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Similar Stories Of Loss And Pain

A report from CNBC. “‘I am seeing homebuyers cancel a contract if their payment is just a little bit higher than what they expected — I’m talking about $100,’ said Al Bingham, a mortgage loan officer at Momentum Loans in Sandy, Utah. ‘Homebuyers are very cautious right now.'”

From Forbes. “New home sales unexpectedly plunged much more than economists projected in July for the second month in a row. Meanwhile, the number of new houses for sale continued to creep up, climbing by 7,000 to an estimated 464,000—meaning it would take about 0.9 months to sell off the current supply of existing homes—the biggest glut since April 2009, notes Pantheon Macro chief economist Ian Shepherdson. New home sales have plunged 39% from a yearly high of 839,000 in January.”

From Newsweek. “‘The pullback in new home sales activity has been significant over a relatively short time frame,’ Alan Ratner, Senior Homebuilding Analyst at Zelman & Associates, told Newsweek. ‘In a matter of eight months, the annualized pace of new home sales activity has plummeted nearly 40 percent, while current activity is down more than 50 percent from the cycle peak set in August 2020,’ he added.”

“According to economist Ian Shepherdson, ‘the worst is yet to come’ for homebuilders and the real estate market. ‘Demand has yet to reach a floor—even though mortgage rates have now stopped rising—and the supply of existing homes likely will rise much further from here,’ he said. ‘No one wants to be the last one to sell in a falling market. Accordingly, we expect a further increase in new home supply and declining sales. Prices will fall substantially, and likely won’t hit bottom until mid-2023.'”

From Marketplace. “A housing recession used to mean foreclosures and underwater mortgages and Ben Bernanke looking like he hadn’t slept in six months. Sabrina Brown, a real estate agent in Fresno, California, has a similar definition. ‘I started in 2006,’ she said. ‘And that was a recession. This right now is just … we are in a reality check.’ She no longer gets 10 bids within 24 hours of listing a home, and, shockingly, prospective buyers actually want to see a house before they strike a deal.”

“‘The home seller, they might say we’re in a recession because they know their neighbor sold six months ago and got $50,000 over,’ she said. ‘And now when they put their house on the market, they’re getting appraised value.'”

From Patch. “The housing market has cooled down significantly across the Golden State, causing anxiety amongst sellers. The median sale price for homes in California dropped from April’s $840,000 to $814,000 in June, according to Redfin.”

The News Herald in Florida. “‘I don’t know if it’s a buyer’s market yet,’ said Debbie Ashbrook, CEO of the Central Panhandle Association of Realtors. ‘We’ll first shift to a normal market, then we might shift to a buyer’s market, (but) we haven’t gotten to a normal market yet.’ While Ashbrook was not convinced Monday the shift to a buyer’s market already has happened, Charlie Commander, manager of CENTURY 21 Commander Realty in Panama City, said he believes it is well under way.”

“‘In my opinion, it has already shifted based on the number of showings that we’re getting for each new listing, (and) the number of listings that are being placed on the market versus the number that are going under contract,’ Commander said. ‘Theoretically, it could end up that (residents) are able to purchase nice homes at a lesser price,’ Commander said. ‘I think it will happen.'”

The Roanoke Star. “While Virginia’s statewide inventory of homes still remains low, in many local housing markets around the commonwealth, the supply of active listings is growing. About half of all counties and independent cities in the state had more active listings at the end of July compared to a year ago. ‘The expanding supply is good news for buyers in the market,’ says Virginia REALTORS® Chief Economist Ryan Price. ‘Buyers’ purchasing power has been impacted by elevated inflation and rising mortgage rates. The slowdown in sales activity we’ve seen in many areas of the state is resulting in a buildup of available homes.'”

ABC 11 on North Carolina. “The latest housing data for Wake County shows the number of closed sales is down to the lower number since February. Compass Realtor Danni Dichito said sellers are experiencing a huge shift in another area of the market. ‘June’s average days on market were six days. July is showing 12 days. So that’s almost doubled, which means buyers are taking a little more than’ a pause,’ said Dichito.”

“A Fuquay-Varina resident noticed the changes in her community. A neighbor had to wait a while for the home to go under contract. ‘She actually had to reduce the price by $10,000,’ said Jimena Martinez. ‘It was sitting for a month, where a year ago there was nothing sitting. Everything was going so quick.'”

The Review Journal. “Last month, Southern Nevada builders sold the fewest homes in at least two years and now, fears of more housing industry layoffs have started to swirl. Builders logged 434 net sales — newly signed purchase contracts minus cancellations — in July, down 61.5 percent from the same month last year, according to figures from Las Vegas-based Home Builders Research. This marked the fourth consecutive monthly sales drop and the lowest tally ‘since the start of the pandemic,’ the firm reported. ‘The slowdown is real and the effects are real,’ Home Builders Research President Andrew Smith wrote in the report.”

“There have been hundreds of layoffs nationally in the housing industry, and ‘word has also started to get out’ in Southern Nevada that builders and contractors are ‘having to come to these difficult decisions,’ according to Smith. Locally, builders’ sales tally last month was ‘unseasonably low,’ and their asking prices ‘have started to plateau,’ Smith, of Home Builders Research, reported. Some builders are still raising prices, ‘but more and more are adjusting in the other direction,’ he wrote.”

From Realtor.com. “An Oklahoma castle featured on HGTV described as a ‘maximalist design’ has proven to be a hard sale, according to realtor.com. The home was listed in late June for $1.5 million with a price reduction in August and now carries a $998,000 price tag. ‘The owners are extensive travelers and have imported items from all over Europe and incorporated them into the house,’ said Lynne Siano with Metro Brokers of Oklahoma in the listing. ‘The castle’s furnishings aren’t included in the sale, but they could be negotiated into a deal. Finding a buyer hasn’t been easy,’ Siano added.”

Community Impact on Texas. “Median home prices in Round Rock, Pflugerville and Hutto decreased for the second month in a row in July, according to data from the Austin Board of Realtors. The ABoR’s monthly report for July shows a median home sale price of $476,458 across the three cities in July, down 5.84% from June’s median price of $506,001. According to the report, home inventory was on the rise in July. Round Rock, Pflugerville and Hutto had a combined 1,201 active listings in July, compared to 933 in June and 543 last July.”

“‘It’s not the intense seller’s market it was a few months ago, and sellers should reset their expectations,’ Ryan Leahy, regional president for Austin mortgage lending company HomeTown Texas, said in the report.”

From CTV News in Canada. “Winnipeg’s red-hot housing market is showing signs of cooling after back-to-back record-breaking years. For realtor Ed Dale, the last two years have been hectic. Fueled by pent-up demand and other pandemic-related issues — 2020 and 2021 were banner years for Winnipeg’s housing market. ‘You know, in certain areas where you couldn’t give a house away all of a sudden, everything got bought up, so it really changed the landscape of resale real estate as we knew it,’ said Dale.”

“But lately, sales haven’t been as easy. Dale said listings are staying on the market far longer and for much less, sometimes even forcing price cuts. ‘But we do see a lot of times people do want to still try and attain the same pricing from two or three months ago, and when that happens, we are having to bring pricing down.’ Market reports from the Winnipeg Regional Real Estate Board show the average cost of a home in Winnipeg skyrocketed to around $450,000 in May and has since made a sharp decline to 400,000.”

