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A Governmental Fiefdom Of Alleged Philosopher-Kings Sowed The Wind And Are Now Reaping The Whirlwind

A weekend topic starting with the Colorado Sun. “Back in 2015, the median sales price for a house in Colorado was $285,000, according to the Colorado Association of Realtors. Between January and September, the median price averaged $575,000. ‘As you can see from the report, it would take pretty considerable drops in values in order for us to get to a level of ‘affordability’ that the state enjoyed back in 2015,’ said Phyllis Resnick, the CSU’s Colorado Futures Center’s lead economist. ‘I use that word in air quotes because I don’t think people thought 2015 was a terribly affordable era. But in retrospect, it actually was because interest rates were almost historically low and the run-up in prices hadn’t happened yet.'”

The Salina Journal in Kansas. “While many of the current developments already underway are for housing in the higher ranges of prices, Mike Schrage, city manager for the City of Salina, said getting more housing on the market, no matter the size, is good for the community, particularly as people upgrade from their existing properties. ‘It may seem odd to (bring in) $400,000 homes, but that move-up housing creates capacity somewhere else on the housing ladder,’ Schrage said.”

The Miami Herald in Florida. “Miami-Dade County’s housing market barreled through September with another double-digit annual price jump, marking an astonishing 130 consecutive months — almost 11 years — of year-over-year price increases. The dwindling demand is expected to force sellers to eventually lower prices. And median prices fell slightly month-to-month in July and August. ‘Sellers are still anchoring their expectations from the early 2022 demand. They are not moving sufficiently down,’ said Mariya Letdin, a business professor at Florida State University. ‘That typically happens. People are quick to raise prices, but adjusting down takes longer.'”

“In recent months. real estate agent Phillip Calloway has noticed more homes are staying on the market longer. Buyers have more ability to negotiate prices and face fewer competitive bidders for homes. ‘Now, if I’m a first-time homebuyer, I don’t have to worry about 15 offers competing against me,’ he said. ‘In most cases, I haven’t written a contract putting money over appraised value in a few months.'”

From Boca News Now in Florida. “Just like everything else in 2022, you can interpret the latest housing sale numbers for Delray Beach and Palm Beach County any way that fits your own personal narrative! Are you a ‘glass half empty’ person? Sale prices are down quarter to quarter! Are you a ‘glass half full’ person? They’re up year to year! BOCA RATON: The average sales price in Quarter 3 of 2022 is $1,264,596. That’s down 14.2 percent from Quarter 2, but up 18.4 percent from Quarter 3 of 2021.The average price per square foot in Quarter 3 is $377. That’s down 6.9 percent from Quarter 2, but up 24 percent from Quarter 3 of 2021.”

“DELRAY BEACH: The average sales price in Quarter 3 of 2022 is $1,063,897. That’s down 13.4 percent from Quarter 2, but up 1.4 percent from Quarter 3 of 2021. The average price per square foot in Quarter 3 is $444. That’s down 8.5 percent from Quarter 2, but up 16.2 percent from Quarter 3 of 2021.”

The Manteca Bulletin in California. “There is still $1 million dollar home buyers out there. But there are not just as many. And they’re favoring newly constructed homes. Even with 270 plus listings for stand-alone homes new and existing under $950,000 in Manteca, there are 42 homes that are pending. Thirty-two of those are existing homes.The other 10 are new homes and reflect a trend by new home builders that happens when the market slows. New home builders list homes on the Metro List and are willing to pay commission to make deals.”

“It creates a situation where prices may still drop after homes have been listed for a while and don’t get offers but the lower you go the pressure to reduce prices softens. A check of the housing market in Manteca, Tracy, Mountain House, and Lathrop confirms the buying slowdown for both new and existing homes. The biggest change is in the $1 million plus market. There is just one existing tract home in the seven figure range with a pending offer between the four communities.”

“It’s a far cry from five months ago when there were 10 pending sales of existing homes in excess of $1 million in the three cities. As of Thursday, there were 21 existing homes above the $1 million mark listed in Tracy. None had offers. Mountain House also has the only $1 million plus tract home foreclose listing in the area. It is for a home built in 2005 on Sanrise Street with five bedrooms and 3.5 bathrooms in 3,634 square feet where the asking price is $1,249,990.”

KRON in California. “Every night in San Francisco, more than 4,000 people sleep on the streets without any form of shelter. In the same city, tens of thousands of homes are vacant without a single person sleeping inside. A new report released Thursday by the city’s Budget and Legislative Analyst Office revealed that a staggering 61,473 homes were vacant in San Francisco in 2021. The number of vacant homes skyrocketed from 40,000 in 2019 to over 60,000 in 2021 — a 52 percent increase in just two years.”

