regs to correct the perceived causes. Whereupon all heaved a sigh of relief, grateful that the nightmare was over, and everybody could go back to making money, getting elected, or writing up banks at examinations for various violations.”

“Yet the two recent debacles occurred only about 23 years apart. In the wake of both events, one major piece of legislation, as well as a few minor statutes, were enacted. The big dog law in response to the S&L mess was the Financial Institutions Reform and Recovery Act (FIRREA). The Great Meltdown triggered the passage of the so-called Dodd-Frank Act.”

“Will Dodd-Frank prevent a future spate of bank failures following on, or followed by, a severely retracting economy? Probably not. Here’s why: No law or regulation can eliminate, or even obviate, two indelible elements of the fabric of financial activity: human nature and the law of supply and demand. Both are hard-wired into our particular cosmos. Bank failures will inevitably be a byproduct of a lot of money on the table and the banking business model is quite simply making a profit on the movement of that money, and you can make a lot of money when you convert moving cash into loan assets.”

“When there’s a lot of money on the table, as in the ’80s with the deregulation of the nation’s S&Ls, or in 2008, when the planetary demand for mortgage backed securities (MBS) created a housing bubble, then supply outstrips demand, and the value of the assets backing the loans decreases. Good loans become questionable quickly, average ones become bad assets almost overnight, and the risky deals that looked like good bets morph into losses immediately. When the money’s on the table, everybody jostles for a seat. Most are good borrowers, some aren’t, and then there’s the sprinkling of crooks, just to spice up the fare. That’s the human nature side of the equation.”

“Neither the federal or state governments can write a statute or regulation to repeal the law of supply and demand. And when an economic train wreck approaches, banks are standing smack in the middle of the track. We don’t know where and when there’ll be enough money on the table to trip the supply/demand balance ratio in the wrong direction: Will it be the stock market? Commercial real estate? Once again, residential real estate? Junk bonds?”

“I’ll go back to a lesson I was privileged to receive way back in the last century. The chairman of Aspen Savings was a gentleman named Mike Conviser, a graduate of the Wharton School, who taught me a lot, a little of which I retained. Mike told how, after he graduated from the University of Pennsylvania, he went to work in Manhattan for James Talcott and Co., at that time one of the largest factoring operations in the world. Since he was single and the new guy, his job was to be first on the scene when a deal went bad. He’d get the file from his boss on a Friday and be on a plane Sunday or early Monday to the site of the disaster. Over the weekend, and on the way, he would pore over the file and wonder, ‘How could this deal ever have gone bad. It looks like every contingency was considered and covered.'”

“But, he explained, ‘It was always what nobody thought of or everybody figured couldn’t possibly happen.’ So, I suspect, it will be with the next bank crisis. But we’ll know it when we see it.”

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This Post Has 104 Comments

  1. From the last link:

    Pat Dalrymple is a western Colorado native and has spent more than 50 years in mortgage lending and banking in the Roaring Fork Valley.

  2. ‘Bank failures will inevitably be a byproduct of a lot of money on the table and the banking business model is quite simply making a profit on the movement of that money, and you can make a lot of money when you convert moving cash into loan assets’

    ‘When there’s a lot of money on the table, as in the ’80s with the deregulation of the nation’s S&Ls, or in 2008, when the planetary demand for mortgage backed securities (MBS) created a housing bubble, then supply outstrips demand, and the value of the assets backing the loans decreases. Good loans become questionable quickly, average ones become bad assets almost overnight, and the risky deals that looked like good bets morph into losses immediately. When the money’s on the table, everybody jostles for a seat. Most are good borrowers, some aren’t, and then there’s the sprinkling of crooks, just to spice up the fare. That’s the human nature side of the equation’

    Is there any question there’s a lot of money on the table? That people are greedy, especially when they have no skin in the game? You do realize the exact same mortgage backed securities system is in place from the last decade?

    ‘It was always what nobody thought of or everybody figured couldn’t possibly happen’

    Hubris hasn’t been regulated. ‘This time is different’ is still uttered.

      1. Of course MBS are still with us, but these days they’re rated BB and lower, but investors still buy ’em because interest rates are near zero.

  3. ‘real house prices have been rising about 100 times faster than they did from 1955 to 1998’

    This is from Rex Nutting. Someone in the MSM finally pointed out this is bat-sh*t crazy.