In Chronicle on the UK. “Too much student accommodation in Newcastle caused the ultimate collapse of the businesses behind the Glassworks block in Ouseburn. Administrators for three companies in the Hong Kong-based Bricks Capital Group – Newcastle Glassworks Limited, Newcastle Glassworks Management Limited and Bricks K5 Capital Ltd – said the companies owed about £11.6m to a Chinese lender, which had not been paid for several years. The 270-bed block on Coquet Street has now been sold to that lender, CIMC, which also owns the company that provided the novel pre-fabricated containers it is built with.”

“Insolvency specialists at Interpath, who are dealing with the administration of the three firms, suggested oversupply of student accommodation in the city had forced rents down as the Glassworks struggled to attract students. Interpath said it understood that some £17.39m was also owed to other CIMC subsidiaries by the Bricks Group.”

From News.com.au. “Three Sydney suburbs and four Melbourne suburbs have seen average house prices drop below what they were in March 2020, according to REA. To qualify for the list, suburbs had to have a minimum of 10 sales. When looking at unit prices, the number of suburbs dropping to an average price before Covid hit leaps up to 45 around New South Wales and Victoria. In Sydney, Rhodes posted the sharpest decline in housing prices, dropping 21.43 per cent. Beecroft had the biggest change of any suburb, with a 40 per cent drop in unit prices. Changes in Melbourne were less dramatic but still significant with Caulfield East house prices falling by 8.83 per cent, and Albert Park house prices dropping 25.23 per cent.”

“‘If we look at the types of areas where the prices are falling, it’s generally the more expensive markets,’ Director Economic Research at PropTrack, Cameron Kusher, explained to news.com.au. ‘It’s really being driven by the fact interest rates are rising quickly and much sooner than people expected.'”

The Telegraph. “China is tearing down tower blocks and pausing construction on buildings that could house 75m people as Xi Jinping’s government seeks to prop up the country’s stalling property market. Analysts have warned Beijing has adopted a ‘build, pause, demolish, repeat’ strategy as Chinese officials seek to restrict supply to avoid a plunge in house prices and boost economic activity through more construction. Researchers at Fathom Consulting revealed that around 3bn square metres of housing has been put on pause or demolished in recent years, stopping properties reaching the market. It is enough to house 75m people.”

“Joanna Davies, head of China economics at Fathom said:’ A key policy tool to manipulate supply is to order the mothballing of properties during the construction phase of a project. These practices enable the amount of new housing under construction to keep rising – which helps to prop up short-term economic growth and keep a lid on social unrest – without flooding the market and driving down property prices.'”

From Go Banking Rates. “On Sunday, June 12, at 10:20 p.m., George — like thousands of other customers using crypto lending exchange Celsius — received an email reading: ‘Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap and transfers between accounts.’ ‘I knew they had exposure but never thought they would lock up our assets,’ George, who wished to publicly divulge only his first name for reasons of privacy, told GOBankingRates.”

“He now has $22,000 in frozen assets and says that his family has been on an ’emotional roller coaster’ over the past few months. ‘I wish I would have pressed the platforms more on the transparency of who they were dealing with. They would have never revealed that, and I should have said, ‘Well, I’ll go somewhere else.’ Greed kept me there.'”

“Similar stories of loss and pain are flooding the Southern District of New York, where bankruptcy proceedings are already happening. Letters included in the court proceedings show customers pleading for a way to get their money back. For example, 72-year-old Lindsey Derence told the judge in a letter to the court that she’s at risk of losing much of her life savings. ‘It took me four years of buying BTC and ETH in small increments to accrue to 1 Bitcoin, 7ETH that are now locked on Celsius. I planned to hold these assets in a safe crypto ‘bank’ and wait for them to increase in value so I could pay off my mortgage. Only without a mortgage payment will I be able to exist on just social security,’ she wrote.”

“‘When I tried to move my cryptos into a custody account, I was locked out by Celsius. That shows his fraudulent intent prior to bankruptcy. Since that moment, I’ve been in a state of fear, depression, anxiety, helplessness at the prospect of losing this much of my life savings. Small depositors must be made whole again,’ she penned.”

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This Post Has 122 Comments

  1. ‘shockingly, prospective buyers actually want to see a house before they strike a deal’

    In Fresno.

    ‘The home seller, they might say we’re in a recession because they know their neighbor sold six months ago and got $50,000 over,’ she said. ‘And now when they put their house on the market, they’re getting appraised value’

    Rock solid lending dammit!

    2. In my area, no houses for sale have had a Zestimate (zillow estimate) for over a year. Even zillow could not justify any of the asking prices.

      Interestingly, in that same area 10% of houses sold early in 2021 were resold at a loss later that year. Apparently some folks realized the housing bubble has been entirely manipulated into existence, and got out.

  2. ‘word has also started to get out’ in Southern Nevada that builders and contractors are ‘having to come to these difficult decisions,’ according to Smith’

    You had yer boom Las Vegas, enjoy the bust. This is the hard part: shack building booms leave a wake of butt hurt, broke former employees. Cuz they never save the money in the good times. And then they walk away from their shacks, and down the bowling ball goes.

  3. Under globalist Quisling regimes, male civil servants can be fired for not being feminists.

    Former civil servant launches legal case claiming he was sacked for not being a feminist

    https://www.dailymail.co.uk/news/article-11139969/Civil-servant-launches-legal-case-claim-sacked-not-feminist.html

    A former Environment Agency manager is taking legal action against the body claiming he was a victim of discrimination for not being a feminist.

    Kevin Legge, 50, says he was forced out of his job at the government agency after taking a stand on his boss’ agenda to promote women over men.

    He has made a claim to an employment tribunal, arguing feminism is a belief system he does not follow.

  4. ‘Analysts have warned Beijing has adopted a ‘build, pause, demolish, repeat’ strategy’

    I told Dan this would happen. Eat yer crowz Dan.

    1. I saw somewhere that China’s building boom was just to fill growth quotas. As a made-up example: “GDP growth is 8.2%. PoohBear wants 8.6% growth. Every high-rise gets up 0.05% growth, so we need to build 8 high rises. Let’s go boyz, quality can go hang, gotta please the poohbear.”

      1. Didn’t some economist claim economic activity could be government paying people to dig holes and paying others to fill them in? That kinda sums up this strategy.

  5. ‘In a matter of eight months, the annualized pace of new home sales activity has plummeted nearly 40 percent, while current activity is down more than 50 percent from the cycle peak set in August 2020,’ he added.”

    Is that a lot?

  6. ‘If we look at the types of areas where the prices are falling, it’s generally the more expensive markets’

    Just like 2017, right Cameron? You can eat yer crowz too.

  7. Sabrina Brown, a real estate agent in Fresno, California, has a similar definition. ‘I started in 2006,’ she said. ‘And that was a recession. This right now is just … we are in a reality check.’

    Sabrina is a realtor, and realtors are liars. This “right now” is a bursting housing bubble, though the industry of dissemblers called the NAR will never acknowledge that.

  8. ‘the biggest glut since April 2009′

    I don’t expect clowns like shack wire to admit they are the clowns they are. Or Diane the clown. But I do wonder why no one is asking, what they hell just happened?

    ‘You know, in certain areas where you couldn’t give a house away all of a sudden, everything got bought up’

    It was a respiratory illness Dale! Sure a little cough or fever and these igloo clusters went to the moon Alice!

    It wasn’t CCP virus Dale. It was insane central bank policy and widespread mortgage fraud.

    1. “and widespread mortgage fraud.”

      And mortgage pimp, realtliar and appraiser, co-conspirators in all, were deliberate in the scheme. Ignore the 800 pound gorilla in the room at your own peril.