From Market Watch. “Dylan Malitsky has been listing his Denver-area home on Airbnb Inc. since moving to Miami for work nearly a year ago. Things went extremely well in the beginning, he told MarketWatch. ‘I had zero experience in real estate,’ Malitsky said. ‘I thought I was the most successful entrepreneur of all time. I thought it was my ticket to building equity and making money.’ But after bringing in about $60,000 since he started renting his property on Airbnb he said his bookings ‘fell off a cliff’ in August. His property hasn’t been booked for any dates in November and beyond — not even for the start of the ski season in December and January.”

“He is not alone. Airbnb hosts are commiserating with one another about declining occupancy rates in Facebook groups, on Reddit and on Twitter, where a screenshot of a Facebook post went viral last weekend. Jim Ewing is the Airbnb host whose Facebook post about his lack of bookings went viral when someone else posted it on Twitter, and said ‘The Airbnbust is upon us.’ He started listing his Palm Springs, Calif.-based property on Airbnb last October, and told MarketWatch he is looking to get out and is interviewing long-term tenants for his property.”

“Ewing said his property — which he and his wife bought as investment with his mother-in-law — had about 80% occupancy until April. Then in May, ‘we went from 80% to zero.’ So they slashed their prices in half and managed to get more bookings. But they have had no bookings since July. And just one booking for around New Year’s Eve, which he said they’ll probably cancel if they find a long-term tenant. ‘My hope is that I’m not making the wrong move,’ he said. ‘That I’m leaving the market in time — before everyone else says [they] need to find long-term tenants.'”

“In Houston, Amber Melenyzer told MarketWatch this past summer was the slowest for her guesthouse in five years. Melenyzer said that in her area Facebook group, ‘a lot of people are trying to dump furniture from their Airbnbs… I think a lot of people may have jumped into it thinking they were going to make money.'”

The Dallas Morning News. “If you are young and have recently become a homeowner, we need to talk. In addition to the usual list of concerns, you now have a new worry. Home prices can actually decline. Yes, this means you. The value of your house can decline. In fact, data from the Texas Real Estate Research Center at Texas A&M tells us that home prices likely peaked in May. And they have been falling since then in every major Texas city.”

“If you bought your house in the last few years, this is new. You’ve known only the joy of homeownership. Maybe even the ecstasy of homeownership. If you stretched to buy a home at four times your annual income, there’s a pretty good chance that your home has made as much money while you were sleeping in it as you did while working. If your home value rose 25% in any 12-month period — and many did — the appreciation was as much as your salary!”

“Other than marrying well or winning the lottery, minting money doesn’t get much easier. But the other side of homeownership isn’t so grand. With mortgage interest rates now at nearly 7%, we’re at an ugly standoff in housing. Fewer buyers qualify. Many owners will find themselves locked in.”

The Globe and Mail in Canada. “Investing certainly isn’t easy, but if we take a step back for a moment, it is easy to see how cheap money has fuelled excess, how prudent valuations got extended and how return expectations swelled. It’s also easy to see how the can got kicked down the road. Now, some of those excesses need to be allowed to return to fundamental valuation levels, reflecting the current social and economic environment. This is not a Harry Hindsight missive. This difficult market environment may be unfortunate, but it is natural, overdue, and healthy.”

“Investors abandoned fundamental valuations, which are not unquestionable rules but are excellent guides, by expecting emergency-level interest rates to fuel valuations for some time to come. Ask the equity analysts how they learned to support stock prices that had fully decoupled from traditional valuation. Ask home buyers about their experience. Sure, allow for the effects of momentum and sentiment and new models, but we need to be wary of true distortion. Current market behaviour continues to reflect more of a fear of missing out (FOMO) on the upside than a fear of the more likely downside.”

“The market can’t go up until this learned bad behaviour and the FOMO stop. For the market to bottom and reflect fair value, thereby becoming attractive again, it has become apparent that it is going to take quite a shock. Investors have been conditioned to not sell – and in fact to buy – the dip, after being saved or supported by cheap money so many times in the past 14 years. It is understandable why it may be natural to rely upon that same approach again this time, but we need to consider if this time is different.”

From Mises.org. “The year 2022 has certainly been a tough one for the Federal Reserve. The Fed missed the emergence of the runaway inflation it helped create and continued for far too long to pump up the housing bubble and other asset price inflation. It manipulated short- and long-term interest rates, keeping them too low for too long. Now, confronted with obviously unacceptable inflation, it is belatedly correcting its mistake, a necessity that is already imposing a lot of financial pain.”

