The Whole Pyramid Is Collapsing Now
It’s Friday desk clearing time for this blogger. “The Federal Reserve’s war on inflation and higher mortgage interest rates have hit Utah’s Wasatch Front housing market — hard. ‘Like a wall,’ said Steve Perry, CEO of the Salt Lake Board of Realtors. ‘It’s forced sellers to have to make adjustments.'”
“Today, an hour-by-hour glimpse into the working world of Chad, a power broker in southwestern Montana. 9 a.m. I am on the phone with a nervous seller trying to explain the latest crazy shift in real estate here. In the last few weeks, it’s like someone turned the tap off. Things in Montana went from absolutely insane to kind of dead! 3 p.m. I drive them past a few more options. There’s so much inventory that’s not moving. Night and day from this time last year. Some people were buying more than one property at a time, then deciding which one they wanted after they owned them both. Now, crickets. I don’t know why, exactly.”
“Home prices in Ada County dropped in the month of June, according to data from the Boise Regional REALTORS.And this trend looks like it may continue for the near future, said Boise Realtor Sheila Smith. ‘There is a dip, but mostly it is a lot of price dropping and the inventory is doubling,’ Smith said. According to Brent Hanson, CEO of City of Trees Real Estate at Keller Williams Realty Boise, a lot of this dip in prices came from builders adjusting their prices with the new interest rates. ‘They’re the first and fastest to make decisions when a market shifts,’ Hanson said.”
“Smith said the days of a bidder coming in and out-bidding the rest of the prospective homeowners by $50,000 in cash are over. In fact, she said what she is seeing as a listing agent is a lot of people who moved to the area during the early stages of the COVID-19 pandemic are now turning on their heels and leaving. ‘I have all these people that are moving back to California,’ she said.”
“Redfin described Sacramento and other inland markets as ‘pandemic boomtowns’ that are seeing dramatic turns. Local real estate analyst and appraiser Ryan Lundquist found similar evidence of a shift. Homes are staying on the market longer, the inventory of available homes on the market is spiking and the number of sales has dropped, he found. He said 43.7% of active listings last week in the region had a price reduction. There have been a lot of big price drops in the market; roughly 11% of listings had a reduction of more than $100,000, according to Lundquist.”
“The median price for a home in the four-county region stood at $610,000 in June, according to Lundquist’s data. That was a drop of $15,000 over May’s median price, an indication, Lundquist wrote, that ‘prices are softening.'”
“Austin Barron of Century 21 in Chico said noted that the average time homes are spending on the market has doubled over the last 6 months from about 7 days to 14 days. Century 21 alone has more than 160 homes currently listed for sale. Listings through Century 21 nearly tripled over the past six months. ‘We’re seeing a lot more listings that don’t even hit that statistic or do sell. They’re being withdrawn, they’re being canceled, their listings expire after three months, or they’re being taken off the market,’ Barron said.”
“Redfin reports show roughly 60,000 home purchases nationwide fell through in June. 24.5% of pending sales were cancelled in the Orlando Metro Area. ‘That is a lot of deals that didn’t go through where typically almost every deal was closing,’ said Shonn McCloud, a lead senior agent with Redfin. As more people back out of deals, more houses are becoming available, and buyers have more power to negotiate. ‘Now, they see that there is more homes on the market that are now competing with the homes that they are already under contract for,’ McCloud said.”
“In June, there were 19% more active listings on the market compared to a year earlier, according to Realtor.com. That’s the biggest annual increase since Realtor.com began tracking that metric in 2017. Austin, Texas saw a 145% surge in inventory on an annual basis last month. Be wary of unrealistic expectations, and don’t assume the days of multiples offers above asking price will continue. ‘Sellers have been shooting for the moon, but the people who are serious about selling need to come back down to reality,’ said Lindsay Neuren, a broker with Compass in Austin.”
“Keone Ball, president of the Realtors Association of Maui, said he, too, sees a normalization happening in the market. Ball said some prices are being reduced to match comparable properties, but ‘by no means are the prices going to drop out, especially on Maui, because our inventory is really low. I do see new listings coming on a lot and I think a lot of sellers think we’re still in the frenzy.'”
“Ali Wolf, chief economist at Zonda, spoke to ‘Marketplace’ host Amy Scott. Scott: You talk to builders, you know, constantly, and I’ve seen some of your tweets. They’ve used words like ‘evaporate’ to describe what’s happened with their markets. How much has their business shifted? Are you seeing prices drop? Are builders actually cutting their prices and offering other incentives, the kind of thing that was kind of unheard of a few months ago? Wolf: This is a very complicated question…But to directly answer your question, 11% of builders have, at this point, dropped their prices.”
“The average price of high-end condominium units in Phnom Penh plummeted by 19.15% y-o-y (inflation-adjusted) to USD 2,633 per sq. m. in Q1 2022, far worse than the previous year’s 4.51% decline. On a quarterly basis, high-end condo prices fell 5.76% in Q1 2022, also in inflation-adjusted terms. Phnom Penh’s apartment market has been cooling recently mainly due to the oversupply of apartments in the city, according to local real estate experts. It is expected that 2022 will see additional completions of 13,000 condo units, according to CBRE Cambodia.”
“Residents of Sydney’s damaged Mascot Towers have reached an out-of-court settlement with the developer of the building next door they allege caused catastrophic damage to their homes.The confidential settlement with Aland Developments has been reached three years after the residents were forced to evacuate due to serious structural cracks in the south Sydney building. ‘The owners of Mascot Towers have been through enormous emotional and financial strain since the evacuation,’ said Scott Higgins, who represented the owners’ corporation. ‘They have ongoing strata levies that they can’t avoid and yet they can’t move back in or sell their units until all the rectification works have been done. They all just want to get on with their lives and put it all in their rearview mirror.'”
“Former UBS Group AG economist Jonathan Anderson once called it ‘the most important sector in the universe.’ More than a decade on, Chinese property is again grabbing the attention of global investors – this time for all the wrong reasons. ‘Property has been getting steadily worse the whole time; prices, sales, starts, all terrible,’ said Craig Botham, chief China economist at Pantheon Macroeconomics in London. ‘The chronic deterioration has now taken another step. It was always going to hit the financial sector eventually, given the prevalence of collateral in loan books with large real estate portions.'”
“‘The whole pyramid is collapsing now,’ said Anne Stevenson-Yang, co-founder of J Capital Research. ‘What’s different is that things are worse now because of the Evergrande crisis a year ago, which is spreading its tentacles throughout the Chinese economy.'”
“One of Canada’s largest banks is calling the housing market’s time of death — 10am Wednesday July 13, 2022. That’s basically the message from a BMO Capital Markets note to investors on Friday morning. Canadian housing affordability was already stretched to the limit, requiring price cuts to keep moving . Add this week’s rate hike, and mortgage payments are now past the late 80s — Canada’s most extreme bubble. It resulted in real estate prices stagnating for nearly two decades afterwards. Today’s environment is much worse.”