      Ashland, OR Housing Prices Crater 23% YOY As Mortgage And Appraisal Fraud Hobbles US Housing Market

      https://www.movoto.com/ashland-or/market-trends/

      1. It’s impossible for shacks to go up 50% or more – in one year – without appraisal fraud. Right Boise?

          1. The rule of law thing went away quite a while ago. But now it’s been exposed and everyone (should be) is aware of it. Now it’s out in the open

    2. The monthly supply of new houses in the United States (MSACSR) is a statistic published by the St. Louis Federal Reserve Bank. MSACSR is the ratio of new homes for sale to new houses sold, and shows how long the current inventory would last if no new homes were built.

      https://fred.stlouisfed.org/series/MSACSR

      MSACSR is a fairly reliable leading indicator of recessions; note the shaded areas for the recessions of 1975, 1980, and 2008. A value of 6 is considered by some to be a “balanced” condition. The curve shows a rapid increase in available homes since December, 2021, a likely indicator that the U.S. economy is heading into, or is already in, a recession.

      The data is updated monthly, but lags by one month;

      The value for May, 2022 was 8.4.
      The value for June 2022 was 9.2.
      The value for July, 2022 was 10.9.

      Since 1963, any time the MSACSR number reached 9.5 or greater, there was an associated recession.

      Also interesting is very rapid drop that began in April 2020. By August, 2020 the MSACSR had dropped to 3.3, the lowest it has ever been (since 1963).

      The previous low was 3.5 in the summer of 2003. Then we see a steady run-up in supply, reaching 10.9 in September 2008 and peaking at 12.2 in January, 2009. So, before the 2007-2008 recession, it took 5 years to go from 3.5 to 10.9.

      By contrast, in our current bubble, it has taken only 2 years to go from 3.3 to 10.9.
      Just wondering what the next month will bring.

  9. ‘Buyers’ purchasing power has been impacted by elevated inflation and rising mortgage rates. The slowdown in sales activity we’ve seen in many areas of the state is resulting in a buildup of available homes.’”

    That right there is why Chief Economist Ryan Price pulls down the really big bucks.

  10. ‘Median home prices in Round Rock, Pflugerville and Hutto decreased for the second month in a row in July’

    Will Austin shack prices level off? The whole fooking sh$tcart is going down.

    1. Imagine seeing 200-250k fake equity slip through your fingers by clinging on during the downturn. Oh, then the torment that’ll plague you thinking what if you’d sold before the slide.

  11. ‘Some builders are still raising prices, ‘but more and more are adjusting in the other direction’

    I’ve posted videos with LV shack builders slashin’ $100k Andy.

  12. Finding a buyer hasn’t been easy,’ Siano added.”

    Finding a buyer is always easy, Siano. You just price the property to sell in the current market. In other words, get to sawin’ and slashin’ like the villain in a Jamie Lee Curtis B-movie horror flick.

  13. “…today we are announcing that Celsius is pausing all withdrawals, Swap and transfers between accounts.’ ‘I knew they had exposure but never thought they would lock up our assets,’ George…”

    “…Greed kept me there…’”

    George, let me break it to you gently:

    You never had any ‘assets’.
    You got conned big time.
    And yes, greed kept you on the hook.

    Enjoy your day.

    1. The crypto space is one giant fraud, George. Assigning value to digital gambling tokens backed by nothing was never going to end well. Stupid, reckless, and greedy is no way to go through life, George, but maybe that’s starting to dawn on you and the other crypto baggies.

    2. “Don’t you know there’s another bubble as well? An expectations bubble. Bigger houses, private planes, yachts… stupid salaries and bonuses. People come to desire these things and expect them. But the expectations bubble will burst as well, as all bubbles do.” ― Edward Rutherfurd, New York

    4. These bitcoin greedheads proudly broadcast — daily — how they loved crypto because it wasn’t under the jackboot of any evil government. That is, until they lost their money… then of course they cry to the evil government for a handout. Have fun staying poor.

      “Only without a mortgage payment will I be able to exist on just social security,’ she wrote.”

      Lindsey, you’re 72. Your formative and working years were the PERFECT time to get a quick husband, nearly-free college, easy jobs, cheap house (with MID on 12%+ interest), refi at low rates, and pay off some kind of dwelling. If you couldn’t make in the US at that time, then that’s your own damn fault.

      2. “…loved crypto because it wasn’t under the jackboot of any evil government….”

        This whole crypto scam reminds me of years ago of ads in the back pages of Popular Mechanics magazine. – ‘The secret that General Motors doesn’t want you to know – run your car on nothing but water and air – Send us $29.95 for instructions…’

    5. I worked at Celsius for about the longest 6 months of my career. I left about 3 months before they filed chapter 11. It was a total sh1tshow. Even from the inside the questions about how the company earned yield were never answered. Ponzi. Mashinsky did more to harm the crypto space than a gaggle of banking lawyers writing anti crypto regs. CFO was arrested in Israel for fraud. Bunch of grifting gypsies.

  14. ‘I am seeing homebuyers cancel a contract if their payment is just a little bit higher than what they expected — I’m talking about $100′

    But these are the winnahs! Al?

  15. “China is tearing down tower blocks and pausing construction on buildings that could house 75m people as Xi Jinping’s government seeks to prop up the country’s stalling property market.

    China has 75 million vacant skyboxes. We’ve got 66 million Biden voters who yearn to live under Communism. This seems like a match made in heaven.

  17. I just saw Marine 1 flying around reho beach….. Must be RetardJoe and his worn out hooker are here hiding behind that $500k fence this week.

    1. Dang Mafi, what are you doing in Reho? If you’re in the DC often maybe I can meet the BFB in the flesh.

  18. For example, 72-year-old Lindsey Derence told the judge in a letter to the court that she’s at risk of losing much of her life savings. ‘It took me four years of buying BTC and ETH in small increments to accrue to 1 Bitcoin, 7ETH that are now locked on Celsius. I planned to hold these assets in a safe crypto ‘bank’ and wait for them to increase in value so I could pay off my mortgage.

    Imagine making it to age 72 and still being so incredibly stupid.

    1. “One of the most important reasons for studying history is that virtually every stupid idea that is in vogue today has been tried before and proved disastrous before, time and again.” — Thomas Sowell

      1. Child Trans craze seems to be new one. Maybe sodom and Gomorrah but it’s only alluded to. Other than that, can’t think of a society that tried to permanently change genders for so many people. It’s one of the most f’d up social crazed I’ve ever read in history.

    2. Here’s how she made it to 72: “Oh, my husband always did that.” I saw that at the post office. A stupid elderly woman couldn’t figure out how to mail a package because her husband always did that. No wonder the scammers target these ladies all the time.

  19. “‘When I tried to move my cryptos into a custody account, I was locked out by Celsius. That shows his fraudulent intent prior to bankruptcy. Since that moment, I’ve been in a state of fear, depression, anxiety, helplessness at the prospect of losing this much of my life savings. Small depositors must be made whole again,’ she penned.”

    Sorry, Lindsey, but fools and their money have been separated since time immemorial. If stupid didn’t hurt, greedy fools like yourself would never learn. And who is supposed to make “small investors” – you mean degenerate gamblers – whole on their “investment” in scam digital gambling tokens?

  22. Bloomberg headline: A ‘Tsunami of Shutoffs’: 20 Million US Homes Are Behind on Energy Bills

    If 20 million people can’t pay their energy bills, how are they supposed to cover their rent or mortgages?

    “This sucker is going down.” — George W. Bush

    1. But though Nice’s household is using less electricity, she’s still getting charged about the same amount per month—$244, on average.

      Per the article she lives in an apartment. My average electrical bill (year round) is less than $100 and I don’t live in a tiny apartment.

      I’ll bet she pulls the D lever every election.

