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Monsters Lurking Just Under The Waves

A report from the Dallas Morning News. “‘Many of you are hearing the housing market is losing some steam,’ James Gaines, the longtime economist for the Texas Real Estate Research Center at Texas A&M University, told members of the MetroTex Association of Realtors. ‘It does appear there is something of a slowdown in the rate of sales going on. Affordability has become an issue obviously. We are beginning to see the early signs of some sticker price stock. Incomes have not increased as rapidly as home prices and that is throwing everything out of balance.'”

The Miami Herald in Florida. “For the Michaelsons, they already know how they’ll split their time in the years ahead. Summer in East Hampton, fall in Manhattan and winter and spring in Miami. ‘Real estate is like an elevator,’ Steven Michaelson said. ‘It’s always going up. If you can own your own place, then it’s great to live in your investment.'”

The Palm Beach Post. “The median price for a home in Palm Beach County dropped for the first time in 18 months, according to a report. In August, the median price for a single-family home rang in at $480,000 — a 4% drop from July and the first decline since before the pandemic hit Florida, in February 2019.”

The Naples Daily News in Florida. “Brenda Fioretti, Broker Associate at Berkshire Hathaway HomeServices Florida Realty, pointed out that the report showed ’24 percent of pending sales during August went back on the market during the month.'”

From Inside Nova. “Was the late-2020-into-early-2021 real-estate market really as hot-hot-hot (and chaotic) as anecdotal evidence suggests? A new analysis says maybe not. New data from Zillow’ debunks common misconceptions that all buyers had the same experience, and shows the reality for most was not as grim. The typical buyer surveyed this year submitted just two offers before one was accepted, up from one in each of the previous three years. A vast majority of buyers (88 percent) had an inspection done before they closed on their new home – another case where anecdotal evidence seemed to paint a different picture. Nearly all buyers surveyed took a private tour before putting in an offer.”

“The fall market has shown signs of cooling as home-value appreciation begins to slow and inventory continues to grow each month.”

From Housing Wire. “‘We are talking about a large number of forbearance exits, between 15,000-to-20,000 a day,’ said Karthik Kumar, global head of mortgage practice at TCS. ‘CFPB has given clear guidance saying (servicers must be) proactive, and if you feel unprepared, it’s unacceptable. The onus gets back to the servicer.'”

From DS News. “Conversations around the federal block on evictions have shifted. There is a consensus on one aspect: ‘We can’t predict the future of the industry.’ But why don’t we know? Why are better predictive analytics not available for investors, servicers, and field service providers to help hazard an educated guess? Many believe that properties may be in a better condition, but others estimate that homes will be found in a much worse condition than standard default inventory. The reasons that feed into this last case are a vast and varied collection of variables that boil down to not having the data available to make any ripe estimations.”

“Under the temporary suspension order, property inspections for loans with a CARES Act forbearance are not required if the loan is current or had not reached the 60th day of delinquency when the borrower requested a forbearance. Still, inspections are required for vacant or abandoned properties. Assuming that borrowers in forbearance are truly occupying the home carries an incredible risk particularly for servicers. Knowing a home is vacant allows servicers to proceed with a fitting response regardless of the moratorium.”

“These assets have not reached delinquency keeping servicers from issuing non-claimable inspections. Non-claimable inspections are necessary and servicer actions cannot be rationalized solely by claimability and bottom line. If a servicer fails to determine an accurate occupancy status at first-time vacancy (FTV), much of the work may not be claimable since it could be deemed as mortgagee neglect or servicing error or could result in demand for reimbursement. All these outcomes can be costly to the servicer, making it imperative to know the true FTV to reduce their exposure.”

“There is general consensus to go that extra mile with nearly all industry leaders reporting that servicers should strengthen FTV to protect their interests despite the upfront, out-of-pocket costs of inspecting occupied homes. This begs the question: why haven’t they? Is it simply because they do not want to challenge the status quo?”

