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There’s A Certain Amount Of Schadenfraude To All Of This

A report from the Real Deal. “More than one in four houses purchased by rental investors in the fourth quarter was a newly built home, according to data. Cash-rich investors see potential in single-family rentals, especially as mortgage rates rise, while builders benefit from selling in bulk, turning a profit more quickly.”

From Bisnow Houston. “As it becomes more difficult and costlier to find and buy a home in Houston and other Texas communities, housing developers are expanding their inventory of housing types, including build-to-rent. But not all developers are seeing the uncertain single-family housing market as an opportunity for growth. And developers aren’t necessarily marketing it as affordable, instead pointing to community amenities and other advantages more commonly seen in multifamily complexes, like maintenance.”

“‘Alex Kamkar, managing shareholder with master-planned developer Bold Fox Development, is skeptical the industry won’t prove exploitative for people looking to break into homeownership. ‘We’re all good capitalists here, and dollars are going to go find yield,’ he said. ‘But the idea that we want to put one of the sacred institutions like your home in the hands of BlackRock and its friends like [Ranieri Partners Chairman] Lewis Ranieri, who literally helped us get to the 2008 housing crisis, is not a good idea. Do we really want to be the generation that turned housing into The Hunger Games?'”

From MIT Technology. “Zillow begun buying up homes in 2018. It estimated returns of $20 billion a year. Zillow Offers, its “instant buying” business, followed startups like Opendoor and Offerpad, which had pioneered ‘iBuying.’ As it turned out, Zillow Offers had lost more than $420 million in three months of erratic house buying and unprofitable sales. So far, Automated valuation models (AVMs) have been able to access only a portion of the information that a family selling its home knows, explains Amit Seru, a professor of finance at the Stanford Graduate School of Business—failing to appreciate architectural style, unruly neighbors, how light hits the porch on late summer evenings, and myriad qualities contributing to a house’s human appeal.”

“Consequently, these AVMs can lead iBuyers to disaster when some sellers offer up ‘lemons’ (dud homes, say, with stinking carpets) and others offer ‘peaches’ (a charming home in a neighborhood full of amenities). By bidding an average price for both homes, the iBuyer ends up paying too much for lemons, while families with peaches—who feel harshly undervalued—refuse to sell.”

From Willamette Week in Oregon. “We get it. This is not Portland’s finest moment. Portland home prices fell 1.6% compared with last year, according to Redfin. Beaverton real estate broker John Tae says he’s seen a recent increase in Portland homebuyers seeking suburban refuge. ‘Number one is the homelessness issue,’ he says. ‘Especially in areas of higher-price-point homes where they step out and there’s a homeless encampment.'”

The Mercury News. “More Bay Area residents are turning to food banks. ‘We are barely making it,’ said Alberto Farias, a 35-year-old construction worker from San Jose, who waited in line at Our Lady of Refuge in the city last week to pick up food with his wife, infant, and 6-year-old daughter. The family has drained their savings and fears an unpredictable medical or car repair bill could bankrupt them. It’s always been hard, he said. ‘Now it’s really hard. My hair is falling out.'”

“PPIC found that over half of Californians are somewhat or very concerned about affording their rent or mortgage. And with prices blowing up, ‘it’s been harder and harder for people to maintain a quality of life that they are used to,’ said Rachel Lawler, a survey analyst at the PPIC.”

The New York Post. “It’s mold before its time. The new Hudson Yards station — opened in 2015 as part of a $2.4 billion, one-stop extension of the 7 train — is already falling apart. Iris Lieu, 34, who works in fashion, looked up at the holes above her. ‘The ceiling [is] not even finished,’ she said. ‘It’s a huge money pit,’ said straphanger Danny Stern, 33, a non-profit employee who was passing through the station on his way to Philly.”

The Toronto Star in Canada. “Mortgage rates are now high enough that many potential buyers will have to qualify at percentages above the stress test, which is presently 5.25 per cent or two per cent above the offered rate, whichever is higher, Sung Lee, a mortgage broker and analyst with Rates.ca noted. ‘As mortgage rates rise, not only do borrowing costs become more expensive, it can also mean that potential homebuyers are qualifying at a rate higher than the current stress test of 5.25 per cent,’ she said.”

“‘Simply put, the recent data leave little doubt that the economy can live with a jump to a one per cent overnight rate and, indeed, higher rates beyond that,’ wrote CIBC economist Avery Shenfeld. Nonetheless, Shenfeld said, Wednesday’s decision leaves little doubt that the bank is getting tough on inflation. ‘They brought out the big guns,’ he wrote.”

“‘If you had any intention of buying into this market, it would have been better if you did it yesterday,’ said Philip Cross, a senior economist and fellow at the Macdonald-Laurier Institute. ‘It’s going to be a lot more expensive 30 days or 60 days from now. At some point, these kinds of hikes shut down demand.'”

