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The Twilight Zone Between Illiquidity And Insolvency

A report from Arlington Now in Virginia. “In terms of homes experiencing a price reduction in Arlington County, things are hot, hot, hot. Within the past week, we’ve seen a nearly 20% uptick in these listings. Approximately two listings per day in Arlington County are having their prices reduced. It’s important to remember — these are just the owners that are proactively cutting the prices of their listings, let alone what may be negotiated down the line.”

The Jamaica Plains Gazette in Massachusetts. “I and others were hoping the fall market would be more robust, so far the condo market remains softer than it had been previously in 2021 and in past years. More condos have been coming on every week, and it just doesn’t seem like there’s enough buyers out there to keep up with the pace of the new condo listings. This is a significant change from past months and years. Again, this has also affected the single family and multi-family market, but not as much. – Ken Sazama, Compass, Sazama Real Estate.”

The Daily Independent in Arizona. “Two Glendale ZIP codes have been ‘cooling off in recent weeks,’ according to the report. Homes in 85310 have seen median list prices drop from $524,000 to $499,450, and the inventory has grown by six. ‘We’re already seeing prices move lower as a result,’ industry tracker Altos Research noted of 85310. The median list price in 85306 also has experienced a drop in four weeks, going from $427,000 on Sept. 6 to $406,000 on Tuesday.”

From Mortgage News Daily. “Both CoreLogic and Black Knight have looked at the million plus home loans that are still in forbearance as the majority of those borrowers are quickly approaching the end of their eligibility. Borrowers who are behind on payments generally have much higher unpaid principal balances as well as larger scheduled monthly payments than those who have stayed current. This is true even before arrearages are considered.”

“Black Knight, as part of its August Mortgage Monitor, looked at what has been touted as a safeguard against widespread post-forbearance foreclosures and says, ‘holding equity in one’s home might not be the blanket backstop to foreclosure activity everyone hopes.'”

“During the Great Recession homeowners with little equity were most likely to be referred for foreclosure, but since 2010 borrowers who are 120 days in arrears have similar rates of foreclosure starts regardless of equity. Ben Graboske, president of Black Knight Data & Analytics says of those who fail to take advantage of selling through traditional channels, ‘Whether [this is] due to lack of understanding of their equity positions or the foreclosure process in general is unclear. But given the large number of high equity homeowners currently struggling to make their payments, this represents a significant challenge for the industry: how to educate struggling homeowners on the post-forbearance, foreclosure and – if needed – home sale processes, to limit unneeded stress on homeowners and the market alike.'”

“Clouding the future of these borrowers even further, Black Knight says the white-hot housing market that has been driving increased equity has begun to show signs of cooling. Early reports on September sales suggest that cool down has continued.”

The Mercury News in California. “Financial and construction woes have jolted San Jose and Fremont residential projects linked to a failed developer and might imperil teacher and public employee pension funds invested in the properties. The housing projects that are hobbled by the problems created by Silicon Sage Builders and the company’s founder Sanjeev Acharya are The Almaden, a 91-unit residential complex on Almaden Road in San Jose; and Savant at Irvington, a 93-unit residential project on Osgood Road in Fremont.”

“The Securities and Exchange Commission has accused Acharya and Silicon Sage of fraud. Silicon Sage has been shoved into court-ordered receivership. The problems with the San Jose and Fremont housing developments are so severe that all of the investments in the two big residential complexes are in danger of being wiped out even if the projects are completed, TriGate Capital warned in documents filed with the U.S. District Court.”

“Also at risk of being completely erased: an unspecified amount of pension money from teachers’ and public employee retirement funds that were invested in both projects in the wake of assurances from Acharya that the residential complexes were bolstered by sturdy financial foundations — when the opposite was the reality.”

From Bloomberg. “China’s property industry has suffered its first default on a dollar bond since China Evergrande Group sank deeper into crisis in recent weeks, fueling investor concerns over other highly leveraged borrowers and about global contagion. Fantasia Holdings Group Co., which develops high-end apartments and urban renewal projects, failed to repay a $205.7 million bond that came due Monday. That prompted a flurry of rating downgrades late Tuesday to levels signifying default.”

“Creditors are now scanning debt repayment calendars as they try to suss out where the next flashpoints across the increasingly strained property industry may be. One date in investors’ focus is Oct. 15, when Beijing-based Xinyuan Real Estate Co. must repay a $229 million outstanding on a dollar bond. Fitch slashed the company’s rating by one notch to CCC last month, citing ‘heightened refinancing risk’ on the firm’s upcoming maturity in October.”