From News.com.au. “Coal. Meat. Wine. Cash. Beijing paints itself as playing a powerful game of coercive diplomacy. But the price may be a homegrown economic reckoning – with Chairman Xi Jinping’s authoritarian acts choking the nation’s ‘miracle’ economy. It’s a rare insight into an internal Chinese political debate. And there’s plenty to argue about. China’s property price bubble is bursting bigtime.”

The Los Angeles Times. “Classroom lights were off at Baita Elementary School. The screen at the front gate usually displaying announcements had gone dark too. Children were playing sports outside instead of learning, and mothers weren’t sure when the energy crisis gripping China would end. ‘We’ve never had power cuts like this in Shenyang,’ said one mother. She declined to give her name. Blackouts for an hour or two were annoying, if tolerable, but now entire neighborhoods in her city were losing electricity for daylong stretches.”

“Chinese social media filled with complaints from other northeastern residents of being stuck in elevators, losing water and a case of carbon monoxide poisoning when exhaust systems lost power in the middle of the night. In a manufacturing area a few miles from Baita Elementary School, all the factories appeared closed this week except for one called Jinbei, which makes car parts.”

“‘What happened was a repeat of what has happened every time there is a negative economic shock in China,’ said Lauri Myllyvirta, lead analyst at the Center for Research on Energy and Clean Air. ‘The government uses real estate construction and infrastructure construction as a way to stimulate the economy. That’s what led to this.'”

“When coal is expensive, many plants report ‘maintenance outages’ and reduce or stop operation rather than suffer losses. ‘No one will generate power to lose more money because they know they’re not only burning coal but also burning money,’ said Li Shuo, senior global policy advisor at Greenpeace East Asia.”

From Business Insider. “The name Evergrande is becoming as famous in 2021 as the name Lehman Brothers was in 2008. The colossal Chinese real-estate developer is wobbling, threatening markets far outside China’s borders. But as big as a $300 billion debt default is, it could just be the tip of the iceberg. Rising prices are ‘a function of supply-side bottlenecks over which we have no control,’ Federal Reserve Chair Jerome Powell told the House Financial Services Committee.”

“Evergrande, then, is simply the most visible risk facing the global economy. The iceberg standing in the way of recovery is larger than it first appears. The energy crunch, the transPacific decoupling, and the ghost of stagflation are monsters lurking just under the waves.”

From Daiji World. “The default troubles at the globes most indebted property development, Evergrande seem like small embers compared to the $8.2 trillion worth of China local government financing vehicles outstanding, Forbes reported. Analysts at Goldman Sachs have flagged the risk of surging local government debt levels that President Xi Jinping’s men have done their best to hide.”

“The data that Goldman’s Maggie Wei highlights is as of the end of 2020. Clearly, the tally is higher now, perhaps markedly. Ten months ago, these shadowy investment schemes had reached 53 trillion yuan, up from 16 trillion yuan, or $2.47 trillion, in 2013. They now amount to roughly 52 per cent of China’s gross domestic product, topping the official amount of outstanding government debt, Forbes said. In other words, as scary at the $300 billion Evergrande story might be, Xi’s government has much bigger problems on its hands.”

“The most acute: keeping GDP this year from falling too far below the 6 per cent Beijing hoped to produce without adding to the nation’s bubble troubles, the report said. The forces behind local governments sitting on financing-vehicle debt worth twice the size of Germany’s GDP date back to 2008.”

“Even before the Lehman Brothers crisis, Communist Party dynamics encouraged municipal borrowing binges. The way local officials got attention in Beijing, and rose to national prominence, was producing above average GDP rates, the report added.That incentivised a couple of dozen prefectural leaders to engage in an infrastructure arms race, of sorts. Metropolises raced to build skyscrapers, six-lane highways, international airports and hotels, white-elephant stadiums, sprawling shopping districts and amusement parks.”