“‘Even after deflating mortgage payments to account for income growth over the decades, the ‘real’ mortgage payment will eclipse those seen at the height of the late-1980s market,’ said BMO senior economist Robert Kavcic . ‘That is, of course, unless home prices continue to decline. And they are…'”
“The Bank of Canada’s surprise jumbo interest rate hike this week has jolted highly indebted consumers, who took out large mortgages during the pandemic, but were less prepared for the sharp rise in borrowing costs. ‘I am distraught,’ said Udit Kumar, who bought a suburban Toronto home this spring. The rate on his variable mortgage has already jumped from 1.84% to 3.4% in just a few months.’We now find ourselves in a situation where the value of our houses might be going down and the mortgages are going up,’ he said.”
“With social media full of people lamenting their suddenly supersized payments and plunging home values, real estate agents say Wednesday’s 100-bp hike has cast another chill over Canada’s already cooling housing market. ‘Everybody just freezes when this happens,’ said Dan Plowman, who owns a real estate agency in Durham, a suburban area east of Toronto. The average selling price in the Toronto area dropped 14.1% in June from February’s peak.”
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The first 4 minute video:
BREAKING! Demand Collapsed | Nashville Housing Market Update
Jul 13, 2022 This video is an analytical approach to the Nashville Tn Housing Market. We are seeing Median Sales Price fall rapidly in the heart of Nashville.
Active Listings
Under Contract
Median Sales Price
MLS Realtracs Data
Nashville Housing Market Update specifically Davidson/Williamson County ~50% of Nashville MSA.
The second 14:38 video:
Serious Problems For Home Sellers In Vaughan, Richmond Hill & Markham
Jul 14, 2022
‘I am distraught,’ said Udit Kumar, who bought a suburban Toronto home this spring. The rate on his variable mortgage has already jumped from 1.84% to 3.4% in just a few months.’We now find ourselves in a situation where the value of our houses might be going down and the mortgages are going up’
They changed this article from the time I found it this morning to the time I prepared this. It had references to how expensive rents were, etc. Well it was cheaper than renting Udit.
“…We now find ourselves in a situation where the value of our houses might be going down and the mortgages are going up…”
Funny how math works, isn’t it, Udit Kumar?
more sad on how the ‘experts’ led the sheep to slaughter – all for their 2.5% commission.
Did they warn you about the way variables rates in Canada work? Did they say that you could just refinance anytime, or that you could take out a HELOC on the appreciation.
As horrible as Udit’s analytics skills were/are, there were so called pros that completely let him walk up to the ledge …
“more sad on how the ‘experts’ led the sheep to slaughter – all for their 2.5% commission.”
Easy money, because talk is cheap.
Words. Tell a totally-dumbed down ignorant puke a few selected words and – presto! – off he goes to willingly and eagerly sign up for a lifetime of debt servitude.
I like it, and I love it, and I want some more of it.
Realtors deal in lies while bankers deal in the truth.
Realtors tell lies to lather up the fools and then they bring these well-lathered fools to me, Mr. Banker, who displays in front of these fools loan documents s that spells out, in crisp, clear English, the truth about what these fools are about to commit themselves to. But the truth does not matter to these well-lathered fools because the truth gets in the way of realizing their foolish dreams- dreams inspired by the words, the lies, told to them by the realtors.
Pukes work, bankers reap. Pukes who work hard to earn money willingly agree to sign over to bankers huge chunks of yet-to-be-earned income. Huge chunks, stretched out over decades.
Realtors work hard to inspire the house-buying pukes into borrowing huge amounts of money and then the realtor brings the pukes to me for some “finishing touches”.
(A joke: A man’s life is not complete until he agrees to purchase a home. Then, and only then, it is finished.)
Bahahahahahhahahahahahahahaha.
The guy was more worried about payment than price. And now, as so often happens, he’s going to get neither.
“houses might be going down”
No Undit Kumar, they have already gone down quite a bit and more to go. Sell now if you can.
He just bought the airbox.
From the Montana article:
‘6 a.m. I get up and check my phone, have my first cup of coffee, and respond to people who were up at midnight emailing me. I have no issues with late-night emails or any contact whatsoever from my clients. My husband sometimes rolls his eyes, and I’m like, “What?! Maybe there are a few inconvenient phone calls, or midnight emails, all for a … $30K check!” I mean, come on. I am more than fine with it!’
** “Maybe there are a few inconvenient phone calls, or midnight emails, all for a … $30K check!” I mean, come on. I am more than fine with it!’ ”
. . . said no-one on their death bed. ever
‘43.7% of active listings last week in the region had a price reduction. There have been a lot of big price drops in the market; roughly 11% of listings had a reduction of more than $100,000’
Is that a lot?
“Is that a lot?”
And does it come with a tube of Donk-eze?
Brookfield, MA Housing Prices Crater 32% YOY As Massachusetts Economy Hemorrhages And Sellers Beg And Plead For Offers
https://www.movoto.com/brookfield-ma/market-trends/
roughly 11% of listings had a reduction of more than $100,000
The UHS crowd were pushing the FOMO and listing prices to levels which would make even the most dishonest person blush. The music completely stopped, and all they’re left with is an mls bursting with overpriced shacks with no offers.
A reader sent these in:
It’s very possible the home price “top” already got blown off in these bubbly housing markets. That’s one takeaway from my nearly 2 hour chat with @RickPalaciosJr. The story publishes tomorrow on http://Fortune.com 👀
https://twitter.com/NewsLambert/status/1547752117783240705
China’s property crisis is getting much worse. These four charts show just how grim it’s looking.
https://twitter.com/RChoongWilkins/status/1547569818261684224
Liz Ann Sonders
Trucking demand has falling swiftly throughout country (although mountain region had slight uptick recently)
https://twitter.com/LizAnnSonders/status/1547541448681308162
Danielle DiMartino Booth
“Private equity firms have a poor track record of successfully owning asset-based trucking companies,” Fuller said. “Running a trucking company is a very complicated business and isn’t for tourists trying to make a quick dollar.”
https://twitter.com/DiMartinoBooth/status/1547642330701672448
*WALLER: WITH HINDSIGHT, FED SHOULD HAVE STARTED TAPERING SOONER.
”With hindsight”.
Dude, it’s literally your job to calibrate monetary policy and you failed pretty miserably.
Let’s try not to s**t the bed again?
Ok, sorry for the rant.
https://twitter.com/MacroAlf/status/1547717954883596288
Comment: They are soiling the bed again as we speak
These guys just keep sh!tting the bed over, and over, and over, yet they never get fired. Can you imagine a job where you get paid so handsomely for failure, with the added bonus of job security?
I noticed this during my years in corporate America. Once people get to a certain level on the corporate ladder, they just keep failing upward. A lot of people high up in these big corporations couldn’t run the night shift at a White Castle. But somehow they bootlick and schmooze their way up the corporate ladder.
Oh dear…more Aussie developers going belly up.