The Globe and Mail in Canada. “Capricious buyers are throwing the Toronto-area real estate market off kilter in April. Patrick Rocca, broker with Bosley Real Estate Ltd., describes the market as ‘spotty’ in midtown Toronto. Mr. Rocca was taken aback when a house with an asking price of $1.699-million attracted only one bidder. Despite the lack of competition, the property sold above asking. ‘Only one offer kind of threw me,’ he says.”

“Around the same time, a condo unit had some attention and one agent signaled that a client was preparing to make an offer, but the buyers backed away. ‘I was told I would have a bully and the bully never came.’ Mr. Rocca says one reason for the uncertainty may be that a bump in listings is taking the pressure off buyers to make quick decisions. According to data from the Toronto Regional Real Estate Board, new listings in the Greater Toronto Area (GTA) swelled 42 per cent in March compared with February.”

“Pritesh Parekh, real estate agent with Century 21 Legacy in Toronto, says the change in tempo from frantic buying in January and February to a more sedate pace in March and April can be unsettling to sellers and buyers. Throughout Toronto, Mr. Parekh noticed hundreds of price changes on listings in March, which indicates that properties failed to sell at the original asking price. Now the spectre of rising interest rates is spooking buyers, and the slight dip in the average price in March has some wondering if prices have farther to fall. ‘Psychologically, it has weighed on people quite a bit.'”

The Daily Telegraph in Australia. “The upcoming federal election, fears of an imminent interest rate rise and a general mood of economic uncertainty have combined to put Sydney’s housing market on ice. Auctioneer Clarence White said that potential rate rises and lacklustre sales results had created an atmosphere of hesitation at auctions. ‘Buyers are reading that the market is going to change, then they see auctions not going too well. They’ve now become frightened of paying too much,’ Mr White said. ‘It’s a fear driven market … before it was a fear of missing out, now it’s a fear of paying too much.'”

From Channel News Asia. “Hong Kong home prices have fallen more than 6 per cent since a peak in August, with no quick recovery in sight as residents leave the city at record rates. ‘I have never seen the property market as quiet in more than 15 years of buying and selling,’ said Ada Chan, 42, who is trying to sell her three-bedroom apartment near the University of Hong Kong. Chan bought the 500-square-foot apartment for HK$17 million (US$2.17 million) in 2018, and she thought it would be worth HK$18.5 million when she listed it. Now, she’s willing to take what she paid. ‘I’m just hoping it to be a tie game,’ she said.”

From Bloomberg. “Brazilian traders know inflation. After decades of dealing with wild bouts of it, they consider themselves experts on the topic. Their American counterparts, they say, got complacent. Years of subdued inflation in the U.S. have lulled them into a false sense of security, as the Brazilians see it. This in turn, the argument goes, led bond trading desks to misread the price spike that began last year and buy the Federal Reserve’s line that the episode would prove little more than a brief blip.”

“There’s a certain amount of schadenfraude to all of this — ‘look at those geniuses on Wall Street’ — and there undoubtedly have been moments over the past two decades when the Brazilian traders’ hyper-sensitivity to inflation has led them to erroneous calls on U.S. markets. But right now they’re raking it in. ‘You can’t keep counting on central banks because they may leave you empty-handed,’ said Bernardo Meres, a partner at SPX Capital, which has about 64 billion reais ($14 billion) under management.”

“‘There’s definitely a lot of leniency with inflation happening around the world,’ said Felipe Guerra, the 44-year-old chief investment officer at Legacy Capital, which has 21 billion reais under management. ‘We’ve seen it happen a number of times: Expectations get out of control, inflation spreads and the central bank is left to chase its tail.'”

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This Post Has 117 Comments

  1. ‘new listings in the Greater Toronto Area (GTA) swelled 42 per cent in March compared with February’

    DONG!

    1. So for a study that started in 2017, we finally get some official numbers on Investors.


      Statistics Canada data highlights how real estate boom may be heightening inequality

      Multiple-property owners accounted for 31 per cent of all homes in Ontario as of early 2020 and almost the same share in British Columbia, a report from Statistics Canada said Tuesday. In the smaller East Coast provinces of Nova Scotia and New Brunswick, the share was about 40 per cent, the data show.

  2. ‘she thought it would be worth HK$18.5 million when she listed it. Now, she’s willing to take what she paid. ‘I’m just hoping it to be a tie game’

    denial

    anger

    bargaining <- Ada you are here.

  4. ‘Now it’s really hard. My hair is falling out’

    That’s all we need.

    ‘over half of Californians are somewhat or very concerned about affording their rent or mortgage’

    Is that a lot?

    1. The Democrat Party loves the poor so much, that they can’t helpnbut create millions more of them.

      “This sucker could go down”

      1. I saw a quote from Milton Friedman, something like “if you put the guberment in charge of the Sahara desert, soon there will be a shortage of sand.”