“After the subprime crisis, this strategy shifted into overdrive. Local governments were a key engine then-President Hu Jintao used to avoid the worst of the global financial crisis. The same with Xi’s men when the Covid-19 crisis arrived in early 2020. The trouble with China’s LGFV boom is the opacity accompanying it. For all their talk of giving market forces a ‘decisive’ role since 2012, China’s leaders have made the country less transparent. Nor has the credit rating system kept pace with the growth in Chinese capital markets, the report added.”

“These days, international investment banks and news organisations worry that warning about China’s local government debt bubble will open them up to retaliation. Not a great look for Asia’s biggest economy.”

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This Post Has 105 Comments

  1. ‘seem like small embers compared to the $8.2 trillion worth of China local government financing vehicles outstanding’

    I that a lot?

    2. “Steven Michaelson said. ‘It’s always going up.”

      Think he meant debt is always going up.

  2. ‘We are talking about a large number of forbearance exits, between 15,000-to-20,000 a day’

    Is that a lot too? Then says senator running dear demands be ready! But DS News (a foreclosure site that’s changed into REIC cheerleader) shows, oh hell no. They aren’t even inspecting these shacks cuz they aren’t delinquent – even though payments stopped over a year ago.

    See how we do things now? We’ll just not count them as delinquent, problem solved!

    Oh and the article mentions they have to pay 15 bucks for an inspection. The same amount they paid in 2007, which hardly covers gas. The foreclosure biz will then be surprised when these inspectors just send in a half a$$ed report with a couple of photos.

    1. ‘If a servicer fails to determine an accurate occupancy status at first-time vacancy (FTV), much of the work may not be claimable since it could be deemed as mortgagee neglect or servicing error or could result in demand for reimbursement. All these outcomes can be costly to the servicer, making it imperative to know the true FTV to reduce their exposure’

      ‘There is general consensus to go that extra mile with nearly all industry leaders reporting that servicers should strengthen FTV to protect their interests despite the upfront, out-of-pocket costs of inspecting occupied homes. This begs the question: why haven’t they? Is it simply because they do not want to challenge the status quo?’

      This article is interesting to me because I know a bit about the boiler rooms on this ship. Servicers are staffed with a revolving door of poorly trained newbies who don’t give a sh$t cuz they won’t be around when it hits the fan. Even regional managers of big outfits come and go.

      Moral is terrible in the fields (people who actually do the work) because of low pay and neglect. Little problems become disasters.

      The there’s “the game.” Running out the clock. Time has to pass before Bank of America can toss this hot potato into fannie or freddie or HUDs lap. Spend as little as possible til then. Do not tell us about issues, we don’t want to hear it. The people in the field likely don’t know this game is going on. So they get discouraged on watching stuff go to hell.

      1. “Oh and the article mentions they have to pay 15 bucks for an inspection. The same amount they paid in 2007, which hardly covers gas. The foreclosure biz will then be surprised when these inspectors just send in a half a$$ed report with a couple of photos.“

        so many missing subzero freezers, viking stoves, miele dishwashers that just walked away upon vacancy . . who coulda knowd!?

    3. Oh and the article mentions they have to pay 15 bucks for an inspection. The same amount they paid in 2007, which hardly covers gas.

      So they want them to do free inspections? What kind of chowderhead would work for free?

      1. They don’t, for long. The trick is they dangle lucrative work in exchange, which doesn’t materialize. When I first got in this biz I discovered something doing inspections. I was really green, probably late 2007. Nobody knew the storm that was coming really. I suddenly got a raft of inspections, around 70 in Flagstaff and Prescott. They were close together so I could make the money work. I quickly discovered they were almost all HELOC’s. So I’d go out there, knock on the door (not really necessary for a vacancy check), and some older person would answer. When I mentioned who sent me they got scared. Eyes got big, they started babbling about what they spent the money on and how it was in line with the terms of the loan. Those were the first times I understood the real fear these FBs had.