Hotondo Homes Horsham, Sydney developer Merhis Group collapse amid construction crisis
https://www.news.com.au/finance/business/other-industries/hotondo-homes-horsham-sydney-developer-merhis-group-collapse-amid-construction-crisis/news-story/54d90e1105d6a27af8146709d86b217a
Three more building companies are casualties of the construction crisis, with a major Sydney developer going under alongside more Victorian firms.
great quotes in this morning post – for instance. Was this an isolated, extreme data point – or was this really a Tulip-mania moment?
Some people were buying more than one property at a time, then deciding which one they wanted after they owned them both. Now, crickets. I don’t know why, exactly.
Live in one, rent out the other I guess.
Flip it in a month for another $50K possibly.
“Some people were buying more than one property at a time, then deciding which one they wanted after they owned them both.”
It almost sounds like something that would happen during a bubble.
Now, crickets. I don’t know why, exactly.”
Are you mentally retarded, Chad? It’s crickets because the Fed’s gusher of funny money stimulus fueled inflation that is now reaching levels where it could unleash social unrest. Nothing terrifies the Powers that Be more than the specter of being forced to flee in their Gulfstreams to some offshore hidey-hole to escape the torches & pitchforks.
Civil unrest is on the rise worldwide.
I saw a Tucker Carlson video about that. And in places the MSM never mentions, like Ghana, which also was arm twisted to “go green” with promises of “you’ll be rich!” Now, blackouts there are the norm.
Ghana
My dad just got back last week. I’m sure I’ll hear about the trip next week when we’re at Shaver Lake.
Oil guy?
No, bucket list trip. My paternal grandparents were missionaries. My father was born in Jos, Nigeria. He and his brother went to retrace some of their footsteps.
I found an article:
https://legalinsurrection.com/2022/07/after-sri-lanka-globalist-green-agenda-pushes-ghana-on-brink-of-collapse/
The Greens truly want people to starve:
Many of you will starve and die, and that is a sacrifice we are willing to make – WEF
I’m glad he’s safely back home. I bluntly told him they were stupid for going. Two old white men with a history of stupidity in a narco-state in our current geopolitical climate. A lot could have gone wrong.
In Panama too. People everywhere are fed up.
https://www.msn.com/en-us/news/world/we-are-desperate-protesters-block-highway-that-links-panama-to-central-america/vi-AAZCAXx
I believe in Ecuador and Argentina too.
Just search “civil unrest” news.
Pakistan, Uzbekistan
Nothing terrifies the Powers that Be more than the specter of being forced to flee in their Gulfstreams to some offshore hidey-hole to escape the torches & pitchforks
What’s funny is they are not safe in those bugout locations. The locals will do the same thing.
The locals will do the same thing.
I suspect this is why so many have private islands. Fleeing to some 3rd World sh!thole won’t be any better.
There’s a youtuber who calls himself the Nomad Capitalist. Last year he was showing off a property he purchased in a tony Bogota neighborhood. Well, Colombians have just elected an Allende style Marxist who campaigned on seizing private property. Even if he can unload it, will he be able to expatriate the proceeds from the sale?
‘We’re seeing a lot more listings that don’t even hit that statistic or do sell. They’re being withdrawn, they’re being canceled, their listings expire after three months, or they’re being taken off the market,’ Barron said.”
Sorry, greedheads, but starving realtors aren’t going to waste their time with your delusional wish price.
“With social media full of people lamenting their suddenly supersized payments and plunging home values, real estate agents say Wednesday’s 100-bp hike has cast another chill over Canada’s already cooling housing market.
Die, speculator scum.
Sonoma, CA Housing Prices Crater 28% YOY As Inventory And Price Reductions Skyrocket Across California
https://www.movoto.com/sonoma-ca/market-trends/
As a noted economist explained, “If you have to borrow for 15 or 30 years, you can’t afford it nor is it affordable.”
Diversity is our Strength: White House Edition
https://www.thedailybell.com/all-articles/news-analysis/white-house-diversity-hires-utter-incompetence-highlights-identity-politics-failure/
Oh dear….
Mortgage boycotts rattle Chinese banks and regulators
https://asiatimes.com/2022/07/mortgage-boycotts-rattle-chinese-banks-and-regulators/
Chinese financial and housing officials reportedly have held meetings with major banks this week after homebuyers from at least 150 property projects announced plans to stop paying their mortgages.
Media reports said on Thursday that financial regulators and Ministry of Housing and Urban-Rural Development officials held emergency meetings with banks on Tuesday and Wednesday to discuss the rising risks of mortgage boycotts.
The reports came after tens of thousands of homebuyers said they would stop mortgage payments as property developers failed to deliver their apartments.
“all these people that are moving back to California”
Go back. And please stay there.
Santa Clara Housing Market Update July 2022Jul 14, 2022 Market Shift Video
https://www.youtube.com/watch?v=BSFkLvTa8JA
12:28.
Boise Idaho Real Estate Market: July 2022 (Boise & Surrounding Areas)
Jul 14, 2022 What are we seeing with Buyers & Sellers?
Increase in Canceled and Expired listings
Inventory continues to rise
Sellers are accepting lower offers and offering buyer concessions
Sellers are looking for skilled listing agents who have experienced market changes
Boise Real Estate Local News:
The incredible price growth we’ve seen since the onset of the pandemic was fueled by a rapid increase in demand for housing as people transitioned to remote work, the continued household formation of millennials, and historically low mortgage interest rates. With an already undersupplied housing market prior to the pandemic, prices shot up as demand outpaces supply.
We’ve seen the buyer pool shrink due to higher mortgage rates and home prices. Cooling demand has given inventory a chance to catch up a bit, giving the remaining buyers more options.
There were 2,135 homes available for sale at the end of June, a 192.9% increase from June 2021, and the highest inventory we’ve seen since September 2016. Even with the welcome inventory gains, the month’s supply of inventory in June was 2.4 months. A “balanced” market, or a market that does not favor buyers or sellers, is typically between 4-6 months supply.
Metrics that indicate competition in the market continued to show signs of normalizing. Focusing on the existing/resale segment, homes that closed last month spent an average of 14 days on the market before going under contract, compared to 10 days in June 2021. Additionally, the average original list price received for existing homes in June was 98.4%, which means that on average, buyers paid less than asking through a lower accepted offer, price reductions, or seller concessions. In June 2021, the average original list price received was 103.9%, which means on average, buyers paid more than asking price.
The housing market conditions we experienced for the last two years were unique. Historically low inventory, coupled with rampant demand, resulted in above average price growth and a highly competitive market. The changes we’re seeing in price growth, inventory, and slower market times is moving us toward a more normal market — one where bidding wars are the exception and not the rule, and buyers aren’t having to make split-second decisions and waive contingencies for their offer to even be considered.
Sales also continued to lag in June. There were 818 closed home sales last month, down 16.0% compared to June 2021, and the fourth month of consecutive year-over-year declines.