        1. I have never heard that before, but it’s the perfect quote. Every time the government gets involved, the prices go parabolic. We need to shrink the US government, and all state and local governments, by 2/3 if this country is to survive.

    3. “a 35-year-old construction worker from San Jose”

      Plenty of small cities that need construction workers — why live in pricey San Jose? Another candidate for Oil City (if he’s legal).

    4. Had lunch yesterday with another person close to me who is pulling the plug on CA and moving out, going to FL, can’t take CA anymore. You could say, last person out of CA, turn out the lights, but with the energy policies there won’t be any lights left to turn out.

      1. Same as last bubble. They’re leaving because of the high housing prices, nothing else. They try to turn the areas they move to into the same sh!tholes.

        1. They try to turn the areas they move to into the same sh!tholes.

          They are missionaries, not refugees.

        2. 100%!
          DeSantis is talking about bussing illegals out of Florida, but there really aren’t that many of them here. I want to see him bus Californians back to California. We don’t want them here.

      2. If they plan on pulling the D lever tell them we’re not so accommodating here in the Sunshine State.

        They’re likely to have their Biden/Harris bumper stickered Prius overrun by a jacked-up F-350.

  6. ‘failing to appreciate architectural style, unruly neighbors, how light hits the porch on late summer evenings, and myriad qualities contributing to a house’s human appeal’

    Or how long will the lampposts stand up to the urine?

    This article has some good info despite being kinda long.

  7. A reader sent this in:

    ‘Vancouver is one of the least affordable cities in the world, and the postal service considers it too “dangerous” to deliver mail. At some point Canada’s going to have to stop pretending the social decay occurring isn’t turning systemic.’

    ‘to clarify, a neighborhood in Vancouver is considered too dangerous due to “drug use, and being verbally assaulted.” I’ve seen notices for similar issues for buildings in Toronto. This wasn’t a problem just 3 years ago.’

    https://twitter.com/StephenPunwasi/status/1513880837867118597

      1. The whole thing has been played down by the globalist scum media. Lampposts fall from bum urine. Street pooping in big cities. Needles. Bay aryan car windows broken. Societal decay is a feature, not a bug.

    3. ‘Vancouver is one of the least affordable cities in the world, and the postal service considers it too “dangerous” to deliver mail.
      I thought I saw something on YT about parts of CA having the same problem and the Postal service not delivery mail to certain areas. If I recall correctly 1 area was in a very rich town but can’t recall the name.

    4. I just saw a report that in Santa Monica the USPS is refusing to deliver mail in one section of the city because the carriers keep getting attacked. This sucker could and will go down.

      1. “This sucker could go down” is a George W. Bush quote from 2008.

        Remember in July 2007 when his Treasury Secretary Hank Paulson said “this is the strongest global economy of my business lifetime” ?

        LOLZ

    1. ‘The former police captain continued, ‘The lives of these black children that are dying every night matter. We can’t be hypocrites.’

      Click!

  9. ‘It’s a huge money pit’

    Notice the REIC doesn’t talk about Hudson Yards anymore.

    ‘Mortgage rates are now high enough that many potential buyers will have to qualify at percentages above the stress test, which is presently 5.25 per cent or two per cent above the offered rate, whichever is higher, Sung Lee, a mortgage broker and analyst with Rates.ca noted. ‘As mortgage rates rise, not only do borrowing costs become more expensive, it can also mean that potential homebuyers are qualifying at a rate higher than the current stress test of 5.25 per cent’

    Well that was fast. What was the point of the stress test? Oh right, to make sure K-dns could pay back loans and now that’s out the window.

    ‘They brought out the big guns’

    But central bankers would never “let” shack prices fall. They’ll break it off in shack gamblers a$$es. Happens over and over.

          2. RPP, I looked at the paper in the twitter link you posted yesterday. The paper is based entirely on computational modeling to identify a potential binding interaction between a sequence remotely related to a snake toxin found in S1 and the target receptor. There is no experimental data in the paper to support the conclusion, such as mutational data and binding studies. Computational studies of this sort are notoriously inaccurate and even worse when there is no supporting experimental data.

            I took the sequence segment of the toxin from the paper and used it to do a blast of search of genbank using default parameters and identified a sequence in the rhododendron plant that is 68% identical as well as a sequence in apple tree phospholipids that is 79% identical while the sequence identity with SARS S1 is about 30% for the same short sequence. There are literally hundreds if not thousands of proteins in genbank with similar or greater degrees of sequence identity to that snake toxin in the paper.

