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People Who Vastly Overpaid Could Have A Slight Loss In Equity

A report from Market Watch. “Lumber prices have dropped by more than 60% so far this year, but don’t count on a recovery soon. ‘Home builders have faced an enormous uptick in cancellations over the past several months due to the sharp rise in mortgage rates and the related softening demand for home buying,’ said Alexander Snyder, portfolio manager, real estate securities, at CenterSquare Investment Management. The trickle down of higher rates is cascading into lower demand for new houses, which leads to lower demand for lumber, which leads to lower prices for lumber.'”

“‘Lumber has witnessed complete demand destruction from a housing standpoint,’ said Greg Kuta, CEO of lumber broker Westline Capital Strategies. It has been a ‘one-two gut punch’ in the form of demand destruction with every kind of ratchet higher in interest rates. When you factor in higher inflation, price appreciation over the past year, and higher interest rates, ‘the single family component of housing is getting annihilated,’ he said.”

Business Insider. “Homebuilders like Lennar and KB Home are already walking away from residential land deals due to the soured outlook in the housing market. In their most recent quarter, Lennar said it canceled contracts to purchase 10,000 lots, while KB Homes dropped 8,800 lots. ‘The lumber market continues to be in a state of overall malaise as buyers anticipate lower overall demand going forward. Many yards are trying to pare their inventories to minimum levels and have really no fear of price upside,’ said Sherwood Lumber’s director of risk management Steve Loebner.”

The Daily News Journal. “Tennessee’s housing market shows signs of cooling. ‘A sign of uneasiness emerged in the corners of the housing market as reflected in significant drops in housing permit activities in Tennessee,’ said report author Murat Arik, director of the BERC at MTSU. Over the past two years, when the Federal Reserve lowered interest rates, Tennessee home buying skyrocketed. Builders couldn’t keep up with demand and the inventory of existing homes was extremely low. Houses sold quickly and offers were often significantly over the listing price. ‘I call it the 2020 covid interest discount,’ said Jason Galaz with Find a Home in Tennessee. ‘But that’s over.'”

“‘If it’s up above $400,000, it could sit on the market a month, maybe two,’ said Galaz, whose brand covers the entire state of Tennessee market. ‘A lot of home sellers are still expecting high demand and they can make up a number. When their home doesn’t sell that quickly, they have a reality check.'”

Carolina Public Press. “Charlotte’s real estate market may be cooling off, with less pressure on homebuyers to bid tens of thousands of dollars over asking price. Morgan Wise, a senior loan officer at Bridgewater Capital, said that recent bidding wars have scared many buyers in the Charlotte area, where it wasn’t uncommon for sellers to receive dozens of offers and to go on to sell for more than $50,000 over asking prices. She recently helped that same client sign a contract to purchase a home for $40,000 below list price, a significant shift from just a few weeks ago.”

“Realtor and broker Heather Hopkinson said that Charlotte’s housing market is catching up with national trends. She said that larger markets like New York’s started slowing first, and now Charlotte’s is following suit. Hopkinson also said she’s seeing a repeat of what happened after the 2008 market crash, a time when she saw low appraisals and quickly fluctuating home prices.”

From WLRN. “Home prices in South Florida are finally falling. Michael Butler, a real estate reporter for the Miami Herald said that a three-bedroom, two-bathroom house in Miami Gardens that had been previously appraised at $350,000 had most likely ballooned to about $550,000 as prices ran wild over the last year. ‘You’re looking at maybe a $20,000 dollar drop between July and August,’ Butler said. ‘Technically, that indicates there was a drop … But in terms of like a more significant drop, $20,000 might not mean a whole lot when you’re still overpriced by $200,000.'”

The Seattle Times in Washington. “‘The cooling has come hard and fast,” Stephen Stanley, chief economist at Amherst Pierpoint, said in a note. Seattle-area home prices in July were still up compared to last year but have fallen since this spring. Single-family home prices were up 14.5% from last July and down 3% from June, according to the index. In Seattle, that was the largest month-to-month drop since January 2009. But in 2008 and 2009, prices were also falling by double-digit percentages compared to the previous year. San Francisco (-3.6%) and San Diego (-2%) also saw large month-over-month declines in July.”

Oregon Pubic Broadcasting. “‘I like to describe the market as having gone from white hot to red hot, but it’s definitely in the cooling phase,’ said Drew Coleman, past president of the Oregon Realtors Association. Deschutes County saw the most drastic dip in median listing prices, going from $777,000 in May to $707,000 in August. This region has some of the highest median listing prices in Oregon, thanks to housing demands in Bend. Multnomah County also saw a slight dip, from $545,000 in May to $525,000 in August.”

“Coleman says Oregon’s most recent homebuyers shouldn’t worry about losing equity — that is, having their home’s value dip below what they bought it for — if they bought at the top of the market, when many homebuyers were making offers well above asking price. ‘People who vastly overpaid for a home definitely could have a slight loss in equity if they did overpay above-and-beyond what the market would bear now,’ Coleman said.”

The LA Daily News in California. “Los Angeles County homebuying chilled this summer. The homebuying pace cooled by 28% in August to a record low as house hunters were scared off by 41% higher house payments. Los Angeles County home prices are now 5.2% off their springtime peak.”

The Express News. “A Dallas developer who discussed plans for several San Antonio projects in recent years is facing federal charges for allegedly bilking Chinese investors of more than $26 million. Timothy Barton, president of JMJ Development and CEO of Carnegie Development, is facing charges of wire fraud, conspiracy to commit wire fraud and securities fraud, U.S. Attorney for the Northern District of Texas Chad Meacham announced. He allegedly went to Hangzhou, China, to pitch real estate projects, telling investors the properties were in desirable neighborhoods in the Dallas-Fort Worth area.”

“They also ‘allegedly misappropriated nearly all investor funds,’ using the money to make Ponzi payments to other investors, buy property under the names of other Barton companies, pay sales commissions to Fu and purchase a private jet for Barton, the SEC said. ‘The properties were never developed and investors have not been repaid,’ the SEC said.”

The London Free Press in Canada. “First-time homebuyers struggling to pull together a down payment to get into the London market might get some relief – if they’re willing to sit tight for a few months. After hitting an all-time high of $825,000 in February, the average resale price of a home in the region dropped to $648,000 in August.”

“According to RBC, London homes, along with those in Kitchener-Waterloo, have seen the second biggest decline in the MLS Home Price Index in Ontario at 16 per cent. Only Cambridge saw a greater decline at 19 per cent. Randy Pawlowski, president of the London and St. Thomas Association of Realtors (LSTAR), said the interest rate hikes have had a big impact on the local market, keeping many buyers on the sidelines uncertain about when to jump into the market and sellers struggling to adjust to the new price reality.”

“‘We haven’t seen a situation like this before, with the pricing, the inventory levels or the interest rate increases to such extremes,’ he said. ‘So, it’s pretty messy out there. Many sellers are struggling to get in line with where today’s buyer thinking is.'”

The Daily Mail. “Britain is heading for a property price crash within the next two years as more than two million households face soaring mortgage costs that will see many forced to sell, analysts have warned. Jittery lenders pulled almost 1,000 deals from the market overnight in the biggest daily fall on record. Homeowner Gary Sanders, 53, said the successive increases in mortgage rates so far this year alone have forced him to put his home back on the market.”