        Fast forward a few months and people were tossing the keys left and right. After that every call was a vacancy check in a way. Yep, old newspapers piled up, grass 3 feet high – it’s vacant! The routine began. Secure it. Post signs, winterize if it was the season. Sometimes winterize it any time. Bid on removing debris and hazards. They even wanted me to upload photos from site to speed everything up.

        One more aspect of that early time I’ve mentioned before: every single foreclosed shack was for sale. The FB didn’t typically live there and was trying to grab that sweet equity. So it was very common to have to call the UHS. “Hello, is Mr FB gone? Yes, he’s cutting off the utilities today so you better winterize it pronto. There’s no way it will sell for what he owes.” That was actually kind of a brief period. Before long none of these FBs were trying to sell. It was a lost cause and everybody knew it.

  3. ‘all the factories appeared closed this week except for one’

    No workie spells deep doo doo.

    1. And not just in China either. From last week’s Economist –

      ‘Flaring Up’

      ‘Britain one again faces interrupted energy supply, empty supermarket shelves and government bail-outs. On Sept 20th, Kwasi Kwarteng, the business secretary, promised Parliament that “there’ll be no three-day working weeks, no throwback to the 1970s”.’ [**Nb. See 4 paragraphs down this isn’t true**]

      ‘The backdrop is fast-rising global energy prices, especially for natural gas… They are painful for many countries, but particularly so for Britain… gas has generated much of its electricity and heated almost all its homes. But North Sea gas is running out; and as Britain has replaced coal-fired plants with wind power in order to reduce carbon emissions, it has become painfully dependent on natural gas imports.’

      ‘But the risks rose in 2017 with the closure of a big gas-storage facility, which left Britain able to store just 2% of its annual demand. Other big gas importers, by contrast, can store 20-30%. And the risks rose further in 2019, when the government capped consumer prices.’

      ‘…from October the price cap would rise by 12%. But since then the wholesale price of gas paid by British energy firms has risen by more than 70%. Seven [energy firms] have failed since August.’

      ‘Some energy-intensive businesses found themselves thrust into a no-day week**. CF Industries, an American-owned fertilizer company, ceased production at its two British sites, saying it was no longer economic. The effects rippled through the food-supply chain. Commercial carbon dioxide (CO2), a by-product of fertilizer production, is used to stun animals before slaughter, package fresh food and keep food cool during transport. In normal times, CF industries accounts for more than half of Britain’s supply. The British Meat Processors Association, a trade body, has warned of imminent meat shortages.’

      ‘The government announced that following talks, CF Industries would be restarting CO2 production. Subsidizing its energy prices would, admitted the environment secretary, cost “many millions.”’

  4. ‘Was the late-2020-into-early-2021 real-estate market really as hot-hot-hot (and chaotic) as anecdotal evidence suggests? A new analysis says maybe not’

    Ahem…

    ’24 percent of pending sales during August went back on the market during the month.’

    But Brenda, these were the winnahs?

    2. Ben, I don’t see much reporting on the DC metropolitan area. I’m a real estate photographer and just this morning a Realtor told me her last listing sold for 100k over asking. Not only that but, the 3 other bids that lost out bought within days. In fact, one buyer approached the neighbor of the house they didn’t get and offered them more than the last one and, bingo, the got it. Is it still red hit cakes here like agents keep saying?

          1. Each agency is making its own decision, Bear. It also depends on the local conditions where the office is located. For the most part, the office buildings are being maintained as usual. Staff can come and go, as long as they are masked and the total # in the office doesn’t exceed a certain capacity. Most are still staying at home, but some came back once the kids went back to school.

        3. Most fedgovs are still on telework in the basements of suburban MD and VA. But not for too much longer. Agencies are starting to bring people back, slowly, allowing a lot of telework. The COVID pandemic ushered in a cash-out rei pandemic. Same equation over and over again:

          bubble equity + low interest rates –> new basement home office, CC pay-downs, and a few sexi-trux.