From News.com.au. “China Evergrande Group’s stunning downfall has dominated headlines for weeks now – and now, countless empty, towering Evergrande developments reveal the true extent of the catastrophe. According to research company Capital Economics, there are more than a million units Evergrande has already sold and promised to build, leaving buyers potentially in the lurch.”

“In a new analysis by The Wall Street Journal, the authors argue that while ‘global investors are worried the crackdown could trigger financial market distress or a protracted real estate downturn’, everyday people who bought apartments in unfinished blocks are simply ‘wondering where their money went.'”

“The publication spoke to a farmer, identified only as Jiang, who said she had recently paid 890,000 yuan ($A189,313) for an unfinished apartment in Lu’an’s Jade Palace development. But work on the project stopped months ago, leaving investors frantic. ‘We spent all our family’s savings on this apartment,’ Jiang told The Wall Street Journal. ‘We really don’t know what to do.’ The publication reported that smaller cities like Lu’an had been the hardest hit by Evergrande’s possible demise, as ‘rows of residential towers, some 26 storeys high, stand unfinished in this provincial city.'”

From Reuters. “New Zealand’s central bank hiked interest rates on Wednesday for the first time in seven years, becoming the second major developed economy to raise rates and one of several to dial back hefty stimulus unleashed in the wake of the coronavirus crisis. Norway’s Norges Bank last month hiked its key rate 25 basis points to 0.25% and forecast four more hikes by end-2022. Bank of Canada Governor Tiff Macklem believes the economy is moving closer to the point where the central bank will no longer need to continue adding stimulus via quantitative easing.”

“The message from the Federal Reserve is clear: it will likely begin reducing $120 billion monthly bond purchases in November and rates could rise faster than anticipated. A hawkish shift by the Bank of England last month has put markets on alert that rates in the world’s fifth biggest economy could rise sooner rather than later. The European Central Bank has taken a first small step towards unwinding emergency stimulus – it will trim emergency bond buys over the coming quarter.”

From Project Syndicate. “Central banks are the only economic actors capable of addressing the funding and market-liquidity crises that are now part of the new normal. There is not enough resilience in non-central bank balance sheets to address a fire sale of distressed assets or a run on commercial banks or other systemically important financial institutions that hold liquid liabilities and illiquid assets. This is as true in China as it is in the U.S., the eurozone, Japan, and the United Kingdom.”

“China’s real-estate bubble—and the household debt secured against it—is likely to implode sooner or later. The dangerously indebted property developer Evergrande could well be the catalyst. But even if Chinese authorities manage to prevent a full-fledged financial meltdown, a deep and persistent economic slump would be unavoidable. Add to that a marked decline in China’s potential growth rate (owing to demographics and enterprise-hostile policies), and the world economy will have lost one of its engines.”

“Across the advanced economies (and in many emerging markets), risk assets, notably equity and real estate, appear to be materially overvalued, despite recent minor corrections. The only way to avoid this conclusion is to believe that long-run real interest rates today (which are negative in many cases) are at or close to their fundamental values. I suspect that both the long-run real safe interest rate and assorted risk premiums are being artificially depressed by distorted beliefs and enduring bubbles, respectively. If so, today’s risk-asset valuations are utterly detached from reality.”

“Central banks, acting as lenders of last resort (LLR) and market makers of last resort (MMLR), will once again be the linchpins in what is sure to be a chaotic sequence of events. Their contributions to global financial stability have never been more important. The goals of 2% inflation and maximum employment can wait, but financial stability cannot. Since LLR and MMLR operations are conducted in the twilight zone between illiquidity and insolvency, these central-bank activities have marked quasi-fiscal characteristics. Thus, the crisis now waiting in the wings will inevitably diminish central bank independence.”

This Post Has 92 Comments
  1. ‘holding equity in one’s home might not be the blanket backstop to foreclosure activity everyone hopes’

    ‘During the Great Recession homeowners with little equity were most likely to be referred for foreclosure, but since 2010 borrowers who are 120 days in arrears have similar rates of foreclosure starts regardless of equity’

    This is an interesting article and this site usually gets into the weeds of “how you too can become an FB!” stuff. I recommend reading it in full. One early takeaway is, surprise! it costs money to sell a shack and most FBs are broke. Secondly, the red hotness is exaggerated. When these millions move to sell, crater. Don’t forget we saw 1.5 million US shacks hit the market in 17 weeks recently.