            The whole SARS/snake venom theory seems to be derived from the extremely tenuous and speculative data found in that paper.

            https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7461543/

            Example blast search alignments below

            Rhododendron

            Query 2 WYFCYKISLADGND 15
            WYFC K+SLAD ND
            Sbjct 73 WYFC-KVSLAD-ND 84

            Apple

            Query 2 WYFCYKISLADGNDV 16
            WYFC K+ LA+ NDV
            Sbjct 60 WYFC-KVPLAE-NDV 72

          4. I looked at the paper in the twitter link you posted yesterday

            I’m told there are 2 or 3 papers in the Twitter thread. I’m honestly not looking that closely. I’ve wasted enough time and energy on the David Martin nonsense. I don’t trust Stew Peters and I don’t trust a chiropractor speaking outside his area of expertise. I don’t ask an optometrist to look at my teeth or a dentist to look at my eyes even though they’re both doctors.

      3. That chart shows that rates could (should) (might have to) go way up from here. Keep your powder dry.

    1. Remember playground wedgies when you got first prize if you’re able to hold the targets underwear over your head like a trophy? That mofo Fraudci is a perfect target.

  11. “We get it. This is not Portland’s finest moment. Portland home prices fell 1.6% compared with last year, according to Redfin. Beaverton real estate broker John Tae says he’s seen a recent increase in Portland homebuyers seeking suburban refuge. ‘Number one is the homelessness issue,’ he says.

    Let’s not confuse cause and effect. The #1 issue in any Democrat-Bolshevik malgoverned urban center is the indescribably stupid voters with seriously defective moral compasses who pull the D lever. Once the D quotient of the population reaches a tipping point where they’ll elect absolute scum as “leaders,” it’s Game Over for that city or community.

    1. seeking suburban refuge

      It wasn’t that long ago that the Narrative was we were all going to live in the big city because of walk scores and ethnic food.

      1. Yup, it was the model for Millenials. The close-in burbs in MD and VA built a lot of that. High-rise apartment/condo “homes” in a “vibrant” neighborhood, close to a Metro station, on a major street artery. Racks of rentable bikes or scooters and a stand of ZipCars (remember those? I guess Uber took it over). Put in a Safeway or a Whole Paycheck or a Trader Joes at ground level, a bar, possibly a plaza/courtyard with a Target or a Marshalls and a spa or two, and you can advertise “Live here, work here, shop here, play here” from the high $500s for a two-bed.

        Small problem. Those Millenials now have dogs and kids and student loans are coming home to roost. They want backyards.
        I don’t know many GenZers, but they don’t seem to be as starry-eyed, or as willing to play a game of “Sardines for Klaus.” And our new undoc guest workers are ALL about the SFH where they can pack in the clan and street park the white van. So who’s going to live in all this?

  12. “Mr. Rocca was taken aback when a house with an asking price of $1.699-million attracted only one bidder. Despite the lack of competition, the property sold above asking. ‘Only one offer kind of threw me,’ he says.”

    Love it. The one guy who “won” apparently didn’t get the memo.

  13. A good article.

    oftwominds-Charles Hugh Smith: Yes, It Is Different This Time
    http://charleshughsmith.blogspot.com/2022/04/yes-it-is-different-this-time.html

    (snip)

    “Most people would be horrified by a 40% decline in their “investments.” When bubbles pop, speculative assets don’t drop 40%, they drop 90% or even 98%.”

    (snip)

    “Most people gambling in assets don’t think they’re gambling; they think “investing” isn’t gambling. But asset bubbles are not the result of investing, they’re the result of speculation running to extremes.

    “Most people would be horrified by a 40% decline in their ‘investments.’ When bubbles pop, speculative assets don’t drop 40%, they drop 90% or even 98%. Many tech companies that were $100+ in early 2000 were $4 or even $2 by 2003.

    “This is not at all unusual. We’ve simply forgotten what happens when bubbles pop.”

    Read the entire article, it’s good.

    1. Don’t you feel a wee bit of pity for the large bovine herd headed into the slaughterhouse.

      And on a personal note, I am very concerned about reports from my daughter that her Millennial day trader boyfriend’s alcohol consumption rate has greatly increased recently. Going broke and overdrinking is a very bad combination of behaviors.

    1. When it’s time for me to do some hard time, you can guarantee I am “transitioning” on the spot.

      1. Since when is this “transgender”?

        Since never.

        There is no such thing as transgender. People who call themselves that are either opportunists or crazy.

    4. “Two inmates at New Jersey’s only women’s prison are pregnant after reportedly having sex with a transgender inmate.”

      Does China have these issues?

      2. Nope. China can get real sh!t done because they aren’t hindered by all that pesky “freedom.” So says Justin Trudeau.

        Really, there’s got to be an acceptable in-between somewhere.

  17. Betcha AOC is in the front row.

    John Hinckley Jr. to Play Sold-Out Concert After Unconditional Release

    BY ALEXANDRA HUTZLER ON 4/13/22 AT 12:26 PM EDT

    John Hinckley Jr., the man who attempted to assassinate President Ronald Reagan, is playing a sold-out concert in Brooklyn, New York later this year.