    1. That’s good, but I find misleading his suggestion that massive post-1995 housing price volatility is somehow normal.

      Something that never happened before in history is not normal. It’s more like The Perfect Storm wave.

      1. This is where the deep bullsh!t is found. Income is not even remotely keeping up with house prices. When house prices run away like that, either incomes need to increase or house prices need to crash. I see no evidence of incomes increasing to match the house prices.

      2. Company didn’t win the contracts they thought they were so I’m on the dole, $ per hour worked is up substantially 😉

  4. ‘We could … cut all house prices, but you’re not going to get re-elected cutting house prices 25 per cent. It would solve one problem and create a whole bunch of others, such as a major recession … bankruptcy … people all of a sudden not having retirement’

    I got news for you Tsur, yer house of cards is gonna leave a bunch of people eating penguins. How do I know? Buying and selling each other shacks doesn’t create wealth. You can’t retire on it, you only have the illusion of wealth before it inevitably blows up.

    1. I can’t even understand his jumble. “We could cut house prices”? Who the hell is ‘we’? Can’t get re-elected? What?

    2. You can’t retire on it, you only have the illusion

      The sooner such fantasies are dispelled the better off people will be. The scammer is the only one that benefits by maintaining illusions.

  5. ‘It’s not that it’s collapsing,’ he said. ‘It’s normalizing.’

    This guy used to comment here.

    ‘APRA, the banking regulator, acts to stop the market from overheating and causing a property bubble. It did this in 2017 following a 68 per cent surge in Sydney property prices over five years but this caused prices to fall 15.3 per cent over two years. Apart from a Covid interruption in early 2020, the market surged again and is at record highs. The 20.3 per cent national annual surge was the fastest since June 1989’

    ‘The last time APRA cracked down on home loan rules, Sydney house prices fell by 15.3 per cent or $160,000 between July 2017 and May 2019. Median prices dived from just over $1million to $880,000. A 15.3 per cent plunge now would see Sydney’s median house price dive by $198,000’

    I guess I’m running a little peek-a-boo with Australia’s national memory. Cuz I seem to be the only one pointing out the obvious. You had a guberment that decided to get off the bubble roller coaster. Crater ensued. Prices were down way more than this. Remember the most expensive shacks falling fastest and further, 30-40%? That is a fact.

    Oh then you elected a bubble reflation-ista, and the central bank was only too happy to go along. See Australia, you guys are running China’s “growth model” too. And the US guberment/central bank is just as stupid and doomed.

    These bubbles are policy: a choice. All bubbles pop.

    1. One sister is Australian by marriage. They bought 75 acres outside Toowoomba, near Gold Coast, Queensland, in 2000 for AUD 50,000. Sold it in May, 2019 for AUD 880,000.

  6. ‘This is the beginning of the end of China’s growth model as we know it,’ he said. ‘The term ‘paradigm shift’ is always overused, so people tend to ignore it. But that’s a good way of describing what’s happening right now’

    I’ll have more on this but I’m starting to think what’s happening is huge. The biggest reason is they let it run on way too long. Last decade I quit following China much cuz pooh bear stopped naughty news. There wasn’t much to read. Then they started cooking up several bubbles. Remember ‘save the A shares’? The commodity bubble? Bond bubble? The freaking garlic bubble! That was the final straw for me, too silly.

    But what I said at the time still stands. It shows they got nothing. Just one more crazy ponzi scheme after another to gin up a point of GDP that they borrow 10 points to achieve.

    A sixth grader could see this would end in disaster.

    1. Another reason I think something is rotten in China:

      ‘Here is a riddle: China has more than enough power plants to meet electricity demand. So why are local governments having to ration power across the country?’

      ‘Thermal coal has tripled in price on some commodities exchanges. About 90% of coal used in China is domestically mined, but mining volumes from some of China’s northern provinces have dropped by as much as 17.7%, according to respected Chinese financial magazine Caijing.’

      ‘Normally, those higher coal prices would have been passed on to energy consumers. But electricity utility rates are capped. This mismatch has pushed power plants to the brink of financial collapse because higher coal prices have forced them to operate at a loss. In September, 11 Beijing-based power generation companies penned an open letter petitioning a central policy decision-making body, the National Development and Reform Commission, to raise electricity rates.’

      “When coal prices are very high, what happens is that it’s not profitable for a lot of coal plants to generate electricity,” Myllyvirta says. The result: Coal-fired power plants have simply shut down.’