    1. “That a number of homeowners apparently entered forbearance as “insurance” was noted early in the pandemic, but this is the first indication we have seen that this has continued to the present in significant numbers.”

      Reminds me of the millionaires that don’t have $400 for an emergency.

      “However, the company found that even those with large amounts of equity who could sell their homes don’t always do so.”

      In yesterday’s San Diego piece, Mike Hardy, a Partner of California Business Churchill Mortgage said, “A big difference in today’s market and back in the Great Recession is the liquidity.”

      Fast forward 24-hrs, and today Ben Graboske, president of Black Knight Data & Analytics says, “But given the large number of high equity homeowners currently struggling to make their payments…”

      Truth is that many homeowners are just renters, and their mortgage lender is the landlord.

  2. The Reuters title:

    New Zealand joins the great central bank exit

    They break it off in shack gamblers a$$ every time. They told you, “we’re in it for the wealth effect”. When that disappears – poof – they hightail it.

    Don’t believe me?

    ‘everyday people who bought apartments in unfinished blocks are simply ‘wondering where their money went’

    Well, we could tell fancy story’s (storey’s for those with a queen on their pesos), but lets cut to the chase. It’s gone, that’s where it went.

  3. ‘Also at risk of being completely erased: an unspecified amount of pension money from teachers’ and public employee retirement funds that were invested in both projects in the wake of assurances from Acharya that the residential complexes were bolstered by sturdy financial foundations — when the opposite was the reality’

    Eat yer crowz Thornberg. If I read this right, even the savior loans are gone.

    1. Don’t worry.

      Taxpayers will make up any shortfalls so that those retire at 55 with a $150,000 per year pensions can continue.

  4. ‘Homes in 85310 have seen median list prices drop from $524,000 to $499,450’

    Here’s what almost no one says: Phoenix is a sh$thole, and Glendale is only slightly less of a sh$thole. But in no sane world is a typical shack there worth half that. Glendale is not new. Most of the shacks there were probably built for less than 100k. So now they’re 20-30 years older and worth half a million?

    1. “So now they’re 20-30 years older and worth half a million?”

      On the property tax invoice there’s land value and the shack value; which one is experiencing the ridicules appreciation?

  5. ‘It’s important to remember — these are just the owners that are proactively cutting the prices of their listings, let alone what may be negotiated down the line’

    That’s the spirit!

  6. BTW, we had a poster show up and say “I’m here for an argument!”

    I know it’s hard to believe, but I’ve got better things to do than sit here all day moderating anonymous strangers arguing. I don’t usually take the time to tell you I don’t have the time. So if you wonder where yer pearls of wisdom went – they’re gone.

    M: I came here for a good argument!

    O: AH, no you didn’t, you came here for an argument!

    M: An argument isn’t just contradiction.

    O: Well! it CAN be!

    M: No it can’t!

    M: An argument is a connected series of statements intended to establish a proposition.

    O: No it isn’t!

    M: Yes it is! ’tisn’t just contradiction.

    O: Look, if I *argue* with you, I must take up a contrary position!

    M: Yes but it isn’t just saying ‘no it isn’t’.

    O: Yes it is!

    M: No it isn’t!

    O: Yes it is!

    M: No it isn’t!

    O: Yes it is!

    M: No it ISN’T! Argument is an intellectual process. Contradiction is just the automatic gainsaying of anything the other person says.

    O: It is NOT!

    M: It is!

    O: Not at all!

    M: It is!

    https://montycasinos.com/montypython/scripts/argument.php.html

  7. Too bad creditors didn’t scan debt investments for their ability to actually pay back the loan. But that might be considered white supremacy.

    “Creditors are now scanning debt repayment calendars as they try to suss out where the next flashpoints across the increasingly strained property industry may be.”

    1. ‘first default on a dollar bond’

      Who remembers when these US peso loans first started? Hurrah! Behold it’s the red hotness of China airboxes on full display!

      Now what are they doing? Defaulting on the US paper first. Annnnd it’s gone…

      1. And they didn’t even get the option of taking a half built crumbling apartment in place of their “investment.”

          1. ‘Today ~85% of home purchases are made by speculators who already have 1 or more properties. Meanwhile tens of millions of Chinese homes sit empty.’

            Aside from being a tradable asset with ownership rights, is an empty home more or less valuable than imaginary currencies? I would think HODLing costs would make an empty home more expensive to HODL.

          2. tens of millions of Chinese homes

            From what I’ve seen, these empty towers of “homes” are as worthless as imaginary currencies.