As the market shifts, sellers may have to adjust their expectations slightly. Offers may not fly in within the hour or first day you list, and your home may not sell for over list price. This isn’t necessarily a bad thing — in fact, it may make your experience less stressful, and sellers are still receiving great values for their homes. Your best bet for selling in today’s market is to price your home appropriately, based on the relevant data, comparables, and expertise offered by your real estate agent, and then allow your agent to market your home on the multiple listing service to reach the widest audience possible.
https://www.youtube.com/watch?v=3knHePBvFlQ
3 minutes.
Jacksonville Beaches Market in a Minute July 2022
Jul 14, 2022 🔥🔥🔥 Is the Shift happening??? In Jax, Atlantic and Neptune Beaches inventory is on the rise. More homes mean more options for buyers and more competition between sellers. The crazy multiple offers and appraisal gaps are starting to drift away with buyers gaining some momentum.
https://www.youtube.com/watch?v=Kcn9c2LbGwc
1:38.
“Global interest rates will likely keep rising until 2023 when heated prices will begin to cool in response to the actions from central banks, according to Kristalina Georgieva, managing director of the International Monetary Fund.
Commodity prices, such as oil, may have leveled out and started sliding in recent months, but Georgieva said that they will do so in response to recession risks and not necessarily because inflation has been tamed.
Pandemic-led disruptions to supply chains have created bottlenecks while the war in Ukraine has exacerbated these shocks. The result has been a surge in prices of goods including key staples like food, fertilizer and energy.”
https://www.cnbc.com/2022/07/15/inflation-will-likely-be-tamed-next-year-when-rate-hikes-start-to-work-imf-chief.html
The “pandemic” did not destroy the economy. Government destroyed the economy.
$125 to fill up the van this morning.
FJB
*” $125 to fill-up the van”
Hey GBTR: sending you an extra:
“Gas, Grass or Azz. No one rides for free!”
bumper sticker for your troubled time$.
also threw in a “If this vans a-rockin’ . . .” sticker since man does not live by bread alone.
The Washington Post is the enemy of the American people.
Washington Post — We have reached the apex of election-fraud debunking (7/14/2022):
“The election was more than 600 days ago, more than a year and a half. Over that period, there’s been not one person who has stepped forward to admit participation in a nationally orchestrated plot to subvert the election in more than a half-dozen states, despite the fact that such an effort would take the involvement of dozens if not hundreds of people.”
The enemy of the American people.
“Beyond the lack of proven human involvement, there has been no demonstration of rampant fraudulent voting in any state. There have been plenty of cases of individual fraud, rooted out through the established, successful mechanisms that are in place to catch such illegalities. There are plenty such cases in every national election. What hasn’t emerged is any evidence of hundreds or thousands of votes having been illegally cast in any state.”
The enemy of the American people.
“Nonetheless, millions of people believe that the election was stolen. So how might they be dissuaded? Perhaps a robust articulation of all of the claims about fraud that have been raised to date? A delineation of the dozens of lawsuits filed in the wake of the election and how they were adjudicated? An explanation of specific clusters of claims, such as the “audit” of votes in Arizona?”
The enemy of the American people.
“Those who think the election was stolen will think that no matter what, adding or subtracting whatever “evidence” they want to assert that their belief is justified. It’s the logical approach of the religious zealot, giving primacy to the belief — as articulated by the subject of devotion — and not worrying about what undergirds it.”
The enemy of the American people.
“Those who believe Trump’s claims that the election was stolen are participants in a torrid love affair with the idea. There’s no dissuading, no telling them that their partner is toxic, dishonest and deceptive. Over time, one hopes, their feelings will simply fade and, while they’ll always harbor positive feelings toward the idea that election was stolen, they’ll move on.”
https://archive.ph/Jvq4g
80+ million voters that voted to re-elect President Trump will not be moving on.
The Washington Post is the enemy of the American people.
It’s comforting to know that at least the dollar is holding up amidst the falling prices of risk assets, including stocks, bonds, housing and cryptocurrencies.
Looks like we’ve got a massive short squeeze going on.
The Financial Times
Euro
Investors bet on deepening euro sell-off as recession fears escalate
Bearish sentiment persists as common currency hits parity with dollar
A montage of the euro coin, dollar notes and a chart
The euro has already dropped 12% this year
Nikou Asgari in London yesterday
Analysts and investors are betting that the euro will continue tumbling even after it reached parity with the dollar as Europe’s economic outlook darkens and the US Federal Reserve raises rates to tackle inflation.
The euro has already dropped 12 per cent this year, leaving it to trade at roughly $1, a level not seen in two decades. A rising number of foreign currency analysts are now expecting the common currency to fall deep into the $0.90 range in coming months.
The currency has been hammered by worries about a looming economic slowdown after soaring commodity prices, stoked by Russia’s invasion of Ukraine, triggered a widespread cost of living crisis. Many analysts say the bloc’s intensifying energy woes will worsen in the colder winter months, sparking fresh challenges.
“The question is not so much whether [a recession] is going to happen, it’s how bad it’s going to get,” said Antoine Bouvet, senior rates strategist at ING.
Citigroup analysts said this week that there was an increasing risk of a “disorderly move” in the common currency to between $0.90 and $0.95.
…
Just ask Dr Copper how much more valuable dollars are today than they were back in March.
The Financial Times
Commodities
Copper rout worsens as recession fears hammer commodities markets
Price of key industrial metal returns to levels last seen in late 2020
Copper rods can be seen at a Vietnamese cable factory
Copper is regarded as a gauge of economic activity thanks to its wide range of uses
Neil Hume, Natural Resources Editor
4 hours ago
A rout in the copper market deepened on Friday, with the price of the world’s most important industrial metal sliding below $7,000 a tonne for the first time since November 2020 as recession fears gripped markets.
The benchmark copper contract on the London Metal Exchange slipped 1.6 per cent lower to $6,987, as slowdown concerns intensified after weak economic data from China. The drop put copper on course for its worst weekly loss since the depths of the pandemic in March 2020, down more than 10 per cent.
Copper is widely regarded as a gauge of economic activity because of its use in everything from household appliances to electric vehicles. It is also a popular way for hedge funds to bet on slowing global growth. Bearish wagers on copper are currently at their highest level since 2015, according to Marex, a commodities brokerage.
“Concerns over declining western economies and the impact of a slow property market as well as repeated Covid-19 lockdowns in China have seen a market worried about lost Russian metal supply . . . change focus,” said Peel Hunt analyst Peter Mallin-Jones.
Copper has dropped vertiginously since its price hit a record high above $10,600 a tonne in March, when the market was convulsed by concerns that Russia’s invasion of Ukraine could disrupt already tight supplies.
Now, the market’s gaze has flipped to fears that aggressive rate hikes by central banks, rising Covid cases in China and the prospect of Russia cutting off European gas will hit demand for copper and other commodities. A stronger dollar has also weighed on copper by making it more expensive for holders of other currencies to buy.
Earlier this week, Goldman Sachs, which has been one of the most bullish voices on commodities, cut its three-month copper price forecast to $6,700 a tonne, citing “increasingly pessimistic growth expectations”.