      ‘Now we have a situation where in some provinces up to 50% of coal-fired power plants are pretending to be out of order or have run so low on coal that they can’t generate,” he says. About 57% of China’s power comes from burning coal.’

      https://www.wbaa.org/post/why-covid-cutting-chinas-power-rations#stream/0

      ‘pretending to be out of order’

      Whoa Nellie! The accountant in me thinks somebody is out of money. You can speculate on exact how that’s happened, but this “official story” doesn’t add up. After all, no factories, no workie, spells deep doo doo.

        1. It also makes Fang Nu want to cash in on his Evergrande real estate investment HODLings…woops

          1. Drama much?

            ‘I have nothing left to live for’: Evergrande meeting descends into chaos as investor pulls knife and threatens to kill herself
            Bryan Ke
            Fri, October 1, 2021,
            10:44 AM · 2 min read

            A compilation video that shows desperate investors confronting Evergrande staff amid the company’s financial issues has gone viral on Chinese social media platform Weibo.

            The confrontation: The 10-minute-long video was published on Sept. 29 to Weibo by local news site Xing Tai Shen Bian Shi, who did not specify when and where the videos were taken, according to Insider.
            …

          3. I thought fang nu was Eric swalwells ccp girlfriend? She’s a ladyboy? Man, that dude likes to live dangerously. Kinda like hunter Biden!

            #FJB

      2. ‘Here is a riddle: China has more than enough power plants to meet electricity demand. So why are local governments having to ration power across the country?’

        Cryptocurrency mining demand for power?

      3. After all, no factories, no workie, spells deep doo doo.

        Central planning at its finest. So why not let utilities charge more. Are they afraid that there will be massive foot stamping should rates go up?

        And why is coal up in price? Is it because St. Greta put producers out of business in places like Oz or Wyoming?

      4. This is somehow reminiscent of Mao’s China wherein the local small farmers throughout China tallied harvest numbers and by the time the piecemeal numbers aggragated to the top they were wildly disparate.

    2. “…‘paradigm shift’ is always overused…”

      How about ‘Ponzi finance collapse’?

  7. ‘There are some people getting loans at eight times income at the moment or more – that really is too high on any measure even with low interest rates’

    Weekend “the REIC are dogs who would sell their grannies for a months commission” note: why did they stop using times income measurements in the US? The last one I saw was many years ago. And it was about the most expensive shacks in the US! What were the times income measures? 7 in San Jose and up to 11 in Mercer Island. That’s right, even with the really high incomes, prices had grown out of control to where they were basically poor if they had to borrow.

    This is speculation: why would one do this? Because some other poor bashtard is gonna come along and stretch to 13 times income.

    1. “Because some other poor bashtard is gonna come along and stretch to 13 times income.”

      This is how wealth is produced. Pukes who can borrow to push housing prices higher produce wealth for their neighbors.

      If the buyer of a house has a hundred comparable neighbors then each dollar of increase for the house he decides to buy creates one hundred dollars of wealth spread out among his neighbors.

      It is easy for the buyer to do this because he does not need to actually have any money, he only needs to have access to money. He gains access to this money by willingly becoming a debt slave.

      The decision of one person to become a debt slave acts to create enormous amounts of equity wealth for his neighbors. Some of these neighbors just cannot stand this newly found prosperity and thus flock to the bank to cash out this equity wealth and hence themselves become debt slaves.

      And the beat goes on.

      1. ‘This is how wealth is produced’

        Then point to it. In fact nothing has been produced. Same shack, different owner, larger loan.

        1. And the money to pump up the Ponzi came from stripping away the interest payments on Grandpa’s and Grandma’s bank CDs and other low-risk investments that used to produce a return in excess of inflation.

          1. A single colleague bought last May in Vista, one of the least upscale parts of North San Diego County. According to Zilldo, she’s up over $150K. That wealth gain is a sizable multiple of her day job income.

          2. And the home purchase price was already around 10X income, though I am not sure about the loan amount, as she sold a condo when she moved to the SFR, so may have brought along equity.

    2. ‘There are some people getting loans at eight times income at the moment or more – that really is too high on any measure even with low interest rates’

      I hate these debt-junkie focks who are borrowing. They are the ones driving up prices.

      1. Vista is the only place I’ve been to where the city father’s felt the need to post a sign at the skateboard park that says “no rioting”. Ooooookay!