  8. “According to research company Capital Economics, there are more than a million units Evergrande has already sold and promised to build, leaving buyers potentially in the lurch.”

    Any idea what’s the average nominal loss to buyers on these unbuilt units?

  9. But given the large number of high equity homeowners currently struggling to make their payments, this represents a significant challenge for the industry: how to educate struggling homeowners on the post-forbearance, foreclosure and – if needed – home sale processes, to limit unneeded stress on homeowners and the market alike.’”

    The first step involves travel agents booking the bullet train to Schlongville.

    1. “…high equity homeowners currently struggling…”

      Paper gains created by the fed to keep debtors from walking away.

  10. Just an order-of-magnitude guess: $300,000. This is because $300,000 × 1 million = $300 billion, a popular figure in MSM discussion of Evergrande’s size.

    But $300,000 per unbuilt unit seems pricey for China. So my guess is probably off to the high side.

    1. “The publication spoke to a farmer, identified only as Jiang, who said she had recently paid 890,000 yuan ($A189,313) for an unfinished apartment in Lu’an’s Jade Palace development.”

      So there’s a hint.
      $A189,313 = $137,337.12.

  11. Another “Oh dear!” moment in time.

    Fantasia downgraded to default status by rating companies as Chinese property sector crisis worsens

    https://www.scmp.com/business/banking-finance/article/3151335/fantasia-downgraded-default-status-rating-agencies-chinese

    Fantasia Holdings Group, the debt-laden property developer founded by the niece of a former Chinese vice-president, has been downgraded to default or near default status by the three major credit rating companies after it missed a bond repayment this week.

    The default by Fantasia adds to growing concerns about the Chinese property sector as China Evergrande Group, the world’s most indebted property developer, teeters towards default.

    1. In the Bloomberg article above they mention these big defaults have been going on since August.

      1. From his exile on Butthurt Island, ABQ Dan is wailing like a Hillary supporter after our last legitimate election.

      2. Since some of these bonds are dollar-based and held by foreigners, they cannot hide these facts anymore.

        Oh well. Screw CCP and these “investors” LOL

  12. Gosh, I hope FBs who stretched to get into the most expensive shacks they could get financing for don’t find themselves having to choose between making their mortgage payment and keeping the heat on.

    US natural gas prices jump 9.5 percent to highest since 2008

    https://www.aljazeera.com/economy/2021/10/5/us-natural-gas-futures-jump-9-5-percent-to-highest-since-2008

    Natural gas futures jumped to the highest settlement price in 12 years in New York as global gas supply shortages stoke concerns for U.S. shortages.

    As the northern hemisphere heads into winter-heating season, low U.S. auxiliary supplies have sparked concerns about potential shortages as demand for the furnace fuel ramps up. Gas futures rose 9.5% to close settle at $6.312 per million British thermal units on the New York Mercantile Exchange, the highest close since December 2008.

  13. Pearl-clutching time for the globalists in France as disillusioned former sheeple are becoming red-pilled and rejecting the globalist Quislings in the co-opted Establishment parties, instead turning to “far right” candidates (anyone who stands up for their countrymen against the globalists & banksters is automatically labeled “far right.”)

    French Radical Surges With Talk of Arming Citizens, Civil War

    https://www.bloomberg.com/news/articles/2021-10-06/french-radical-surges-with-talk-of-arming-citizens-civil-war?srnd=premium-middle-east&sref=ibr3A0ff

    Media pundit Eric Zemmour is emerging as one of the most popular French presidential candidates as he talks about gun rights, banning immigration and civil war. And he hasn’t even confirmed he’s running.

    Zemmour would get 17% of votes in the first round of the election on April 10, effectively knocking out nationalist candidate Marine Le Pen, who’d win 15%, as well as the center-right Republican party candidate, according to a poll by Harris Interactive for Challenges magazine. Emmanuel Macron would get 24%.

    1. Nowhere is the blowback from globalism more apparent than France. They’ve got another French Revolution brewing.

  14. The Financial Times
    Opinion Markets Insight
    Valuation not stories ultimately determines investment returns
    Tremendous liquidity in financial system has led to series of bubbles fed on hype over wondrous trends
    Despite the hype over the dotcom boom, a trader who bought the Nasdaq Index in 1999 would take almost 14 years to break even
    Richard Bernstein yesterday
    The writer is chief executive officer and chief investment officer of Richard Bernstein Advisors

    A prime rule of investing is that return on investment is highest when capital is scarce. In other words, one should want to be the sole banker in a town with 1,000 borrowers. Supply and demand of capital ultimately determines investors’ returns.