“He told MailOnline: ‘People are suffering now because of the seven increases since the end of last year. My mortgage has already risen from just over £500 a month to £1200 a month. I know they are going to go higher. I have put my property on the market as I have no choice but to sell. I am a 53 year old man who has worked hard his whole life and I find myself being forced to move back with my parents.'”

From Reuters. “Investors dumped shares and bonds of Chinese property developers on Wednesday, after a media report that CIFI Holdings (Group) Co had defaulted added to worries over the crisis-stricken real estate sector. Hong Kong-listed shares of CIFI Holdings plunged 32.3% to a record low as of the market close on Wednesday, after credit intelligence provider Reorg reported that the Chinese developer had missed payment on certain non-standard debt.”

“In a letter to employees dated Sept. 27, CIFI Chairman Lin Zhong said the company’s priority now is to survive. ‘Hardship and ordeal will persist for quite a long period of time,’ Lin said in the letter, which was widely distributed via social media and confirmed by the company. Lin said mortgage boycotts have prompted many local authorities to tighten cash withdrawals from escrow accounts, further squeezing liquidity for property developers.”

“‘Although we have more than 30 billion yuan ($4.14 billion)of cash sitting on the books, the overwhelming majority of it could not meet reasonable demand by companies,’ CIFI’s letter said. ‘In the coming months, CIFI’s cash flows will meet unprecedented challenges.’ A source with direct contact with Lin told Reuters that Lin is under immense pressure, as there’s no fresh, big policy support in sight, so ‘it’s unclear when the industry can see a gleam of hope.'”

Related Posts

Oh That Real Estate Bubble

https://www.youtube.com/watch?v=B37Autd784Q https://www.youtube.com/watch?v=lU4gmAIB3lc https://www.youtube.com/watch?v=m9rXdL08v34 https://www.youtube.com/watch?v=JGrxfBmOQ6E

This Post Has 141 Comments

  1. ‘People are suffering now because of the seven increases since the end of last year. My mortgage has already risen from just over £500 a month to £1200 a month. I know they are going to go higher. I have put my property on the market as I have no choice but to sell. I am a 53 year old man who has worked hard his whole life and I find myself being forced to move back with my parents.’

    Well, tell yer parents it was cheaper than renting Gary.

  2. From the last link:

    ‘Last week, CIFI was downgraded by Fitch Ratings, which cited the developer’s declining liquidity buffer and higher leverage’

  3. Following on the heels of Brandon’s deranged, demonic address to the nation from the ruined Democrat-Bolshevik malgoverned hellhole of Philadelphia, his “advisor” is ratcheting up the rhetoric from the Great Unifier’s floundering administration. Note to self: anyone who opposes the Brandon regime force-marching us down the road to Venezuela del Norte is, ipso facto, “a danger to our way of life.”

    We’re gonna need a bigger gulag….

    Video: Biden Advisor Declares MAGA Conservatives Want To ‘Destroy’ America

    https://summit.news/2022/09/27/video-biden-advisor-declares-maga-conservatives-want-to-destroy-america/

    Says Trump supporters are a ‘danger to our way of life’

    1. There can be no negotiation with Marxists. None. The only option is their complete and total extermination.

      P.S. Pinochet did nothing wrong.

    2. They are trying to accuse us of what they are guilty of. Essentially they are coming right out and saying they want to destroy America.

    1. don’t worry they will be fully backgrounded and vetted just like the couple million from across the border and the few hundred thousand from Afghanistan and couple 100k more from Iraq. I’m sure it’s all good.

  8. Yellen the Felon has done more than any single individual to destroy the middle and working classes in this country during her tenures as Fed Chair and Treasury Secretary. If there were any accountability for the really big criminals in this country, she’d be headed straight for the Florence, CO Supermax.

    Treasury Secretary Janet Yellen preparing to depart White House after midterms as Biden faces referendum on turbulent economy: Report

    https://www.dailymail.co.uk/news/article-11256845/Treasury-Secretary-Janet-Yellen-preparing-depart-White-House-midterms-Report.html

    The White House is preparing for Janet Yellen to leave her post as Treasury Secretary as soon as November as Americans rank the economy as one of their biggest concerns with just weeks until Election Day.

    Her potential departure is in the early stages and would come after the 2022 midterms, people familiar with the matter told Axios, and no decision has been made on a replacement.

  9. Oh dear….

    Hong Kong home prices fell in August to lowest since February 2019, unlikely to be boosted by ‘0+3’ quarantine relaxation

    https://www.scmp.com/business/article/3194081/hong-kong-home-prices-fell-august-lowest-february-2019-unlikely-be-boosted

    The prices of homes in Hong Kong fell by 2.26 per cent in August to their lowest level in three-and-a-half years, and are unlikely to get much support from the city’s reduced Covid-19 hotel quarantine requirements.
    An index measuring overall home prices slumped to 368.2 in August from 376.7 in July, according to official data released on Wednesday by the Rating and Valuation Department. Prices for flats of at least 752 sq ft fell 2.3 per cent in August, while prices for flats smaller than that decreased by 0.83 per cent. The August reading is the lowest since February 2019, when it settled at 367, government data shows.

  12. As long as it takes, how long is that?

    “Asked about the Ukraine proposal, a National Security Council spokesperson told The Hill “we are glad Congress is prepared to fulfill our funding requests on Ukraine through the end of 2022, ensuring we can continue to provide Ukraine with critical security and economic assistance as they defend their country against Russian aggression.”

    “President Biden has been clear we will support Ukraine for as long as it takes, and we look forward to Congress passing this funding to signal our enduring commitment”

    https://thehill.com/policy/defense/3663008-12-3-billion-for-ukraine-included-in-continuing-resolution/

    Corporate welfare for Lockheed Martin and Raytheon.

    And an endless supply of your taxpayer money gifted to the most corrupt nation in Europe.

    “They’re not sending their best”

    2. Looks like the Iranian suicide drones are really effective and taking out Ukrainian targets with deadly accuracy. Wonder how long it will take for the U.S. to respond with an expensive countermeasure?

  13. Attorney General Merrick Garland is the enemy of the American people.

    “GOP lawmakers are demanding Attorney General Merrick Garland justify why the FBI deployed dozens of fully-armed agents to raid Catholic pro-life activist Mark Houck as his “screaming” children watched the feds drag their father off to jail.”

    https://www.thegatewaypundit.com/2022/09/22-lawmakers-demand-merrick-garland-explain-exactly-fbis-swat-team-raided-pro-life-activist-mark-houck-excessive-force-used-fbi-american-citizen-local-mat/

    The Day Of The Rope is coming, globalist sh*tbags…

    2. “screaming” children watched the feds drag their father off to jail.”

      For a case the city police and district attorney declined to file charges on.

      New information raises questions about FBI raid on Catholic father of

      By Shannon Mullen
      Washington, D.C. Newsroom, Sep 25, 2022

      When both the city police and the district attorney declined to file charges against Houck, the escort filed a private criminal complaint in Philadelphia municipal court, Middleton said. The case was dismissed in July when the man repeatedly didn’t show up in court, Middleton said.

      Just days later, Houck received a “target letter” from the U.S. Attorney’s Office informing him that he was the focus of a federal criminal probe into the same incident, Middleton said.

