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The Great Disinflation Of The Housing Market Is Clearly Underway

A weekend topic starting with WTOP. “‘We’ve seen a huge slowdown in demand. In fact, I’m talking to real estate agents who are canceling open houses because they say nobody is showing up right now,’ said Diana Olick, who has covered real estate for CNBC for two decades. ‘The sky is no longer the limit for homeowners. And that’s what real estate agents are having to tell them.'”

From CBS News. “‘The housing market is in a downturn right now. It’s cyclical, and it just doesn’t support the number of employees we had before,’ Chief Economist of Redfin, Daryl Fairweather, said. Realtor Tina Yassin has been trying to sell a home in Arlington, Texas, for 28 days. The home saw a price drop but still hasn’t attracted buyers. ‘This home, I imagine that, six months ago, would have sold,’ realtor Tina Yassin said. ‘Would not have been on the market two weeks later.'”

“Yassin said the demand drop depends on the market and area. In areas like Dallas-Fort Worth, prices are steady — but most realtors are telling sellers not to expect bidding wars, especially on homes that need some work. Meanwhile, markets like Toledo, Ohio, Rochester, New York and even Chicago and Los Angeles, have seen prices drop.”

The Dallas Business Journal in Texas. “‘While none of the builders want to see a slowdown, we’re in an unhealthy mode right now,” said Ted Wilson, principal with Residential Strategies, Inc. Wilson said builders just adding to the number of units they have under construction is not a good trend. ‘Going forward, they’re going to meter out future starts to more closely approximate how many units they’re actually closing,’ he said. ‘A lot of builders have been maintaining these prospect lists, which is how they’ve gone about selling their houses. What we’re hearing is that the size of those prospect lists is getting whittled down.'”

The Dallas Morning News. “Adam Perdue, an economist for the Texas Real Estate Research Center at Texas A&M University, said the Fed is facing a tightrope walk between raising rates fast enough to tamp down inflation without raising rates too fast and causing a recession. Whatever happens with interest rates could dramatically shift the housing market. ‘If we manage to get back to a normal economy, then we would expect [home] price appreciation to fall for a few years until we get back to our trend line,’ Perdue said. ‘If they end up pushing it too far and we end up in a recession, we might actually see prices fall.'”

From Bloomberg. “On the edges of US Sun Belt suburbia, the wait lists for new houses are gone. And homebuilders are doing something they haven’t done in years: slashing prices.The fastest-rising mortgage rates in decades have cooled demand so abruptly in many hotspots that it took the industry by surprise. Builders that were artificially limiting sales and auctioning houses to the highest bidder now have inventory to move.”

“In the Austin, Texas, and Nashville, Tennessee, metro areas, for instance, the share of new-construction offerings with price cuts has quadrupled from a year earlier, according to Redfin Corp. They tripled in Phoenix and doubled in the Tampa, Florida, region.”

“‘We are in a different place — the builder can no longer name a price and say, ‘pay it or move along,’ said Nicole Freer, a Houston agent who has slashed prices by $2,000 to $20,000 on homes she lists for builders. ‘They’re telling us: ‘Our managers have allowed us to negotiate again.’ Of her roughly 120 listings for builders, about 70% now have cuts, she said. “

“In the Phoenix metropolitan area, 22% of new-home listings had price cuts from May 9 through June 5, up from 7% a year earlier, according to data from Redfin. In Tampa, the share jumped to 21% from 9% a year earlier, and in Austin, it climbed to 13% from just 3%. A PulteGroup Inc. website shows 146 finished homes in Arizona, mostly with price reductions. Jim Zeumer, vice president of investor relations, said those appeared to be typical incentives used to sell spec houses — those built without a buyer in place — that are complete or will be finished soon.”

“A key metric to watch is the contract cancellation rate, said Rick Palacios, research director at John Burns Real Estate Consulting in Irvine, California. It topped 9% nationally in May, according to his company’s survey of builders, up from 6.6% in April. ‘The writing is on the wall that more supply is coming, no matter how you slice and dice the data,’ Palacios said. ‘Builders are trying to get in front of that wave. We could have the double-whammy of the economy cooling and a lot of supply coming on. That’s not the best recipe to sell homes.'”

From ABC 15 in Arizona. “The Valley of the sun’s real estate market is still hot, but cracks are starting to appear. Listing data is where the cracks start to form. Price reductions have been rare in the past few years, but in the past few months, they have spiked to a market share of 9.8% which is just off the five-year high of 9.8% in late 2018. Inventories are starting to rise as well. Home inventories rose 29% in eight months of last year. This year they have risen 21% in four months. More new housing permits typically signal a growing market, but just this past month housing permits dropped by over 1,900, one of the largest drops since record keeping began.”

From Money. “Many markets are slower. Nicole Rueth, producing branch manager at The Rueth Team in Denver, notes that real estate agents she has spoken to have listings with very few showings and no offers. In less competitive areas you don’t have to be as aggressive. During the height of the pandemic buying frenzy, Rueth encountered people who were willing to purchase a house on busy streets with power lines running overhead simply because it was a house and there weren’t any other options available.”

“But now, more inventory is coming onto the market. Active listings increased by 17% year-over-year during the second week of June. Fewer buyers are going to have to settle for whatever happens to be for sale. Instead, they can focus on how that house fits their lifestyle and their financial needs. Rueth says buyers now need to ask themselves: ‘Is this home really worth this amount of money?'”

From WKRN on Tennessee. “Those out-of-town cash buyers and California companies continue to anchor the Nashville market. However, with rising mortgage rates, we are seeing some changes. Active housing inventory is up 45% over last year. ‘We are seeing sellers getting more anxious and realistic about losing the window of opportunity to sell,’ said Jeff Checko, relocation director at RE/MAX Advantage. ‘I really think our values, while we’ll see kind of a screeching halt but a stop to this rampant appreciation, I don’t think we’re going to be looking at people that are upside-down so to speak and having a lot of non-performing assets with bank-owned properties or anything because people in our market will still have opportunities and options.'”

From KMVT on Idaho. “Western Magic Valley Realtor president Lisa Haney said last year the median price for a home in the Magic Valley was just under $300,000. It is now around $380,000. ‘It has just snowballed, and we are finally cooling down. The market is finally slowing down. We are catching up with inventory,’ Haney said. ‘They call this the great disinflation of the housing market and that is clearly underway,’ University of Idaho associate professor Steven Petersen.”

The Oklahoman. “If the spike in interest rates turns around the sellers’ market for homes and puts buyers back in charge, the boom will have gone out with a bang in Oklahoma City, not a wheeze. The increase in listings as sales remained flat pushed the supply of homes for sale through Realtors up 41.7%, enough to last one month, up from 21 days a year ago. ‘We are starting to feel a slow shift in the market but the ‘shift’ is actually normalizing the market,’ said Amanda Kirkpatrick-Lawler, broker-owner of Metro Mark Real Estate. ‘We are still in a sellers market, but sellers are starting to be more realistic than before.'”

“The market still holds challenges for buyers, and some sellers, Will Flanagan, managing partner of Kevo Properties said. ‘I’ve had clients that approached me wanting to make a list price offer, which at this point may as well be considered a lowball offer,’ Flanagan said.”

The Daily Independent on California. “Some buyers are taking this rise rather cautiously as the local housing market has cooled off a bit this week from the buying frenzy that began in the spring of 2020. Local appraisers, home inspectors, and realtors report their workload and pace of activity has tapered off a bit. At present there are 41 site-built homes on the market.”

From Fox 5 in California. “After a rapid increase in home values across San Diego County, recent data shows the first signs of a market that is finally cooling off. ‘If your finger is on the pulse of the market you look at the inventory, look at the reductions, look at the market days. What’s going on here and is it a blip or a trend,’ FOX 5 real estate expert Ken Kaplan said. ‘Homes are receiving one or two offers instead of 20 and not going over asking price, but maybe at asking price.'”