    Historic US monetary growth has generated tremendous liquidity of capital in the financial system. Given long-term rates are not much higher than the short-term rates at which banks usually borrow money, there have been weaker incentives to lend.

    That has trapped liquidity within the financial markets, leading to a series of bubbles. These feed on hype and there are accordingly many exciting investment stories focusing on future economic trends.

    Investors, however, must objectively analyse these wondrous themes because history shows valuation, and not stories, ultimately determines investment returns.

    Innovation and disruption are cornerstones of capitalism, yet many investors ironically treat these themes as being, well, innovative.

    Individual investors are not alone when it comes to forming potentially overly enthusiastic expected returns. Institutional investors continue to increase allocations to venture capital funds and have even been lured into the cryptocurrency craze.

    Investors seem to have forgotten the lessons of the technology bubble. Lofty valuations, like those for stocks associated with today’s innovation, disruption and technology themes, can significantly hurt returns even if the economic themes do come true.

  15. Parents take a stand against FBI crackdown on CRT opponents

    By Callie Patteson
    October 5, 2021

    Parents and politicians are slamming the Department of Justice’s decision to bring in the FBI to investigate a spike in “threats against school administrators, board members, teachers, and staff,” saying the Biden administration is likening their protests of “woke” policies such as Critical Race Theory — as well as mandatory mask wearing — to “domestic terrorism.”

    In recent months, dozens of parents have taken a stand in school board meetings against the teaching of Critical Race Theory in classrooms and to protest mask mandates, causing some to wonder what the FBI and DOJ are actually investigating.

    https://nypost.com/2021/10/05/parents-pols-slam-fbi-probe-into-crt-related-harassment-in-schools/

    1. The Democrat Party is the party of white genocide.

      Replacement Theory isn’t a theory, it’s the Democrat Party blueprint for white genocide.

  16. “Central banks are the only economic actors capable of addressing the funding and market-liquidity crises that are now part of the new normal. … Their contributions to global financial stability have never been more important.”

    Freedom is slavery, etc.

  17. “ “Also at risk of being completely erased: an unspecified amount of pension money from teachers’ and public employee retirement funds that were invested in both projects in the wake of assurances from Acharya that the residential complexes were bolstered by sturdy financial foundations — when the opposite was the reality.” “

    Not to worry. Taxpayers are on the hook to bail out California’s massive pension plan with wildly exorbitant pensions should there be a shortfall and meanwhile, the pension managers are walking away with $50 million or more in bonuses for their astute strategies.

    1. “…Not to worry. Taxpayers are on the hook to bail out California’s massive pension plan with wildly exorbitant pensions should there be a shortfall and meanwhile…”

      Here is a fun site:

      https://transparentcalifornia.com/

      Just supply the name of your favorite California public servant and bingo full salary and benefit information.

    1. just received 2021-2022 property tax bills here in Sacramento County.
      interesting format change: the printed image no longer contains ” THIS TAX BILL INFORMATION WAS REQUESTED BY A MORTGAGE COMPANY ” at the bottom of the invoice.

      interesting indeed

      1. Assessed v. appraised v. mortgage note presents a real problem for a whole bunch of ‘players’. 😉

    1. “The irony was that Backpage had been working with the FBI and the National Center for Missing and Exploited Children to help police investigate instances of sex trafficking, and the police had come to rely on its cooperation.”

      Some official had a vendetta; likely someone who used their website for illicit services.

        1. I think I’m going to start answering my phone that way:

          Ring ring!

          F*** Joe Biden, Ben speaking.

        1. MSM: Lets Go Brandon
          I think the reporter made a nice attempt at keeping the obvious obscenity from interrupting her interview. She thought quickly on her feet. I mean, what was she supposed to do?

          1. Report it. She’s a “journalist”.

            What do you do when someone mentions realtors? I know my first response is “realtors are liars”.

            Isn’t yours?

  18. It’s like the Austin police are getting their orders from the Soros machine, perhaps we should expect a False Flag from Austin.

    Austin police limiting response to ‘non-emergency calls’

    By KCBD Staff
    Published: Sep. 30, 2021 at 8:07 PM EDT

    Provided by Austin Police Department

    The Austin Police Department (APD) will implement changes to call routing and non-emergency response services on Friday, October 1, 2021.