      Through his attorney at the time, Houck tried to contact the U.S. Attorney’s Office to discuss the case but never received a response, Middleton said.

      “The next time they heard anything was Friday morning,” he said.

      That day, Sept. 23, federal law enforcement officials arrived outside the Houcks’ home in Kintnersville in Bucks County, Pennsylvania, around 7 a.m.

      “A SWAT team of about 25 came to my house with about 15 vehicles and started pounding on our door,” Houck’s wife, Ryan-Marie Houck, told CNA on Friday, just hours after her husband’s arrest.

      “They said they were going to break in if he didn’t open it. And then they had about five guns pointed at my husband, myself, and basically at my kids,” she added.

      https://www.catholicnewsagency.com/news/252385/mark-houck-fbi-arrest-abortion-clinic

    1. It will be interesting if the Fed stays the course with interest rate hikes and QT as they claim. What will happen to municipalities that have to pay significantly higher interest rates to issue bonds with a shrinking tax base as home prices and property taxes fall?

      1. Heres the thing….. The stated goal is to drown housing in the bath tub. What’s the issue with the collateral damage? The end zone is 90 yards away. It’s a long way down. A very long way down.

        Let go or be dragged.

        1. I don’t see how they can crash the housing market without crashing the banks, the municipal bond market, pensions, the GSEs. etc. Can we go back to normal without scrapping the whole financial and monetary system and starting over?

          1. It’s possible they were caught unawares by inflation. Forcing their hand. It’s also possible this is all part of the plan. That they knew they were printing way too much money. If you’ll remember when I saw Albuquerque up 30%, I made the point that there was no way that was going to be sustained and the PTB had to know that. And we saw the central bank/sh$tholes-are-skyrocketing phenomenon spread everywhere.

            As far as normal, Jerry Powell said, at the peak of CCP virus hysteria, we’re never going back to normal. Oddly, the WEF and most central bankers and other assorted globalist scum were saying the EXACT SAME THING. I think it’s useful to keep in mind that we have been constantly moving from one crisis to another for going on 3 years now. “They” are constantly pushing to destabilize the population of the planet. This is consistent with that.

          2. Edward Dowd on 9/27/2022 w/ 56s video:

            Market predictions from February on Bannon’s War Room @SteveBannon when I first appeared. S&P was around 4500. Everything in the news is a distraction from a sovereign bubble debt collapse and that’s why the Dollar index is failing up. The higher the dollar goes with speed (rate of change ) is indicative of the greatest global margin call ever in the history of financial markets in process. Remember nothing goes down in a straight line.

            We are here because of Central Banks & Politicans…never forget that.

      2. Maybe, and I know this sounds crazy, they could learn to do with less and not waste so effing much.

        I know, crazy thoughts, never happen.

  16. An “election denier” is anyone who believes that Joe Biden won the 2020 election. Joe Biden will never be the legitimate president of the United States, and this alleged judge is a tyrant.

    “A federal judge delivered a blistering rebuke of Republican Party leaders Tuesday for what she said was a cynical attempt to stoke false claims of election fraud of the kind that fueled the Jan. 6 attack on the Capitol.

    U.S. District Court Judge Amy Berman Jackson said former President Donald Trump had turned his lies about the election into a litmus test for Republican candidates and that “high-ranking members of Congress and state officials” are “so afraid of losing their power” that they won’t contradict him. That fealty, she said, comes even as law enforcement and judges involved in cases related to the former president are facing unprecedented threats of violence.”

    https://www.politico.com/news/2022/09/27/oath-keeper-trial-trump-jan-6-00059091

    Trump won 2020.

    The 2020 election was stolen.

  17. Newest from Alex Berenson:

    “You may have wondered how the United States is still clocking 3000 Covid deaths a week when even Joe Biden – who can barely manage a staircase unaided – easily beat Omicron.

    The Milwaukee coroner’s office has the answer. It publishes anonymized death reports, including cases where Covid is listed on the death certificate. Here are four of the seven from the last two weeks. Average age 90.

    The youngster in the group was 80 and had metastatic prostate cancer.

    And diabetes.

    And Parkinson’s disease.

    And COPD.

    These folks are not the exceptions, they’re the rule. “From” versus “with” Covid is a pointless distinction for this population.

    Anyone dying of Omicron is likely either incredibly old, incredibly sick.

    And, according to the coroner’s office, most are vaccinated.”

    https://alexberenson.substack.com/p/six-recent-covid-deaths-per-the-milwaukee/

    Never forgive, and never forget, the illegitimate and unelected government that wanted you FIRED FROM YOUR JOB for not getting injected with experimental mRNA poison.

    It’s a medical genocide.

    2. “You may have wondered how the United States is still clocking 3000 Covid deaths a week
      I Was at my Dr’s earlier this week for routine check up.
      He said he had lost 2 patients to Covid in the last 3 months and a third was in the ICU about to die.
      All were over 90.

        1. Most people don’t make it to their nineties. But yeah, most people who “died of Covid” actually died from something else. There was a huge financial incentive to put Covid on their death certificates. All part of the scam, which has mostly run its course. Now we are back to Warmism, which will be an excuse to return the west to the pre-industrial age, except for the people who matter, who will still have air conditioned mansions, cars, private jets and plenty of meat on their tables.

          I’m beginning to wonder if I’ll live to see another non-crisis period.

  18. This is Joe Biden’s America.

    “Conservative activist Robby Starbuck shared a compilation of shocking video footage from the Chattanooga Pride Youth Day event at the Wanderlinger Brewing Company. The video includes a little girl wearing a “rainbow” dress who appears to be about 4-5 years old is seen standing on a stage while Disney music plays and rubbing her hand repeatedly up and down the genitals of a man dressed like the “Little Mermaid” while he stands still and allows her to fondle him.”

    This is the Democrat Party.

    “In another portion of the video, a drag queen can be seen lying down on a stage and spreading his legs wide open while toddlers watch from below. In yet another scene in the video, small children attempt to hide from an overweight man dressed in a gaudy green costume who lurks around the room until he finds a woman who will hand him (a perfect stranger) her baby, who proceeds to cry, as the drag queen hands the baby back. In the final scene, a child can be seen walking up on stage and handing one of the drag queens a bill”

    https://www.thegatewaypundit.com/2022/09/beyond-sick-drag-queen-dances-little-girl-repeatedly-rubs-hand-crotch-little-mermaid-costume-another-drag-queen-spread-legs-wide-open-stage/

    Remember, when you buy a house, your property taxes are paying to promote this in the public schools.

    2. These are dangerous times , when you have a collusion of powers that are controlling the narrative, to defraud the public , for a pre-planned One World Order / Great Reset takeover .

      Now all of a sudden if you question a election, your a terrorist trying to destroy the Country.
      If you question a expiermental vaccine, or you dispute punishment of losing your job or credentials if your not willing to be a lab rat for a new technology fake vaccine, your the enemy that deserves punishment.
      Thousand of Scientists and Doctors under assault because they dispute the safety or effectiveness of a vaccine, or the justification of global lockdowns and mass vaccination.
      I was listening to a Attorney yesterday who has 14 cases he has filed in which the Hospitals killed these patients.
      This lawyer went on to say that the hospitals got a 20% bonus if they administered the killer protocols.
      In summary, he said that in some States the hospital incentives were so high that in some cases they got over 500 thousand for one patient. All this bribery came out of the tax coffers and bills passed by our wonderful elected politicians.
      Control of the narrative, to pull off mass genocide, and destruction of current systems for pre-planned take over by sinister anti humanity psychopaths.
      Don’t comply, they want to kill you or enslave you.