“Kaplan says this slow but steady shift began about 60 to 90 days ago and he’s seeing anywhere from 5 to 20% of the existing inventory being reduced in certain areas. ‘Asking for sellers who’ve been on the market for a little while for closing cost, for help with buying down the rate so you can get that great rate, those things that were off the table previously are now kind of back on the table,’ Kaplan said.”

From 425 Business in Washington. “WaFd Bank CEO Brent Beardall delivered the Midyear Economic Forecast at the Bellevue Chamber’s fourth annual luncheon Thursday. Chief among the stated concerns was the rate of inflation, which he noted is seeing its biggest increase in more than 40 years. ‘Toto, I’ve got a feeling we’re not in Kansas anymore,’ Beardall quipped about the drastic surge. ‘The world has changed — it’s changed dramatically, and it’s changed quickly.'”

“‘Part of the reason for that,’ he said, ‘is the officials at the Federal Reserve were unfortunately mistaken when they saw the first signs of inflation. They said it’s transitory, that it’s not going to be sustainable. And they were unfortunately wrong, at least in the short term.'”

“Moving on to real estate and using the example of a $1.6 million Bellevue home — the average home price in the city according to Beardall’s data — he played out mortgage rate increases thusly: ‘In December last year, the interest rate was about 3.5 percent and your monthly payment was $5,748. Think about what happens if you’re just willing to take the increase in interest rate through to your mortgage. That means your mortgage goes from $5,700 to $7,700, an increase of 35 percent in your mortgage payment to buy the same house.'”

“For some consumers, Beardall said up to 70 percent of their income could solely go to housing in the current market. ‘If you asked me, ‘Brent, are you nervous about home values when you’ve got $6 billion of single-family loans on your books?’ Of course, I’m nervous about home values,’ he told the audience. ‘But do I think it’s a bubble? No. Because if you’re in an inflationary environment, what do you want to own? Real assets.'”

“Beardall recalled previous economic forecasts, during which he urged caution regarding crypto. ‘It’s good to finally be right if you’re stubborn enough like I am,’ he said with a laugh. ‘For those of you that have heard me the last few years, I’ve said cryptocurrencies are the biggest Ponzi scheme of my lifetime. And I think that’s coming to fruition.'”

“Crypto is so volatile because it has no repayment source, “unless there’s a bigger sucker than you,” Beardall said. He went on to point out that earlier this year, the cryptocurrency market had a larger market cap than all the banks in the United States combined. ‘Let that sink in,’ he said. ‘Now, there’s some reason coming into the marketplace.'”

This Post Has 161 Comments
  1. From the video:

    Home Sales Drop Nearly 50% In Vaughan, Richmond Hill & Markham – Jun 16, 2022

  2. This is from the Daily Independent link:

    ‘Ridgecrest is the third largest city in Kern County and the largest in Eastern Kern County.’

  3. ‘If you asked me, ‘Brent, are you nervous about home values when you’ve got $6 billion of single-family loans on your books?’ Of course, I’m nervous about home values,’ he told the audience. ‘But do I think it’s a bubble? No. Because if you’re in an inflationary environment, what do you want to own? Real assets.’

    That’s good Brent cuz yer about to own a lot of shacks!

    1. ‘Because if you’re in an inflationary environment, what do you want to own? Real assets.’

      If too many smart people think the same way as Brent, and act on their insight by loading up on shacks, seriously overvalued housing prices would be a natural consequence.

  4. ‘On the edges of US Sun Belt suburbia, the wait lists for new houses are gone. And homebuilders are doing something they haven’t done in years: slashing prices.The fastest-rising mortgage rates in decades have cooled demand so abruptly in many hotspots that it took the industry by surprise. Builders that were artificially limiting sales and auctioning houses to the highest bidder now have inventory to move.’

    ‘In the Austin, Texas, and Nashville, Tennessee, metro areas, for instance, the share of new-construction offerings with price cuts has quadrupled from a year earlier, according to Redfin Corp. They tripled in Phoenix and doubled in the Tampa, Florida, region’

    HBB beats the big media – again. It’s OK to follow me around fer yer next scoop bloomberg. It’s not the first time.

    1. “HBB beats the big media – again.”

      It helps increase objectivity to not have to cater to the political whims of your corporate masters.

    2. ‘In the Austin, Texas, and Nashville, Tennessee, metro areas, for instance, the share of new-construction offerings with price cuts has quadrupled from a year earlier, according to Redfin Corp

      1. …hrm…messed up that comment!

        Was going to say that there’ still a ton of development going on in my area outside Nashville. In one development along the highway I counted 20 houses in some stage of construction…. Everywhere you look that’s the case — either projects just breaking ground/getting started, or lots cleared and houses going up as quick as possible.

        It’d be nice to see that slow down or stop, and the land remain trees or farmland…

        1. While it will pause for a bit, 250,000 people a month are currently flooding across one border with no accounting of the other 3 borders. Plan accordingly.

  5. ‘If we manage to get back to a normal economy, then we would expect [home] price appreciation to fall for a few years until we get back to our trend line,’

    It seems like a quicker way to get back to the trend line would be for home prices to fall for a few years, like they did from 2007 – 2012.

    1. We didn’t have realtors making YT videos back then. Contagion is going to spread like wildfire.

      1. That video from Utah I posted yesterday afternoon (look it up) mentioned that kinda. He said social media has people spreading bad shack news lightning fast.

        1. The faster it all comes down the faster we can get back to normality. Funny how the panics and crashes of the late 1800’s and early 1900’s sorted themselves out without Gov’t intervention.

  6. I forgot to include this with the Colorado article:

    ‘Now, a rising number of sellers are dropping their asking prices. A little over 22% of homes for sale during the four week period ending June 11 had a price drop, the highest share since Redfin started tracking the data in 2015. In some cases, notes Rueth, those price reductions are happening immediately after the first weekend the home has been on the market’

    First weekend? Whao Nellie, wa happened to my shortage Denver?

    1. If they are dropping prices after the first weekend, that means they got zero interest (or almost none). even the slowest realtor realizes that. If you are getting showings but no offers, you’re close. If you aren’t even getting showings, you’re wayyyyyyyyyy too high. Almost certainly realtors getting listings and taking the seller’s price but then the complete lack of showings awakens the seller at least a little bit. But now you’re behind the 8 ball as a seller because you wasted your best showing weekend. and now your house has a price reduction which means buyers can wait, because if you came down once, you’ll come down again. Multiply by tens of thousands of homes.

    2. Denver is a sh*thole.

      “Denver7 Investigates has spent months digging into crime data and found that catalytic converter thefts have increased more than 5,000% statewide between 2019 and 2021.”

      5,000% is that a lot?

  7. ‘We’ve seen a huge slowdown in demand. In fact, I’m talking to real estate agents who are canceling open houses because they say nobody is showing up right now…The sky is no longer the limit for homeowners. And that’s what real estate agents are having to tell them’

    Hey Diane – Click!

    1. “I’m talking to real estate agents”

      First start with the “I’m talking” part. That’s the problem with cheap talk by dummies(Debt Donkeys, Degenerate Gamblers, Housing Hens and other assorted KnowNothings). Anything they hear, they parrot. It’s that simple. Then theres the “to real estate agents” part. Nobody with a dollar in their wallet would talk to or otherwise waste time with a pick pocket or flim flam man on the street. Yet broke assed degenerates go out of their way to repeat word for word the uninformed and tall tale stories puked by a lying realtor.

      San Francisco, CA Housing Prices Crater 21% YOY As Excess, Empty And Defaulted Housing Inventory Floods Bay Area

    2. ‘The sky is no longer the limit for homeowners. And that’s what real estate agents are having to tell them.’”

      Those aren’t “homeowners,” those are speculators.

    3. why didnt she say this 3 months earlier – and save some unsuspecting citizens so much trouble?

      Home prices typically rise 4% to 6%, year over year, but had gone up 20% from a year ago, she said.

  8. ‘Active housing inventory is up 45% over last year. ‘We are seeing sellers getting more anxious and realistic about losing the window of opportunity to sell…I really think our values, while we’ll see kind of a screeching halt’

    I love a good screeching halt in the mornin’!