          I just completed a refi myself. When I asked a question, they all said “Oh, it must be your first refinance, let us explain,” as if there were no first refinances anymore. Which makes me wonder just how many people are doing repeated refis.

        4. I got a Donk she ain’t go no equity,
          A cash out refi was her friend.
          I got a Donk she ain’t go no equity,
          A cash out refi was her friend.

          Stamping her feet in circles,
          Losses gonna rise like a bird up in the sky,
          Stamping her feet in circles,
          Losses gonna rise like a bird up in the sky.

          https://youtu.be/ghj5V5cUo1s
          Billy Preston – Will It Go Round in Circles

          Silver Spring, MD Housing Prices Crater 18% YOY As Soaring Housing Inventory Blankets Northern Virginia Area

          https://www.movoto.com/silver-spring-md/market-trends/

          1. FYI, I didn’t take any cash out at all, unless you count that free month that happens for all refi and purchases. I got a lower interest rate and shortened the mortgage, that’s all.

        5. Ben,

          I’m going to start taking the opposite position of most people here. What are the rules so I don’t get booted off the site?

          3. The only hard-and-fast rule seems to be to not annoy Ben. Make posts short and easy to moderate. No massive links. Try to stay away from links to ZeroHedge.
            No trolling with obvious cut-and-paste pre-written talking points or what-about-isms, i.e. the type of stuff you see at other websites.
            If you take an opposite view, support your view with your own arguments. Brevity.
            Don’t bother to counter the Mafia Blocks crater/movato posts. He’s been doing it for years. Just bring him some Hot Cheetos.

          4. ‘I’m going to start taking the opposite position of most people here’

            Why? What’s the point? To convince some person you’ll never meet that yer right, whatever that is? Do you really have that much extra time? Cuz I don’t.

          5. BTW I’m also in the DC area. If there were red hotcakes, they are definitely cooling down.
            The house that went $100K over list, what was the original list price? Where was it, roughly? Location still means something. Was it renovated, or was it a Grandma-finally-died house? I’m curious about the context.

            Also, pricing structure is very different between types of housing. Older shady-suburb consumer starter homes, new starter homes (condos/townhomes), luxury homes, and commercial condos are all very different.

            If you are a real estate photographer, you are probably most familiar with the luxury SFH market, where the seller can afford professional photography. Those prices are influenced by consumer finance. Ben posts a lot of articles on the developer/macro side, where prices are more influenced by central bank and interest rates and construction loans and land prices. So when Ben says “sinking like a turd in a well,” or “where’s mah red hotcakes ” or “How do those cap rates look now,” he’s not disagreeing with you.
            He might be referring to a new condo tower in New York or Lagos or Shenzhen or Melbourne, not the stately mansions by the Cathedral or in Potomac or MacLean.

  5. ‘Real estate is like an elevator,’ Steven Michaelson said. ‘It’s always going up.

    ————–

    I don’t even have a good comeback for that. 🤷🏼‍♀️

    1. Lol. Blinded interpretation of his own analogy. That says a lot about the mindset that got us here.

      2. Definitely! Having the runoff two months after the general election gave them time to set the machine up.

  8. “China’s property price bubble is bursting bigtime.”

    it’s only a depression when you lose your job

  10. Grocery Shoppers, Protesters Fighting Back, Chanting “FREEDOM”

    by Steve Watson
    October 4th 2021, 6:32 am

    Footage out of Melbourne Australia this past weekend shows a squad of riot police harassing and beating grocery shoppers attempting to buy food and coffee before returning home, while a second video captured angry protesters fighting back, chasing the police away and loudly chanting “FREEDOM”.

    The insane video resembles something out of a dystopian nightmare movie.