  19. “Homebuilders like Lennar and KB Home are already walking away from residential land deals due to the soured outlook in the housing market. In their most recent quarter, Lennar said it canceled contracts to purchase 10,000 lots, while KB Homes dropped 8,800 lots.”

    Interesting to read this, about a day after reading in the Wall Street Journal about how the US is running out of land on which to build houses. Could this just be an appearance, due to big corporate hoarders?

    1. The U.S. Is Running Short of Land for Housing
      Land-use restrictions and lack of infrastructure have made it harder for developers to find sites to build homes; ‘almost across the board, you’re fighting for land’
      A new housing development site on land that used to be part of the Thomas family ranch.
      A new housing development site on land that used to be part of the Thomas family ranch.
      By Konrad Putzier
      / Photographs by Angela Owens/The Wall Street Journal
      Sept. 25, 2022 1:10 pm ET
      …
      https://www.wsj.com/articles/the-u-s-is-running-short-of-land-for-housing-11664125841

      1. running out of land???????? Oh my goodness, these “experts” really need to get out of downtown NYC and take a drive around the country. They might notice that there is a lot of land. a lot.

        Hell they blew up nukes in nevada and not only did no one care, but no one noticed.

        1. A flight over the northwest part of the country between Nebraska and Washington State is informative. Other than a few sparsely distributed towns, there are few signs of human habitation. The land seems no less habitable than the semiarid wasteland which much of California’s population of 40 million inhabits.

  20. This is Joe Biden’s America.

    “According to a recent survey by Bluecrew, a workforce service platform, 69 percent of Americans say they are actively looking for extra work hours, while 68 percent say they are reevaluating their current work situation.

    Furthermore, 72 percent of Americans say inflation has impacted how they view their job, and 57 percent say they sought new or additional roles in the past year as the cost of living has ballooned since 2021 under the Biden administration.

    Eighty-five percent of Americans said skyrocketing prices are affecting their spending and buying habits.”

    https://www.breitbart.com/politics/2022/09/27/survey-nearly-7-in-10-americans-searching-extra-work-due-surging-inflation/

    I saw a Hispanic panhandler for the first time ever yesterday. In Sheridan, CO holding a sign asking for help for food and rent. I’ve never seen a panhandler before that wasn’t white or black.

    1. Petty theft, and not so petty theft has skyrocketed in my little burg, Small wonder, as times are super tough and there are no consequences as the Soros backed DA in Fort Collins just turns them loose.

  21. “Seattle-area home prices in July were still up compared to last year but have fallen since this spring. Single-family home prices were up 14.5% from last July and down 3% from June, according to the index. In Seattle, that was the largest month-to-month drop since January 2009. But in 2008 and 2009, prices were also falling by double-digit percentages compared to the previous year. San Francisco (-3.6%) and San Diego (-2%) also saw large month-over-month declines in July.”

    For comparison to the year-on-year rate of price change, it is helpful to convert the one month changes to annualized rates.

    Seattle: 1-(1-0.03)^12 = 30.6%

    San Francisco: 1-(1-0.036)^12 = 35.6%

    San Diego: 1-(1-0.02)^12 = 21.5%

    Those all look to me like double digit percentages. And they don’t reflect the recent turmoil in the debt markets, which has pushed up mortgage rates to 7%. More losses lie ahead.

  22. A reader sent these in:

    Heard a friend say “you can drive a truck through the bid-ask spread” and that perfectly describes my life right now. 9 listings, the most ive ever had at once, and its v quiet. Spoke with the top 30 buyers in the neighborhood where these listings are and half were “pencils down”

    https://twitter.com/MaxMBerger/status/1574910974577979393

    Carl Quintanilla

    (Bloomberg) – Say goodbye to the housing bull run. US home prices — for the first time in a decade — are falling.

    https://twitter.com/carlquintanilla/status/1574952305203744768

    A real estate horror story

    • Sell Dec ’21. Lock huge gain, prepayment penalty
    • 1031 into PHX apartments. 80 LTV bridge, 2 year cap.
    • Cap expires Dec ’23. 10Y at 5%.
    • Equity gone, tax man cometh

    https://twitter.com/evanmr/status/1574813986989559810

    Bloodbath.

    https://twitter.com/NipseyHoussle/status/1574966850638979072

    So tired of hearing how we need the Fed to save us from the consequences of years of horrible Fed policies.

    https://twitter.com/RudyHavenstein/status/1574901381634195456

    30 year mortgage nearly 7% now. Record refis last year at 3%. Who wants to sell a house w/a 3% mortgage and buy another one at 7%? Pay $20k more in interest on $500k. No one.

    https://fortune.com/2022/09/26/housing-market-real-estate-prices-interest-mortgage-rate-highest-since-2002/
    “This time we don’t have a supply glut nor a subprime crisis”

    https://twitter.com/SuburbanDrone/status/1574578973438263325

    What we are witnessing is a Black Swan event in the bond market. Treasury volatility is the highest since the market lows of March 2020 and before that October 2008.

    https://twitter.com/SuburbanDrone/status/1574855556891873282

    Sky-rocketing inflation and interest rates
    Collapsing economy
    Collapsing currency
    Fiscal stimulus

    The UK is officially the locus of the Global Minsky Moment. Never go FULL Third World.

    https://twitter.com/SuburbanDrone/status/1574908591458361347

    Credit card debt at record highs in 2022 … Charge it !!! Worry about it later.

    https://twitter.com/WallStreetSilv/status/1574957066577268736

    Jay Parsons

    The rental market of 2022 looks nothing like 2021. With Q3 almost in the books, the preliminary numbers for apartment demand look wayyyyyy weaker than expected. We’ll release final numbers next week, but this could be the downside scenario we warned about earlier this summer…

    https://twitter.com/jayparsons/status/1574751570872483841

    Refinancing costs for Investment Grade sterling corporate bonds have soared the most since financial crisis

    https://twitter.com/AlessioUrban/status/1574855795023482911

    UK homebuilders

    https://twitter.com/AlessioUrban/status/1574858172891861005

    This 20% ytd UST long bond decline has only happened twice…1931 & 1937. Witnessing history now.

    https://twitter.com/warrenbachman1/status/1574799598140391424

    The mortgage industry operations are looking at a complete overhaul at every Lender. They can’t downsize fast enough to get profitable.

    https://twitter.com/KirkChivas/status/1574464931621117952

    “Timber!!!….” Demand destruction in action. Expect more of this kind of price-softening in once-hot markets (autos, housing, etc) over the coming months/quarters as recession hits in earnest.

    https://twitter.com/menlobear/status/1574750195375489024

    Home prices are selling for 9.5 times the average income. This is the highest home price to income ratio ever!

    https://twitter.com/EPBResearch/status/1574805291165704194

    Grandpa: “7% mortgage rates aren’t high.” Me: “Get off my lawn. You bought your house for $20,000 and refi’d all the way down.”