    This change is a result of a recent review of APD’s patrol COVID mitigation protocols, recent staffing challenges, as well as recommendations from the Reimagining Public Safety (RPS) Task Force aimed at finding alternative response solutions to non-emergency calls that do not involve sending a police officer.

    The changes will affect response to the following non-emergency situations:

    Below is a list of incidents or issues the community can report through iReportAustin.com or by calling 3-1-1, effective October 1, 2021, if the incident is no longer in progress, a suspect is no longer on scene or there is no immediate threat to life or property:

    Animal Service
    Auto Theft

    Burglary of residence, business or vehicle

    Crashes not requiring a tow, when there are not injuries, both drivers have proof of insurance and a driver’s license, and when neither driver is impaired

    Verbal Disturbances

    Prostitution

    Suspicious Person / Vehicle

    Vandalism

    Theft

    The alternative response protocols are also in alignment with the recommendations brought forward by the Reimagining 911 and Non-Police Crisis Response work group of the RPS Task Force.

    https://www.kcbd.com/2021/10/01/austin-police-limiting-response-non-emergency-calls/

    1. It sounds thick with bureaucratic layers and overlords, while they complain of shortfalls in funding and blame the cut services on the scapegoat named Covid.

    2. That’s cool. Let it descend into the NYC/Seattle-like shithole that it really is.

      Hope you didn’t pay too much for that rapidly depreciating house in Austin. 🤣

  19. I am watching a new huge round about intersection being constructed in the busiest intersection of Sarasota FL whereby an average of 52,000 vehicles pass daily.
    Smack dab in front of all this construction is an airbox named Vue, which is next to the Westin and has some affiliation with shared parking and other nuisances.
    At street intersection level, the Vue has several private pedestrian entrance/exit points onto a sidewalk perhaps two feet from the property wall where the gates are located. The sidewalk has just been jackhammered and lifted away.
    So the gates now front dirt for the new intersection.
    The study and consideration of a plat map would have revealed this public …. Ah what is the term … property basically as the city can use it at its discretion.
    Conversion to round a outs and construction to enlarged intersections are common in high growth areas like this one. So the very old intersection was not seriously considered when the Vue was built.
    The units — a basic unit sold for over a million and on up. Haven’t looked but prices seem to be dropping.
    Well we looked at one well I did for my hubby as we needed housing while building custom, but the water tanks are on the roof mind you $3million + for penthouse and garages full of high end cars — so a shared water heater with Luke warm water.
    A balcony off one of the units had about an 8 foot crack at the origin was almost 1/2 inch. My husband said the foundation was shifting and he not only did not want to buy but does not even want to drive past it.

  20. ** “Austin police limiting response to ‘non-emergency calls”

    oh great. so pretty much unless you’re bleeding, pleading or speeding, call a social worker.
    or your cousin vinny & crew.
    bubba & his good ‘ol boys
    hector y comparadres comradres.

    verdad

    1. And the Department of Defense data that proves the injections aren’t safe or effective is being censored extremely by the disinformation service called Fraudulent And Fake News.
      Covering up this data has put these gangsters in the category of murderers at this point. The cover up and suppression of meds that worked against Covid was equally sinister and killed thousands .
      They have to be stopped because no facts , damage or death is going to stop these killers.

  21. Well, well, well… This is interesting. U.S. Attorney General Merrick Garland recently instructed the FBI to begin investigating parents who confront school board administrators over Critical Race Theory indoctrination material. The U.S. Department of Justice issued a memorandum to the FBI instructing them to initiate investigations of any parent attending a local school board meeting who might be viewed as confrontational, intimidating or harassing.

    Attorney General Merrick Garland’s daughter is Rebecca Garland. In 2018 Rebecca Garland married Xan Tanner [LINK]. Mr. Xan Tanner is the current co-founder of a controversial education service company called Panorama Education. [LINK and LINK] Panorama Education is the “social learning” resource material provider to school districts and teachers that teach Critical Race Theory.

  22. Anybody have any hints how to jerk zillows search settings around properly? I’ve created searches for specific areas with specific price parameters and lot size and yet the results its giving are including stuff way outside the parameters. I want a clear picture of inventory coming on the market. Sure detest Zillow!

    1. I’ve had better luck with Realtor.com. Zillow never seemed to focus my search on single story homes.

    2. Given how they leveraged up to go long on U.S. residential investment properties at bubbly valuation levels, why would Zilldo want to offer a transparent view of the race to the exits now underway? Doing so could damage the value of their HODLings. Why would they want to shoot themselves in the foot?