      1. Not just any apartment but a ‘studio’ aka a one room hovel. How do you rack up 3k in unpaid power bills on one room? That takes a special kind of person.

  23. Is it safe to assume that the fallout from China’s real estate implosion will stay in China…just like the CCP virus did?

    1. The Financial Times
      Chinese business & finance
      Investors price in $130bn loss on China developers’ dollar bonds
      Beijing will need to deploy ‘big bazooka’ to end crisis of confidence among homebuyers, market participants say
      The China Evergrande Group Royal Peak residential development under construction in Beijing, China
      A China Evergrande residential development under construction in Beijing. The unravelling of Evergrande, the world’s most indebted developer, has plunged the highly leveraged sector into turmoil
      Hudson Lockett and Cheng Leng in Hong Kong and Thomas Hale in London yesterday

      Investors are pricing in almost $130bn in losses on Chinese property developers’ dollar debt on mounting worries the country’s housing market will face a protracted crisis unless Beijing steps in with a large-scale bailout.

      Two-thirds of the more than 500 outstanding dollar bonds issued by Chinese developers are now priced below 70 cents on the dollar, a common threshold for distressed status, according to a Financial Times analysis of Bloomberg data.

      The rising pressure on the market comes a year after Evergrande, the world’s most indebted developer, began spiralling into default, unleashing tumult throughout a sector responsible for roughly 30 per cent of the country’s annual economic output.

      Beijing’s response has been limited to incremental measures, including a cut this week to the mortgage lending rate. But analysts said policymakers’ refusal to launch a sweeping bailout may only add to the ultimate cost of rescuing the industry and could worsen the fallout for global markets and trade as Chinese growth grinds slower.

      “With the industry headwinds and negative news, it’s very clear many more developers’ offshore [dollar] bond prices have fallen sharply since last year,” said Cedric Lai, a senior credit analyst at Moody’s Investors Service. “We still believe defaults will continue through the rest of 2022, particularly for developers with large offshore debt maturities and weak sales.”

      Many developer dollar bonds are now priced at a level that implies a very high risk of default. One bond maturing on September 7 issued by Kaisa Group, one of the first in the sector to miss a dollar payment late last year, is priced at $0.09 on the dollar, implying a loss of about $272mn on principal of $300mn. A bond of the same size from Shanghai-based Shimao maturing in just over a year is priced just below $0.10 on the dollar, indicating a potential $268mn loss.

      Taken in aggregate, investors have priced in almost $130bn of losses on the more than $200bn in outstanding dollar bond repayments owed by Chinese real estate groups, reflecting a discount of nearly two-thirds to the market’s presumed value if all repayments were made successfully.

      China’s real estate groups have missed payments on a record $31.4bn worth of dollar bonds in 2022. The companies have faced particular strain due to maturity walls, in which several developers are expected to pay back principal, or the amount they initially borrowed, at once. Companies often seek to roll over borrowings into newly issued debt to extend these maturities, but ructions in the market have made this nearly impossible for most issuers.

      The drumbeat of defaults is the result of what one veteran investment banker in Hong Kong described as a “perfect storm” for developers, who must try to refinance to stave off more missed payments while struggling to assuage growing doubts among Chinese homebuyers and top leaders in Beijing.

      “There’s a good reason these bonds are trading at distressed levels,” said the banker, who is head of debt syndicate for Asia at a major European lender. “The odds of a lot of these guys ever repaying is anyone’s guess.”
      …

      1. “Companies often seek to roll over borrowings into newly issued debt to extend these maturities, but ructions in the market have made this nearly impossible for most issuers.”

        Check kiting won’t save you, once the gamblers feel a desperate urge to cash in their chips.

        “Beijing will need to deploy ‘big bazooka’ to end crisis of confidence among homebuyers, market participants say”

        How are they going to pay for bailouts, given the ongoing economic implosion? I don’t expect dollar denominated Chinese real estate development bonds to pay off at very many pennies on the dollar, regardless.

      1. The Financial Times
        Chinese business & finance
        China’s distressed asset funds struggle to profit from collapsing property sector
        Groups reluctant to invest when there is still no bottom in sight for real estate market
        Men work at a construction site of apartment buildings in Beijing
        China’s builders are defaulting on loans after Beijing tightened lending regulations, but private sector asset management companies say banks remain reluctant to write off bad debt
        Sun Yu in Beijing 5 hours ago

        Distressed asset managers in China’s private sector are struggling to profit from the country’s slowing economy, with no bottom in sight for its collapsing property sector and lenders reluctant to write off bad loans.

        Almost a dozen distressed investment funds told the Financial Times they had not increased their exposure to residential and commercial properties, usually the most popular form of collateral in Chinese debt restructurings, despite soaring defaults in the real estate sector.

        “A lot of us are standing by not knowing where to spend our money,” said an executive at Qingdao Huba Asset Management Co, which specialises in trading bad loans.

        China is suffering one of its worst economic slowdowns in decades after government efforts to reduce debt in the property sector, which accounts for about one-third of economic output, led to a collapse in real estate prices.

        This has combined with the negative impact of the government’s strict zero-Covid policy and a regulatory blitz against high-flying technology companies to depress domestic demand. Even property companies once considered financially reliable, such as the country’s largest real estate group, Country Garden, are reporting falling profits.

        Although Beijing has announced interest rate cuts and some bailout initiatives for the property sector, it has failed to arrest the meltdown: house prices fell for 11 months consecutively up to July. This has left asset managers reluctant to enter the market for fear they will not recoup investments.

        “[Distressed asset management] only works when you think there is going to be mark-to-market pricing and a cyclical improvement,” said Andrew Collier, managing director of Orient Capital Partners in Hong Kong. “But if you don’t have accurate pricing and you have a structural downturn that could go on for another decade, then there is no way you can sell your assets.”
        …

  24. A reader sent these in:

    Monthly eviction filings relative to average in Dallas and Ft Worth…

    Please move along… nothing to see here…
    Not a recession.

    https://twitter.com/WallStreetSilv/status/1562212944271785984

    Lance Lambert

    This year, we hit an all-time high in the total number of housing units under construction.

    https://twitter.com/NewsLambert/status/1562092029315846146

    Aaron Layman

    The state of the luxury new home market per Toll Brothers’ Q3 2022 earnings report: No Bueno. Net contract value down 44% year-over-year.Contracted homes down 60%. Lowered deliveries guidance to 10,000-10,300 homes in FY 2022.

    https://twitter.com/dfwaaronlayman/status/1562180303107538948

    Ian Shepherdson

    Hmm. Single-family seas adj existing home prices fell at a 12% annualized rate in the three months to July. Listings up 40% since March. Lots of people have to move for work or family reasons, and the buyers have gone.

    https://twitter.com/IanShepherdson/status/1561993022761566208

    Zillow used an algorithm to buy houses and ended up paying too much for houses. Carvana used an algorithm to buy cars and ended up paying too much for cars. I think there is a lesson in here somewhere.

    https://twitter.com/dailydirtnap/status/1562221573939118081

    20 million behind on their electricity bills. *economy is fine*

    https://twitter.com/DonMiami3/status/1562281541652430849

    Eric Basmajian

    The months’ supply of new homes EXPLODED in July. The new home market now has 10.9 months of supply! Price cuts are going to come fast and hard in the new home space.

    https://twitter.com/EPBResearch/status/1562079144028037120

    Peter Schiff

    July new home sales crashed 12.6%, a much bigger fall than was expected. YoY sales have collapsed 29.6%. New home sales have now dropped during 6 of the last 7 months, and are at the lowest level since Jan. of 2016. The supply of unsold new homes is its highest since March 2009.

    https://twitter.com/PeterSchiff/status/1562088239414083584

    Nick Timiraos

    The inventory of new homes for sale rose to its highest level since April 2008 last month. At July’s sales pace, there was 10.9 months of supply, up from 5.7 months in January.