    Hinckley, 66, announced the show in a Twitter post last week, writing that he will be performing at the New York City borough’s Market Hotel on July 8. “Get your tickets while you can,” Hinckley wrote at the time. According to Pilot Venue, the website selling tickets to the event, the show is now sold out.

    https://www.newsweek.com/john-hinckley-jr-brooklyn-concert-sold-out-1697693

  19. Off topic, but the hypocrisy and selective outrage and definition of sexual assault and groping of these woke focks is too hard to ignore:

    During her appearance on Jimmy Kimmel Live! on Tuesday, Gillian Anderson recalled meeting Bill Clinton for the first time

    ““He did the most miraculous thing in the world, he shakes your hand, then he grabs your elbow and at the same time he holds your arm further up,” Anderson recalled. “Slightly intimate little thing. [He] makes eye contact. And he moves on to the next person. Then he looks back at you..

    ..“I went home, I thought — this was in the days of answering machines — I literally thought that I was going to go home to a message from him,” she said. “I did. It was that real.”

    “Then did you vote for him after that?” Kimmel asked.

    “Yes, I did,” Anderson said, after a dramatic pause.”

    There is so much wrong with this I don’t even know where to start. First off, Clinton was married. Next, in this woke age of political correctness, #metoo and all the other stuff going on, this woman is happily remembering a married man running for office, running his hand up her arm in a sensual manner, and expecting – hoping for – a call from him to cheat on his wife.

    Even worse, the woke fock Kimmel sees nothing wrong with it when he’s supposedly championing #metoo and all of the other PC and woke sh!t going on. If they were talking about DJT it would be in the vein of sexual assault. But since it’s good ol’ Billy Boy, raper of under aged girls and frequent flier on Jeffrey Epstein’s Lolita Express, it’s perfectly fine. The selective bias is disgusting.

    And then she voted for him, happily, and has no problem admitting it to this day. A corrupt child rapist who should be in prison.

    1. The left went from #believewomen to smearing Tara Reade’s character in every way possible in about 18 months.

    2. Bill Clinton will be whomever you want him to be at any given time. Many people drop any scepticism of his authenticity because they want to be lied to. The truth and facts are too complicated and distressing.

      Can you imagine Bill in his early twenties chatting up the ladies at a bar. Packing a fake money roll and high end car keys. Karma has come to in the form of a life sentence with a known sociopath.

      1. Karma has come to in the form of a life sentence with a known sociopath.
        i would not wish HRC on anyone. Not even Bill.

    3. He’s a Democrat so he probably stole he watch while she was feeling all “tingly”. He certainly wasn’t stealing her virginity which was decades lost.

      1. April 14, 2022 1:45 PM PDT
        Last Updated 7 hours ago
        U.S. stocks dip, bond yields climb on tightening concerns
        By Sinéad Carew
        4 minute read
        A broker looks at a graph on his computer screen on the dealing floor at ICAP in London, Britain January 3, 2018.
        REUTERS/Simon Dawson
        Summary
        Wall Street indexes close lower, bond yields rise
        Euro dips while dollar rises
        Gold falls slightly, oil futures rise

        April 14 (Reuters) – Wall Street stocks finished lower while bond yields and the dollar rose on Thursday as investors worried about the potential for aggressive U.S. policy tightening as other central banks around the world moved to reduce support.

        The benchmark 10-year U.S. Treasury yield jumped, following two days of declines, after a flurry of U.S. economic data such as retail sales and jobless claims and the European Central Bank’s announcement of less aggressive than expected tightening plans.

        New York Fed President John Williams said on Thursday that the U.S. Federal Reserve should reasonably consider raising interest rates by a half percentage point at its next meeting in May, which was seen as a further sign that even more cautious policymakers are on board with bigger rate hikes. read more

        This was after the ECB said it plans to cut bond purchases – known as quantitative easing – this quarter, then end them at some point in the third quarter.

        Investors also eyed hefty rate hikes by New Zealand’s central bank and the Bank of Canada, and a surprise rate hike by the Bank of Korea as well as policy tightening by the Monetary Authority of Singapore.

        These moves all exacerbated bond yield increases and stock price declines, according to Mona Mahajan, senior investment strategist at Edward Jones who also noted that Thursday’s data showed the Fed’s need to act fast.

        “All systems are go for the Fed to move pretty aggressively,” said Mahajan. “Generally it’s a global battle to fight in
        flationary pressures.”
        …
        https://www.reuters.com/business/global-markets-wrapup-1-2022-04-14/

  20. Is it safe to assume the risky financing that led to the 2007-2009 housing market collapse is a thing of the past?

    1. National
      Millions of Americans are resorting to risky ways to buy an affordable home
      April 14, 2022 3:18 PM ET
      Jennifer Ludden

      Donald Strayer and his wife, Julia, thought they’d found an affordable dream home in Ohio’s Appalachian mountain foothills. But after years of payments directly to the seller, he discovered the owners had kept his money and let the property fall into foreclosure.