    https://twitter.com/cullenroche/status/1574479559096905728

    Jaw-dropping. Average rate on a 30 year fixed-rate mortgage pierced 7 today, per Mortgage News Daily, reaching 7.08%. A 20-year high.

    https://twitter.com/Neil_Irwin/status/1574814433913757696

    The boundary between Scottsdale, Arizona and the Salt River Indian Reservation

    https://twitter.com/Rainmaker1973/status/1574817516232347648

    🇺🇸 (1/10) | As I already warned several times, the #housing #recession has gained traction since July as prices started dropping ⬇

    https://twitter.com/C_Barraud/status/1574820341309968386

    Lance Lambert

    Monthly principal and interest payment on a $600,000 mortgage:

    @ 2.65% = $2,418 (i.e. rate entering 2021)
    @ 3.2% = $2,595 (i.e. rate entering 2022)
    @ 7.08% = $4,024 (i.e. today’s average rate)

    https://twitter.com/NewsLambert/status/1574821760192708611

    1% increase in rates = -10% homes prices. We’ve lost 40-45% of home values. Just takes time now.

    https://twitter.com/GRomePow/status/1574823183378620417

    Lance Lambert

    We’re amid the biggest mortgage rate shock since 1981.

    https://twitter.com/NewsLambert/status/1574825947580305409

    8% mortgages come with 50% off homes. Just takes time. People don’t buy homes, they buy payments.

    https://twitter.com/David32375134/status/1574807896566763524

    1. “8% mortgages come with 50% off homes. Just takes time.”

      About five years should do it, for those who can play the long game.

  23. Is there a technical difference between Quantitative Easing and buying long-dated sovereign bonds to suppress yields below market rates?

    1. The Financial Times
      Markets Briefing Sovereign bonds
      UK government bonds rebound after Bank of England ‘reassurance’
      US Treasuries also rally after 10-year yield reached 4% for first time in 12 years
      The 20 Fenchurch Street skyscraper, also known as the ‘Walkie Talkie’, on the skyline in the City of London
      The City of London. The pound and UK government debt have sold off sharply since chancellor Kwasi Kwarteng announced his plan for £45bn worth of tax cuts
      Joshua Oliver, Tommy Stubbington and Chris Flood in London an hour ago

      UK government bonds rallied on Wednesday after the Bank of England intervened to calm market turmoil, but sterling weakened as investors continued to worry about chancellor Kwasi Kwarteng’s economic plans.

      The central bank on Wednesday announced it would buy long-dated gilts in light of the recent “significant repricing” of UK government debt. “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” the BoE said.

      Thirty-year gilt yields, which earlier on Wednesday touched a 20-year high of more than 5 per cent, fell to 4.13 per cent. The long-dated debt was on track to post the sharpest drop in yields for any single day on record, according to Tradeweb data.
      …

      1. “Bank of England ‘reassurance’”

        Putting it in quotes doesn’t hide that it’s a bailout.

        “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,”

        This argument is always trotted out to justify central bank bailouts. Too bad that printing money to buy down long-term bond yields is inflationary.

      2. “The Bank is monitoring developments in financial markets very closely in light of the significant repricing of UK and global financial assets.

        This repricing has become more significant in the past day – and it is particularly affecting long-dated UK government debt. Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability. This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy.

        In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses.”

        As others have noted, these “significant repricing”s and “dysfunction”s are never a problem when they’re to the upside, even though they exclusively benefit the parasite class and harm everyone else when they inevitably reverse. If they were so worried about “financial stability” and the “real economy,” they wouldn’t manipulate the price of money to begin with.

        1. “…never a problem when they’re to the upside…”

          Exactly.

          Asset prices rising => all is well

          Asset prices falling => systemically important crisis, requiring intervention to support prices

    2. The New York Times
      To Calm Markets, Bank of England Will Buy Bonds on ‘Whatever Scale Is Necessary’
      The purchases are designed “to restore orderly market conditions,” the central bank said, after days of turmoil that followed the government’s plan for sweeping tax cuts and higher borrowing.
      This article is part of our Daily Business Briefing
      The Bank of England is taking steps to intervene in the financial markets after the announcement of an economic growth plan spooked investors.
      By Eshe Nelson
      Reporting from London
      Sept. 28, 2022
      Updated 3:51 p.m. ET
      The Bank of England intervened forcefully on Wednesday to relieve days of market turmoil after the new government’s fiscal plans sent borrowing costs soaring and the British pound sinking to record lows.

      In an extraordinary intervention, the bank said it would undertake large-scale purchases of British government bonds in the coming weeks. In addition to bringing down interest rates, the move helped buoy the pound, whose weakening has added to the nation’s inflation worries.

      “The purpose of these purchases will be to restore orderly market conditions,” the central bank, which is independent of the government, said in a statement. “The purchases will be carried out on whatever scale is necessary to effect this outcome.”
      …

  24. ‘US home prices — for the first time in a decade — are falling’

    What about 2014 Carl? Or the 2018 ebola! period? When the central bank raised rates.

    1. … but do you feel the rage…..:) The spontaneous meltdowns, incesssant clucking and hoof stamping over falling housing prices and soaring interest rates is pure gold….. pure gold Jonesy.

  25. Shacola is a member of a demographic that votes 90%+, every election, for Democrats. Now Shacola is reaping what she voted. This is what we call “poetic justice,” Shacola. You made your bed, now go lie in it.

    Homeless vagrant takes up residency on Los Angeles homeowner’s PORCH and refuses to leave – as woman who lives there alone claims cops have done nothing to help protect her

    https://www.dailymail.co.uk/news/article-11255345/Homeless-vagrant-takes-residency-Los-Angeles-homes-PORCH-refuses-leave.html

    A Los Angeles homeowner who is housing an uninvited homeless man on her porch is concerned for her safety after the police have ‘done nothing’ to remove him.

    Shacola Thompson, a resident of Van Nuys, said the homeless man has nestled up on her patio furniture about ten times this month.

    Thompson first noticed unusual activity outside her home when she found graffiti on her porch near Hazeltine Avenue and Sherman Way. She was able to take a peek at her front door camera and saw the unidentified man lounging on her outdoor couch.

  26. Entrusting your money issuance to Keynesian fraudsters and your governance to globalist Quislings…what could possibly go wrong?

    Pension funds ‘would have collapsed TODAY’ if Bank of England didn’t hit panic button: Bank announced £60billion government debt buy-up amid fears institutions were within HOURS of being crushed by soaring interest rates and plummeting Pound

    https://www.dailymail.co.uk/news/article-11258227/BoE-announces-buy-government-debt-bid-ease-market-chaos.html

    1. Good thing they have all those derivatives and complex financial instruments to protect their holdings in such times.

      right????

      right????????

  27. So I’ll be getting a refund check for the loans I paid off and the tuition I paid out of pocket?

    What the first legal challenge to derail Biden’s student loan forgiveness plan means for borrowers:

    “Nothing about loan cancellation is lawful or appropriate,” Frank Garrison, an attorney at Pacific Legal Foundation, said in a complaint filed in federal court in U.S. District Court for the Southern District of Indiana.