      1. Those were precisely my thoughts about why their saved search tools leave much to be desired. I’ll try realtor

  23. A Made-in-China Financial Crisis?
    Oct 6, 2021
    Paola Subacchi

    Since the 2008 global financial crisis, the Chinese financial system has grown to become systemically important. Yet it is not clear that the international financial safety net has the resources to protect the world from the associated risks.

    LONDON – As the International Monetary Fund and the World Bank prepare for their annual meeting next week, all eyes are on Evergrande, China’s second-largest property developer, which apparently cannot repay about $300 billion it currently owes to banks, bondholders, employees, and suppliers. With the property giant teetering on the edge of bankruptcy, the world is being forced to contemplate a scenario it had never seriously considered: a made-in-China financial crisis.

    Observers have been quick to draw parallels between the Evergrande debacle and past crises. Some compare it to the 2008 crash of the US investment bank Lehman Brothers, which triggered a massive banking and financial crisis. Others recall the near-collapse of the hedge fund Long-Term Capital Management in 1998, which was staved off only by a bailout from the US Federal Reserve to protect financial markets. Still others invoke the collapse of Japan’s real-estate bubble in the 1990s.

    In all of these cases, the combination of excessive leverage and overvalued assets triggered instability. But none really offers much insight into the situation at Evergrande, owing to the peculiarities of China’s banking and financial system, which is driven by policy, not markets. Whereas a country like the United States may provide a bailout when financial collapse seems imminent, China intervenes in capital markets regularly and tolerates few risks to financial stability. China’s monetary authorities are thus well-versed in managing the financial troubles of domestic firms, shielding the distressed ones from contagion, ensuring low borrowing costs, and providing selective bailouts.

    In engineering such rescues, the Chinese authorities are unlikely to agonize over the question of whether a firm really is “too big to fail,” as the US authorities did in the days before the Lehman Brothers bankruptcy. China would much rather risk moral hazard than jeopardize financial stability.

    Given this, it is probably safe to assume that China will intervene to manage Evergrande’s collapse. But the episode will nonetheless leave two major scars on China’s economy.

    1. Is it safe to assume that what happens in China’s financial system will stay in China? Or is there a significant risk that global financial contagion from the Evergrande and related Chinese real estate debt implosions will infect the global financial system, the same way that COVID-19 has infected the global human population?

      1. It’s all contained…just like U.S. subprime mortgage lending was in the summer of 2007.

        Evergrande Collapse Unlikely to Impact US CRE Market, But Might Have Some Upside
        U.S. commercial real estate should feel little effect from the collapse of China’s second-largest developer — in fact, there might be upside
        By Lauren Elkies Schram
        October 6, 2021 12:06 pm
        Ocean Flower Island
        WILL IT WILT? The 2,000-acre Ocean Flower Island in Hainan is one of 1,300 Evergrande developments.
        Photo: STW932/via wikkicommons

        Life is not so grand for China Evergrande Group. That doesn’t mean the blues for U.S. real estate investors or owners, however.

        The Chinese property giant is saddled with more than $300 billion in liabilities and $88.5 billion of debt, causing alarm worldwide that China is experiencing its own “Lehman moment,” referring to the 2008 bankruptcy of Lehman Brothers investment bank in the U.S. that led to a global financial crisis.

        As a result of the crumbling of China’s second-largest private property developer, many stock market indices dropped last month. Families who invested their life savings in pre-sold unfinished homes, along with suppliers, contractors, employees, creditors and banks, are out significant sums.

        But, there are some signs that the property developer’s debt woes are contained abroad, and will not much affect commercial real estate stateside.

        “This is not comparable to distress in a large financial institution, where there may be direct exposures around the world,” said economist Sam Chandan, dean of New York University’s Schack Institute of Real Estate. “The exposure of U.S. institutions to the portfolio would be limited.”

        U.S. Federal Reserve Chairman Jerome Powell last month assuaged fears about international exposure to Evergrande’s collapse.

        “In terms of the implications for us, there’s not a lot of direct United States exposure,” Powell told reporters after the Fed’s Sept. 22 policy meeting, per Reuters. “The big Chinese banks are not tremendously exposed, but you would worry it would affect global financial conditions through global confidence channels and that kind of thing. But I wouldn’t draw a parallel to the United States corporate sector.”

      2. Hong Kong developer quits the stock market as Evergrande fallout spreads
        By Laura He, CNN Business
        Updated 6:16 AM ET,
        Thu October 7, 2021
        Why global investors are focused on Evergrande

        Hong Kong (CNN Business)
        Chinese Estates Holdings plans to go private after its stock was slammed by fallout from the crisis at Evergrande.