        1. In all fairness, Vista is less sketch than places where I have previously lived, such as Richmond, CA, where the only reason it ever showed up in a national news story was if a sensational crime was committed or a chemical plant leaked toxic gases into the air.

    3. I didn’t know they did stop using it but likely to distort perceptions by way of hidden numbers. That way it can remain mysterious. The metrics are unavailable, to get the balloon really huge but not readily reveal just how big by comparison as the datta is missing.

  9. Bullshit warning!

    This crazy bubble runup in U.S., and now international, home prices has occurred a total of twice going back to 1890 or so: First from circa 1997 through 2007, then from 2012 through 2021.

    Both episodes are the result of deliberate government intervention to use subsidies, abolition of traditional lending standards, and Ponzi finance to massively stimulate demand to manic levels, driving prices skyward to unprecedented heights. Both were enabled by central bank expansion of its traditional mandate into housing market intervention and stimulus, through ever lower rates and Quantitative Easing to fund MBS purchases.

    Both of the twin bubble episodes are destined to end in tears, footstamping, and bailouts.

    “Over shorter periods, home prices are extremely volatile, as anyone who remembers the great housing bubble of the 2000s will recall. From 1998 to 2006 (when prices peaked), nominal house prices more than doubled on average. After factoring in the loss in purchasing power due to inflation, real prices rose at an annual rate of 6.9%. Homeowners lost most of those gains over the next six years as real home prices fell at a 7.1% annual rate.”

  10. This news should make it easier to throw Chinese national investors in U.S. real estate under the bus when our incipient real estate bust emerges in plain view:

    Foreign investors are losing out in Evergrande’s battle to survive
    Analysis by Michelle Toh,
    CNN Business
    Updated 9:52 PM ET, Fri October 1, 2021
    Why global investors are focused on Evergrande

    Hong Kong (CNN Business)
    The endgame for Evergrande is still up in the air. But the troubled Chinese conglomerate is starting to get its priorities in order — and foreign investors look to be bottom of the list.

    In recent days, the property giant has worked to clear some tabs with domestic lenders as it tries to sort through its $300 billion mountain of debt. But the firm has stayed silent on two interest payments to offshore investors that came due in the past two weeks.

    Those interest payments were due on dollar-denominated bonds: one for $83.5 million, and the other $47.5 million. Deadlines came and went last Thursday and this Wednesday, respectively, with no official update.

    That suggests that the company’s priority is to pay back Chinese investors first, if it can pay them back at all. It’s also under huge pressure from Beijing to protect people who bought its apartments and have not yet taken possession of them. China’s real estate sector and related industries are estimated to account for about 30% of GDP, and officials want to avoid a wider crisis.
    …

    1. “But the troubled Chinese conglomerate is starting to get its priorities in order — and foreign investors look to be bottom of the list.”

      I am shocked, shocked to be at the bottom of the list! 🙂

      1. Bottom of the list? That’s an upgrade from earlier this week when China announced foreign investors would not be compensated at all, that is, not on the list.

  11. Evergrande may just be the tip of the iceberg. It’s one of 4 major warning signs flashing for the global economy.
    Ben Winck and Harry Robertson
    6 hours ago
    Evergrande China construction
    Evergrande is China’s second-biggest property developer.
    Noel Celis/Getty Images

    — China’s Evergrande is spooking markets and the global economy faces a range of threats that could derail recovery.
    — Soaring energy prices are disrupting production; in the background the US and China still aren’t getting along.
    — With growth slowing and prices hitting multiyear highs, economists are talking about the dreaded “stagflation.”
    …

    1. DP World sees no quick end to global shipping bottlenecks
      By Alexander Cornwell
      2 minute read
      DP World Chairman Sultan Ahmed bin Sulayem speaks during an interview with Reuters on the opening day of Dubai Expo 2020, in Dubai, United Arab Emirates October 1, 2021. REUTERS/Abdel Hadi Ramahi

      DUBAI, Oct 1 (Reuters) – Dubai ports giant DP World sees no early end to disruptions in global supply chains that have set off delays at ports and logistics hubs around the world, its chairman said on Friday.

      The disruptions, a result of pandemic lockdowns and an unexpectedly rapid recovery in demand, have also led to shipping container shortages and skyrocketing freight rates.