    1. Now that it unceremoniously plunged through $20,000, just after the HODLers deemed that to be a support level, what is the next mythical support level?

      1. what is the next mythical support level?


        Gosh! I hope no one borrowed money to buy bitcoin.

        1. I have just went at warp speed into us dollar debt and traded it for bitcoin at 20k. Helocs, credit cards, swaps, etc The dollar is done, it will soon hyperinflate into oblivion as all fiat does.

          What idiot would hold a currency (us dollar) that soon China won’t take for goods, Russia won’t take for fertilizer, the Middle East won’t take for oil? We consume 90% of the world’s illicit drugs, globally our country is the hunter Biden of world politics. The usA A worthless crackhead. No thanks, I will tale currency not lorded over by pooping pants dementia joe.

          1. I have just went at warp speed into us dollar debt and traded it for bitcoin at 20k.

            It’s at $18,230.37 right now. Back that truck up!

          2. Now at $17,773, and it appears to be finding some support there. Some months ago I read a few articles recommended by HBBer IPFreely. One of those articles said that there’s some break point around $17,000 where Tether will give up its ghost. Without Tether, Bitcoin is basically done. Maybe. I don’t think the idea of Bitcoin will ever die.

        1. Historians will look back on crypto as the most insane bubble in human history….a time when there was so much money in the system people used it to buy digital pet rocks.

    2. 600 year fiat chart

      monetarygold (dot) com/wp-content/uploads/2021/07/Table-01.jpg

      What clown would hold us dollars when they can escape the sinking titanic and hold bitcoin? Putin has broken the petrodollar.

      1. Putin has broken the petrodollar.

        It was a self-inflicted wound by our globalist leaders.

        1. Biden was more worried about showers with his daughter than helping the nation or the currency.

      2. What clown would hold us dollars when they can escape the sinking titanic and hold bitcoin? Putin has broken the petrodollar.

        What kind of clown would believe in Buttcoin?

    3. Earlier this year – when Miami introduced its crypto currency.

      The panels and speakers raved about bitcoin and its future. MicroStrategy Inc. co-founder Michael Saylor, who leveraged his business-software company and put more than 100,000 bitcoins, worth more than $6 billion at the peak, on its balance sheet, said: “I am more bullish than ever on bitcoin.” ARK Investment CEO Cathie Wood said bitcoin would rise to more than $1 million. PayPal Holdings Inc. co-founder Peter Thiel suggested bitcoiners should make an “enemies list” of people opposed to the cryptocurrency.

      So what happens to the fancy houses and condos in the Miami area that were purchased by folks in the crypto industry.

      1. Bitcoin offers freedom from a tyrannical government, evil hedge funds, corrupt fbi, etc. I thought most here wanted ethics and morals? If bitcoin was used to buy those Miami houses, there is a ledger of account in the money itself of whose hands that money passed through.

        No dark money pools to be used by the ciA to fund evil projects like hunter Biden biowespons labs to kill innocent Slavic children?

        Oh wait, you like a fiat money system of us dollars without block chain so that an evil government can tyrannize and kill you with no ledger on where the money came from or is going to? So Cia can run afghan heroin or Chinese fentanyl to kill our children for profit.

        Below you see how crypto traders can’t hide their trades from each other, the money is transparent! This feature also keeps Powell from fooking u, keeps Pelosi from taking corrupt bribes, jeff eppstein and Biden from buying pedo sex, etc etc. Anyone who wishes to support the current fiat money darkness that we have lets Satan grow unchecked. Blockchain brings information symmetry, no more evil dudes using anonymous money to break laws and hurt little people.

        Crypto Traders Turn Against Each Other in a Collapsing

        bloomberg (dot) com/news/articles/2022-06-17/crypto-traders-turn-against-each-other-in-a-collapsing-market?fromMostRead=true&sref=ibr3A0ff

        With crypto prices tumbling precipitously, traders have begun increasingly turning against one another to eke out ever-elusive profits.

        Many shark traders scour blockchains — digital ledgers for recording transactions — seeking information on other traders, particularly those with highly leveraged positions, an anonymous user known as Omakase, a contributor to the Sushi decentralized exchange, said in an interview.

        1. “ there is a ledger of account in the money itself of whose hands that money passed through.”

          “ Bitcoin offers freedom from a tyrannical government”

          I think I’d rather have the tyrannical government given these options.

          1. As the fda approves or mandates clot shots that kill children, I hope you are joking about tyranny. As Mel Gibson said in Scotland, what will you do without freedom?

  9. “But the rate of increase year over year will go back to 2, 3%.”

    That is exactly the same thing the “real estate experts” said on this same (and all other) local channels back in 2006.

    Homeowners: To sell or not to sell?

    By: Joel Lopez
    Posted at 10:41 PM, Jun 17, 2022

    WEST PALM BEACH, Fla. — To sell or not to sell? That’s the question so many homeowners like Lori Poss are facing.

    “You’re always getting papers in the mail. They’re always (asking), ‘Hey, are you interested in selling? Make some money on your property?'” said Poss.

    “If you really want to sell at the peak, now would be the time is hard to say,” said Johnson. “The last change overtook one to three months, depending on where you were.”

    “With the demand that we have here with the inventory shortage, I think you’ll either see prices slow dramatically,” said Johnson. “In other words, maybe they won’t decline. But the rate of increase year over year will go back to 2, 3%.”


    The accompanying 1:42 video is worth a look and a chuckle.

  10. The “died suddenly” train keeps chugging along:

    Tyler Sanders — the 18-year-old Emmy-nominated actor for his role in Amazon’s “Just Add Magic: Mystery City,” has died, according to multiple reports.

    1. I personally never heard of the kid but a quick search tuned this up.

      Was Tyler Sanders Vaccinated?

      Published 22 hours ago
      1 min read

      Tyler Sanders, who appeared in episodes of 9-1-1: Lone Star, Fear the Walking Dead, and The Rookie and starred in the Amazon spinoff series Just Add Magic: Mystery City, died in his Los Angeles home on Thursday. At the moment, he was 18 years old.

      1 COMMENT

      Nun Ya
      June 18, 2022 at 12:54 pm

      Yes he would have been vaccinated since Disney produces 9-1-1 and required all of the crew and actors to be vaccinated.

    2. bitchute (dot) com/video/Kcarao3qrkLH/

      1 minute video showing all the advertising paid for by Pfizer. Erin Burnett, Anderson Cooper, Norah O’Donnell, etc etc.

      Yellow journalists bought off by big pharma to lie and kill Americans with clot shots. It’s satanic, like us dollar fiat. Yet many here want to slay bitcoin freedom to remain in their Biden bucks shackles. Neo had to wake up the fools in the matrix.

      1. bitcoin freedom

        A Ponzi scheme with zero intrinsic value. Enough with BTC already!

        1. Your Biden bucks are inflating away, don’t shoot the messenger of an alternative. If you think quadrillions in fiat debt and warp speed 11 printing presses are good for our future, make your case. I made mine and stand with Satoshi against tyranny.

          1. I made mine and stand with Satoshi against tyranny.

            You’re getting destroyed. Math is not your strong suit.

    1. “Putin just caused Dementia Joe to fall off his bike.”

      I watched it again.

      And again, and again and again and again and again…


      🙂 🙂 🙂 🙂 🙂

    2. Looks like he couldn’t get his shoe free of the pedal clip in time to prevent tipping over in the wrong direction.

          1. I used a bike as primary transport for 12+ years and never used a pedal strap, or those ridiculous clippy shoes. You don’t need them unless you’re going long distances on clear country roads, which Biden clearly was not. I’d be surprised if he pedaled for two miles.

  11. Can you imagine the saturation media coverage if one of Trump’s daughters had written this in her diary?

    ‘If that’s not child molestation, it is definitely close’: Tucker Carlson blasts Biden over daughter Ashley’s diary admission that taking showers with him as a girl may have contributed to her sex addiction after revealed the extract

    1. Using trumps daughter against him in the j6 hearings by liz cheney is very low, using bidens daughter against him is also very low. I believe both men slept with their daughters, there is a famous picture of Trump holding a 12 year old Ivanka by a statue of 2 parrots having sex. Maybe its Why she hates daddy Trump so much. You don’t get to be the Manchurian president from either party unless they have dirt on you.