“Sharing the pain of millions of investors who bought assets at the bloated prices of the Everything Bubble, the Fed now has a giant mark-to-market loss on its own investments—this fair value loss is currently about $1 trillion, by my estimation. It is also facing imminent operating losses in its own profit and loss statement, as it is forced to finance fixed-rate investments with more and more expensive floating rate liabilities, just like the 1980s savings and loans of Paul Volcker’s days as Fed Chairman. In short, the Fed, along with other members of the international central banking club, sowed the wind and is now reaping the whirlwind.”

“It is often argued, especially by economists and central bankers, that central banks should be ‘independent,’ thus presumably practicing by themselves the vigilance against inflation, making them something like economic philosopher-kings. Indeed, inside most macro-economists and central bankers there is a philosopher-king trying to get out. But the theory of philosopher-kings does not fit well with the theory of the American constitutional republic.”

“Those who support central bank independence always argue that elected politicians are permanently eager for cheap loans and printing up money to give to their constituents, so can be depended on to induce high inflation and cannot be trusted with monetary power. But if the central bank also cannot be trusted, what then? Suppose the central bank purely on its own commits itself to perpetual inflation—as the Fed has! Should that be binding on the country? I would say No. The U.S. Constitution clearly assigns to the Congress, to the elected representatives, to the politicians, the power ‘to coin money [and] regulate the value thereof.'”

“Along similar lines, I have previously recommended that Congress should form a Joint Committee on the Federal Reserve to become highly knowledgeable about and to oversee the Fed in a way the present Banking committees are not and cannot. I argued: ‘The money question,’ as fiery historical debates called it, profoundly affects everything else and can put everything else at risk. It is far too critical to be left to a governmental fiefdom of alleged philosopher-kings. Let us hope Congress can achieve a truly accountable Fed.”  

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This Post Has 116 Comments

  1. ‘It’s a far cry from five months ago when there were 10 pending sales of existing homes in excess of $1 million in the three cities. As of Thursday, there were 21 existing homes above the $1 million mark listed in Tracy. None had offers’

    Where did the winnahs! go?

  2. ‘a lot of people are trying to dump furniture from their Airbnbs… I think a lot of people may have jumped into it thinking they were going to make money’

    And they borrowed a sh$tload of money Amber. When the forebearance first rolled out I posted several examples of bad loans that were for short term rentals. So just why is guberment subsidizing loans to amateur hotel clowns and toilet scrubbing gamblers? And I’m talking about shacks specifically for short term rentals. No intention of living there or renting out long term.

    Oh well, they’re fooked now.

    1. Die, speculator scum. Houses are for living in, not bringing STR pestilence into residential neighborhoods and pricing locals out of the market.

  3. ‘Back in 2015, the median sales price for a house in Colorado was $285,000, according to the Colorado Association of Realtors. Between January and September, the median price averaged $575,000. ‘As you can see from the report, it would take pretty considerable drops in values in order for us to get to a level of ‘affordability’ that the state enjoyed back in 2015,’ said Phyllis Resnick, the CSU’s Colorado Futures Center’s lead economist. ‘I use that word in air quotes because I don’t think people thought 2015 was a terribly affordable era’

    It wasn’t Phyllis. By 2015 the bubble reflation was well underway. Could we not have skipped this explosion? Did it really do us any good now that we’re unraveling this period in record time? Just WTF do we even have central banks if this is the best they can do?

    1. We won’t fix this until every current and past Fed chair is doing hard time in a federal prison, along with their bankster accomplices.

  5. ‘revealed that a staggering 61,473 homes were vacant in San Francisco in 2021. The number of vacant homes skyrocketed from 40,000 in 2019 to over 60,000 in 2021 — a 52 percent increase in just two years’

    That’s a shortage right there.

    The title of the STR article:

    Airbnb hosts say bookings ‘fell off a cliff’ amid influx of new vacation rentals and rising prices

    There’s no barrier to entry. Where a hotel guy has to look at the market, placing his bets there aren’t too many (there are). Look at me, Ima running – with scissors!

    ‘Ewing said his property — which he and his wife bought as investment with his mother-in-law — had about 80% occupancy until April. Then in May, ‘we went from 80% to zero’

    It’s worser. Many of these STR clowns needed elevated STR hocus pocus to qualify for the loans. Which means – mortgage fraud! The lenders didn’t know real rents wouldn’t support the loan? They did, but were too happy to stuff their pockets with the loot.

    This pesky moral hazard keeps popping up!