      “I really don’t think it’s going to be resolved this year, DP World’s Sultan Ahmed bin Sulayem told Reuters on the opening day of Expo in Dubai, itself delayed a year by the pandemic.

      He said he could not predict when the disruptions would end but that he was hoping for a breakthrough sometime next year.

      “I don’t see it ending soon but… I think as soon as most people are vaccinated it will be over,” bin Sulayem said.

      The supply chain disruptions have been compounded as ships wait for days to enter some ports such as in Southern California where a record number of vessels have waited off the coast.
      …

      1. I think as soon as most people are vaccinated it will be over

        Pray tell, what does the virus have to do with shipping? This shortage/supply chain upheaval sounds very contrived to me. Having perpetual shortages sounds like one more way to control the masses. Maybe PedoJoe will get to decide who gets to buy a new F-150 and who doesn’t?

        1. It’s not the virus but the policies in response to the virus (e.g., lockdowns and vaccine mandates) that are causing supply chain disruptions. bin Sulayem doesn’t seem to understand that the “vaccine” is non-sterilizing and non-durable.

        2. I was wondering the same thing. Just why are 66 ships sitting in water outside San Diego. Bring ‘em in and unload ‘em.

  12. Seeing those years listed and aligning with my own struggles was a painful reminder as to why I’ve been a homeowner twice but those few years were just a fraction of my three decades as an adult. School debts, deaths (costs, never inheritance), bailing out family, medical issues, poorly timed moves, laid off ’08-09, child care expenses due to spouse disability. And I did buy at decent times, most recently 2011 – forced sale in 2015. I “celebrate” 50 this month with perfect credit, tons of money in the bank…and a miserable renter. This market needed to crash years ago, and I was just reaching for my checkbox around March 2020 when this crap doubled-down.

    I’m sure there are lots of stories like mine (hi, divorcees!). You hit this market at the wrong time (or born the wrong time) once in life, very bad. You hit this market wrong twice in life, through your own fault or not, and you’re done.

    This is what happened when the American Dream was corrupted into owning other people’s home’s instead of just your own, turning it into a stonk with winners and losers.

    1. “I’ve been a homeowner twice but those few years were just a fraction of my three decades as an adult.”

      Same here.

    2. The only home I’ve owned was inherited 5 years ago in my early forties. My husband, 10 years my senior and previously divorced, has never owned a home.

    4. You hit this market wrong twice in life

      I haven’t been playing by the “rules” for a very long time now.

  13. Has anyone tallied the true cost of cryptocurrencies in terms of time and resources wasted on the pursuit of imaginary wealth?

    1. Bitcoin mining producing tonnes of waste
      Published 20 September 2021
      Electronic WasteImage source, Getty Images

      Bitcoin mining produces electronic waste (e-waste) annually comparable to the small IT equipment waste of a place like the Netherlands, research shows.

      Miners of the cryptocurrency each year produce 30,700 tonnes of e-waste, Alex de Vries and Christian Stoll estimate.

      That averages 272g (9.5oz) per transaction, they say. By comparison, an iPhone 13 weighs 173g (6.1oz).

      Miners earn money by creating new Bitcoins, but the computing used consumes large amounts of energy.

      They audit Bitcoin transactions in exchange for an opportunity to acquire the digital currency.

      Attention has been focused on the electricity this consumes – currently more than the Philippines – and the greenhouse gas pollution caused as a result.

      But as the computers used for mining become obsolete, it also generates lots of e-waste.

      The researchers estimate Bitcoin mining devices have an average lifespan of only 1.29 years.

      As a result, the amount of e-waste produced is comparable to the “small IT and telecommunication equipment” waste of a country like the Netherlands researchers said – a category that includes mobile phones, personal computers, printers, and telephones.

      The research is published in the journal Resources, Conservation & Recycling.
      …

    2. Why Bitcoin’s pollution could grow after leaving China
      Bitcoin miners need to find new, cheap sources of electricity
      By Justine Calma
      Sep 30, 2021, 1:52pm EDT
      Russia’s Largest Bitcoin Mine Turns Water Into Cash
      Cryptocurrency mining rigs sit on three-storeys of racks inside the BitRiver Rus LLC cryptocurrency mining farm in Bratsk, Russia, on Friday, Nov. 8, 2019. Andrey Rudakov/Bloomberg via Getty Images

      China is cracking down on Bitcoin mining, and some experts fear that the cryptocurrency’s environmental footprint could become dirtier as a result.