    Grocery shoppers under attack in suburban Melbourne, Australia

    The Gateway Pundit
    Published October 3, 2021
    54,433 Views

    https://rumble.com/vna7jj-grocery-shoppers-under-attack-in-suburban-melbourne-australia.html

    Australian chanting Freedom – australians are fighting back
    The Gateway Pundit
    Published October 3, 2021
    55,035 Views

    https://rumble.com/vna7oj-australian-chanting-freedom-australians-are-fighting-back.html

  12. Eco-Lunatics Block Roads Again, Prevent Ambulance From Getting to Hospital

    by Paul Joseph Watson
    October 4th 2021, 5:46 am

    Another video shows motorists doing the job the police were seemingly incapable of doing quickly enough and physically removing the protesters.

    “There’s a fu#king ambulance, you stupid pricks, get out of the road!” one man asserts.

    https://www.infowars.com/posts/eco-lunatics-block-roads-again-prevent-ambulance-from-getting-to-hospital/

    2. IIUC, this is the going theory:

      1. Market will have a 10% “correction.”
      2. Market will then recover, possibly to DOW 40K.

      After that the theory diverges:
      3a. That 10% shook out weak hands, recovery continues, smooth sailing. That’s the attitude of msm media channels.
      3b. That 10% was just a prelude. Recovery is just a crack-up melt-up wishful thinking dead cat. After the bounce, the problems from pre-pandemic — repo market, money printing, etc — will finally come to a head and we’ll have an epic crash 70-80%, followed by hyperinflation. This is the opinion of the likes of Kiyosaki and of course the PM bugs.

      I believe we are still in Part 1: Slow-moving 10% correction. The technicals are showing a very weak market.

      1. Interest rates for the US 10 year and the Federal Funds Rate have been trending down for 40 years. Eventually they hit the lower bound. When that happens, that’s going to create some kind of equilibrium that may finally slow down or stall asset price increases.

        I’m no expert but this is one multi-generational factor that is, I think, about to change – we’re at or near the lower bound. Also if inflation persists, that could be another factor that has not been in play for a 40 years. If inflation doesn’t result in politicians being voted out, then will the government and Wall Street dictate that the Fed do anything about it? What is best for them? No one wants to break the currency. They will always be able to maneuver better than everyone else to capture any arbitrage opportunities.

        I don’t know. But this is, it seems to me, a big change, when interest rates hit the lower bounds and cannot go lower.

  14. A NYT headline:

    Nobody Really Knows How the Economy Works. A Fed Paper Is the Latest Sign.

    Many experts are rethinking longstanding core ideas, including the importance of inflation expectations.

    In other words, sh!t happens and it isn’t the Anti-President’s fault. This must mean they know bad stuff is coming.

    1. “…experts…”

      There’s that word again. These are the same people who have been getting it wrong the entire time. “Experts?” Hardly…

      1. The ubiquitous ‘experts’, ‘authorities’ and ‘officials’. In a Marxist regime, there’s plenty of those.

    2. “experts”…

      “THIS time, we’ve got it figured out.”

      What all central planners think they can do is optimally direct the economy, while also helping themselves and their colleagues to a little skim.

      What they wind up doing is creating a crony-based system, a hidebound, hollowed out economy, and dramatic wealth inequality.

      The question is, is the population comfortable enough with its bread and circuses to be untroubled by the the above? Or does the above cause them sufficient pain to demand changes?

      Hard to say, but I think we will find out.

    1. Global markets swoon as Evergrande hints at rescue deal
      Lucy Harley-McKeown
      Mon, October 4, 2021, 12:39 AM·3 min read
      Asian markets extended their dip into the red.
      Photo: Lee Jin-man/AP

      Asian markets extended their dip into the red in Monday’s session as investors digested news that trading of Chinese property firm Evergrande’s shares had been suspended.

      The developer, which is more than $300bn (£221bn) in debt, later said it is expecting a takeover offer and there would be “an announcement containing inside information about a major transaction”.