…
Red-Hot Sacramento Housing Market Shows Signs Of Slowing
CBS Sacramento
Jul 14, 2022
https://www.youtube.com/watch?v=dGjcSkL5H9E
1:43.
OC Real Estate Marketplace Update For the Week Ending 7.16.22
Jul 14, 2022 Summary:
• The active listing inventory continued to surge higher adding 312 homes in the past couple of weeks, up 9%, and now totals 3,803 homes, its highest level since November 2020. In June, there were 11% fewer homes that came on the market compared to the 3-year average prior to COVID (2017 to 2019), 418 fewer. Last year, there were 2,528 homes on the market, 1,275 fewer homes, or 34% less. The 3-year average prior to COVID (2017 to 2019) was 6,708, or 76% more.
• Demand, the number of pending sales over the prior month, decreased by 151 pending sales in the past two weeks, down 8%, and now totals 1,710, its lowest level at this time of year since tracking began in 2004. Last year, there were 2,761 pending sales, 61% more than today. The 3-year average prior to COVID (2017 to 2019) was 2,582, or 51% more.
• With supply soaring higher and demand falling, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, surged from 56 to 67 days in the past couple of weeks, a Slight Seller’s Market (between 60 and 90 days). Housing is rapidly cooling, and the market time is at its highest level since May of 2020. It was at 27 days last year, much stronger than today.
• For homes priced below $750,000, the market is a Hot Seller’s Market (less than 60 days) with an Expected Market Time of 41 days. This range represents 18% of the active inventory and 29% of demand.
• For homes priced between $750,000 and $1 million, the Expected Market Time is 60 days, a Slight Seller’s Market. This range represents 24% of the active inventory and 27% of demand.
• For homes priced between $1 million to $1.25 million, the Expected Market Time is 71 days, a Slight Seller’s Market. This range represents 13% of the active inventory and 12% of demand.
• For homes priced between $1.25 million to $1.5 million, the Expected Market Time is 68 days, a Slight Seller’s Market. This range represents 12% of the active inventory and 11% of demand.
• For homes priced between $1.5 million to $2 million, the Expected Market Time is 87 days, a Slight Seller’s Market (between 60 and 90 days). This range represents 12% of the active inventory and 9% of demand.
• For homes priced between $2 million and $4 million, the Expected Market Time in the past two weeks increased from 88 to 98 days. For homes priced between $4 million and $8 million, the Expected Market Time increased from 143 to 159 days. For homes priced above $8 million, the Expected Market Time increased from 353 to 625 days.
• The luxury end, all homes above $2 million, accounts for 21% of the inventory and 11.5% of demand.
• Distressed homes, both short sales and foreclosures combined, made up only 0.2% of all listings and 0.1% of demand. There are only 5 foreclosures and 1 short sale available to purchase today in all of Orange County, 6 total distressed home on the active market, up 1 from two weeks ago. Last year there were 7 total distressed homes on the market, similar to today.
• There were 2,362 closed residential resales in June, 33% less than June 2021’s 3,545 closed sales. June marked a 6% decrease compared to May 2022. The sales to list price ratio was 101.5% for all of Orange County.
https://www.youtube.com/watch?v=F8yrHQx5l3M
7:17.
Builders ‘anxious and nervous’ as Raleigh housing market cools
ABC11
Jul 14, 2022 The Raleigh housing market is cooling and a realtor says buyers are starting to gain back power. ‘Ultimately, it’s a really positive thing because the way the market was trending, it’s not something that was sustainable.’ New construction is becoming easier to purchase, where there used to be a waiting list.
https://www.youtube.com/watch?v=Yrn4khwBAcw
2:28.
https://www.worldpropertyjournal.com/real-estate-news/united-states/seattle/real-estate-news-declining-home-prices-in-2022-redfin-housing-reports-for-2022-home-sellers-now-dropping-asking-prices-in-2022-rising-mortgage-rate-da-13211.php
1 in 4 U.S. Home Sellers Nationwide Now Lowering Asking Prices in June
Residential News » Seattle Edition | By David Barley | July 15, 2022 9:04 AM ET
“According to national property broker Redfin, nearly two-thirds (61.5%) of homes for sale in Boise, ID had a price drop in June 2022.That’s the highest share of the 97 U.S. metros in Redfin’s analysis. Price drops have become a common feature of the cooling housing market, particularly in places that were popular with homebuyers earlier in the pandemic.”
“Next came Denver (55.1%) and Salt Lake City (51.6%), each metros where more than half of for-sale homes had a price drop. They were followed by Tacoma, WA (49.5%), Grand Rapids, MI (49.3%) and Sacramento (48.7%). Seattle (46.3%), Portland, OR (45.7%), Tampa, FL (44.5%) and Indianapolis (44.1%)-all of which saw price cuts for nearly half the for-sale homes-round out the top 10.”
“Boise also had the biggest increase in the share of listings with price drops from a year earlier, when 25.7% of sellers cut their price. Denver, Salt Lake City and Grand Rapids were also among the 10 metros with the biggest upticks from a year earlier.”
“Boise, Salt Lake City, Sacramento and Tampa were popular during the pandemic with homebuyers moving in from pricey coastal job centers, taking advantage of low mortgage rates and remote work. Their popularity led to heated competition for a limited supply of homes for sale, pushing up prices and making them unaffordable for many buyers. In Boise, for instance, the typical home sold for $550,000 in May, up more than 60% from two years earlier. Home prices increased 44% to $610,000 in Sacramento. Mortgage rates nearly doubled to almost 6% in the first half of 2022 priced even more buyers out.”
https://nypost.com/2022/06/24/us-housing-market-price-correction-to-hit-coast-to-coast-moodys-economist-warns/
Real Estate
US housing market price correction to hit ‘coast to coast,’ economist warns
By Thomas Barrabi
June 24, 2022 12:30pm Updated
“Cheap mortgage rates,
a lack of housing inventoryand surging interest during COVID-19 lockdowns drove a steep spike in home prices over the last few years — a trend that is expected to slow as the Fed tightens policy and mortgages approach 6%.”“Larry Botel, a senior real estate adviser at Solomon Partners, said a housing correction is inevitable and “has already started to happen.””
“Your average home buyer cannot afford to pay the same amount as they could so prices need to adjust,” Botel said. “The same math will also continue to benefit the rental market as it will continue to be an option for price conscious homebuyer.”
https://www.cnbc.com/2022/07/12/us-real-estate-markets-that-are-cooling-the-fastest.html
Personal Finance
These 10 U.S. real estate markets are cooling the fastest: Here’s what to know if you’re a prospective buyer
Published Tue, Jul 12 20222:54 PM EDT | Updated Tue, Jul 12 20223:38 PM EDT
Kate Dore, CFP® @katedore
“10 fastest-cooling U.S. housing markets”
“Here are the U.S. markets that have cooled the most over the past year, according to Redfin, and their median sale price as of May 2022.