      1. If it were your rental house, and the government was offering to cover a homeless family’s rent via section 8 would you or the neighbors really want them as tenants?

        1. I think he was advocating for the government to pass some more laws to take those empty homes away. Those who want the government to step in on the topic of empty homes or STRs are asking the fox to guard the henhouse. But then again he’s in California, maybe he likes socialism.

    2. Tom Jefferson warned us about this long ago and we are now seeing it in real time.

      “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…. I believe that banking institutions are more dangerous to our liberties than standing armies…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

  6. I was thinking during last night’s bout of insomnia that this housing bubble we post about started growing around 1997, 25 years ago, during the Clintons’ time in the WH. It has been nearly 20 years since Ben started documenting its progress.

    Watching it implode presently is bringing me some feelings of nostalgia.

    1. In 2005 I sent this writer a link to the HBB:

      ‘If you bought your house in the last few years, this is new. You’ve known only the joy of homeownership. Maybe even the ecstasy of homeownership’

      He wrote back, saying ‘interesting. But why a blog about a housing bubble?’

      The Ecstasy of Gold (Live) – Ennio Morricone Orchestra

      https://www.youtube.com/watch?v=nOE24dd0Xmc

      4 minutes.

    2. Graham-Leach-Bliley repealing Glass-Steagall was 1998 I believe. Matches nearly perfectly with the bubble.

      1. Indeed, it’s one piece of the asset pie.

        Back in the 70’s something changed enabling share holders to reap the profits from increased productivity rather than employees. I see stories about it from time to time, but economics isn’t my forte.

      2. Also suspension of mark-to-market accounting, whatever that rule was. It allowed banks to keep homes empty on their books instead of fire-selling them on the courthouse steps to at least be fixed up as affordable housing.

    3. But the real bubble started when we left the gold standard and went to untethered fiat. You can trace these bubble cycles back and they line up perfectly. You can then extrapolate out and make a pretty good guess as to how the next bubble cycle is going to go. After this one is worked out we will find a way to even more ridiculous prices and even more people on the streets. This will continue until the dollar system is replaced. The odds are that it will persist for our lifetimes and will be for future generations to sort out. In the mean time, you ignore the cycle at your own peril. As I’ve said before the cycle is based on a natural phenomenon that occurs in the population and the banksters are just riding on it. The next bubble is already ensured, we just have to clear this one out which will take a few years.

  7. BOCA RATON: The average sales price in Quarter 3 of 2022 is $1,264,596. That’s down 14.2 percent from Quarter 2, but up 18.4 percent from Quarter 3 of 2021.The average price per square foot in Quarter 3 is $377. That’s down 6.9 percent from Quarter 2, but up 24 percent from Quarter 3 of 2021.”

    “DELRAY BEACH: The average sales price in Quarter 3 of 2022 is $1,063,897. That’s down 13.4 percent from Quarter 2, but up 1.4 percent from Quarter 3 of 2021.

    We’ve never had this kind of price volatility in shacks that I can recall, up and down. And we are seeing it all over the globe.

    1. To sow the wind and reap the whirlwind is an interesting phrase; it might well already be proverbial when Hosea uttered it, and it certainly has become proverbial ever since. It is an easily understood agricultural metaphor: the whole premise of farming demands a person reaps more than he originally sowed, else he will not be able to survive. Sowing a little and reaping a lot is great when it comes to food; it is terrifying and horrible when it comes to consequences of transgression. “Wind” often denotes vanity or futility (cf. Ecclesiastes 2:11); Israel sowed the vanity of idolatry and would reap the whirlwind of complete devastation and destruction at the hands of Assyria. That did, indeed, escalate quickly!

      https://www.spiritualmanna.info/windwhirlwind/#:~:text=To%20sow%20the%20wind%20and%20reap%20the%20whirlwind,else%20he%20will%20not%20be%20able%20to%20survive.

  10. Another “Oh dear” moment in time…and here I thought “homeowner” and “mortgage payer” were synonymous.

    Nightmare scenario for mortgage payers as two costs skyrocket

    https://www.news.com.au/finance/economy/australian-economy/nightmare-scenario-for-mortgage-payers-as-two-costs-skyrocket/news-story/9ef7cfb854820fe62e0b557670c43d6f

    Australia is facing a huge challenge and two things are conspiring to create huge consequences for Aussie mortgage payers.

    1. Your mortgage payments are due every month regardless of how well the top hats manage foreign affairs and resources.

  12. Nothing to see here…move along.

    China’s former president Hu Jintao, 79, is forcibly removed from seat next to his successor Xi Jinping at televised Communist Party Congress and dragged out of the room

    https://www.dailymail.co.uk/news/article-11343239/Chinas-former-president-Hu-Jintao-forcibly-removed-seat.html

    This is the moment China’s former president Hu Jintao is forcibly removed from his seat next to his successor Xi Jinping at the televised Communist Party Congress and dragged out of the room.