    Since 1963, this figure has been higher only a few times:
    -Aug ’08-Mar ’09
    -Sep ’81
    -Apr ’80

    https://twitter.com/NickTimiraos/status/1562113794133876738

    As the housing market is crashing. Banks reported an increase in foreclosures during the first quarter of 2022, according to a quarterly survey published by the @USOCC Office of the Comptroller of Currency this week.

    https://twitter.com/GregCrennan/status/1562112276336824321

    California’s median home price declined 3.5% in July to $833,910 from the $863,790 recorded in June.

    https://twitter.com/unusual_whales/status/1562049765549826048

    US new home supply from a shortage to a glut 👇 Congratulations to those who bought a house above asking price few months ago, because home prices only go up.

    https://twitter.com/MichaelAArouet/status/1562118330542338048

    1. ‘we hit an all-time high in the total number of housing units under construction’

      But the clowns at shack wire say builders said stop?

      via GIPHY

    2. “Zillow used an algorithm to buy houses and ended up paying too much for houses. Carvana used an algorithm to buy cars and ended up paying too much for cars. I think there is a lesson in here somewhere.”

      Stocks and other vanilla financial instruments are fungible. Houses aren’t, hence the pricing inefficiencies (people buy them for emotional/irrational reasons). Also why Wall Street keeps inventing new exotic/opaque financial instruments, because they hate pricing transparency. Plus Wall Street blows up all the time due to wrong assumptions in algorithms, difference is they have the Fed/taxpayer to bail them out. Great work if you can get it.

      1. Should have added, pricing inefficiency is why housing also has a whole industry of vastly overpaid grifters attached to it.

  25. Denver mortgage lender with this message for recent buyers in the Colorado housing market
    Denver7 – The Denver Channel
    Aug 24, 2022 Jimmy Everett, owner and operator of Everetts Lending, says buyers worried about what the shift in the housing market means for the price of their home should pause and take a breather as the market shifts from a sellers to a buyers market.

    “Hello, I’m Jimmy Everett’s owner and operator of Everetts lending. My two quick tidbits for people in this current real estate market in the climate one for those of you who may have bought a home in the last six to 12 months, who are hearing that the price you paid months ago is not what you could get for your home today….

    I want you to one take a deep breath first and foremost, with any investment, say you bought a stock stock might go down momentarily, but long term, you know it will go up….

    Real estate market no different. So you’re not selling your house today, that investment historically will continue to increase in value.

    Second point I would like to make to you is to take information from the Federal Reserve in perspective. So a lot of times we’ll hear the federal the Fed raise interest rates, that means mortgage interest rates raise, that is not the case our rates aren’t correlated together.

    In fact, the last time the Fed raised their interest rates, mortgage rates actually went down. So make sure when you hear that news again, take that deep breath, reach out to your professional, get their opinion, their expertise and go from there.

    Don’t be panicked.

    https://www.youtube.com/watch?v=sA9DLzoZDNk

    1:25.

    1. Jimmy seems knowledgeable and well spoken, I should give him a call to see if now is a good time to buy.

  26. “Accordingly, we expect a further increase in new home supply and declining sales. Prices will fall substantially, and likely won’t hit bottom until mid-2023.’”

    It took half a decade to reach bottom in the last two real estate crashes (roughly 1991-1996, 2007-2012), but this time is different.

      1. We’re harder to ignore this time, given how spot on our predictions proved in the 2007-2009 financial collapse. At the end of the day, the collective wisdom of the Housing Bubble Blog crowd left the MSM annointed experts looking like a bunch of dumbazzes.

  27. ‘The sky is not falling’ Denver realtor says it isn’t what you’re hearing in the real estate market
    Denver7 – The Denver Channel
    Aug 24, 2022 DENVER – A recent report from real estate brokerage firm Redfin shows the Denver metro area’s housing market is among the most vulnerable during an economic downturn.

    With recession fears and higher interest rates contributing to a shift in the market, a Denver realtor proposes you take a more balanced look at the recent headlines.

    “Hi, my name is Laurie Abby, I am the CEO of the Abby collection at Compass real estate.

    And the one thing I want buyers and sellers in Denver, Colorado SmartThings to know is that the sky is not falling. It isn’t what we’re hearing out there in the marketplace.

    If you’re a seller, and you price your home correctly, and you get it ready, and you stage it, and you do all of the right things, your house is absolutely gonna get sold.

    If you’re a buyer, it’s also a great time because there’s some opportunity, a lot of sellers and pricing a little bit too high because they’re going to things that happened in the spring.

    So if you’re a buyer, you have an opportunity to get some things that were priced a little high and get them a little bit under market value. You do need to still pay asking if it’s if it’s priced well, and you will have the opportunity to get some things on inspection where we haven’t had that for the last year or two. It’s been all the power has been all in the seller stand.

    So it’s actually not a bad time. We’re back to when the market was a little bit more balanced for everybody”

    https://www.youtube.com/watch?v=ETt7PLUbfxE

    1:25.

  29. Real Estate Market Update (August 2022)
    Aug 23, 2022 The real estate market in the Sacramento Valley continues to shift as we move late into the summer. We have seen a substantial change with the housing inventory, but is it because sellers are rushing to list their homes? No that’s not the case.

    There are five things that are important to know about today’s real estate market. Number one, the increase in housing supply is not due to sellers. In a short period of time we went from having about three weeks of inventory in the Sacramento region to ten weeks. What’s causing that change? It’s actually a result of fewer buyers getting into contract. We’ve seen close to 2000 fewer sales in the region since May which means listings that would have normally sold are still on the market, in other words, the increase in supply came from weakened demand rather than more listings hitting the market.

    Since June 2020, we have seen a reduced number of new listings coming on the market and there has not been a spike in recent months. Sales volume has taken a nose dive in the last two months which has been a contributing factor to the increase in available listings. Remember, housing supply can grow from either seller’s listing more often or for buyers purchasing fewer homes.

    In addition, with new construction home sales declining there is more available inventory from that segment of the market as well for buyers to choose from. The changes in the market with increasing inventory and decreasing sales activity are across all price ranges.

    If you’re a seller be patient, be realistic. You’ve got to make a good first impression. Go out with your best foot forward. There’s more competition for you right now. It’s different today, not like it used to be. It can take time to find the right person. Sounds like dating advice doesn’t it.

    If you are a buyer 5% interest rates are historically still very low and it is projected that we will have positive price appreciation this year.

    Let’s take a quick look at the market statistics. In the Tri-County area at the end of July we had 3,777 homes for sale that’s a 14% increase from June. There were 2,529 new listings in July which is down by 17% from June. There were 1,723 pending sales is a 2% increase from June. The average days on market increased from 16 days in June to 22 days in July. Although inventory increased, there was virtually no impact on the average price per square foot which is now $334. The median home price did decline to $598,000 which is $23,000 lower than June.

    In El Dorado Hills we had 148 homes for sale at the end of July which is an increase of 8% from June. There were 83 new listings which is a decrease of 22% from June. There were 53 pending sales which is a decrease of 2% from June. The average price per square foot actually increased by 1% to $386 and the medium home price increased from $955,000 to a $1,050,000.