      Frankly I liked America when people might have had some expectation of privacy and dignity, which we don’t now. Using people’s kids against them is why I give up on the usa, her Biden bucks currency, and her corrupt govt. The congress just fooked rand Paul’s balanced budget. Bitcoin for me, the rest of you can stay shackled to your fed reserve notes Rothschild tyranny.

      It is harder to convince a man they were made a fool, than to open their eyes to their own slavery and lies.

      1. have had some expectation of privacy and dignity,

        Says the same guy who wants every single financial transaction on the blockchain. Never fear, bub, you’ll get that wish. Just not how you want it.

      2. “I believe both men slept with their daughters…”

        You post some interesting material here when you aren’t pimping sh!tcon. Do you have any supporting evidence, or is this just based on your gut feeling?

          1. I had a b-school classmate who was briefly on The Apprentice. He was getting calls left and right from people before the 2016 election seeking dirt on DJT.

  12. Are We Back To “NORMAL” Yet??🏡

    This is 39 minutes on Phoenix. I watched these. This one she says we’ve been through the stages of grief:

    24:25 – Our current reality

    You can pause it and read the Cromford text. It’s really bad.

    27:00 – Cromford report update
    29:23 – Cromford chart on prices explained

    1. Yep. Colbert’s in deep with the Democrats and very likely a protected media mouthpiece.

    1. You fail to recognize that the fiat USD is backed by the USG and up until this year was the world reserve currency. Big difference from BTC.

      1. USD is backed by the USG

        Oh wait, usg, you mean a president that sleeps with his daughter? A congress that is so morally corrupt that Pelosi has to go on ru Paul’s drag tv show to help gays diddle our kids? A Supreme Court so ignorant that ketanji can’t define what a woman is? A currency backed by guys called helicopter Ben and yellin the felon?

        I hope you are smart enough to realize anything backed by these clowns, Which you call the USG, needs to be laughed out of existence. Which is what China, Russia, Middle East, etc are doing to the usA. Being backed by these clowns is a reason to RUN from the dollar, not run to it.

        You do see world events don’t you? How the us dollar is being rejected by the other 200 nations of planet earth? Maybe I am myopic however, the dollar isn’t catering because it’s got Biden, Pelosi, Powell, on its side, bwahahaha!!! Oh my God what a joke!! R u 4 real?? You are pulling my leg right?

    2. when they can escape the sinking titanic and hold bitcoin?

      Last time I checked, it was BTC that was doing an imitation of the Titanic. You said you bought in at 20K. If that is true, you are already down 10%, and in just a couple of days.

      1. you are already down 10%

        BTW, here at the HBB we have a term for that. We call it “crater”

      2. U r right, best to be on the side of usa Biden bucks, didn’t he just fall off his bicycle? Him and the us dollar are catering.

    3. “…escape the sinking titanic and hold bitcoin?”

      Shitcon is the sinking titanic of currencies, especially now that central banks are tightening policy. What is it about bouncing down the stairs to the basement floor that you find difficult to grasp?

  13. 6 External Factors That Affect Current Housing Market

    Jun 18, 2022 The #BayArea housing market slowdown continues! How long will it last? What are the factors that affect the current market?

    She goes over the stats. Looks like everything has nosed over and headed down:

    0:00 Santa Clara County Housing Market Stats

    At 5:00, price decreased. “This part is a little scary.” In the first 15 days of June they have more sawin’ and a slashi’ than all of May. Eat yer crowz Thornberg.

    1. Builder
      Former Housing Cynic Chris Thornberg Says It’s Time to Buy
      To support his optimism, the economist points to high levels of affordability, declining delinquency rates, and shrinking supply.
      By Claire Easley

      Back in 2007, when some hopeful real estate professionals were broadcasting that the time was right to jump into homeownership, Chris Thornberg wasn’t among them. Shortly after the National Association of Realtors launched a campaign that year emphasizing that it was a great time to jump in, Thornberg, the founding principal of Los Angeles-based Beacon Economics, responded with an interview with TheOrange County Register. “What’s the point of buying today when you can buy it for 10% less in a year?” Thornberg said.

      He had a point.

      But these days he’s feeling quite different. “When you look at interest rates and the price of homes relative to people’s income, you see affordability is really, really good right now,” he told Builder in a phone interview this week. “In a lot of markets in the U.S., the degree to which affordability has improved makes this a time that you want to get involved in the market.”

  14. SHIFT – What’s Happening in Real Estate | Real Estate Market Update June 2022

    Jun 17, 2022

    ‘Longer To Sell: The number of days it takes to get an offer accepted is going up for those homes on the market now. For pending and sold homes, the data shows no change yet we’re observing homes that would take a week to sell taking several weeks to sell and those that would’ve taken 3 weeks to sell take even longer now.’

    ‘Lower Price: Accepted offers are lower in price across the Bay, different property types and price points. Many areas are back to prices observed in the first quarter of 2021. Based on offers being accepted now, -10%-13% price difference from a few weeks ago means Buyers’ monthly mortgage payments are similar to what they were given the interest rate changes;
    Sellers are the ones cashing out with less equity. The downward price pressure can persist pending future interest rate hikes.’

    ‘Fewer Sales: About -33% fewer homes were sold in the first half of 2022 vs 2021; this is about where we were in 2019, pre-pandemic. If you have any questions, give me a ring!
    Silicon Valley/Bay Area Real Estate – Olga Golovko – Keller Williams Realty.’


    1. ‘the data shows no change yet we’re observing homes that would take a week to sell taking several weeks to sell and those that would’ve taken 3 weeks to sell take even longer now’

      So they’re a lion. Nothing new really, Socket Site has pointed this out fer years.

      1. The grandma-finally-died house on my block is still sitting with a paltry $20K+ price cut, which is still about $25K higher than it would have fetched even at the height of the frenzy. It’s been on the market for six weeks now.

        The sweat-equity flipper with the sexi-truk must have spent more on that renovation than I thought he did. (I’m guessing at least $60K just in materials.)

  15. – I found this interesting:
    New listings on TODAY = 138 Homes.

    – Is that a lot? 🙂 This is one day’s worth of new inventory. I’m sure that’s completely normal. /s

    – Also note that “price reduced” is now up to 20.5% in this city that I follow. This is just getting started, IMHO. Mortgage rates are up from under 3% to over 6% in under 1 year, so doubling.

    – Price and rates are inversely proportional. Prices were already expensive before the rate rise (due to low rates). Guess what happens now?

    – Price is set at the margins. Falling prices engender lower prices, because “comps.”

    – 1st: Sales decline. 2nd: Inventory builds. 3rd: Prices decline. We’re already well into stage 3.

    – Get some popcorn and a cold beverage of your choice (my choice is a local craft beer) and watch as the slow-motion train wreck of housing bubble 2.0 bursting continues apace. Don’t forget about stock bubble (dot-com) 2.0 and bond bubble 1.0 bursting at about the same time as well, just to make our lives a little more “interesting.”

    – The Fed (aka Keystone Cops) still sees a “soft landing.” Soft, as in a Wile E. Coyote hitting the canyon bottom moment soft landing, IMHO. The Fed and Federal government own this. Biden will be remembered as the worst U.S. President ever; even worse than Jimmy Carter. Congress did nothing to prevent the crash. They were all too busy trading their Nancy Pelosi portfolios to pay any interest to the concerns of their constituents. I foresee guillotines in the not-too-distant future.