    Hu Jintao, 79, was taken off stage shortly after foreign media came in to the Great Hall of the People.

    The 79-year-old appeared slightly disorientated as two assistants came to speak to him and reluctant to move in part of the clip.

          1. Never mind about tech sanctions. Try some food sanctions. Or just allow pirates to rule the seas and take out a couple container ships and oil tankers. After a year or two China won’t be lookin’ so good.

  13. A reader sent these in:

    The Fed’s DOUBLE policy error can be viewed thusly: Treasury inflation expectations are LOWER than in 2007 and 2000. However, the Fed’s housing bubble combined with rate hikes has caused the cost of carry for a purchased home (new or existing) to increase 150%.

    https://twitter.com/SuburbanDrone/status/1582900402365681665

    People really out here thinking somebody is going to take on a $6.5k mortgage for a home you could have bought for 350k in 2019

    https://twitter.com/NipseyHoussle/status/1583293623814103042

    The commodities market is so tight that a small pivot will fuel inflation. People think a pivot is the less destructive option, I think it is the worst one. If getting inflation under control was the target, they’ll lose it this way.

    https://twitter.com/AlessioUrban/status/1583583386106355712

    Most of the whining for FR to stop are those who’ve benefited massively from cheap money. They’re wealthy. 70% of Americans don’t have a pot to piss in. They’re getting killed by price rises. I don’t believe FR can fix but they’ve got to keep going to stop the rampant speculation.

    https://twitter.com/123MathMan/status/1583591083572748291

    Rick Palacios Jr.

    Single-family rents are cooling. Wonder how much of that is due to ‘shadow supply’ hitting rental market. By shadow supply I mean fix/flip deals now broken, so renting becomes exit. Many short-term rentals likely not performing to plan, so repositioning as full-time rental, etc.

    https://twitter.com/RickPalaciosJr/status/1578064803939041283

    Apartment rents fell in September in more than half (80) of the nation’s 150 largest metros. Here are the top 11 — had to make it an uneven 11 to make room for ReTwit’s favorite market: BOISE.

    https://mobile.twitter.com/jayparsons/status/1583548664659685376

    Mortgage applications to purchase a new home… It turns out that high prices and 7%+ mortgage rates don’t mix well… Something has to come down, either high prices or high rates … which will it be ???

    https://twitter.com/WallStreetSilv/status/1582989999556829185

    Austin Market feels very slow right now. It’s like driving 120 MPH then slowing down to go 30 MPH in a school zone. It was FOMO on the way up, now it’s FOBS “fear of buying sh$t” in the way down.

    https://twitter.com/atxREpodcast/status/1583471364735803392

    You mean home prices rising 40% in two years CRUSHING families and stealing the American Dream? That sort of stability?

    https://twitter.com/GRomePow/status/1583485009050017792

    So US housing demand is cratering due to 7%+ mortgage rates and at the same time there is record amount of homes under construction 👇 Hmmm… what does it mean for home prices? Chart

    https://twitter.com/MichaelAArouet/status/1583428724464439297

    Lance Lambert

    #NEW @FreddieMac slashes its 2022 and 2023 home price outlooks.
    Back in July, they forecasted +12.8% for 2022 and +4% for 2023. Now, they’re forecasting +6.7% for 2022 and -0.2% for 2023.

    https://twitter.com/NewsLambert/status/1583534084977934337

    Rick Palacios Jr.

    Monthly home price declines already match pace seen during worst of subprime days right before Lehman. The rate of price increases 2020-early 2022 were also unprecedented, so swift move down makes sense (especially at 7%+ mortgage rates).

    https://twitter.com/RickPalaciosJr/status/1583480047842664449

    I recently met with the head of a prominent family office that focused on RE and found out he downsized his operations to a bare minimum to manage some of the properties they still hold. He told me he went on hiatus because he sees the ugliest storm ever seen in his life upcoming.

    https://twitter.com/cafetero7878/status/1583647223661092864

    Canadian real estate moments… 3 townhouses bought with 10% down… all under water…

    https://twitter.com/mortimer_1/status/1583682107137986562

    This last one: ‘Bank of Canada robbed me of my equity.’

    You mean they broke it off in yer a$$ Raj?

    2. ‘People think a pivot is the less destructive option, I think it is the worst one. If getting inflation under control was the target, they’ll lose it this way.”