        The Hong Kong developer had seen its shares plunge as much as 44% this year to their lowest level in nearly two decades as Evergrande teetered on the edge of collapse. Chinese Estates is the second largest shareholder in Evergrande after founder and chairman Xu Jiayin.

        “Directors are cautious and concerned about the recent development of China Evergrande Group including certain disclosures made by China Evergrande Group on its liquidity,” Chinese Estates said in a filing to the stock exchange late Wednesday.

        It offered to pay minority shareholders 1.91 billion Hong Kong dollars ($245 million) for their 25% stake and take the company private. The offer represented a premium of about 83% over the stock’s closing price on September 28, the last full day before it was suspended from trade.

    2. a made-in-China financial crisis

      The crisis was made when the mountain of debt was first piled up. Let those who enabled this around the world get their lesson, good and hard.

  24. This is amusing.

    Evergrande’s most bizarre holdings? A hodgepodge of amusement parks all over China called ‘Fairyland’
    Matthew Loh
    Oct 5, 2021, 2:27 AM
    Evergrande
    The logo of Evergrande Real Estate on a crane in Hangzhou, east China’s Zhejiang Province Long Wei/Costfoto/Barcroft Media via Getty Images
    – The real estate giant Evergrande also owns 15 amusement park projects in China.
    – They’re dubbed “Fairyland” theme parks and were meant to “surpass” Disneyland.
    – Videos show one of its parks being completely empty, while Wall Street Journal reporters found another partially operating.

    Property behemoth Evergrande may be best known in China for building millions of apartments and being at least $300 billion in debt, but it seems its founder and chairman, Hui Ka Yan, may also have wanted to become the country’s next Walt Disney.

    Within Hui’s real estate empire lies a lesser-known subsidiary — an assortment of amusement parks aimed at promoting Chinese culture by using next-gen tech.

    Its pet project was christened “Fairyland,” the brand name for theme parks across China for kids aged 2 to 15. According to Evergrande’s annual reports, the parks promise mythical rides combined with high-tech indoor facilities and online entertainment.

    Evergrande brimmed with confidence when it announced its plans in 2017. Fairyland was supposed to be a household name that “surpasses” Disneyland, offering 33 major attractions per location, reported state-run tabloid The Global Times.

    Its parks operate year-round, boasted Evergrande, using their “all-indoor, all-weather, all-season” facilities. Evergrande was even set to open a “Water World” with 120 water rides, and said it would develop 20 to 30 such parks over the next few years.

    In 2018, it said all Fairyland projects were expected to open to visitors by 2021. The next year, it pushed that deadline back to 2022.

  25. Why does silver and gold continue to crater day after day? Silver and gold is cheaper today than it was 10 years ago.

      1. “JPMorgan entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of Connecticut charging the company with two counts of wire fraud. Under the terms of the DPA, JPMorgan will pay over $920 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC being announced today and with part of the criminal disgorgement credited against payments made to the Securities Exchange Commission (SEC) under a separate agreement with the SEC being announced today.”

        The government just wants their cut. The fraud will carry on.

  26. The Financial Times
    US Treasury bonds
    US government bond market specialists warn of fragility in Fed pullout
    Concerns remain over gaps in liquidity after weak supports during pandemic-induced instability
    Primary dealers, the banks that are tasked with providing a stream of prices for Treasuries
    Industry data suggests primary dealers, the banks that are tasked with providing a stream of prices for Treasuries, pulled back from the market in February and March last year before the Fed stepped in
    Kate Duguid in New York
    3 hours ago

    US government bond specialists are starting to fret over how the world’s most important market will cope when the Federal Reserve pulls back its pandemic-era support.

    The $22tn Treasuries market forms the basis for pricing other assets around the world. It is famed for its liquidity — a broad term meaning it is easy to hop in and out of trades. But on several occasions since Covid-19 first hit, gaps in liquidity have appeared, creating jerky price movements.

    When the Fed starts to trim its $120bn-a-month bond buying scheme, possibly as soon as November, some participants fear the lack of once-reliable market support could generate more instability.

    The Treasury market system “is primed so that high-frequency traders and primary dealers pull back when there are problems”, said Yesha Yadav, a professor at Vanderbilt Law School in Nashville who studies Treasury market structure and regulation.

    “The way this is set up is designed to fail. It is exceptionally fragile,” Yadav said.

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