    1. – Q) I thought there was a “shortage” of houses? Where did all of that inventory come from?
      – A) While you’ll never hear this from the REIC/UHS, speculators are dumping houses as they all rush for the exits. At once. No housing bubble here. /s

    2. New listings in Colorado Springs, CO TODAY now up to = 148 houses, and the day isn’t over yet! Harry Potter has been busy of late! 🙂

    3. Biden will be remembered as the worst U.S. President ever;

      He will be remembered for eating ice-cream, pooping on the pope, and sleeping with his daughter while Rome burned. The petrodollar might have lasted another decade or 2 if he had different policies. Instead it’s cratering.

      Soon Americans won’t have middle east gas at any us dollar price, won’t have Chinese goods at any dollar price, won’t have russian food or fertilizer at any dollar price.

      We will have hundreds of millions of starving low iq migrants flood over our borders as China, Russia protect their borders and laugh at us. At least we got Nancy Pelosi on ru Paul’s drag show saying they are our future. The USA is so fooked.

      1. Many of us here are trillionaires so naturally aren’t as worried as you. I keep a 10 trillion dollar Zimbabwe note above my desk to remind myself of how rich I am. (treeeelllionaire!) All kidding aside, we have a lot of room for zeroes on our money still. We aren’t even carrying 1000 dollar notes yet! Relax a little bro and maybe lay off the bitcoin while you still have some money left. Perhaps try this:

  16. Austin Housing Market Deep Dive | Jun 6th – 13th

    Jun 17, 2022

    13:21. Lots more inventory. At 3:15 mentions 1,349 price changes in one week the most he’s seen evah. 89% were price drops. At 4:35 back on market “a lot of new construction buyers have not been able to lock a rate cuz they don’t have a date for closing…they’re having to cancel those contracts.” At 7 minutes “inventory is going up at an exponential rate”.

    This is a solid video.

    1. inventory is going up at an exponential rate”.

      Wut? I thought it was different this time, not like 2008? Inventory was limited? Bfb always says realtors are liars, every single one of them.

    1. My old home in Round Rock is up for sale over $400k. I paid $116k for it in 2000. I’m sure that’s completely normal appreciation for an 1800 sq. ft. house.

  17. 3 Things You Need to do to Sell Your House in 2022 in Austin, TX
    Premiered 5 hours ago The market has changed in 2022. Do you want to see your house?

    1. Price it based on comparable properties that have sold within a mile of your home that have sold in the last few months

    2. Make it present well! Fix issues, paint, change out lights. This is all cheap and easy to do.

    3. Market your home. You need to do more than just list a home on the MLS. Print marketing, social media marketing, video marketing, call neighbors. You need to do more to get top dollar!

    3:48. What a perfect snapshot of the UHS mood in Austin this steamy day.

    1. Price it based on comparable properties that have sold within a mile of your home that have sold in the last few months

      Homes near me have reduced price by 30%, 300k homes now going for 200k in north Florida. My in laws can’t take that kind of haircut, Florida real estate was how they were going to fund retirement. My wife will probably have to divorce me now and move back in with them to take care of their golden years.

      2. Make it present well! Fix issues, paint, change out lights. This is all cheap and easy to do.

      My inlaws couldn’t get any roofers to fix their leaking roofs in their rental houses near panama city, all too busy with new construction, now as Ben proves, the builders are shutting down, and the roofers are all moving back up north into mom’s basement, so no fixing the roofs still. I imagine this holds true for painters, electricians, etc. that followed the easy money to Florida or elsewhere and are now going back home many states away.

  18. Soros was a fool to bet against the bank of England and the British empire, until he won. Biden and his Biden bucks are catering, Powell can’t save the worthless dollar. When you go fill up your vehicle tomorrow, with Saudi refined oil, tell me how much less your Biden bucks buy than when Trump was in office. The Biden bucks are printing so fast, soon it will be easier to use them than toilet paper to wipe your butt. 60 billion Biden bucks to Ukraine just recently! Lol!

  19. Tyrone biggums aka Dave chappele as a Crack head, endorses this article. Why would anyone buy homes in Denver, Dallas, Atlanta, Seattle, Miami, Orlando etc with this reality?

    zerohedge (dot) com/personal-finance/if-streets-america-are-chaotic-now-what-will-they-be-when-things-really-start

    Once upon a time, the beautiful new cities that our forefathers constructed were the envy of the entire planet, but now many of them have degenerated into crime-infested hellholes that are absolutely teeming with violent predators.  Shoplifting has essentially become a national pastime, open air drug markets operate freely right under the noses of indifferent authorities, and addicts pull down their pants and take a dump whenever and wherever they feel like doing so.  Thanks to record levels of illegal immigration, gang membership is absolutely exploding, and human trafficking has reached truly frightening levels.  Of course our steadily thinning police forces are overwhelmed at this point.

    1. zerohedge (dot) com/political/plenty-gop-help-senate-shoots-down-rand-pauls-balanced-budget-resolution

      Us dollar keeps buying less and less gas at the pump as dollar printing goes to warp 11. U r fooked if you bet on future purchasing power of Biden bucks as they crater. I guess you could trade in your truck for a bicycle, but then you might fall over and smash what is left of your brains, like Biden just did.

      Bitcoin 4 da win!

      1. At the top of the hour, let’s all please observe a minute of silence to commemorate the $2,130,000,000,000 in crypto baggie net worth vaporized so far by the crypto Ponzi implosion. We also need to take up a collection to fund a monument to all those dear departed Yellen Bux that have winged off to debased currency heaven.

        Largest cryptocurrency tumbles as much as 13 per cent on Saturday, breaching US$18,000, as sell-off quickens

        The total market cap of cryptocurrencies was around US$870 billion on Saturday, down from US$3 trillion in November

        1. I wonder how many new homes were being purchased with profits from BTC, etc? We know that the tech stock slam-down has removed billions in down payments from potential home buyers but I wonder if the BTC crash is having the same effect?

    2. Looks like some whales are coming in to try to save it. I’m guessing it was a combination of dead cat buyers pouncing on the $20K mark, and algos covering shorts. I don’t see anything fundamental holding BTC up, not even sentiment.

      Does anyone know what precipitated this crash? Interest rate hikes drying up the easy money?

      1. It started with the easy money going away but this current drop seems to be coming from Asia. Some enterprising lads thought it would be a good idea to collect large pools of crypto and then make lots of loans that paid way above market rates. They are being forced to liquidate. Soon there will be news of serious contagion that spills over to the real world. I don’t think it can be hidden much longer but we’ll see. Sudden bankruptcies are coming.

        1. Thank you for a real answer. There had to be some concrete catalyst in there somewhere, not just random BS like “someone went sane.” And Tether hasn’t even hit the mainstream yet.

    3. Home Markets Crypto
      Bitcoin skids under $20,000 in Minsky Moment for crypto: ‘Psychologically for a lot of people, this is galling’
      Last Updated: June 19, 2022 at 10:09 a.m. ET
      First Published: June 18, 2022 at 6:30 p.m. ET
      By Mark DeCambre
      ‘Bitcoin has already broken down [and is] now seeing significant downside follow-through,’ says Katie Stockton of Fairlead Strategies. Bitcoin believer Yves Lamoureux of Lamoureux & Co., though, thinks ‘bitcoin is fine.’
      A bitcoin enthusiast poses beside a statue of Satoshi Nakamoto, the putative inventor of the cryptocurrency, in September 2021 in the Hungarian capital Budapest. attila kisbenedek/Agence France-Presse/Getty Images
      Referenced Symbols
      BTCUSD -0.24%
      SPX +0.22%
      DJIA -0.13%
      GC00 -0.01%
      DXY -0.02%

      Is bitcoin (BTCUSD, -0.24%) facing a breaking point? That’s what some investors, acolytes and otherwise, might be contemplating, as the cryptocurrency’s descent accelerates over the weekend. The world’s No. 1 digital asset was last trading at $18,654, down more than 70% from its peak of around $65,000, with the broader crypto market feeling to some as if it were in free fall.

      “Psychologically for a lot of people this is galling,” said Charles Hayter, chief executive officer of CryptoCompare, a company that provides data and analytics about the crypto market.

      Hayter, speaking to MarketWatch in a weekend interview, allowed that the risks inherent in bitcoin are part of its appeal.