San Jose, California — $1,560,000
Sacramento, California — $610,000
Oakland, California — $1,070,000
Seattle, Washington — $850,000
Stockton, California — $576,000
Boise, Idaho — $550,000
Denver, Colorado — $612,000
San Diego, California — $875,000
Tacoma, Washington — $575,000
San Francisco, California — $1,620,000”
– While many bugged-out of large cities during the pandemic, just like housing bubble 1.0, it was cheap credit and low rates that drove the housing mania in current housing bubble 2.0. Don’t blame the pandemic. Blame the Fed’s “wealth effect” policies since 2010.
– You can “thank” the Fed for the extreme, experimental monetary policies of QE and ultra-low rates (ZIRP) for that. Free money! Whee! Every asset bubble is driven by cheap credit. It wasn’t different this time. But now that inflation is out of control, the Fed – who created all of this inflation – has to “do something.” The arsonist in charge of the fire brigade. What happened? I thought MMT was sound and central planning always has good outcomes? Unicorns and rainbows forever?
– So now here we are, liquidity tightening and rates rising as the slow-motion train wreck of “The Everything Bubble” bursts. Stonks, bonds, housing, crypto, auto loans all included this time. And yet the Fed claims to expect a “soft landing” from the upcoming recession as all asset bubbles pop at nearly the same time. Real wages are down. The consumer is already in recession. Someone’s a lyin’.
You can “thank” the Fed for the extreme, experimental monetary policies of QE and ultra-low rates (ZIRP) for that.
“Experimental” seems to be all the rage these days, whether it be jabs or the economy. And when things don’t turn out as expected. we are gaslighted and told that the experiment had nothing to do with the disaster.
A telltale sign you live in a Democrat malgoverned sh!thole:
Link:
https://www.9news.com/article/news/investigations/denver-repeat-auto-theft-suspects/73-50b23bad-6df6-418d-b2ed-6036d184c342
From the article, the profiled auto thieves target higher priced vehicles, though I have heard of beaters being the target as well,
This is Dumver’s District Attorney:
https://www.denverda.org/meet-the-da/
“They’re not sending their best”
Mortgage Rates and Housing Inventory | CBS Dallas |
Jul 14, 2022
https://www.youtube.com/watch?v=tenqwyLggRw
2:29. Nice of those sellers to pay down my interest rate!
Drive thru index update:
I was out and about and on my way home, around 7PM, I decided to grab a burger. I hadn’t been to the relatively new Culver’s, mostly because the drive thru always had long lines (10+ cars).
Lo and behold! There was no line at Culver’s.
I think I can reconstruct what happened. After spending $100 to refill the tank and spending more at the supermarket, even after plenty of “hedonic substitution”, people look into their wallets and find them empty, so no fast food. Baloney sandwiches at home are on the menu.
You have to go *inside* Culver’s to get the full menu, drive thru is limited menu items only.
I went through the Culver’s drive thru. I could see inside. There were a few diners; but not many.
There is another, older Culver’s in the Johnstown portion of Centerra. I’ve been to that one before.
I still periodically drive by a sort-of local gun range. It’s still pretty silent there. Nobody has money for ammo.
It’s also too expensive to drive there.
nobody wants to throw expensive ammo at just paper……………..
“Baloney sandwiches at home are on the menu.”
A few years ago in Greece a peanut butter-n-jelly sandwich would score some time between the thighs.
people look into their wallets
Maybe a bit of “How are we going to pay our credit card bill.”
Definitely
Housing Market MADNESS
Jul 15, 2022
https://www.youtube.com/watch?v=TQcQCQRpCtg
2 minutes. Boise. Lots of new shacks.
Creative lending. Oh boy.
Baby voice and vocal fry. My ears!
Toronto homeowner says he ‘never expected’ mortgage payments to surge
CTV News
Jul 14, 2022 New homeowner Youseff Shehata says he’s had to cut down on his expenses after his interest rate payments spiked.
https://www.youtube.com/watch?v=RiE2EeNm_Ps
3:49. It’s still cheaper than renting Youseff. Now go out on a date with yer rate! I hope it’s a cheap date. “I cannot take anymore than that.” “I cannot sell for 20% less.”
This is what it really all comes down to. This guy is fooked. At least one more rate hike coming. He can’t sell, fired his cleaner, worried about groceries. There’s yer stress test falling on it’s a$$ K-da. And it’s only been March since he became a winnah!
Also is a point that the Phoenix loan officer made about the new date the rate BS. UHS is telling people to get a 2 year adjustable loan so they can “get in.” Probably not 20% down obviously. What if there’s a 20% downdraft like this? It can and does happen. (Especially when these stupid market went up 60% in 2 years). Well yer loan expires and Shazaam! yer under water and can’t refi. Of all the REIC crap we see this “you can always refinance” is straight out of 2005.
I watch a lot of videos I don’t post and I’m hearing UHS north of Dallas saying they’re down 10% here and there.
At least one more rate hike coming.
This is what I find comical – the “smartest guys in the room” are all predicting a FED pause, as if somehow they can just decide to not raise rates and inflation will magically go away. That’s not how it works. That’s the whole “transitory” thing all over again – or “still.”
They are in denial of what needs to be done to finally extinguish the rampant price increases. You either raise the fed funds rate above CPI, or you continue to “let inflation run hot” and get more and more broke, angry people.
“…FED pause, as if somehow they can just decide to not raise rates and inflation will magically go away.”
With inflation reads steadily accelerating and month-on-month inflation running at over 10%, I don’t understand the FED pause case, especially when preparations for a 1% rate hike are underway.
It is possible that da Boyz are predicting a scenario they don’t actually believe, in order to set up trading opportunities.
It is possible that da Boyz are predicting a scenario they don’t actually believe, in order to set up trading opportunities.
I think it’s just more of the magical thinking and experimental monetary policy games. The whole “soft landing” rhetoric from the FED is about parking asset prices at a permanently high plateau while somehow magically bringing down CPI. But it’s pure fantasy, just like MMT. We need to fire these clowns – all of them.
We need to fire these clowns
Sadly, they don’t work for you and me.
“They are in denial of what needs to be done to finally extinguish the rampant price increases. You either raise the fed funds rate above CPI, or you continue to “let inflation run hot” and get more and more broke, angry people.”
– You’re in good company. David Einhorn of Greenlight Capital agrees with you! The historical approach fight to high inflation has been to raise interest rates above the inflation rate. However, the Debt-to-GDP was only 30% in 1981. It’s now 120%. Can the Fed really raise rates higher than the “official” 9.1% CPI inflation rate in our highly indebted economy? Obviously, no, since that would drive the U.S. into a depression and the Treasury into default, since the Fed buys Treasury debt via money printing (debt monetization). So the Fed does a lot of talking instead and raises rates in tiny increments. They’re smoking hopium. I’ll be surprised if the Fed gets to 3% on the FFR before something “blows up.” Debt and deficits matter! What comes next is we get “more and more broke, angry people.” (social unrest)
https://www.youtube.com/watch?v=YvbjYTebx88
Sohn 2022 | An Investment Idea from David Einhorn
32,494 views | Jun 10, 2022 | 18:23
End the FED and screw the banking cartel.