    In Folsom there were 172 active listings at the end of July which is a 15% increase. There were 120 new listings which is an 8% decrease from June and there were 65 pending sales, which is a decrease of 12%. The average price per square foot was $364 which is a decrease of 4% from June. The median home price declined from $790,000 to $775,000.

    https://www.youtube.com/watch?v=WvqkSzKOmec

    5:35.

    1. My husband and I both paid off our respective student loans. I am so incredibly tired of these lazy a$$ do-nothings thinking they deserve free college.

      1. TBH, I’m not entirely against “free college,” simply because college used to be nearly free. That is, tuition at state schools was so low you could pay it by working Christmas break at KMart. Some community college tuitions are nearly free now.

        I wouldn’t be against free tuition, IF students get good grades in HS/SAT scores, chose from a list of approved majors, and keep a minimum GPA. What I take issue with is students borrowing gobs of money for beer and luxury student housing. I wonder how many of those kids racked up $10K just in spring breaks.

        1. If tax dollars are paying for it then it isn’t free. I don’t want to pay for someone else’s college.

          1. Dumb questions of the day:
            1) Who gets to pay for debt forgiveness?
            2) Will it make inflation get worse?
            3) Should future generations of student borrowers expect debt forgiveness?

        2. “I wouldn’t be against free tuition, IF students get good grades in HS/SAT scores, chose from a list of approved majors, and keep a minimum GPA.”

          One of my sons smiffed out, applied for, and exploited such an opportunity at a CA community college. I’m not entirely clear why he qualified, as we are firmly middle class, and not generally eligible for low income programs, I was surprised that he qualified.

          But he won’t be accepting any Biden bux, because he has no debt.

      2. “My husband and I both paid off ”

        I guess that was a mistake, wasn’t it? Wow, think about it, how have we fallen……

        1. No, not a mistake. Imagine how the government will hold their “kindness” over the heads of everyone who accepts it.

    2. “When do I get a refund check?”

      My brother wants his money back for paying his son and daughter’s college tuition, books, room and board.

      1. I don’t recall anyone paying back my student loans.

        There’s no fair way to implement debt forgiveness, and it creates massive moral hazard going forward for more debt jubilees. It also generates Democratic party votes and potential future campaign contributions.

    3. And just before the election. Knock me over with a feather.

      Not sure what effect it will have. I wasn’t expecting any of those deadbeats to pull the R lever.

      2. ” I wasn’t expecting any of those deadbeats to pull the R lever.”

        Well the hope is they may actually get off their a@@es and pull the D lever.

      3. “Not sure what effect it will have.”

        Giving these people a hearty laugh.

        Why spend their money when they can spend yours.

        The 30 Universities With the Largest Endowments

        BY TOM FISH ON 8/27/21

        30. Boston University ($2,311,388,000)

        29. University of Rochester ($2,318,529,000)

        28. Pomona College ($2,321,097,000)

        27. Boston College ($2,433,821,107)

        26. Amherst College ($2,473,283,206)

        25. University of Richmond ($2,513,209,000)

        24. Williams College ($2,744,103,362)

        23. California Institute of Technology ($2,987,001,000)

        22. Brown University ($3,976,694,000)

        21. New York University ($4,219,313,605)

        20. University of Pittsburgh ($4,289,974,484)

        19. Dartmouth College ($5,731,322,087)

        18. University of Southern California ($5,739,565,000)

        17. Vanderbilt University ($6,270,876,534)

        16. Johns Hopkins University ($6,275,939,000)

        15. Rice University ($6,506,177,000)

        14. Cornell University ($6,974,636,536)

        13. University of Chicago ($7,244,602,984)

        12. Washington University in St Louis ($8,130,483,000)

        11. Northwestern University ($8,244,818,000)

        10. Duke University ($8,609,004,000)

        9. Emory University ($8,626,248,037)

        8. Columbia University ($10,950,738,000)

        7. University of Notre Dame ($11,565,964,000)

        6. University of Pennsylvania ($14,649,761,000)

        5. Massachusetts Institute of Technology ($17,443,750,000)

        4. Princeton University ($25,623,628,250)

        3. Stanford University ($27,699,834,000)

        2. Yale University ($30,295,003,000)

        1. Harvard University ($40,929,700,000)

        https://www.newsweek.com/universities-largest-endowments-america-harvard-yale-stanford-1620979

        1. EXACTLY! I’m all for student loan cancellation, ONLY if they charge it to these massive endowments. How stupid are we to put up with this BS, while these bloated indoctrination mills sit on the equivalent of several nations GNP

    4. And they say that just that $10K is going to cost $300 billion dollars. I wonder what the courts will say? This reminds me of the EPA case: too far-reaching for the executive branch.

  31. I’ve posted info on the book Votescam (1992) (about election fraud) before, thought I’d do it again 😜 More references this time.

    Web Archive (site defunct, first capture):
    https://web.archive.org/web/20000817221206if_/http://www.votescam.com:80/frame.html

    YT: Vote Scam – The Stealing of America’s Elections | Apr 23, 2011
    (bad video, sound, long…worth watching)
    https://www.youtube.com/watch?v=1oA4nDuuBOg

    Book (there’s an update ed, too, though OOP):
    https://www.amazon.com/Votescam-Stealing-James-M-Collier/dp/1974027066
    First title of top review says it nicely:
    An incredible story of election fraud from 1964 up through the early 1990s

    Internet Archive (book,original ed):
    Votescam: The Stealing of America
    https://archive.org/details/15-votescam-the-stealing-of-ameri-james-m.-collier/page/n3/mode/2up

  32. ‘Two constitutional lawyers who worked in the Bush and Reagan administrations say that the warrant used to search former President Donald Trump’s Mar-a-Lago residence had no legal basis.’

    ‘A former president’s right under the Presidential Records Act supersedes the statutes the Department of Justice and FBI used to carry out the raid earlier this month, wrote David Rivkin Jr. and Lee Casey, who both served under Presidents Ronald Reagan and George H. W. Bush.’

    “The judge who issued the warrant for Mar-a-Lago has signaled that he is likely to release a redacted version of the affidavit supporting it. But the warrant itself suggests the answer is likely no—the FBI had no legally valid cause for the raid,” they wrote in the Wall Street Journal on Tuesday.’

    ‘Earlier this month, federal Magistrate Judge Bruce Reinhart unsealed the warrant and property receipt, showing that it allowed FBI agents to obtain all “physical documents and records constituting evidence, contraband, fruits of crime, or other items illegally possessed in violation of 18 U.S.C. §§793, 2071, or 1519.”

    ‘And the materials that could be seized are “any government and/or Presidential Records created between January 20, 2017, and January 20, 2021,” which encompasses all of Trump’s presidential term.’

    ‘As a result, the two scholars said that “virtually all the materials at Mar-a-Lago are likely to fall within this category” but “federal law gives Mr. Trump a right of access to them.”

    “His possession of them is entirely consistent with that right, and therefore lawful, regardless of the statutes the FBI cites in its warrant,” Rivkin and Casey wrote.’

    “Those statutes are general in their text and application. But Mr. Trump’s documents are covered by a specific statute, the Presidential Records Act of 1978,” they said, adding that a Supreme Court decision in 1974 affirms their argument. “The former president’s rights under the [Presidential Records Act] trump any application of the laws the FBI warrant cites.”

    ‘The 1978 law, which was passed two years after former President Richard Nixon resigned, “lays out detailed requirements for how the archivist is to administer the records, handle privilege claims, make the records public, and impose restrictions on access,” they added. “Notably, it doesn’t address the process by which a former president’s records are physically to be turned over to the archivist, or set any deadline, leaving this matter to be negotiated between the archivist and the former president.”

    https://www.theepochtimes.com/fbi-mar-a-lago-warrant-had-no-legal-basis-constitutional-lawyers_4685637.html

    1. Charlie stands for late term abortions and transitioning children!

      An open southern border, critical race theory in schools, forced vaccines, trans boys in girls bathrooms and on girls teams!