        1. The Financial Times
          Crypto industry braced for fallout after weekend meltdown
          Bitcoin fell as low as $17,628 under pressure from central bank rate rises
          A representation of bitcoin
          Investors fear a drop in bitcoin below $20,000 may prompt forced liquidations of large leveraged bets
          Scott Chipolina and Joshua Oliver in London 4 hours ago

          Crypto investors and executives are bracing themselves for further pain after the price of bitcoin tumbled over the weekend, worsening the credit crunch hitting the industry.

          Bitcoin, the world’s most actively traded cryptocurrency, fell as low as $17,628 on Saturday before rebounding, according to data from CryptoCompare.

          Investors and executives have been anxiously watching the token’s price, fearing a drop below $20,000 may prompt forced liquidations of large leveraged bets.

          Bitcoin, which acts as the main benchmark for the broader cryptocurrency market, has come under acute pressure in recent months as central banks and governments shifted from a prolonged period of ultra-low interest rates to a fight against surging inflation.

          “This is a dark winter ahead for crypto as the era of free money comes to an end with this weekend another brutal sell-off across the board. Risk assets are all getting thrown out the window,” said Dan Ives, managing director and senior equity analyst at Wedbush Securities.

    1. “Died of Suddenly” is going to become more and more common. It won’t be long before everyone knows a child or young adult who was believed to be healthy and who died with no warning. Eventually it’s just going to be accepted as a fact of life. When someone says “it’s normal for young people to suddenly die” the majority will nod their head in agreement (while they wait in line for their COVID booster)

      1. Given how the glowies have to stage “right wing terrorism attacks” (where there are no acts of violence) I think Dr. Walwnsky has nothing to worry about.

  20. Mr banker, Biden bucks or Satoshi silver? The msm have lost control of the narrative, no more gaslighting of inflation expectations. Game over. The party was fun while it lasted.

    zerohedge (dot) com/economics/us-rent-prices-surge-record-highs-americans-expect-inflation-get-worse

    Inflation apologists can’t seem to wrap their heads around the fact that the Fed and government use creative accounting to soften data and misrepresent the economic threat.  

    Rent prices jumped over 20% in Orange County, CA.  They are up 19.3% in the greater Cleveland area.  They are up 15.5% in the Cincinnati area.   Nashville and Seattle saw prices rise over 30%.  And, Austin, TX is witnessing epic rental inflation of over 50%.  New York’s median rent cost climbed to $4000 per month despite the fact that vast numbers of people have left the city in the course of the past two years. 

    Officials including Treasury Secretary Janet Yellen have only just recently admitted that inflation is not transitory as they had insisted a year ago.  However, the public seems to be learning that establishment economic predictions cannot be trusted and they are already preparing for more pain in the near future.  A George Mason University poll indicates that the majority of Americans are cutting back on spending to adapt to higher prices.  Over 66% of participants polled expect inflation to climb even more this year.

    Inflation worries have continued to soar over the past several months while the populace has dealt with constant gaslighting from the media telling them that the economic instability they are facing is “not something they should be concerned about.”

  21. How about another 0.75 point rate hike from the Fed to follow immediately on the heels of last week’s?

    1. The Financial Times
      Federal Reserve
      Fed official supports 0.75 percentage point rate rise in July
      Christopher Waller expects inflation data to warrant a back to back jumbo increase
      Waller does not expect inflation to moderate sufficiently in the coming weeks to slow the pace of monetary tightening.
      Colby Smith in Washington
      8 hours ago

      A top US Federal Reserve official expressed early support for another 0.75 percentage point interest rate rise at the central bank’s next meeting in July, in anticipation that inflation will not moderate sufficiently to slow the pace of monetary tightening.

      In a remarks delivered on Saturday, Christopher Waller, a Fed governor, affirmed the central bank’s commitment to tackling the worst inflation problem in more than forty years, saying it was “all in on re-establishing price stability”.

      Waller’s comments come just days after the Fed significantly stepped up its efforts to tackle soaring prices and implemented the first 0.75 percentage point rate rise since 1994. The Swiss National Bank and Bank of England also raised interest rates this week, as the world’s central banks took aggressive action to stamp out surging inflation.

      “If the data comes in as I expect I will support a similar-sized move at our July meeting,” Waller said on a panel hosted by the Fed’s Dallas branch, characterising this week’s decision as “another significant step toward achieving our inflation objective”.

      In addition to raising the federal funds rate to a new target range of 1.50 to 1.75 per cent, the US central bank also signalled support for what looks set to be the fastest monetary tightening since the 1980s.

  22. The Financial Times
    Bitcoin drops below key $20,000 threshold
    Crisis in digital assets deepens as crypto market benchmark falls sharply
    The price of Bitcoin dropped below $19,000 on Saturday, below the peak level of the previous bull run
    Joshua Oliver
    June 18 2022

    Bitcoin’s price has broken below the key threshold of $20,000 for the first time since November 2020, risking triggering a fresh wave of selling and deepening the crisis gripping the digital asset sector.

    The largest cryptocurrency, which acts as a benchmark for the broader crypto market, plunged to under $18,000 on Saturday, a fall of around 14 per cent, before bouncing back slightly. That took it below the peak level of the previous bull run in crypto markets in 2017 and erased years of gains for long-term holders.

    Traditional financial markets were shaken this week after a trio of big central banks, led by the US Federal Reserve, boosted borrowing costs as part of an effort to tamp down intense inflation. Global equities posted their worst week since the darkest days of the pandemic in March 2020 as traders fretted that the aggressive action could snarl global growth or even trigger a recession.

    The crypto market has sustained particularly acute pressure as the race for returns prompted by the massive stimulus efforts of central banks and governments at the height of the pandemic abruptly shifts into reverse.

    Investors and executives have been anxiously watching the price of bitcoin in recent days, fearing a drop below $20,000 may prompt forced liquidations of large leveraged bets in the markets, putting more pressure on the price and worsening the credit crunch that has already struck large crypto lenders and traders.
    Line chart of $ per coin showing Bitcoin plunges below $20,000 for the first time since 2020

    In the last week Celsius and Babel Financial, a pair of crypto lending companies, blocked withdrawals while Three Arrows failed to meet demands from lenders to stump up extra funds to cover soured bets. Last month, luna and terra — two tokens that were popular with crypto traders seeking ultra high yields — collapsed.

    “The dominoes are falling now,” said Conor Ryder, analyst at research and data provider Kaiko on Friday. “With more dominoes probably comes more downward price action, which will probably see a snowball with these liquidations.”

    Bitcoin has shed more than 70 per cent of its value since its peak last autumn as investors flee more speculative assets with the tightening of monetary policy around the world by central banks. Total crypto market value has dropped below $1tn from a peak of $3.2tn. The price of ether has also dipped below $1,000, taking its declines this year to more than 70 per cent. The Bitcoin price dropped to around $17,600 at one point on Saturday, according to data from CryptoCompare, before rebounding to hover just under $20,000.

    1. The Financial Times
      Opinion Lex
      Cryptos: meltdown will hit minorities and young people most
      A less prominent factor behind the crypto bubble may have been a faster rise in the price of assets, such as housing, than in wages
      A representation of a bitcoin
      Since last November bitcoin has lost 70% of its value
      3 hours ago

      A quarter of black Americans with a household income over $50,000 own cryptos, according to a separate survey conducted by Ariel Investments and Charles Schwab. That compared to just 15 per cent of white Americans with a similar income. More than twice as many black investors said cryptocurrency was their first investment — 11 per cent vs 4 per cent.

      Wariness of traditional investment products has historical roots. In the past, people of colour were subject to discriminatory lending practices by large banks. They are more often targeted by predatory lenders with subprime loans.

      Across all ethnicities, 25-34-year-olds are the predominant age group, according to Insider Intelligence. Young people and minorities may figure as significant crypto buyers because incomes and personal wealth are lower in these overlapping groups. Housing equity is out of reach as an investment in expensive cities such as New York and San Francisco for people of modest means. For some of them, cryptos may have appeared to be affordable alternatives.