    “In an end-run around Congress, the administration threatens to enact a profound and transformational policy that will have untold economic impacts,” the complaint goes on to say. “The administration’s lawless action should be stopped immediately.”

    https://www.cnbc.com/2022/09/28/what-legal-challenge-to-student-loan-forgiveness-means-for-borrowers-.html

  28. Stop using Google and Android.

    “The technocratic cabal is pushing the world toward global tyranny, and Google is one of the primary supporters, aiders and abettors, of this scheme. Indeed, without Google, the dream of a One World Government would likely never happen, as it relies on social engineering and artificial intelligence. Google is a frontrunner and expert in both, and controls entire populations in ways we don’t even fully understand.

    Over time, Google has positioned itself in such a way that it’s become deeply embedded in your day-to-day life. Every minute of every day, it’s collecting data on everything you do, everywhere you go, everything you share, question and believe.

    Google catches every single move you make online if you’re using a Google-based product, be it their search engine, Google Docs, Google Wallet, Gmail, Chrome browser, Google Photos, Android Auto, Android TV, Gboard, Google Alerts, Connected Home, Chromebook, YouTube — the list goes on.

    All Google products are interconnected, and the data from all their different products and services are collected to build your personality profile. That profile is then sold to third parties. It’s also used by Google to influence your thoughts, beliefs and behaviors using AI analytics.

    Google is a censoring agency with the ability to restrict or block access to websites across the internet — The most crushing problem with this kind of internet censorship is that you don’t know what you don’t know.

    If a certain type of information is removed from search, and you don’t know it should exist somewhere, you’ll never go looking for it. And, when searching for information online, how would you know that certain websites or pages have been removed from the search results in the first place? The answer is, you don’t.”

    https://www.theburningplatform.com/2022/09/28/ditch-google-and-gmail-before-its-too-late/

    1. Remember back in the old days when there would be outrage amongst the neckbeards and freedom of information would be ensured? How is it that all of the neckbeards have disappeared? How do we not have a decent competing search engine that is premised on some very basic ideals?

      Please don’t respond with duckduckbs.

  30. I wonder how many people bought houses sight unseen in Ft. Myers. I wonder if they will still have houses by tomorrow.

    1. “….Ft. Myers. I wonder if they will still have houses by tomorrow….”

      Per latest news, a big question is if they will be able to find Ft. Myers?

      Its looking pretty ugly right now, next couple of hours ‘iffy’

      2. Its looking pretty ugly right now

        Headline: “WINDS 155 mph.”

        I use a site called windy dot com to evaluate wind and wave forecast while I’m cruising on the Great Lakes. I’ve found it to be very reliable. Check it out. Winds seemed to be below 50 knots.

        1. “Headline: “WINDS 155 mph.”

          That ain’t good.

          Forecasting on this storm wasn’t great, they were calling for it to hit from Tampa to the panhandle a little over a day ago. They didn’t have much time or at least urgency and they probably got a pretty ugly storm surge from Naples up to Fort Meyers.

          Nice breezy day in Jupiter for the most part today although it was pretty nasty from the feeder bands last night.

          Tornado in Delray Beach last night.

          https://www.orlandosentinel.com/weather/hurricane/fl-ne-hurricane-ian-tornadoes-20220928-vfocxklth5guhdcucnlrsfmd34-story.html

    2. My niece who bought in Florida last year not only finds her house in the path of future price declines, but also under a hurricane warning.

  32. It’s beyond negligence or incompetence, the Democrat Party is enacting a controlled demolition of the economy.

    “Voters see no end to the economic destruction under President Joe Biden, with most now predicting a 1930s-style Great Depression.

    In the latest Rasmussen Reports survey, 57% said that they believe the United States will enter a “1930s-like Depression” soon, including 21% who think a depression is “very likely.”

    The new survey is the latest warning sign to the White House and the Democrats eyeing a 2024 presidential bid. Most respondents have said in recent polls that they believe the nation is on the wrong track, but a depression is a whole different game.

    In recent months, inflation, gas prices, and mortgage rates have hit or nearly hit two-decade highs, and polls have shown that a worried public is bracing for a hard economic landing.

    The Rasmussen survey also flagged concerns among parents about the nation their children will live in. “Only 24% believe today’s children will be better off than their parents”

    https://www.washingtonexaminer.com/news/washington-secrets/most-fear-1930s-like-depression-rasmussen-poll

  33. Nice financial system ya got there…would be a shame if anything happened to it.

    Kwasi Kwarteng WON’T rethink tax-cutting Budget: Ministers deny blame for ‘global’ market chaos after Bank of England is forced to launch £60 billion government debt buy-up to stop soaring interest rates causing ‘mass’ collapse of pension funds

    https://www.dailymail.co.uk/news/article-11258227/BoE-announces-buy-government-debt-bid-ease-market-chaos.html

    Kwasi Kwarteng will not rethink his tax-cutting budget, with ministers refusing to take the blame for the ensuing market chaos, despite the Bank of England being forced to launch a £60billion government debt buy-up to prevent soaring interest rates causing a collapse of pension funds.

    In a shock and highly unusual move today, the Bank of England declared it would be purchasing gilts in response to the ‘significant repricing of UK and global financial assets’ since Mr Kwarteng’s announcement on Friday.

    It has emerged that the extraordinary intervention was triggered by fears that otherwise institutions would have been crushed within hours – putting the whole system at risk.

  34. Trying to summon forth some vicarious mortgage panic, but just not feeling it. BTW, FBs, it wasn’t YOUR home until the last mortgage check cleared. Sorry that whole “get up on that property ladder” thingy isn’t working out so well for ya!

    ‘We could lose our home and nobody cares’: Mortgage panic deepens as families fear they will default on soaring repayments – amid warnings of 15% fall in house prices as lenders pull 1,000 deals in 24 hours with interest rates heading towards 6%

    https://www.dailymail.co.uk/news/article-11259405/Well-lose-home-cares-Mortgage-panic-deepens-families-fear-default.html

    Mortgage panic is deepening as families fear that they will default on soaring repayments and lose their home amid warnings of 15 per cent fall in house prices as lenders pull 1,000 deals in 24 hours with interest rates heading towards 6 per cent.

    Britain is heading for a property price crash within the next two years as more than two million households face soaring mortgage costs that will see many forced to sell, analysts have warned.

    1. ‘The government is gambling with our homes’
      Sky News
      Sep 28, 2022 There’s been a record drop in the number of mortgage products available to borrowers over fears interest rates could increase further. At a time when many are struggling to keep up with the price of energy, food and other essentials, homeowners are now adding mortgage payments to the list of rising costs.

      https://www.youtube.com/watch?v=S27-_ceBRnk

      2:15.

    2. Mortgage panic deepens as families fear they will default on soaring repayments

      If they think it’s bad now, just wait until UK mortgage rates hit double digits. It’s going to be a bloodbath. Brits will have monthly mortgage nuts that exceed their take home pay.

  36. “The Other Reason The BOE Panicked: 26% Of All UK Mortgages Are Variable Rate And Set For Imminent Repricing”

    https://www.zerohedge.com/economics/other-reason-boe-panicked-26-all-mortgages-are-variable-rate-and-set-imminent-repricing

    (snip)

    Earlier today, we described the main reason why the BOE panicked – which, with billions in pensions set to suffer catastrophic losses absent an intervention, perhaps merited the latest central bank bailout. There is another reason why the central bank stepped in.