      Bitcoin is incredibly energy hungry. To create new coins, miners race to solve complex puzzles using specialized machines. As a result, Bitcoin is estimated to use as much electricity annually as the entire country of Poland. Until this year, a majority of that electricity came from a mix of coal and hydropower in China. Last week, China sounded the death knell for Bitcoin mining within its borders when it made all cryptocurrency transactions and mining illegal — although most mining operations fled earlier in the year when bans were announced in provinces where most had previously set up shop.
      …

    3. “Bitcoin miners need to find new, cheap sources of electricity”

      No, they really don’t need to.

    4. Bitcoin has another major pollution problem brewing
      By Shawn Tully
      September 26, 2021 3:00 PM PDT
      Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.

      Call it Bitcoin’s other pollution problem.

      The signature crypto-currency’s giant carbon footprint, equal to that of Greece, is stoking concern about its future even among such fans as Elon Musk. What’s much less appreciated is the volume of electronic waste the network generates. Miners are locked in an arms race to install ever-more-powerful machines that they’re discarding at a faster and faster pace. The upshot: If its average price over the last two months of $47,000 holds, Bitcoin miners will soon be dumping the same volume of small IT equipment as the nation of Italy. Much of the toxic runoff from those mounds of metal refuse will leach into the soil and water supply. To put it mildly, the bulk of the world’s Bitcoin isn’t produced in places devoted to responsible collection and recycling of e-waste.
      …

    5. Is it an overstatement to note that cryptocurrencies are an illegal, immoral, unethical, and filthy waste of productive resources?

    6. World / Americas
      Bitcoin launch sparks wave of cryptocurrency speculation in El Salvador
      — El Salvador’s plan, the brainchild of 40-year-old President Nayib Bukele, is the biggest test for bitcoin in its 12-year history
      — The government’s new digital wallet, called Chivo which is slang for ‘cool’, comes pre-loaded with US$30 worth of bitcoin
      Published: 12:44am, 3 Oct, 2021
      Updated: 12:44am, 3 Oct, 2021
      Why you can trust SCMP

      Bitcoin has unleashed a wave of speculation in El Salvador since its adoption as legal tender last month.

      Uber drivers, waiters and shop owners are day-trading the cryptocurrency on their phones, buying dips and selling rallies with a government app that comes pre-loaded with US$30 worth of bitcoin.

      The government’s new digital wallet, called Chivo, was designed to facilitate bitcoin transactions, but the ease with which users can top up their balances and switch instantly between dollars and tiny, fractional amounts of the cryptocurrency makes it a perfect tool for speculation.
      …

    7. Yahoo
      Crypto prices skyrocket after El Salvador begins harvesting volcano power to mine for Bitcoin
      Zachary Halaschak
      Fri, October 1, 2021, 9:08 AM·
      4 min read
      In this article:

      The value of cryptocurrencies is erupting after El Salvador announced it is now using volcanic energy to mine Bitcoin.

      El Salvador’s President Nayib Bukele tweeted on Friday at about 1 a.m. local time that his country had minted the first volcano-powered Bitcoin. He referred to the mining operation as the “volcanode” after posting a video earlier this week of what appeared to be rigs at a geothermal Bitcoin mining operation.
      …

      1. I can’t overstate my amazement at the lengths to which cryptocurrency scammers will go to bamboozle greater fools into believing in the wonders of imaginary wealth creation.

        1. Well it’s nothing compared to fiat scammers. And not one crypto owner has started a war and created a draft so their friends could profit.

      1. Thousands have been created and it is a fascination for some. Mostly it is decentralized and has a public blockchain. Some of the technology created from cryptos is carving the future in other areas. Veritasium has not been approved and has actually been hijacked by central banks because it is decentralized banking that completely wipes out the banking system as it is currently structured. Mostly people who scoff cryptos know very little about them.

  15. First time posting in 15 years! I remember this blog from back in 2007. So much has changed, but housing insanity remains the same.

    1. “First time posting in 15 years! I remember this blog from back in 2007. So much has changed, but housing insanity remains the same.”

      I started coming here years before the 2008 bust too. I agree, the insanity driving RE is just as–if not more–prevalent now than it was back then.

      Conclusion: Combine greed and fear and for many, rational thought goes right out the freaking window.

      Pass the popcorn, please…

  16. Quick question. I don’t see a way to register a new username on this blog. I only see a login link. How would I register an account?