      If you’re so hate filled that you don’t like that he doesn’t want your vote.

      My hate filled @ss will be pulling the lever for DeSantis.

    1. Can Californians afford electric cars? Wait lists for rebates are long; some programs have shut down
      Nadia Lopez
      CalMatters
      Quentin Nelms, who lives in Tulare, qualified for a state subsidy but the electric car’s cost rose too fast.

      When Tulare resident Quentin Nelms heard California was offering a hefty state subsidy to help lower-income residents buy electric cars, he applied right away.

      But it wasn’t as easy as he thought it would be.

      Nelms spent four months on a waitlist before he was accepted into one of the state’s clean-car incentive programs in January. He qualified for $9,500 that he planned to use to buy a 2022 Ford Mustang Mach-E. But after discovering that several dealerships had raised the car’s price by more than $10,000 during the time it took to get the grant, he could no longer afford the roughly $53,000 cost.

      “We got into this program and it’s not helping like it’s supposed to,” Nelms said. “It’s useless at this time because there’s nothing out there and the cars that you do find, everything’s gone up in price.”
      …
      https://www.vcstar.com/story/news/2022/08/02/can-californians-afford-electric-cars-wait-lists-rebates-long-and-some-programs-have-shut-down/10215518002/

    2. I guess it never occurred to Governor Nuisance to consider reducing traffic congestion in cities like LA and SF, where people waste their lives sitting in traffic, to remedy excess greenhouse gas emissions. Instead he wants to export California’s anti-economy program to Detroit, by killing gasoline powered automobile production.

      1. Energy and Environment
        California to ban sales of all new gas-powered cars beginning in 2035
        By Breanne Deppisch, Energy and Environment Reporter
        August 24, 2022 01:00 PM
        Cars and trucks roll along a section of Highway 99 during rush hour that’s being worked on for the high-speed rail in Fresno, California.
        (AP Photo/Gary Kazanjian)

        California regulators are expected to ban the sale of all new gasoline-powered vehicles beginning in 2035, a major step for the largest auto market in the United States and one that the Democratic government hopes can accelerate the transition toward electric vehicle adoption.

        The rule is expected to take effect Thursday following a vote by the California Air Resources Board, according to the New York Times. It also sets interim targets to help phase out the sale of internal combustion engine models: By 2026, it states, 35% of new cars sold must be zero-emissions vehicles — an amount that climbs to 68% in 2030. Currently, just 12% of new cars sold in the state are electric vehicles.

        California is the largest auto market in the U.S., meaning its actions are likely to have an outsize impact on the auto industry. It would be the first ban on internal combustion engines within the U.S.

        In announcing his support for the plan in 2020, California Gov. Gavin Newsom noted that transportation accounts for more than 50% of California’s greenhouse gas emissions.

        He also noted that without taking such a step to accelerate actions to reduce transportation emissions, the state will not be able to achieve its goal of a carbon-free economy by 2045.
        …
        https://www.washingtonexaminer.com/restoring-america/faith-freedom-self-reliance/california-to-ban-sales-of-all-new-gas-powered-cars-beginning-in-2035

  37. I like the security guard strolling by at 0:29 and the dropped drawers getaway disguise at the end.

    NYPD NEWS
    @NYPDnews
    🚨WANTED for ASSAULT: Do you know this guy? On 8/20/22 at approx.

    6:00 PM, inside of Kings Plaza Mall in Brooklyn, the suspect approached a 36-year-old male from behind and punched him in the head causing a serious physical injury. Any info? DM
    @NYPDTips
    , or call 800-577-TIPS.

    https://twitter.com/NYPDnews/status/1562047072269991938?s=20&t=rLXpAZyYQKK9_tqlu4ph6w

  38. When I was a kid we wanted to grow up to be a guy like this.

    RIP Len Dawson

    Len Dawson smoking during Super Bowl I is an all-time great sports photo

    By James Dator
    Aug 24, 2022

    https://twitter.com/SkyyHighTy/status/1562408303178973185?s=20&t=ll5Q8hRMexGSKR845ly7cQ

    Super Bowl I was incredible close in the first half, a true duel between Dawson and Bart Starr.

    Returning to the locker room in what he felt was a good position, playing some of the best football of his life — Dawson lit up a cigarette, chilled on a chair and had himself a cold one. That’s the true magic of this photo. It lacks any sense of nervousness or anxiety, and there was no reason for Dawson to feel rattled.

    For all the iconic images from that game it’s this photo of Len Dawson in the locker room that’s up there with Vince Lombardi being hoisted in the air for the most memorable. A legendary quarterback, sitting in complete confidence, taking a drag off a smoke in a way that’s simply cool as hell.

    RIP to Len Dawson, one of the greatest quarterbacks of all-time, and an absolute legend.

    https://www.sbnation.com/nfl/2022/8/24/23319755/len-dawson-smoking-super-bowl-i-photo

  39. There is no shortage of CR8R news today in sovereign debt markets, as Powell rehearses for his Jackson Hole speech.

    Higher mortgage rates are soon to follow…

    1. The Financial Times
      Markets Briefing Sovereign bonds
      Government bonds sell off on higher interest rate expectations
      Closely watched Jackson Hole symposium starts on Thursday
      A trader works at Frankfurt Stock Exchange
      Eurozone bond prices fell, with the yield on the two-year German Bund adding 0.08 percentage points to 0.90%
      Ian Johnston in London and Nicholas Megaw in New York an hour ago

      European and US government debt sold off on Wednesday as investors cranked up their expectations of how high central banks will raise interest rates to curb inflation.

      The moves, which were particularly pronounced in UK and European markets, came on the eve of a multi-day economic symposium for policymakers in Jackson Hole, Wyoming. The event, hosted by the Kansas City arm of the US Federal Reserve, is closely watched by investors for signals from central bankers on the future direction and pace of monetary policy.

      The yield on the UK’s two-year gilt, which is particularly sensitive to changes in interest rate expectations, jumped 0.22 percentage points to 2.90 per cent, reflecting a significant drop in its price. The benchmark 10-year gilt yield added 0.12 percentage points to 2.69 per cent.

      Those sharp moves came as pricing in money markets indicated investors were expecting the Bank of England to lift borrowing costs to almost 3 per cent by November, up from projections just a week ago of 2.6 per cent and a current base rate of 1.75 per cent. Data released last week showed that UK inflation rose to a more than 40-year high in July.

      Antoine Bouvet, senior rates strategist at ING, said the UK Debt Management Office’s announcement on Tuesday that it will sell £1.5bn in short-term gilts on Thursday has added to the unease. The sale comes during a time when liquidity, or the ease of buying and selling bonds, has been worsening across European fixed-income markets due to summer holidays and heightened economic uncertainty.

      “It’s nothing massive by any stretch of the imagination but it shows that when you add supply to an illiquid, very nervous market, the impact can be quite sizeable,” Bouvet said.

      The more volatile moves in gilts become, the worse liquidity will get, he added. “It’s a bit of a chicken and egg scenario.”

      Short-dated eurozone bond prices also dropped, with the yield on the two-year German Bund adding 0.08 percentage points to 0.90 per cent and Italy’s equivalent debt instrument rising 0.05 percentage points to 1.87 per cent.