      Five years ago, Donald Strayer thought he’d bought a dream home for his extended family. It was on a pretty spot in Ohio’s Appalachian mountain foothills, with room for him and his wife, his daughter’s family, plus their horses and goats. And he could actually afford it.

      Strayer had been turned down for a bank loan because of bad credit — he says it’s because of hospital bills years ago. The 58-year-old former forklift driver has a chronic lung disease and lives off disability. Instead of a regular mortgage, he signed what’s known as a land contract directly with the seller.

      The price was $39,900. For a down payment he sold his childhood home, which he inherited when his dad died, “the only thing I had in the whole world.”

      For years he made monthly payments of $350 on his new home. And then “one day the sheriff just showed up,” he says. “It was foreclosed and they wanted to take my property.”
      …
      https://www.npr.org/2022/04/14/1092560617/millions-of-americans-are-resorting-to-risky-ways-to-buy-an-affordable-home

    2. Win the open house
      Housing & Homelessness
      Mortgage interest rates are rising. If you’re looking at adjustable-rate loans, know the risks
      A photo of a for sale sign in front of a home in Inglewood in February.
      A for-sale sign stands in front of a home in Inglewood in February. Rising interest rates and high home prices are prompting some buyers to consider lower-payment but riskier mortgages.
      (Gary Coronado / Los Angeles Times)
      By Jon HealeyUtility Journalism Senior Editor
      April 4, 2022 5 AM PT

      A few years after risky mortgages and related investments led to a global financial collapse, the Federal Reserve put out a handbook to help consumers make smarter choices about their home loan options. The focus was on adjustable-rate mortgages, whose exotic variants were among the prime culprits in the meltdown.

      “To compare two ARMs or to compare an ARM with a fixed-rate mortgage,” the handbook states, “you need to know about indexes, margins, discounts, caps on rates and payments, negative amortization, payment options, and recasting (recalculating) your loan.”

      Wait, what?

      In plain English, the Fed was cautioning home buyers that it’s harder to predict the cost of an adjustable-rate mortgage than a plain vanilla fixed-rate mortgage. You have to understand not just your current payments but also how the lender will calculate the amount you will pay after the interest rate starts to adjust. You also have to understand how the principal amount you owe may grow instead of shrink, and what your potential offramps might be.
      …
      https://www.latimes.com/homeless-housing/story/2022-04-04/thinking-about-an-adjustable-rate-mortgage-know-the-risks

  21. I’m not sure who the worse humans are, realtors or the people who park at the gas pump and go shopping in the station.

    Then I realized only realtors do that!

  22. New York Post — Democrats fear Sen. Dianne Feinstein no longer mentally fit for Congress (4/14/2022):

    “Longtime Sen. Dianne Feinstein is showing clear signs of cognitive decline, according to a new report, leaving her colleagues in Congress scrambling for ways to persuade her to retire before her term expires in 2024.

    “It’s bad, and it’s getting worse,” one Democratic senator told the San Francisco Chronicle, which also reported that a member of California’s congressional delegation who has known Feinstein (D-Calif.) for 15 years recently had to reintroduce themselves to her repeatedly over a discussion lasting several hours.

    “I have worked with her for a long time and long enough to know what she was like just a few years ago: always in command, always in charge, on top of details, basically couldn’t resist a conversation where she was driving some bill or some idea,” the lawmaker said. “All of that is gone. She was an intellectual and political force not that long ago, and that’s why my encounter with her was so jarring. Because there was just no trace of that.”

    https://nypost.com/2022/04/14/democrats-fear-sen-dianne-feinstein-no-longer-mentally-fit/

    After my now deceased aunt had a stroke, she started deteriorating to the point where she could no longer distinguish between myself and my brother, she would call me 20 minutes after calling me, and repeat herself.

    The Democrat Party is the party of elder abuse and exploitation, keeping people like this in office, and illegitimately installing a senile pedophile like Biden into office. They are literally “not sending their best.”

    1. Also note that she is the source of the phrase “Real Journalists” dating back to the year 2013:

      “The main point of controversy surrounded an amendment by California Democratic Sen. Dianne Feinstein, whose definition of a journalist would limit those receiving the legal protection. Feinstein said a definition was needed because she didn’t want to extend the media protections to certain types of writers.”

      https://www.newsmax.com/US/feinstein-journalist-define/2013/10/06/id/529491/

      “They’re not sending their best”

    2. My grandfather once asked me if Popeye was still alive. He lived to be 102.

      He worked for ConEd and had a pension; they called every year to make sure he was still alive.