      Genuine crypto bros — programmers at digital start-ups — face a dual hit. They may become redundant even as value evaporates from tokens they saved from wages partly paid in crypto.

      The crypto bubble was pumped up primarily by plentiful free money. But a less prominent driving factor may have been a faster rise in the price of assets, such as housing or a college education, than in wages. According to Brad Sherman, a Congressman from California: “What we need is a society where people make enough money [to] save and . . . buy a house instead of a coin.”

    1. The Financial Times
      Alex Mashinsky, Celsius founder feeling the heat
      Crypto lending group faces crisis of trust after blocking its 1.7mn customers from making withdrawals
      Joshua Oliver and Kadhim Shubber in London June 17 2022

      Alex Mashinsky, the founder of crypto lender Celsius, has built a cult following by tapping public mistrust in mainstream financial institutions.

      Launched five years ago, Celsius, which offers clients high interest rates on crypto depThe Financial Times s drawn in 1.7mn customers under the slogan “#unbank yourself”.

      Now the company itself faces a crisis of trust after its move on Monday to block customers from withdrawing funds, citing “extreme market conditions” following a wave of outflows and losses on risky trades.

      Only three days earlier, during his weekly hour-long YouTube broadcast to customers, Mashinsky had been in typically pugnacious form, dismissing critics who were warning of an impending liquidity crisis.

      “All these naysayers and haters haven’t built anything,” Mashinsky told clients, whom he calls Celsians. “Celsius has billions in liquidity, and we provide immediate access to anyone who needs access to it.”

      His failure to deliver on this promise has left Mashinsky fighting for the company’s survival and his customers fearing huge losses.

      John, a commercial real estate broker from Philadelphia who declined to give his last name, started to pull his money from Celsius last weekend but still has $150,000 trapped. “It’s definitely a let-down,” he said. “I probably didn’t look into him as much as maybe I should have.”

      Mashinsky tweeted on Wednesday that “this is a difficult moment” and that his team was “working nonstop”.

      Celsius marketing has cast Mashinsky, known for his signature “Banks are not your friends” T-shirt, as a Robin Hood figure and self-help guru who will help customers achieve “financial freedom”. He has criticised rival crypto groups such as Coinbase for returning more money to Wall Street investors than to their customers, and his personal website includes a tab on “failed ventures”, offering up the lesson he learned as a “maverick investor and entrepreneur”.

    2. The Financial Times
      Bitcoin drops below key $20,000 threshold
      Crisis in digital assets deepens as crypto market benchmark falls sharply
      The price of Bitcoin dropped below $19,000 on Saturday, below the peak level of the previous bull run
      Joshua Oliver 2 hours ago

      Bitcoin’s price has broken below the key threshold of $20,000 for the first time since November 2020, risking triggering a fresh wave of selling and deepening the crisis gripping the digital asset sector.

      The largest cryptocurrency, which acts as a benchmark for the broader crypto market, plunged to under $18,000 on Saturday, a fall of around 14 per cent. That took it below the peak level of the previous bull run in crypto markets in 2017 and erased years of gains for long-term holders.

      Later in the day it rallied somewhat to top $19,000 but fell again early on Sunday to around $18,200 according to website CryptoCompare.

    3. The Financial Times
      Opinion Personal Finance Advice & Comment
      Time to cut your stock market losses — or not?
      Bear market history suggests staying invested beats cashing out
      Merryn Somerset Webb
      Illustration of bitcoin
      Bitcoin is 70 per cent off its highs
      Merryn Somerset Webb
      June 17 2022

      Trigger warning: if you are a crypto fanatic you may find this column both offensive and distressing.

      Right, that bit out of the way, it is not crypto I want to start with. It is other, lesser, chaos. If you spent the past few weeks attempting to navigate stock markets — or attempting to ignore them — you might have the feeling that everything is unmapped, unprecedented and unpredictable.

      But it isn’t really so. We have had no shortage of warnings from history — and from many a market old timer — about all this. We know that over easy fiscal and monetary policies lead to inflation.

      We know that very low real interest rates tend to lead to capital misallocation. We know that investors mostly don’t like inflation to get over 4 per cent — although they were a little too sanguine when it hit 4 per cent this time around.

      We know that long-duration stocks — the jam-tomorrow ones that soared during the pandemic years — are very sensitive to moves in interest rates. We know that long-term market valuations tend to return to the mean — and we have lots of rules of thumb that give us some hints as to when we should start worrying about that kind of thing.

      Think of Warren Buffett’s focus on the ratio of total US stock market valuation to US GDP for example — the latter is currently rather higher than the former, something which suggests the US market is still unpleasantly overvalued.

      We have also had lots of numbers to add to those rules of thumb — there is an almost overwhelming volume of data on stock markets. So we know, for example, that even at the end of April this year the US market was trading at somewhere between 30 per cent and 50 per cent higher than its 15-year median on pretty much every valuation method you might have thought of using — for example, 50 per cent for price to book and 33 per cent for dividend yield.

      We are also aware that there was no major market globally that could be considered properly cheap. If you think of that — as Duncan Lamont, head of research and analytics at Schroders, does — as being over 15 per cent below the 15-year median in valuation terms, this represented a pretty clear and present danger to markets.

      Things have eased a little over the past week — Lamont’s latest numbers have most markets showing at least some green with even US stocks, as measured by the MSCI US index — 6 per cent below their 15-year median, at least in terms of the trailing price/earnings ratio.

      These numbers don’t tell us everything of course — in a world of cost-push inflation and super-stressed consumers, the e in lots of p/e calculations is likely to be too optimistic meaning valuations are actually even higher than they look.

      At the same time the past 15 years have been all about the easy money macro regime that we are now leaving far behind us: over the past 15 years, for example, the US median p/e has been 19.6 times, but over the very long run it has been more like 17.5 times. Maybe 17.5 is a more relevant number to watch. Something to worry about.

      We also know quite a lot about how bear markets tend to play out. We’ve seen these kinds of multiple collapse before — think the early 1970s, 1987 and the early 2000s — and we’ve also seen profit collapses of the type we might now expect.

      Liz Ann Sonders, chief investment strategist at Charles Schwab, has looked at US market falls in bear markets (including those that fell 19 per cent rather than the full technical 20 per cent) with recession and without recession.

      The average market fall in the no-recession group has been 28 per cent and in 34 per cent with recession — not much difference in the great scheme of things but it is worth noting that the recessionary bear markets lasted on average twice as long as the non-recessionary.

      Lamont has also looked at how long losses have lasted in previous market collapses — in nominal terms. If you had stuck with stocks after the first 25 per cent fall in markets in 1970, 1974, 2001 and 2008 you would have been even after somewhere between 2 and 4.8 years.

      If you had dashed for cash after a 25 per cent fall instead, that number rises very substantially — to 5.3 after the crash of 1974, and to very big indeed post-2001, as you are still under water.

      More to worry about. The key point here is that we might not know quite which template to use for the crash of 2022 yet (although the 1970s look like the best place to start). But we do at least have templates to choose from. It is also worth noting that using these templates is not about recognising that there is value in listed companies — of course there is. It is about figuring out how to price that value in any one environment.

      On to the offensive and distressing bit. Ready? None of the above is true of cryptocurrencies. None of it. There is no template for their behaviour — there is no history to lean on. And there is also very little to back up the idea that there is value in crypto that we can find a way to price rationally.

      It isn’t a store of value — bitcoin is 70 per cent off its highs and down 25 per cent in the last five days alone. It isn’t an inflation hedge — it would be up 10 per cent this year if it were. It isn’t uncorrelated to interest rates — far from it!

      1. “All that bitcoin — and other cryptos — have proven themselves to be is temporarily turbocharged plays on money printing. I can make a case for there being residual value in almost any asset. I can’t make one for bitcoin.”

        — Merryn Somerset Webb

        1. What is it about “worthless fake currency” that crypto HODLers don’t grasp?

          Ponzi assets are great fun on the ride up. Bumping down the staircase to the bottom, not so much.