      Markets were closed in mainland China for a holiday, however the Hang Seng headed 2.3% lower overnight and Japan’s Nikkei closed 1.1% lower.
      …

      1. Sounds like a rescue effort is underway behind the scenes for Evergrande, similar to the one that was orchestrated for Lehman Brothers back in 2008.

        1. Bigger banks (GS, JPMorgan) set up that Lehman fail by dumping derivatives into Lehman. Then after Lehman intentionally failed, bought it back for pennies on the dollar and got federal bailout money too. Lehman was always an outsider.

  17. Holy moly what a swing. Futures were up 500+ points now DOW is down 439 points almost a 1,000 point swing. Fed pumping beginning to fail? Housing influence? China ever .. ? HOUSING is not an insignificant factor.

    1. a 1,000 point swing

      The Plunge Protection Team sees the carnage, realizes they can’t do anything about it, and retire to a nearby bar.

    1. “Student activists had been threatening harassment against faculty in multiple UCLA schools if they didn’t offer black students preferential treatment, including “no-harm” final exams, following the death of George Floyd in May 2020.”

      That’s pretty rich for a University environment.

      1. What is a “no harm” final exam? Is it one that has the answers pre-filled?

        Academia needs to beware, as trade schools that prepare STEM students for professions in coding, circuit design, etc. are popping up. Imagine, a hiring manager seeing “UCLA” on a resume decides to pass on it, as there is no way of knowing if the candidate is competent or has any problem solving skills.

        1. My sister’s community college employer is pressuring their mathematics instructors to pass failing students in order to get numbers up. She’s not on board with the plan. But she has retired early, so it’s someone else’s problem now.

        2. Any good engineering school in the U.S. has ABET certification, a national board of professionals. I can’t imagine them walking into the race bait trap.

  19. “Analysts at Goldman Sachs have flagged the risk of surging local government debt levels that President Xi Jinping’s men have done their best to hide.”

    That worked out great for Enron, up until the point when all their hidden debt piles came to light. After that point, the firm collapsed into a heap of financial rubble within a matter of days.

    We’ll see if it’s different with the Evergrande Pooh Bear’s real estate empire.

      1. WTC 7 was probably the 21st century’s version of the Library at Alexandria. Maybe it housed all THE GOOD STUFF.

        da bear

    2. I always thought that Enron was just a really, really, really bad hedge fund. Basically a leveraged-long commodity futures trading outfit.

      Did they corner “energy prices” and have no one to sell to (or offload risk)?

      da bear

  22. MARKETS
    Inspector General probing whether Fed official trades broke ethics rules or the law
    PUBLISHED MON, OCT 4 2021 5:36 PM EDT
    UPDATED 60 MIN AGO
    Thomas Franck

    KEY POINTS
    The Fed is working with the Office of Inspector General in its review of trades made by central bank officials to determine if they met ethics standards and did not break any laws.

    Those trades, some of which totaled millions of dollars, have sparked concern that central bank officials could have traded based on nonpublic information.
    Fed Vice Chair Richard Clarida, Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren all traded just before and during the Covid-19 pandemic.
    …

    2. Depends on what they mean by “before” the pandemic. We’ve known about the pandemic since Christmas 2019.

        1. The only news I could find was “summer” of 2019, corresponding to hospital visits in Wuhan. And there was a strange flu going around during the World Military Games in October 2019. The official Patient 0 is identified as November 2019.

          Looks like it took a few months for the leak to propagate. Or, more likely, I think the virus at the Military Games was not contagious enough to propagate. So it mutated, and THEN propagated.

          1. So it mutated

            You can make up all kinds of stuff when you actually don’t know. It’s hard to know anything when most of what we’ve been told all along was a lie.

          2. “Make stuff up.”

            We scientists call that “formulating a working hypothesis.” It’s Step 1 of the scientific process. 😛

          4. You can make up all kinds of stuff when you actually don’t know

            Biochemistry, molecular biology, virology or immunology.