      1. I Bet One Legend That Keeps Recurring Throughout History, In Every Culture, Is The Story Of Popeye.
        -Jack Handey

    3. There’s speculation this is being planted so Feinstein will resign before the election & the governor can appoint a Democratic replacement.

  23. – Britain “gets religion” in its housing market. This may be because the asset bubble cycle has played out and everyone suddenly realizes that there’s really no free lunch, but rather only politicians “helping” markets by picking winners and losers. It now looks like AU, CA, and the US are well on their way to housing “enlightenment” as well.

    – There’s a reason limited government and free markets work, while the opposite doesn’t.

    “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand” – Milton Friedman, Nobel Laureate Economist

    “The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’ ”– Ronald Reagan – 40th president of US (1911 – 2004)  

    “Everything a government touches, turns to crap.” – Ringo Star

    https://www.newstatesman.com/business/2022/04/britain-has-fallen-out-of-love-with-its-housing-market
    Britain has fallen out of love with its housing market

    Long-held assumptions about rising house prices are being shattered by the affordability crisis.
    1 April 2022
    By Polly Bindman

    “When Nigel Lawson described the NHS as “the closest thing the English people have to a religion”, his party was in the process of substituting it with another: the housing market. Policy changes such as tax incentives, the right to buy and the deregulation of the private rental market had formed the basis of Thatcher’s goal for a “property-owning democracy”, and for decades the narrative has held that rising house prices translate into general wealth.”

    “Polling released yesterday (31 March) indicates that the British public no longer believe this story. Confronted by low levels of home ownership and an affordability crisis, the British public would now prefer house price growth to remain low or to stop entirely, and homeowners are in favour of bold reforms to make housing more affordable at the expense of their own properties increasing in price.”

    “The polling, carried out by YouGov on behalf of the research and campaign group Positive Money, found that more than half (54 per cent) of British homeowners would be happy if their own home did not rise in value in the next ten years, if that meant houses were more affordable for those who don’t own property. Since 2000, average wages have grown by 94 per cent while house prices have grown by 224 per cent.”

    ““I think people realise that the system is broken when you can’t really own a home just from having a job,” said Danisha Kazi, senior economist at Positive Money. “Soaring house prices are locking the younger generation out of home ownership.”

    “The realisation that rising house prices do not create prosperity even for wealthier homeowners means that support for reform comes from a broad range of demographics.”

    “The report also counters the common assumption that the housing crisis is primarily the result of a shortage of homes. It reveals that new supply has in fact exceeded the formation of new households in recent decades. In 2020 there were 7.5 per cent more dwellings than households in London and 4.8 per cent more in the south-east.”

    “Home ownership in England peaked at 71 per cent in 2003, and has since fallen to 65 per cent. For young adults it has fallen more sharply, to 47 per cent, while home ownership among ethnic minorities is lower still, at 35 per cent.”

    “Years of policies such as help to buy, changes to stamp duty, the shared ownership scheme and extended mortgage terms have only served to financialise Britain’s housing market, a problem most voters now apparently recognise: a large majority believes that the purpose of a house “should be mainly a home, not a financial asset”.”

  24. JPM and Jamie Dimon foreshadowing that we will be in recession in Q4. That cash on hand for consumers and businesses (from govt handouts and earlier loans) will have some spending capabilities in Q2 and Q3.

    Keep in mind that JPM is at its 52 week low (125.02 – 172.96) @ $126 today so off 27%.


    The risk that the Federal Reserve accidentally tips the U.S. economy into recession as it combats inflation is rising, according to JPMorgan Chase CEO Jamie Dimon.

    The CEO of the biggest U.S. bank by assets said Wednesday that economic growth will continue at least through the second and third quarters of this year, fueled by consumers and businesses flush with cash and paying off debts on time.

    “After that, it’s hard to predict. You’ve got two other very large countervailing factors which you guys are all completely aware of,” Dimon told analysts, naming inflation and quantitative tightening, or the reversal of Fed bond-buying policies. “You’ve never seen that before. I’m simply pointing out that those are storm clouds on the horizon that may disappear, they may not.”

    Dimon’s remarks show just how quickly major events can change the economic landscape. A year ago, he said the U.S. was enjoying an economic “Goldilocks moment” of high growth coupled with manageable inflation that could last through 2023. But stubbornly high inflation and a host of possible impacts from Russia’s invasion of Ukraine have clouded that picture.

    The risks spilled into view on Wednesday, when JPMorgan posted a 42% profit decline from a year earlier on increased costs for bad loans and market upheaval caused by the Ukraine war.

    Specifically, the bank took a $902 million charge for building loan loss reserves, a stark reversal from a year ago, when it released $5.2 billion in reserves.