    It’s not just the US where housing affordability is the worst in history: in a note from DB’s Jim Reid, the bank’s head of thematic strategist writes that the bank’s UK Homebuilding equity research team pushed out some fascinating insights into what the recent UK issues could do to housing affordability.

    The note served for Reid’s latest Chart of the Day, and shows the ratio of UK mortgage payments to take home pay. The colored lines and numbers look at where this would go if you moved rates up in 50bp increments, relative to the last published version of this chart which used an average new mortgage rate of 1.9% in Q2.

    For reference, Lloyds Bank were offering a 2yr fixed rate last night at 4.95%, assuming a 60-75% loan-to-value ratio, which goes up to 5.29% for 90-95% loan-to-value.

    So at these levels, this would send affordability to worse levels than that seen during the GFC and within a couple of percentage points of the peak in the late 1980s/early 90s when the UK saw a savage house price crash. The report (available to pro subscribers ) also shows that in aggregate, we’re already around those levels for London.

    Of course, not every mortgage needs to be refinanced today so these rates have time to change before most refinance. However, unlike the US where a 30-year fixed market dominates, the FCA suggested in August that 26% of the total outstanding UK mortgages are variable rate and thus dependent on where the BoE’s bank rate is. It is currently 2.25% but markets are now pricing in a terminal rate above 6% which would be a huge shock if it got close to happening over the next 6-9 months as is priced in. 74% of mortgages are fixed (mostly between 1-2%), and half of these will need to be refinanced within the next 2 years, with half at a fixed rate beyond 2 years (but rarely beyond 5 years).

    So 26% of mortgage payments are at risk of imminent increases, 37% at risk over the next two years if rates don’t rapidly fall, and 37% can ride out this storm for a few more years.

    As Reid concludes, while much can change very quickly in politics and markets, if markets are correct, “the UK housing market is in for a huge amount of pain ahead,” unless the BOE were to somehow monetize all the upcoming debt issuance and sends rates back to zero.

    1. Keep in mind that in the UK, “fixed rate” means that your interest rates is fixed for a few years and not for the life of the loan.

      1. The Financial Times
        FT Alphaville Sovereign bonds
        Dun dun . . . dun dun . . . dun dun dun dunnnnnnnnnnnnn!
        What will get chomped on first?
        Robin Wigglesworth 15 hours ago

        Overnight, according to our Refinitiv terminal, the 10-year US Treasury yield finally breached the 4 per cent level for the first time since 2010.

        It has since slipped back to 3.9781 per cent, but the wildness of the move from about 1.5 per cent at the start of the year — and the sub-1 per cent level it held for much of 2020 — is incredible.

        Behold, the scariest chart in financial markets:
        [TREASURY YIELD SPIKE FIGURE]

        Obviously, levels are arbitrary etc etc, and the 4 per cent mark is mostly famous for Jamie Dimon’s longstanding prediction that it could hit this level, and Industry-Harper’s infamous options trade.

        But this still feels like a moment. As our FT colleagues wrote overnight, a “volatility vortex” has slammed into the US Treasury market.

        Whatever way you cut it, the seismic shift in the US Treasury market is tightening financial conditions for everyone on the planet. If we continue along this path, something is inevitably going to break.
        …

        1. “dun dun dun dunnnnnnnnnnnnn!”

          Gotta love the onomatopoeic reference to the Fate Theme from Beethoven’s 5th Symphony. This is getting serious!

      2. how close we came to catastrophe

        I see the word “leveraged”. They must be very important gamblers, that cannot be allowed to be ruined.

        I seem to remember when the Pound was worth $3.50.

        2. According to sources, in 1864 it was worth $9.97. The long term chart has it plunging even further. Perhaps more immigration would create the demand they need to make it more valuable. Or maybe green energy? I’m sure they’ll think of something.

      3. Kwasi Kwarteng was ignoring calls?? Maybe he was on a conference call to Zimbabwe. Printin’ ain’t easy, yo.

  37. ‘using the money to make Ponzi payments to other investors, buy property under the names of other Barton companies, pay sales commissions to Fu and purchase a private jet for Barton, the SEC said. ‘The properties were never developed and investors have not been repaid,’ the SEC said’

    Hey, that’s just like China!

  41. The present US administration should be considered a terrorist organization and tried in world courts for the destruction of Nordstream I and II.

    1. I am still stunned by this, and expect there will be some form of retaliation, such as power grid sabotage. Imagine if the lights were to go out on the eastern seaboard for a whole week. After all the looting there would be nothing left

  42. Went outside and watched the trees bend and the clouds spin for about a half hour, gusting to 50 mph or so, pretty exhilarating. Still have to pray for those people in Naples, Fort Meyers and others on the Gulf coast who took the hit, I’ve got a feeling sunrise is going to bring some sad and ugly.

  43. Democrats Seek 600X as Much Taxpayer Money for Ukraine than to Fix Jackson, Mississippi, Water Crisis

    JOHN BINDER
    28 Sep 2022

    In May, Biden signed a $40 billion military aid package for Ukraine. House Republican leadership — including Reps. Kevin McCarthy (R-CA), Steve Scalise (R-LA), and Elise Stefanik (R-NY) — voted with Democrats to approve the $40 billion while only 57 House Republicans voted against the spending boondoggle along with 11 Senate Republicans.

    Now, in a short-term spending bill, Democrats are hoping to send another $12.3 billion to Ukraine — 600 times the $20 million that lawmakers are seeking to help fix Jackson’s water crisis where residents are being warned of lead contamination.

    https://www.breitbart.com/politics/2022/09/28/democrats-600x-taxpayer-funds-ukraine-jackson-mississippi/

    1. “…than to Fix Jackson, Mississippi, Water Crisis”

      That’s a local issue typically solved by the county issuing municipal bonds for capital improvement projects, and the county’s taxpayers repay them over an extended period.

  44. So many are saying why would anyone sell with a 3% rate? How about the 750,000 couples that get divorced each year in America. With increased debt loads that number will only go higher.

    1. LIVE UPDATES
      Updated Thu, Sep 29 2022 12:23 AM EDT
      Stock futures inch lower after Wednesday’s big market rally
      Samantha Subin
      Seek additional assets to diversify against equity risks, says Xponance CEO Tina Byles Williams

      Stock futures inched lower on Thursday morning after the Dow Jones Industrial Average staged a comeback off its lowest level for the year.

      Futures tied to the Dow Jones slipped 22 points, or 0.07%, while S&P 500 and Nasdaq 100 futures shed 0.08% and 0.2%, respectively.

      The overnight moves came following a broad rally for stocks as the Bank of England said it would purchase bonds in an effort to help steady its financial markets and the cratering British pound. Sterling has stooped to record lows against the U.S. dollar in recent days.

      It marked a stark shift from the aggressive tightening campaign many global central banks have undertaken to cope with surging inflation.

      During regular trading on Wednesday, the Dow gained 548.75 points, or 1.88%, to 29,683.74, while the S&P 500 rose 1.97% to 3,719.04, after hitting a new bear market low on Tuesday. Both indexes snapped a six-day losing streak. The Nasdaq Composite was up 2.05%, closing at 11,051.64.