        2. Say what ever you want about BitCoin. But one thing is clear, BitCoin will never have a negative value which won’t be able to be said for many real Estate assets in the future.

          1. If you borrowed fiats to purchase crypto, when it’s value goes to zero, you will still owe the money you borrowed, so in practical terms its value is negative.

    4. Bloomberg
      Saudi Arabian Stocks Tumble as Oil, Rates Roil Mideast Equities
      By Shaji Mathew and Farah Elbahrawy
      June 19, 2022 at 4:31 AM CDT

      Saudi Arabia’s benchmark stock index headed for the longest losing streak since 2020, following a global sell-off in equities last week and after oil fell the most in three months on Friday. Stocks in Qatar and Kuwait also declined.

      Gulf equities are selling off due to the impact of higher interest rates could have on the demand of commodities, said Jassim Al-Jubran, head of sell-side research at Riyadh-based Aljazira Capital. “The current hit is driven by panic and partially by margin calls.”

      However, Al-Jubran said he doesn’t “expect the current declines in the Saudi market to sustain for long time as we start to see a good potential in some sectors with the current decline.”

  23. Ideas
    The End of the Asset Economy
    Rising interest rates are ending an era in which the rich got much, much richer.
    By Annie Lowrey
    A top hat spewing three downward trending arrows.
    Paul Spella / The Atlantic; Shutterstock
    June 18, 2022, 6:30 AM ET
    About the author: Annie Lowrey is a staff writer at The Atlantic.

    Here’s a bit of esoterica I think about from time to time: Mark Zuckerberg has a mortgage.

    Or at least, he had one. A decade ago, the Facebook founder refinanced his loan on a $6 million Palo Alto mansion. He was worth $16 billion at the time, meaning he could have bought that house and a hundred more outright, no mortgage necessary. But First Republic Bank offered him an adjustable-rate loan with an initial interest rate of just 1.05 percent—below the rate of inflation, meaning the financier was paying him for the privilege of lending him money. Zuckerberg got to preserve his Facebook holdings, load up with tax-advantaged debt, and benefit from rising Silicon Valley real-estate prices.

    Why not take the loan?

    “Why not take the loan?” has been a pretty good summary of American wealth building and class dynamics in the past few decades. An extended period of low interest rates has translated into surging asset values. That has made the small share of Americans capable of investing in homes, farmland, stocks, bonds, commodities, art, patents, water rights, start-ups, private equity, hedge funds, and other assets breathtakingly rich, fostering astonishing levels of wealth inequality. Given low labor-force participation and sluggish wage growth, the United States has come to look like what the theorists Lisa Adkins, Melinda Cooper, and Martijn Konings have termed an “asset economy”—in which prosperity is determined not by what you earn but by what you own.

    The “why not take the loan” days are at least on hold. The Federal Reserve is hiking interest rates as it struggles to tamp down on inflation. That has pushed equities into a bear market (because corporate profits are at risk and investors are pulling back to safe assets), the housing market into a correction (because mortgages have become much more expensive), and the tech sector into free fall (as many companies are being asked to deliver profits, for once). Financing for mergers, acquisitions, and start-ups has dried up. And the economy might be on the verge of its second recession in two years, particularly if gas prices remain high. Animal spirits and a few hundred additional basis points have erased colossal sums of paper wealth in the past half year: $2 trillion and counting in crypto, $7 trillion and counting in stocks, uncalculated sums of home equity.

  24. Basically, what happened was that money corrupted everything , so it produced the fake world we live in today. ..
    It corrupted Science, journalism, Universities and schools, economic systems, food , geopolitics, Governments, pharmaceuticals, you name it ,its been corrupted.
    So, the only thing left is false narratives as the populations of the Globe fight the cumulative harm of this corruption that is the greatest threat that humanity has ever faced.
    A cancer of corruption so great that it seeks to destroy humanity , enslave humanity , and alter humanity , for a World vision by hijackers , fraudsters and murderers , who plan to rule the World.
    A World where 2++2 equals 5 , because they say so.
    A World where your injected with poison , forced to eat whatever they produce, hacked with no freedom to do anything but comply with the “Boot to the Neck.”
    Like any gone amuck cancer, it won’t be happy until it destroys the host in its aberration of life.
    But ,humanity is bigger and more powerful than this small group of invaders that have literally waged war on the human race.
    Biden is the figure head of what they are. A dysfunctional ghost with policies of destruction , A tyrant for the One World Order that seeks to pervert and destroy all that humans want.
    They have nothing to offer the human race, which will become clearer and clearer as they proceed with their One World Order, Great Reset agenda.
    I predict that they will fail , and just because they spend a century planning this take over , by all the corruption they accomplished, the human race will rebel, and their intend for humanity will directed back at them .

  25. The Financial Times
    US economy
    Fed’s Mester warns returning inflation to 2% will take ‘a couple of years’
    Cleveland governor says she is not ‘predicting a recession’ but adds that risks are growing
    Loretta Mester, president and chief executive officer of Federal Reserve Bank of Cleveland
    Loretta Mester says recession risks are rising partly because monetary policy has not pivoted to fighting inflation as quickly as it could have
    Felicia Schwartz in Washington
    10 hours ago

    Recession risks are growing and it will take “a couple of years” for inflation to return to the US Federal Reserve’s target of 2 per cent, Loretta Mester, president of the Cleveland Fed, said on Sunday.

    “I’m not predicting a recession,” she said. “The recession risks are going up, partly because monetary policy could have pivoted a little earlier than it did. We’re doing that now by moving interest rates up but, of course, there’s a lot of other things going on as well,” she said on CBS’s Face the Nation.

    “We do have growth slowing . . . and that’s OK, we want to see some slowing of demand to get in better line with supply.”

    Mester said that while monetary policy can target the excessive demand in the economy, it will take time to get the supply side “to come back into better balance”.

    “It isn’t going to be immediate that we see 2 per cent inflation, it will take a couple of years, but it will be moving down,” she said.

    US Treasury secretary Janet Yellen conceded on Sunday that the economy would slow, but said a recession was not “inevitable”.

    “I expect the economy to slow, it’s been growing at a very rapid rate as the labour market has recovered and we’ve reached full employment,” Yellen said on ABC’s This Week. “We expect a transition to steady and stable growth but I don’t think a recession is at all inevitable.”

    The Fed this week raised its main interest rate by 0.75 percentage points, the first time it has done so since 1994.

    It also set the stage for much tighter monetary policy in the near term, with officials projecting rates will rise to 3.8 per cent in 2023 and most of those increases scheduled for this year. The federal funds rate is now between 1.5 per cent and 1.75 per cent.

    On Saturday, Fed governor Christopher Waller said he would support another 0.75 percentage point interest rate rise at the central bank’s next meeting in July if, as expected, data show that inflation has not moderated enough.

    Fed chair Jay Powell has said his goal is to bring inflation down while maintaining a strong labour market.

    “That’s going to take skill and luck, but I believe it’s possible,” Yellen said.

  26. Hi Ben, long time no see. The only other name that looks familiar is Professor Bear. Here in Deer Isle, Maine, the demand for MODEST housing still exceeds the supply, but the million-dollar stuff is languishing, and pretty soon the half-million dollar stuff will also be languishing. I have recently made a construction loan for a pair of modest houses, and the builder alleges that he already has a tenant anxious to occupy one of them ASAP. That’s believable. Whether the builder will choose to go ahead and put a second house on the parcel remains to be seen.

    One of my most annoying borrowers ever was herself a real estate agent, and I’m thrilled that she got so rich (??) last year that she fully paid off her mortgage, and I won’t ever lend her another penny. The lobstermen, retirees, and small landlords are more reliable. I had to do some forbearance with the LL’s during the “eviction moratorium,” but they’re perfectly well caught up at this point.

    OK, I’m looking forward to future buying opportunities, as I did NOT get very sucked into the stock market. About 5% of my assets are in that. About 40% in cash or cash-equivalents. Like Ben, I find the downdrafts interesting.

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