    1. I’ve seen this movie before
      And I have to admit it’s no bore
      But the lying, the dying, the late night crying,
      I have to confess that I can’t take it no more

    1. That little beta cvck couldn’t get a piece of asz if his life depended upon it. He’s up near the front of the line of crooked necks.

      1. Nevermind:

        “I realized I was gay when I was 21.”

        Too many beta soy polesmokers, not enough alpha males.

      1. He is, but I’m not sure he knows it.
        Yuval Noah Harari’s History of Everyone, Ever
        His blockbuster “Sapiens” predicted the possible end of humankind. Now what? By Ian Parker | February 10, 2020
        https://www.newyorker.com/magazine/2020/02/17/yuval-noah-harari-gives-the-really-big-picture

        In “Sapiens,” Harari writes in detail about a meeting in the desert between Apollo 11 astronauts and a Native American who dictated a message for them to take to the moon. The message, when later translated, was “They have come to steal your lands.” Harari’s text acknowledges that the story might be a “legend.”

        “I don’t know if it’s a true story,” Harari told me. “It doesn’t matter—it’s a good story.” He rethought this. “It matters how you present it to the readers. I think I took care to make sure that at least intelligent readers will understand that it maybe didn’t happen.” (The story has been traced to a Johnny Carson monologue.)

        Oy vey. No mention of Klaus.

    3. …those things which proceed out of the mouth come forth from the heart; and they defile the man.

      Matthew 15:18

  26. New Mexico is paying college tuition for illegal immigrants with COVID relief funds

    Alexa Schwerha | Reporter
    Wednesday, April 13, 2022 10:09 AM

    New Mexico Governor Michelle Lujan Grisham has signed the New Mexico Opportunity Scholarship Act into law, which provides scholarships covering tuition and fees at the state’s public higher education institutions.

    The law extends to illegal immigrants, The New York Times reports, in addition to prison inmates and students from “tribal nations” that extend beyond state borders.

    The New York Times reports that the program will cost $75 million for the 2023 fiscal year, with “$63 million com[ing] from pandemic relief funds.”

    https://campusreform.org/article?id=19349

  29. Is it safe to assume the Russian Ukraine invasion will have negligible impacts on U.S. investors?

    1. The Financial Times
      Citigroup Inc
      Citi profits tumble as bank warns it could lose $3bn in Russia
      US lender says Russian exposure has fallen to $7.8bn this quarter
      Citigroup headquarters in New York.
      Citi did not provide an update on the Russian sale process, but sanctions have made it unlikely the lender could exit the business without further losses
      © Bloomberg
      Imani Moise in New York
      10 hours ago

      Citigroup’s profit nearly halved in the first quarter as the US bank warned of up to $3bn in potential losses linked to its Russian operations.

      Citi said on Thursday it had set aside $1.9bn to cover loan losses, including $1bn for its Russian exposure and $900mn to cushion the blow from deteriorating economic conditions driven by inflation and soaring energy prices.
      …

    1. Federal Reserve
      Fed’s Waller sees likelihood of multiple half-point interest rate hikes ahead
      Published Wed, Apr 13 2022 4:18 PM EDT
      Updated Wed, Apr 13
      Jeff Cox
      Key Points
      — Federal Reserve board member Christopher Waller said Wednesday that he expects interest rates to rise considerably over the next several months.
      — In a CNBC interview, Waller said current data on inflation and the general strength of the economy justify half-percentage-point increases ahead.
      — The Fed normally increases in 25-basis-point increments.
      …
      https://www.cnbc.com/2022/04/13/feds-waller-sees-likelihood-of-multiple-half-point-interest-rate-hikes-ahead.html

      1. “Fed’s Waller sees likelihood of multiple half-point interest rate hikes”

        yawn… —Paul Volker, from his grave

    2. Economy & Policy
      The Economy
      Peak Inflation? Not So Fast.
      By Lisa Beilfuss
      April 15, 2022 2:00 am ET
      The producer price index showed surging prices for meat and fish categories, costs that tend to crop up in the grocery store. Here, a market in Monterey Park, Calif., on a recent day.
      Frederic J. BROWN / AFP / Getty Images

      The latest consumer price index brought a collective sigh across Wall Street this week. Inflation has peaked, sang many economists, strategists, and headlines. But the logic behind the optimism is flawed.

      First, consider the inflation report that followed CPI. The producer price index is often blown off because what matters most for the economy is what is happening with consumers, who make up two-thirds of gross domestic product and whose expectations for future prices help determine actual inflation. But investors should take the March PPI, which rose a record 11.2% from a year earlier, even more seriously than the corresponding CPI.

      Before the pandemic, the PPI didn’t do a great job predicting the CPI, says Citi economist Veronica Clark. “But when we get big shifts, like over the past year, it is a more reliable leading indicator,” she says.
      …
      https://www.barrons.com/articles/peak-inflation-2022-transitory-51649966350

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