      As stocks rose and the BOE shared its bond-buying plan, the yield on the benchmark 10-year Treasury note dropped the most since 2020 after briefly topping 4%.
      …
      https://www.cnbc.com/2022/09/28/stock-market-news-open-to-close-futures-live-updates.html

    2. Wealth
      Stock market losses wipe out $9 trillion from Americans’ wealth
      Published Tue, Sep 27 2022 12:57 PM EDT
      Updated Tue, Sep 27 2022 7:37 PM EDT
      Robert Frank

      Key Points
      – Americans’ holdings of corporate equities and mutual fund shares fell to $33 trillion at the end of the second quarter, down from $42 trillion at the start of the year.
      – With major market indexes falling further since July, experts say losses from financial markets could total $9.5 trillion to $10 trillion.
      – Economists say the drops could add pressure to Americans’ balance sheets and possibly hurting spending.

      Falling stock markets have wiped out more than $9 trillion in wealth from U.S. households, putting more pressure on family balance sheets and spending.

      Americans’ holdings of corporate equities and mutual fund shares fell to $33 trillion at the end of the second quarter, down from $42 trillion at the start of the year, according to data from the Federal Reserve. With major market indexes falling even further since early July, and the bond market adding further losses, market experts say the current wealth losses from financial markets could total $9.5 trillion to $10 trillion.
      …
      https://www.cnbc.com/2022/09/27/stock-market-losses-wipe-out-9-trillion-from-americans-wealth-.html

  46. Is the BoE move the first sign central bankers in the West will not be able to go the distance on Quantitative Tightening plans?

    1. 3 minute readAugust 4, 2022 3:03 PM PDT
      Last Updated 2 months ago
      Bank of England set to become first big central bank to sell QE bonds
      By David Milliken
      Bank of England (BoE) building seen in London
      Buses travel past the Bank of England (BoE) building, London, Britain, December 16, 2021.
      REUTERS/Toby Melville/

      LONDON, Aug 4 (Reuters) – The Bank of England looks set to become the first major central bank to sell some of the government bonds it purchased during more than a decade of quantitative easing, with a 40 billion pound ($49 billion) sales programme likely to start next month.

      The BoE’s Monetary Policy Committee said on Thursday it was “provisionally minded” to start sales in the second half of September, subject to economic and market conditions and a confirmatory vote at its next meeting on Sept. 15.
      …
      https://www.reuters.com/markets/europe/bank-england-set-become-first-big-central-bank-sell-qe-bonds-2022-08-04/

    2. Bank of England intervenes with temporary QE to stem sell-off
      To ‘restore market functionality’
      Elliot Gulliver-Needham
      28 September 2022 • 1 min read

      The central bank said it was ready to “restore market functioning and reduce any risks from contagion” to UK households

      The Bank of England has delayed gilt sales, which was to be the start of the reversal of Quantitative Easing, instead making temporary purchases of long-dated gilts from today “to restore orderly market conditions”.

      “The purchases will be carried out on whatever scale is necessary to effect this outcome,” the bank added. It said they will be strictly time limited and last until 14 October.

      The central bank said that it had been monitoring the significant repricing of gilts in recent days and was ready to “restore market functioning and reduce any risks from contagion” to UK households.

      “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability,” it warned. “This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy.”

      While the bank said that the plans to reduce its overall gilt holdings by £80bn were “unaffected and unchanged”, it will delay the planned sales next week until 31 October.
      …
      https://www.investmentweek.co.uk/news/4057115/bank-england-intervenes-temporary-qe-stem-sell

    3. forexlive.com
      News
      GBP
      Will the BOE band aid work?

      It’s mental to think that the BOE has had to make such an intervention based on a reaction to government policy and not an external shock
      Justin Low
      28/09/2022 | 03:52 GMT-7

      10-year gilt yields have tumbled significantly since the announcement, down 40 bps on the day now to 4.10%:

      The BOE has backed down from QT and then some in their latest announcement, offering to buy government bonds “temporarily” in order to try restore order and function in the gilt market. And so now, we have rate hikes and QE (well, sort of) at the same time with the UK now joining Europe and the ECB.

      In any case, the takeaway from the past week is essentially policy incoherence from the UK and this just adds to that. Sure, there were signs of dislocation and dysfunction with the gilt market and the BOE action today will help with that. However, is it really a be-all, end-all solution?

      I want to say that I’m on the fence but in all honesty, I’m leaning towards a hard no.

      I mean, when a central bank has to step in with major intervention in the bond market as a result of government policy and not some of external shock, something is deeply rotten at the core. That of sort of dynamic in itself is dysfunctional.

      This is essentially a band aid solution in trying to restore confidence in the gilt market but unless it is accompanied by some change or backing down on the fiscal side, it is hard to see this as being a turning point for UK assets.

      If Kwarteng is going to keep doing Kwarteng things and the BOE has to come out to put out the fire in every instance, it’s not exactly a picturesque graphic of the UK economy – especially when you have to consider that the central bank has to run against its own policy resolve in trying to fight high inflation pressures.
      …
      https://www.forexlive.com/news/will-the-boe-band-aid-work-20220928/

    4. Yahoo Finance
      Stock market news live updates: Stock futures move lower after relief rally falters
      Alexandra Semenova
      Thu, September 29, 2022 at 3:54 AM·2 min read

      U.S. stock futures slumped Thursday morning as recession jitters returned to Wall Street after a relief bounce in the previous session spurred by the Bank of England’s bond-buying move.

      Futures tied to the S&P 500 plummeted 1.1% in the early trade, while those on the Dow Jones Industrial erased 250 points, or around 0.9%. Contracts on the technology-focused Nasdaq Composite barreled down 1.4%.

      The renewed risk-off mood places all three major averages on pace to give up gains that came after England’s central bank said it would resume bond purchases to help stabilize financial and currency markets. Investors celebrated the shift away from aggressive policy tightening by officials in recent months. The S&P 500, Dow, and Nasdaq each rallied roughly 2%.

      EY Parthenon Chief Economist Gregory Daco said in a note that “the absence of proper policy coordination along with the speed and synchronization of rate hikes” risks an “excessive and disorderly tightening of financial conditions.”

      “In the UK, the economic outlook has recently taken a turn for the worse with the release of Prime Minister Liz Truss’ budget leading to a market rout, with treasury yields surging to their highest since 2010 and the British pound plunging to its lowest level in 37 years,” Daco said.

      Following the Bank of England’s intervention Wednesday – the purchase of around 65 billion pounds, or roughly $69 million, of long-dated gilts – British 30-year bond yields tumbled 100 basis points after touching a two-decade high.

      Meanwhile in the U.S. on Thursday, Treasury yields nudged higher after rising – and then falling – at the fastest pace in decades. On Wednesday, the benchmark 10-year Treasury note — a crucial economic benchmark — briefly hit 4%, hitting an important milestone amid the worst bond sell-off since 1949.

      Atlanta Fed President Raphael Bostic said on Wednesday that the decision by his central bank peers across the Atlantic to return to bond buying did not change his views on U.S. Federal Reserve policy or stoke fears England’s economic faults could pour over.
      …
      https://finance.yahoo.com/news/stock-market-news-live-updates-september-29-2022-105414183.html

      1. A couple months ago I was setting out for my cycling ride at 0430-hrs in order to beat the heat. Now it’s still chilly at 0900-hrs, and yellow leaves are falling everywhere. 🙁

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