    1. You don’t have to register anything and yer email can be fake. I don’t use it except to see if someone is trying to hijack yer screen name.

  18. BREAKING: AI-powered DoD data analysis program named “Project Salus” SHATTERS official vaccine narrative, shows A.D.E. accelerating in the fully vaccinated with each passing week

    Conclusion
    In conclusion, these data from the DoD / JAIC absolutely shatter the false narrative of Biden, Fauci, Walensky and other “authorities” who are still attempting to gaslight the American people into thinking that hospitals are filled with unvaccinated people. In reality, the vast majority of hospitalizations and deaths are occurring among those who were fully vaccinated, according to the 5.6 million people studied in this particular data set (Medicare). Importantly, post-vaccine health outcomes are worsening over time, meaning that the vaccines appear to be gradually damaging the immune system over subsequent months, making vaccinated individuals far more vulnerable to subsequent infections. This is the very definition of ADE (Antibody Dependent Enhancement), about which many analysts such as Dr. Sherri Tenpenny have warned. Now, it appears that ADE is no longer merely a theory but rather a confirmed phenomenon reflected in official Medicare data. Attorney Thomas Renz told Natural News today that these data should immediately result in not just the FDA’s revocation of mRNA vaccine EUA and approval status, but that the FDA, Fauci and Big Pharma’s top executives should be sued under RICO Act violations for racketeering and organized crime.

    3. Importantly, post-vaccine health outcomes are worsening over time, meaning that the vaccines appear to be gradually damaging the immune system over subsequent months, making vaccinated individuals far more vulnerable to subsequent infections.

      Yet another conspiracy theory is turning into a conspiracy fact.

      But don’t expect that to dissuade the True Believers. If it does get to the the point that it becomes impossible to hide the numbers of people dropping dead, they will try to gaslight us and say it’s not the vax (they will likely try to pin the blame on the unvaxxed).

      1. It is already happening. The death rates are rising so quickly the funeral homes and cream stories are weeks behind.

        1. The evidence shows that these vaccines should be pulled from to market immediately.
          Instead these criminals of the Biden Administration are doubling down on mandating a jab in every arm so as to cover up the the outrageous failure of these expiermental injections.
          They are in a race against time to cover up this medical assault against humanity that is a lab rat expierment gone bad by Big Pharmaceutical, that think they have no liability for this crime.

          How do you like big Monopolies like Big Pharmacy corrupting Government to get a Dictorship of mass genocide . Corporate Governance by a One World Order of deranged psychopaths that rigged the National election to bring on a killing Dictorship .

          No doubt they wanted to use a disease they created by gain of function to dismantle the globe by Medical Tyranny that has been one big fraud after another for this enemy insurrection to take over. I have never witnessed something this vile and evil in my lifetime .

      1. Some rich fock with more money than sense.

        More likely a debt donkey with no sense whatsoever.

  21. Argument
    An expert’s point of view on a current event.
    China’s Property Sector Has Bigger Problems Than Evergrande
    Chinese economic troubles may come far faster than the markets expect.
    By Logan Wright, director of China markets research at Rhodium Group.
    The logo for Evergrande City
    A view of the logo for Evergrande City in Wuhan, China, on Sept. 24. Getty Images
    September 29, 2021, 12:17 PM

    The late Massachusetts Institute of Technology professor Rudi Dornbusch famously remarked, “The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.” Last week’s market panic over China’s property market and its largest and most indebted developer, Evergrande, was a case in point. Informed China observers have been concerned about the imbalances in China’s property market, often described as one of the largest financial bubbles in history, for over a decade. But it was just last week that markets suddenly and collectively decided that China’s property sector now posed a meaningful risk to the global recovery—and to China’s long-term growth prospects.

    The story of how China’s property market reached this point is an illustration of both Beijing’s power over market forces and its limitations. The property market kept expanding because investors and developers generally thought that it was far too important for Beijing, which depended on it to maintain rapid rates of economic growth and households’ net worth, so any downturn would be short-lived. The government, after all, had stepped in to prop up faltering financial markets and enterprises before out of fear of social or economic disaster, such as its response to the stock market meltdown of 2015 and the massive monetary and fiscal stimulus in 2008-2009.