      That’s how the Fed fostered runaway inflation in the 1970s.

      I doubt they will repeat the mistake, but you never know.

    1. Hotel has a concierge, cleaning lady, rooftop, bar, restaurant, security, pool, taxi stand, + room upgrades for loyalty. Airbnb has hidden cameras, a cleaning fee, discriminatory hosts + they ask you to take out the trash, strip your linen, and scrub the tub before you leave lmao

      1. The Four Seasons never joined the tacky loyalty rewards hype
        But at least in a hotel room — any hotel room — i can find the light switch, the bathroom, the thermostat and can call housekeeping for more towels, and don’t have to spend my vacation on a hunt for the light switch just to be cute and unique. The air bb’s have ALWAYS been a puke of a thought for endless reasons.

  19. Mass Formation Psychosis.

    The Atlantic — The Bivalent Shot Might Lay You Out (10/21/2022):

    “Every immunization I’ve watched him receive—among them, four doses of Moderna’s COVID-19 vaccine—has absolutely clobbered him with fevers, chills, fatigue, and headaches for about a full day. When he got the flu shot and the bivalent COVID jab together a few weeks ago, he ended up taking his first day off work in more than a decade.”

    https://archive.ph/rAtPZ

    Four injections?

    Katherine Wu your spouse will be dead within a year. You will be a widow, and probably soon dead yourself.

    2. My daughter scheduled her employer mandated covid booster and a flu shot on a Friday afternoon so that she could spend Saturday in bed. Fortunately, the resulting symptoms were not that bad.

  20. With globalist Quislings selling off formerly sovereign countries to the highest bidder, while ruthlessly purging their “woke” Armed Forces of white male patriotic officers, it should come as no surprise that some officers are cashing in on their expertise and training by prostituting themselves to adversaries like China.

    Ex-RAF top gun (call sign Hooligan) has made a killing training China’s fighter pilots – and helped recruit dozens of British airmen paid £250,000 a year by Beijing… so why has the MoD only just woken up to this outrage?

    https://www.dailymail.co.uk/news/article-11341957/Ex-RAF-gun-killing-training-Chinas-fighter-pilots-recruiting-British-airmen.html

  23. This is the sun-glass girl:

    Park City Housing Market Update: WHERE ARE WE HEADING?
    Nicole Bowdle Park City Real Estate
    Oct 22, 2022

    👉🏻The Wasatch Back is outperforming nearly all other markets around the country. Limited inventory and relatively strong demand have caused our median and average sales prices to rise, although not at the rapid pace of the pandemic years.

    👉🏻The Wasatch Back offers an amazing lifestyle and peace of mind that is in limited supply nationally.

    👉🏻Growth in the Synderville Basin, Jordanelle, and Heber Valley has continued to benefit significantly from new construction, as our housing footprint expands to areas surrounding Park City Proper. Buyers and sellers are adjusting to the tempering of our market and balancing mixed economic signals of inflation, recession, interest rates, continuation of remote work environments, full employment, and all-time highs of household wealth. We see no signs of a new “housing bubble” emerging, but rather a return to historical norms…. still very positive for the Wasatch Back.

    Chapters:
    0:00 Housing Bubble
    1:37 interest rate sensitive markets
    2:28 Park City is a Bubble Market
    3:05 Wasatch Back Summary
    3:26 Buyer’s opportunity
    6:17 The Economy
    7:05 Park City Limits 84060
    8:07 Snyderville Basin 84098
    8:42 Jordanelle
    9:23 Heber Valley
    9:50 East Summit County ( Kamas, Coalville , Wanship)
    10:26 Summary

    https://www.youtube.com/watch?v=-cyiZa1aXI0

    11:31.

  24. This is a pearl-clutching documentary. The globalists are becoming alarmed as their housebroken RINO controlled opposition pets are being challenged by right-wing political novices fed up with government overreach and the Republicrat duopoly’s craven subservience to its globalist and corporate pimps.

    Crush the Opposition, but First the Dissenters | Breaking The Vote

    https://www.youtube.com/watch?v=WTBt8K0A7fs&t=2063

  25. The Housing Market ‘Is Crashing,’ Says KPMG Chief Economist
    NBC News
    Oct 20, 2022 With 19 days until the elections, voters are concerned around the economic landscape. CNBC Senior Economics Report Steve Liesman and KPMG Chief Economist Diane Swonk discuss the state of the economy and concerns about a looming recession.

    https://www.youtube.com/watch?v=ggOTxSGc4pg

    10:29.

  27. “With mortgage interest rates now at nearly 7%, we’re at an ugly standoff in housing. Fewer buyers qualify. Many owners will find themselves locked in.”