The Fed became the market by buying mortgage backed securities with QE. This occurred long before covid hit. In fact, they were still fighting the last crash and refusing to normalize. If you recall, they swore they couldn’t even taper just a little without serious problems. How long can they resist not buying mbs?? This is one big game of chicken now. They know they can’t raise rates to the level they need to so they are hoping that if they close the housing ATM everything will settle down. Too much of the economy survives on various real estate schemes and financing. Somewhere someone has an accurate curve that shows the point of no return. A cliff is approaching and the runway has been foamed. One by one they will each have their Wile E. Coyote moment. Imagine millions of Wile E. Coyote’s all crying out at once… WHY ARE YOU LAUGHING???
“The Fed became the market by buying mortgage backed securities with QE.”
And they did it so quietly and with so little fanfare that most people didn’t even notice that anything had changed.
Once taken, such a step is nearly impossible to walk back without creating severe ructions.
Come on, turn that frown upside down
https://www.youtube.com/watch?v=p7aMswY5vnc
Salt Lake County home sales fall to lowest numbers in 10 years
FOX 13 News Utah
Jul 14, 2022 Home sales in Salt Lake County and all along the Wasatch Front have dropped to numbers not seen in nearly a decade.
https://www.youtube.com/watch?v=HvjjQ6dq5WE
1:25.
CR8R
Wait, what happened to we have low inventory….2.3 months of inventory to “lowest sales in 10 years”. Those two things don’t go together.
Does it seem like the air has left the balloon?
The Financial Times
Opinion The Long View
The era of the Great Exasperation arrives for investors
It is hard to imagine what form online cheerleading for the stock market might now take
Katie Martin
Investors are facing what Rabobank describes as “the maddening market pendulum” as unpredictability continues
Katie Martin 11 hours ago
The Great Moderation is dead, and the obituaries are now rolling in.
The past 30 years or so may not have felt like the best of times for investors. The financial crisis of 2008 was no fun, for instance, and even the Greek debt crisis tested nerves, to take just a couple of recent blow-ups. But in retrospect it was a golden period.
“The Great Moderation, a period of steady growth and inflation, is over, in our view,” the BlackRock Investment Institute wrote this week. It was, BlackRock said, a remarkable period of stability.
Barclays has also chimed in, marking the end of a “mostly calm and predictable macroeconomic backdrop” that has helped investors for three decades. In its place, the bank said, is “a new era of instability”.
Another name for it might be the Great Exasperation.
The horror show in stocks is dragging on to its third consecutive quarter, and the stories fund managers tell themselves to try to understand the world (“narratives”, to use the grander term) are just constantly failing to stick. Rabobank describes it as “the maddening market pendulum”.
The latest big idea — a bet on US recession — has stumbled at an early stage after the country produced surprisingly robust employment data.
That bet itself emerged to replace one on peaking inflation, which also fell apart this week when annual inflation came in at a scorching 9.1 per cent in the US. “Mea culpa,” said Ajay Rajadhyaksha, a rates strategist at Barclays. “Financial markets are very good at making analysts feel foolish, and that’s especially been true in 2022.” He had expected the Federal Reserve to respond to moderating inflation with smaller interest rate rises. But the inflation data “blew that out of the water”.
Bond yields, which set the tone across different asset classes, are swinging around on an alarming scale and with unusual frequency — 0.2 percentage points here, 0.2 points there. It doesn’t sound like much but these are wild scenes for debt markets. All asset managers can do is warn of more turbulence ahead.
The crypto market, for all its faults, has an answer to this sort of malaise. Backers of non-fungible tokens (those super-ugly pieces of digital “artwork”, often pictures of apes) have taken to hiring “chief vibes officers” or “directors of vibes” to keep the mood upbeat as the price of these baffling pictures declines, the Guardian reported this month.
“There are ways that you can . . . trade based on the momentum that is, for the most part, built on vibes,” one advocate said. OK. I guess if you are going to lose money, you may as well have fun in the process.
…
‘The past 30 years or so may not have felt like the best of times for investors. The financial crisis of 2008 was no fun, for instance, and even the Greek debt crisis tested nerves, to take just a couple of recent blow-ups. But in retrospect it was a golden period.’
‘Barclays has also chimed in, marking the end of a “mostly calm and predictable macroeconomic backdrop” that has helped investors for three decades.’
Remember ‘Reagan proved deficits don’t matter’? They found out that they could print as much money as they wanted cuz globalism had hammered the working class so hard. No inflation. Race to the bottom.
‘In its place, the bank said, is “a new era of instability”
Well fudge.
“The post-Volcker years have been very good for financial markets and for our generation,” he says, referring to Paul Volcker, the Fed Reserve chair from 1979-1987 who was credited with ending high levels of inflation. “I call that generational luck.”
There it is again.
So they’ve renamed sentiment to vibes? Those cryptobros are so forward thinking!
They are just a rug pull or two away from a total meltdown.
Does it seem like the air has left the balloon?
No.
DOW soars 658 points.
I’m stuck on “husband” Is Chad a power broker or power bottom?
Listings are up in Arizona
https://armls.com/docs/new-list-chart.pdf
https://armls.com/statistics
Next in line for Pres is …
(drum roll)
… Kamala Harris.
https://www.zerohedge.com/political/former-white-house-physician-says-biden-wont-finish-his-term
IIRC, they need to drag Biden across the halfway mark so they can run Harris twice.
This candidate never polled above 2% in her own party during the 2020 primaries.
You assume voting matters. My ballot for the gubernatorial recall is still showing as “outbound.”
Seems like Brandon could have found one of those radical women with the crew-cut sides and long cut center stripe colored purple albeit higher IQ score?
Harris is embarrassingly stupid, an imbecile.
She’s a whore!!!
That is such B.S. He will finish his term even if they have to prop him up like A Weekend At Bernie’s. He is the ultimate puppet for the libtard goon squad. He’s not going anywhere.
As more people back out of deals, more houses are becoming available, and buyers have more power to negotiate. ‘Now, they see that there is more homes on the market that are now competing with the homes that they are already under contract for’
This is an interesting statement. “Yer water heater sux, I’m gonna buy something cheaper and better.”
‘to directly answer your question, 11% of builders have, at this point, dropped their prices’
Note we are not informed of how many shacks have been slashed, where, and by how much.
Stephen Punwasi 🌋 🚀
Canada reacts to housing becoming more affordable:
– Millennials
vs
– Politicians who have HELOCs and bought investment properties while saying they’ll make housing affordable while betting they can make home prices higher
https://twitter.com/StephenPunwasi/status/1547949341926600712
Goes on to say:
I’m almost giddy waiting to hear Freeland explain it’s a supply problem. lol.