      Investors were on Wednesday expecting the European Central Bank to implement 1 percentage point of interest rate rises by October, from a current deposit rate of zero. The ECB raised interest rates by half a percentage point in July, its first increase in more than a decade.
      …

    2. The Financial Times
      Sovereign bonds
      Hedge funds build biggest bet against Italian debt since 2008
      Investors are worried about the fraught political situation and rising economic challenges
      The total value of Italy’s bonds borrowed by investors to wager on a fall in prices hit its highest level since January 2008 this month, at more than €39bn
      Laurence Fletcher and Nikou Asgari in London an hour ago

      Hedge funds have lined up the biggest bet against Italian government bonds since the global financial crisis on rising concerns over political turmoil in Rome and the country’s dependence on Russian gas imports.

      The total value of Italy’s bonds borrowed by investors to wager on a fall in prices hit its highest level since January 2008 this month, at more than €39bn, according to data from S&P Global Market Intelligence.

      The rush by investors to wager against Italy comes as the country faces rising economic headwinds from the surge in European natural gas prices prompted by Russia’s supply cuts and a fraught political climate with elections looming in September.

      “It’s the most exposed [country] in terms of what happens to gas prices, and the politics is challenging,” said Mark Dowding, chief investment officer at BlueBay Asset Management, which runs around $106bn in assets. He is shorting Italian 10-year bonds using derivatives known as futures.

      The IMF warned last month that a Russian gas embargo would lead to an economic contraction of more than 5 per cent in Italy and three other countries, unless other countries shared their own supplies.

      Italy is also considered by investors to be among the most vulnerable countries to the European Central Bank’s decision to unwind its stimulus programmes by raising interest rates and halting the bond purchases that have propped up the country’s vast debt market.

      A period of relative political calm ushered in by Mario Draghi’s appointment as prime minister in February 2021 was shattered in July this year when the former ECB chief resigned and his national unity coalition administration unravelled.
      …

    1. Real Estate
      Home prices fell for the first time in 3 years last month – and it was the biggest decline since 2011
      Published Wed, Aug 24 2022 9:25 AM EDT
      Updated 6 Hours Ago
      Diana Olick
      Key Points
      – Home prices declined 0.77% from June to July, the first monthly decline in nearly three years, according to Black Knight, a mortgage software, data and analytics firm.
      – While the drop may seem small, it is the largest single-month decline in prices since January 2011. It is also the second-worst July performance dating back to 1991.
      – “Further price corrections are likely on the horizon as we move into what are typically more neutral seasonal months for the housing market,” said a Black Knight executive.
      …
      https://www.cnbc.com/2022/08/24/home-prices-fall-for-the-first-time-in-three-years-biggest-drop-since-2011.html

      1. 1-(1-0.0077)^12 = 8.9% annualized rate of decline in the US housing market…

        The bubble is hissing very loudly now as the helium rapidly escapes.

  42. Biden is right: A lot of students at elite schools have student debt

    Adam Looney Wednesday, March 3, 2021

    President Biden made headlines recently when he expressed reluctance to forgive large amounts of student debt owed by well-off students at elite schools. “The idea that … I’m going to forgive the debt, the billions of dollars in debt, for people who have gone to Harvard and Yale and Penn …” he said, not finishing the sentence but leaving listeners with no doubt about what he thinks. There are real tradeoffs involved: “[I]s that going to be forgiven, rather than use that money to provide for early education for young children who come from disadvantaged circumstances?”

    Biden was right. Even though elite schools represent a small fraction of all undergrads, affluent students at elite schools borrow a lot. In 2014 (the last year for which data was available), Harvard students owed $1.2 billion, Yale students $760 million, and University of Pennsylvania students a whopping $2.1 billion, according to an analysis I produced with Constantine Yannelis. Students at other elite schools, like the University of Southern California, NYU, and Columbia, owed billions more.

    According to the Department of Education’s College Scorecard, students who graduated or withdrew in 2017 or 2018 from elite or highly selective colleges and graduate programs (as ranked by Barron’s) owed about 12 percent of all student debt in those years, but account for only four percent of all borrowers.

    Students from elite colleges owe a disproportionate share of student debt in part because of the large graduate and professional degree programs at those schools. Harvard, for example, is the country’s largest law school, most of its students borrow, and the average borrower graduates with about $143,000 in student loans. Harvard Law graduates probably owe taxpayers more than half a billion dollars—loans they can and should pay back. And that applies not just at Ivy League schools but at many institutions with advanced degree programs. Nationwide, more than 40 percent of student loans were used to pay for graduate or professional programs. And the degree programs that are the largest sources of student debt are MBA programs and law schools.

    https://www.brookings.edu/opinions/biden-is-right-a-lot-of-students-at-elite-schools-have-student-debt/

  44. US housing market in ‘much worse shape’ than Fed: economist
    By Thomas Barrabi
    August 24, 2022 | 4:07pm

    The Federal Reserve’s policy tightening has nudged the US housing market into a slump — and policymakers have yet to fully acknowledge the extent of the trouble, according to a prominent economist.

    Ian Shepherdson, a chief economist at Pantheon Macroeconomics, provided a bearish outlook for homeowners after federal data showed sales of new single-family homes hit their lowest level in nearly seven years in July.

    Sales fell 12.6% to a seasonally adjusted annual rate of 511,000, well below consensus expectations.

    “The housing market is in much worse shape than the Fed has been willing to admit,” Shepherdson said in a note to clients. “But policymakers have made it clear that inflation is their primary objective, and housing is collateral damage.”
    …
    https://nypost.com/2022/08/24/us-housing-market-in-much-worse-shape-than-fed-admits-economist/

    1. “I’ve been bearish as hell about housing for months and, well, I’m feeling vindicated.”

      I’ve been bearish about housing for about twenty years now. Think how vindicated I’m feeling!

      Albeit, I didn’t foresee the Fed backstopping the Housing Bubble with quantitative easing, starting around 2012. I’m pretty sure I would have felt vindicated a lot sooner without that intervention to redistribute wealth from nonhomeowners to homeowners.

      ‘“I’d say if you are a homebuyer, somebody or a young person looking to buy a home, you need a bit of a reset,” Powell said. “We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again.”’

      You see, Jerome Powell wants what would be good for the Nation overall: Lower inflation, lower interest rates, and lower home prices. These certainly are laudable goals!

  45. 7 Stocks to Sell Before the 2022 Housing Market Crash
    These are the stocks to sell as real estate experts warn the sector is in a recession
    5d ago · By Josh Enomoto, InvestorPlace Contributor

    – Be very careful with these stocks to sell ahead of a possible housing market crash.
    – Redfin (RDFN): Redfin having lost all its gains from the pandemic doldrums tells you all you need to know.
    – Zillow (Z, ZG): As buyers move to the sidelines, Zillow seems to have little relevance.
    – Compass (COMP): Layoffs and more layoffs don’t bring much encouragement to Compass stakeholders.
    – Opendoor (OPEN): Unfortunately, Opendoor’s iBuyer model introduces problems while really solving none.
    – D.R. Horton (DHI): If housing is so strong, someone needs to ask why D.R. Horton is down 27% year-to-date.
    – KB Home (KBH): Remember that KB Home peaked in 2005 before the housing market collapsed in 2008.
    – Matterport (MTTR): While its 3D imaging service is impressive, there are fewer housing units now to image.

    While no guarantees of a housing market crash exist, investors may need to start considering sector-related stocks to sell. Primarily, it’s no longer amateur doom-and-gloom luminaries broadcasting bearishness. Instead, the National Association of Realtors confirmed what the National Association of Home Builders admitted: residential real estate has entered a recession.
    …
    https://investorplace.com/2022/08/7-stocks-to-sell-before-the-housing-market-crash/

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