    So many being told by realtors not to worry about rates because they can always refinance later at a lower rate. Just had to explain this stupidity to friend. Never mind the assumption that rates will go back to the insane levels they were at months ago, if your home drops even 5% in value after you’ve purchased it you may no longer qualify due to the fact your LTV (loan to value) falls below qualifying guidelines. Drop more than 10% and you’re likely hosed and stuck where you are for the next ten years until values come back, assuming they even do. So for all you sheep being led to the slaughter, hear these words….YOU CAN’T JUST REFINANCE!!

  28. Las Vegas Housing Market
    Dorthy Sierra
    Oct 21, 2022 The numbers for August are in. We had more homes for sale than our highest number back in November 2014. We had fewer homes being sold as well. How long will inventory continue to rise? And as expected, 🏡💰home prices fell again but are still higher than year end and a year ago. Buyers market is in full swing but what does that mean for your situation?

    https://www.youtube.com/watch?v=SRFN0PA-dPM

    1:46.

    1. “Another sh$thole goes negative YOY.”

      Yeah, blue collar Milpitas was an auto assembly plant worker’s town that struck tech-gold kinda like Jed Clampett discovering oil while out squirrel hunting.

    1. “These numbers tell us that most Americans are just barely scraping by, but our leaders want us to buy into the illusion that most people are “doing well” these days.”

      Sure, but somehow these dickheads are driving around in leather appointed Diesel powered $85k pickup trucks with lift kits, 22-inch wheels wrapped in “big-meats.”

        1. Yeah, my “around town” car is a beater. My area is almost solid blue collar working class, and lifted trucks seem like a birth rite.

      2. I was at the diesel pump filling my truck up a while ago, and some young guy pulled up in what looked to be a new $90k+ Ford F350 diesel. He put $10 in, then left. I had another third of a tank to fill by the time he started his truck and was leaving.

        1. He put $10 in, then left

          That would be me, back in 1968. Except it would be only a $100 old Chevy and about $3 worth. At the Sunoco station, they’d give you a big yellow smiley face coffee mug (not plastic), if you filled it up.

  31. “‘As you can see from the report, it would take pretty considerable drops in values in order for us to get to a level of ‘affordability’ that the state enjoyed back in 2015,’ said Phyllis Resnick, the CSU’s Colorado Futures Center’s lead economist. ‘I use that word in air quotes because I don’t think people thought 2015 was a terribly affordable era. But in retrospect, it actually was because interest rates were almost historically low and the run-up in prices hadn’t happened yet.’”

    And the necessary run-up in the money supply hadn’t happened yet either.

    It takes money to buy, already possessed money or borrowed money, it doesn’t matter. As you can see from the chart below the money supply exploded and this explosion let to the expansion of asset prices for both stocks and houses.

    https://fred.stlouisfed.org/series/M2SL

    But as you can see from the chart something different is now happening with the money supply which leads one to believe something different will now happen with asset prices.

    Stay tuned.

  32. Pricing is Crucial | Orange County Housing Report
    Echelberger Group
    Oct 21, 2022 Buyers now have the upper hand when negotiating in today’s market, which means sellers must painstakingly arrive at the asking price to be successful.

    Attention Sellers: To find success, sellers must price their homes according to its Fair Market Value. With the market leaning in the buyers favor and values slowly falling, careful pricing is crucial.

    What we know:
    → Inventory still low
    → Demand has softened
    → Hardly any Nor Cal buyers
    → Interest rates slowing things down
    → Inventory over 79% compared to last year

    What we can expect:
    → People will decide based on election
    → Pause first week of November

    https://www.youtube.com/watch?v=ZRdtKM4MQzc

    3:15.

  35. From Mises.org. “The year 2022 has certainly been a tough one for the Federal Reserve. The Fed missed the emergence of the runaway inflation it helped create and continued for far too long to pump up the housing bubble and other asset price inflation. It manipulated short- and long-term interest rates, keeping them too low for too long. Now, confronted with obviously unacceptable inflation, it is belatedly correcting its mistake, a necessity that is already imposing a lot of financial pain.”

    “Sharing the pain of millions of investors who bought assets at the bloated prices of the Everything Bubble, the Fed now has a giant mark-to-market loss on its own investments—this fair value loss is currently about $1 trillion, by my estimation. It is also facing imminent operating losses in its own profit and loss statement, as it is forced to finance fixed-rate investments with more and more expensive floating rate liabilities, just like the 1980s savings and loans of Paul Volcker’s days as Fed Chairman. In short, the Fed, along with other members of the international central banking club, sowed the wind and is now reaping the whirlwind.”