    But as Beijing struggled to contain the speculative fervor and rapidly rising prices that resulted from the property bubble, Chinese authorities eventually turned to harsher and blunter measures that are now creating punishing economic costs. And after a summer of aggressive regulatory actions against several dynamic private sector firms, financial markets are grappling with the question of how far Beijing will go.

    China’s property market is fundamentally imbalanced: too much housing, too little demand among owner-occupiers, and not enough people moving to the places where housing is oversupplied. China’s urbanization rates and household formation rates arguably peaked around the time that the working-age population began declining, between 2013 and 2015. But the rate of new residential building projects just kept rising, and construction kept powering the economy. Such projects hit a new high only in 2019, with developers initiating construction of around 18 million to 19 million units, and the COVID-19 pandemic only slowed new construction marginally in 2020.
    …
    https://foreignpolicy.com/2021/09/29/chinas-property-sector-evergrande/

  22. Not sure what happened to the blog’s participants over the last 13 years, but I’m shocked many hear are so anti-crypto here. The petro-dollar and the Fed is what has ailed the country since 1913 and crypto is the antithesis of that.

    From a macro standpoint, everything works in cycles. Crypto is no different and we’re in the final months of the latest bull cycle for cryptos in general and BTC in particular, that started with the latest halving in 2020. We’ll see some insane gains from here, likely well over six figure BTC ($135k is the target) before the next crypto winter and bear market.

    After that, figure the next BTC halving is 2024, so that will kick off the next bull cycle and a run to $500k-1M. Check out Plan B’s Stock to Flow model that the above is based on.

    Anyway, why not make money, regardless of how you feel about it. It kind of reminds me of housing decisions here. 17 years in a cash flow positive multi and exiting with a nice profit. Plenty have made more and many less with SFH’s, but the bottom line is you have to live somewhere. FWIW, this blog helped me to recoginize tops in the housing cycle and maybe time this exit better than my last entry.

      1. All life is speculation. As they say, the only certainty in life is death and taxes… although I hear that if you relocate to Puerto Rico and establish yourself there officially, you can exclude taxes out of that equation.

        The vaccine mandates make you speculate about your health and now employment… am I more at risk from Covid or the jab? Will I lose my job if I don’t get the jab. People speculate on their professiona and income all the time. Why else would someone spend 10’s or hundred’s of thousands on degrees and law schol or Master’s and such if they didn’t speculate there would be a financial benefit later on?

        Look, all of existance is a casino and your playing, whether you like it or not. The one thing I’ve figured out in 40 something years is that it’s better to have money than not in life. Learn to identify and manage risk and make smart bets, or get lucky once in a while. Else stay poor. Nothing wrong with that decision, but it isn’t one I’m willing to accept if I have the means to.

        As for housing, I’ve never lost money in the 21 years I’ve owned real estate (2000-2003 and 2004-2021). I was lucky, then patient, and now hopefully smart.

        With crypto, it seems God (and Satoshi) has given the masses a way out of poverty and a way to change their life for the better, but many don’t want to see. Reminds me of the story of the family on the roof of their flooded house asking God to save them. Three times people showed up to help them off the roof and each time they waited because God was supposed to save them. When they finally drowned and asked God at the gates of Heaven why he didn’t save them, he answered “Who do you think sent those folks to rescue you from the roof? It’s not my fault you failed to recognize providence.”

        1. We’ll see some insane gains from here

          By what stretch of imagination is a Ponzi scheme based on nothing a gift from God?

          1. By what stretch of imagination is a Ponzi scheme based on nothing a gift from God?

            Agreed. To say such a thing is blasphemy

          2. Why would you think BTC is a ponzi? It is a deflationary crypto in an inflationary world. 21 Million. That’s it. Supply and demand.

            Crypto, specifically BTC, is out of the hands of governments and their inflationary schemes. As to the ponzi aslect, well, why do diamonds have any value? Why does gold? Hell, you do know there is an asteroid no so distant from Earth that has more gold in it than has ever been mined in all of human existance, right? Talk about a ponzi…

          3. northeastener

            Troll. you have hijacked a long time poster’s name and can’t even spell English.

            FU

            FJB

        2. “…although I hear that if you relocate to Puerto Rico and establish yourself there officially, you can exclude taxes out of that equation.”

          Kinda wondered what Mauldin was doing there!

          1. Now you know… legal tax haven, at least for now. My understanding is if you do it right, you owe nothing to the Feds. Lots of crypto rich are doing it.

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