    3. I think J-Pow is finished. With two Regional Bank chiefs removed for impropriety, the case could be made that J-Pow has fostered a culture of corruption at the Fed. If Clarida goes, I can’t imagine J-Pow, who has suspect trades of his own, will not go as well. I suspect they started getting a bit sloppy under Bernanke, who is now flat out on Ken Griffin’s payroll. Congress is allowed to trade on material non-public information and I suspect the Fed started to think it had the same privilege but its role in the theater* of government is a bit different.

      In The Big Short, they mentioned the revolving door between the Fed, the putative regulator, and Wall Street (recall the Fed was created by the government and Wall Street to be their tool, not their master).

      The Fed is part of government theater* and as such, its officials needs to stay in character.

      ————————–
      * Walter Bagehot, in The English Constitution, published in 1867, asserted that a constitution needed two parts, ‘one to excite and preserve the reverence of the population’ and the other to ’employ that homage in the work of government’. The first he called ‘dignified’ and the second ‘efficient’.

  24. Teacher bullies students into getting a vaccine, calling them selfish people who are killing others

    9,165 views
    Oct 3, 2021

    Tanner is a 10th-grader at Puyallup High School. He says his biology teacher Rocquel Stanley became upset that some students were improperly wearing their masks. It set her off on a rant against her unvaccinated students. She called unvaccinated students “selfish” and said they weren’t welcome at school. She accused her unvaccinated students of killing people by spreading variants of the virus, warning them that they could “literally kill everyone on the planet.” (Video taken on September 27. Find more at KTTH.com)

    https://youtu.be/olrQVZmItvc?t=146

    2. by Steve Watson
      October 5th 2021, 4:55 am

      A professor who claims he was suspended for refusing to grade black students more leniently has charged that UCLA sidelined him in an effort to offset its own “horrible reputation for racism.”

      As we reported last year, Accounting lecturer Gordon Klein was placed on leave after he rejected requests to allow black students to take final exams at a later date as a response to the death of George Floyd and black lives matter protests.

      https://www.infowars.com/

  26. Does it seem like the stonk market is in a slow motion crash?

    How long can a slow motion crash proceed before it suddenly shifts into overdrive?

    2. The Financial Times
      Markets Briefing Equities
      Tech stock slide drags Wall Street lower
      Shares of Facebook, Apple, Microsoft and Amazon weigh on the benchmark S&P 500
      A trader works at his desk on the floor of the New York Stock Exchange
      The S&P 500 fell 1.3 per cent, taking it more than halfway to an official correction
      Naomi Rovnick and Nicholas Megaw in London 8 hours ago

      Shares of big tech companies slid on Monday, with stocks such as Apple, Microsoft, Facebook and Amazon dragging the S&P 500 to its lowest close since late July.

      The benchmark index fell 1.3 per cent, taking it more than halfway to an official correction — when stocks drop 10 per cent from their all-time high. Some of the index’s tech heavyweights propelled the decline.

      Facebook was among the five worst-performing stocks on the S&P 500, declining 4.9 per cent as its Instagram, WhatsApp and namesake Facebook services suffered outages.
      …

  27. Is it unfair to suggest that communism leads to bad investment decisions and massive resource wastage?

    1. Empty Buildings in China’s Provincial Cities Testify to Evergrande Debacle
      The property giant borrowed heavily to develop in out-of-the way places like Lu’an
      By Yoko Kubota and Liyan Qi
      / Photographs by Raul Ariano for The Wall Street Journal
      Oct. 4, 2021 3:41 pm ET

      LU’AN, China—Rows of residential towers, some 26 stories high, stand unfinished in this provincial city about 350 miles west of Shanghai, their plastic tarps flapping in the wind.

      Elsewhere in Lu’an, golden Pegasus statues guard an uncompleted $9 billion theme park that was supposed to be bigger than Disneyland. A planned $4 billion electric-vehicle plant, central to local leaders’ economic dreams, remains a steel frame with overgrown vegetation spilling into the road.

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