They made money so cheap that over 1 in 5 homes were bought by investors, who didn’t care about price because they wanted to pass costs on.
In Ontario, up to 60% of the new supply in cities was bought by investors. We’re pretending this is natural market demand?
https://twitter.com/StephenPunwasi/status/1547951809758502914
In Ontario, up to 60% of the new supply in cities was bought by investors. We’re pretending this is natural market demand?
Why does this information mostly see the light of day when prices start falling? The time for it to be prevalent is before prices start rapidly increasing. Turning houses into speculative widgets is bad policy for society.
Turning houses into speculative widgets is bad policy for society.
Maybe, but on the bright side, a lot of these speculators are going to feel the pain and many will have their financial life (life in general?) ruined for years.
We must embrace the values and cultural norms of our globalist imports.
Rochdale grooming gang ringleader who blamed his crimes on Western society for allowing young girls to ‘parade on the streets’ gets prison ‘equality’ role
https://www.dailymail.co.uk/news/article-11018733/Rochdale-grooming-gang-ringleader-blamed-crimes-Western-society-gets-prison-equality-role.html
The vile ringleader of the notorious Rochdale child sex grooming gang has been appointed ‘equalities representative’ at his maximum security jail.
Shabir Ahmed was handed the role in a move branded an ‘insult’ to his victims despite having attempted to blame his crimes on Western society for allowing young girls to ‘parade on the streets’.
Is market timing really a bad idea? I’ve heard so many financial advisors parrot the advice, yet it seems like every successful investor figured out how to employ an effective market timing strategy.
Tis a puzzlement!
I’m about to post an entertaining example.
The Financial Times
Lunch with the FT Life & Arts
Emmanuel Roman: ‘Markets are a very complicated Impressionist painting’
The famously literary Pimco chief on generational luck in finance, where you find ideas, and the art of investing in good times — and bad times
Alec Russell 11 hours ago
Emmanuel “Manny” Roman is waiting for me at his table in Marino, an old Italian family restaurant in Hollywood. I am a few minutes late. If anyone has an excuse to be late, it is my guest, the chief executive of Pimco, the giant fund manager. It has some $2tn of assets under management and the markets are in turmoil. I am hotfoot, I explain, from the Getty Museum, on the far side of town.
With the same crisp precision that he might outline to investors his view on whether to stay invested in China or how much to worry about exposure to Russia — his answers, I learn later, are yes and not much — Roman rules on the merits of the Getty and the Los Angeles County Museum of Art. He then urges me to go to The Broad museum, though cautions it is “the collection of a very rich man so it’s incredibly predictable”.
…
“People trade too much,” he replies. “In the next 12 months there’s going to be plenty of things to do because things break and they become cheap. The discipline is to say, right now not a lot is happening where we can do better than the market. Then all of a sudden it’s a totally different ballgame and you can deploy plenty of capital — and do it very well.
“So the pandemic, terrible as it was, gave a unique opportunity to invest money pretty well. It was a window where things became incredibly cheap. Same with 2008. Same with 2001.”
Where he does agree with me is on the role of timing. His career has coincided with years of loose monetary policy, ultra-low interest rates and quantitative easing, which have allowed firms such as Pimco to prosper despite the financial crisis and the pandemic.
“The post-Volcker years have been very good for financial markets and for our generation,” he says, referring to Paul Volcker, the Fed Reserve chair from 1979-1987 who was credited with ending high levels of inflation. “I call that generational luck.”
…
“Overconfidence is one of the great sins of mankind — and fund managers,” he says. “It’s easy to build a narrative where you say I have seen this before.” Richard Thaler, the behavioural economist, a friend and a Pimco consultant, “constantly” reminds him “of the bias that all humans have”.
“It’s very hard to escape that sometimes . . . and that’s why thinking through portfolio construction and risk and debating it with people of different backgrounds and age groups is very important . . . And not just people in your own mould.”
…
“But the big existential risk for all fund managers is that something goes very wrong in the US. Because all of a sudden it’s not a small position. It’s a very big position. So housing for example is a near existential risk for everyone because it’s just so big and there are so many ramifications, the banks, the financial system and so on.”
…
Reading between the lines, it sounds to me like he anticipates a massive CR8R formation event over the next 12 months, far exceeding what we have seen so far. And it might happen in the US housing market.
The trick will be to keep your powder dry up until the OH SHIFT! moment that nobody could have seen coming.
“So housing for example is a near existential risk for everyone because it’s just so big and there are so many ramifications, the banks, the financial system and so on.”
It probably doesn’t help matters that so much housing worldwide has been snapped up by too-clever-by-half investors funded by low interest loans.
Now that rates are going up and bubble valuations are no longer supported, the race to the exit by this investor horde could turn into a systemically important market collapse.
“The post-Volcker years have been very good for financial markets and for our generation,”
The current Fed leadership is hitting the reset button. No sustainable opportunity will materialize until after much more unraveling pain has played out.
Oh dear….
https://azbex.com/trends/sellers-flooding-market-with-listings/
See “systemically important” comment above.
The report said the Greater Phoenix housing market is shifting faster than it had seen at any point in the past 22 years, that supply is increasing at the worst possible time and that, “We are seeing the fastest cooling trend that the Greater Phoenix housing market has ever experienced.”
Greater Phoenix
A city based on the house building industry.
The skydiving scene really thrives just south of Phoenix in Eloy during the winter months. I imagine its the same for many other activities.
Another “Oh dear!” moment in time.
China home prices fall for 10th month as property crisis deepens amid economic slowdown, credit crunch and mortgage boycott
https://www.scmp.com/business/article/3185397/china-home-prices-fall-10th-month-property-crisis-deepens-amid-economic
Property prices in mainland China fell for a 10th straight month in June, underscoring how government relief efforts are failing to curb the country’s spiralling real estate crisis.
New home prices in 70 cities, excluding state-subsidised housing, slipped 0.1 per cent from May, when they declined 0.17 per cent, National Bureau of Statistics said on Friday.
Take it from a man who has previously witnessed 50%+ market routs, including the 2007-2009 episode…
MoneyWise
‘The worst bear market in my lifetime’: Here’s why Jim Rogers thinks stocks will decline for a long time — but he also suggests 2 shockproof assets for protection
Jing Pan
Fri, July 15, 2022 at 6:30 AM·4 min read
With the S&P 500 down about 21% year-to-date, the situation for stocks is pretty grim — but according to legendary investor Jim Rogers, it’s just the start.
“This has to be the worst bear market in my lifetime, which means it will go down a lot and it will last a long time,” the 79-year-old told ET Now last month.
…
https://finance.yahoo.com/news/worst-bear-market-lifetime-why-133000700.html
Skimming the article, it sounds like he really believes that HODLing dollars isn’t a bad strategy for the time being.
Linked from NoNewNormal on dot win.
Why was every “Vax Injured” person completely anti vax before getting it?
https://www.reddit.com/r/newzealand/comments/vynfqu/why_was_every_vax_injured_person_completely_anti/
“They’re not sending their best”