    “They sow the wind
    and reap the whirlwind.
    The stalk has no head;
    it will produce no flour.
    Were it to yield grain,
    foreigners would swallow it up.”     – Hosea 8:7

    http://www.ronpaulinstitute.org/archives/featured-articles/2022/october/17/destroy-the-economy-win-a-nobel-prize/

    Destroy the Economy, Win a Nobel Prize
    Written by Ron Paul
    Monday October 17, 2022

    “Former Federal Reserve Chairman Ben Bernanke is a 2022 recipient of the Nobel Prize in economics for his writings on how government should respond to bank failures. Honoring Bernanke for his advice on what government should do when banks fail is like giving a fire safety award to an arsonist.”

    “Bernanke was Fed chairman when the housing bubble, created by his predecessor Alan Greenspan in the wake of the bursting of Greenspan’s tech bubble and the 9-11 attacks, exploded. When the housing market collapsed, Bernanke worked with Congress and the Bush administration to bail out big banks and Wall Street firms.”

    “In the years following the meltdown, the Bernanke-led Fed tried to “stimulate” the economy via massive money creation, near zero interest rates, and “quantitative easing,” where the Fed injects liquidity into the market via purchases of financial assets including Treasury bonds.”

    “The Fed’s post-meltdown policies produced sluggish growth at best, while laying the groundwork for the next bust. A sign that the next crash was around the corner came in September of 2019, when the Federal Reserve began pumping billions of dollars a day into the “repurchasing” market, which banks use to make overnight loans to each other, in order to keep that market’s interest rates from rising above the Fed’s target rate. The covid lockdowns then gave the Fed an excuse to push interest rates to zero and massively expand quantitative easing.”

    “The Fed’s actions are the prime culprit behind the price inflation plaguing America’s economy. The Fed has responded to the price inflation by increasing interest rates, although rates remain much lower than they would be in a free market. The fact that even these relatively small increases helped push the fragile economy into recession shows the instability of our debt-based economic system.”

    “I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. … You are a den of vipers and thieves.” – Andrew Jackson, 1834, on closing the Second Bank of the United States; (unabridged form, extended citation)

    “The bold effort the present (central) bank had made to control the government…are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it.” – Andrew Jackson

    – Needless to say, but I will : End the Fed. Unelected and unaccountable. The Bank of Evil.
    – Congress? Hello? Bueller?

    1. “A Governmental Fiefdom Of Alleged Philosopher-Kings Sowed The Wind And Are Now Reaping The Whirlwind”

      What better summary of the financial crisis at hand is possible?

      “Honoring Bernanke for his advice on what government should do when banks fail is like giving a fire safety award to an arsonist.”

      Seems like I recently posted something to that effect. I’m always curious whether others read what we write here, or if they independently have the same thoughts.

    2. Re: End the Fed

      You have sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go! – Oliver Cromwell to the Rump Parliament, April 20, 1653

  39. In Democrat-Bolshevik judicial systems, white males who interfere with state-sponsored vibrancy are deserving of extrajudicial execution.

    Missouri woman WON’T be charged with killing fireman after grabbing gun from her felon boyfriend – who was brawling with him – and shooting the first responder: Prosecutors say she acted in self-defense

    https://www.dailymail.co.uk/news/article-11342641/Missouri-woman-WONT-charged-shooting-fireman-dead-grabbing-gun-felon-boyfriend.html

  40. Great Reset: Outrage as German City to Force Meatless Meals on Elementary School Children

    https://www.breitbart.com/europe/2022/10/20/great-reset-outrage-as-german-city-to-force-meatless-meals-on-elementary-school-children/?utm_source=wnd&utm_medium=wnd&utm_campaign=syndicated

    All school meals are to be meatless from now on in the German city of Freiburg, with authorities mandating vegetarian-only menus from 2023.

    Children going to primary school or daycare in Freiburg will no longer be able to have meat for lunch, with authorities in the city ruling that all meat and fish offerings will be stripped from school meals starting in 2023.

    The decision follows similar moves in the United Kingdom, while government officials in the Netherlands have meanwhile been encouraging elementary school children to eat bugs as a “sustainable” source of protein.

  41. Todays HBB Halloween tip:

    Pumpkin Killing 2020
    hickok45
    Oct 21, 2020 That time of year again, time to continue our annual Pumpkin Killing endeavors. With over ten years of experience at this, we’ve earned a Ph.D in the art of pumpkin destruction!
    With everything from an Uzi to a John Deere Tractor to a muzzleloader, we have all the “tools” we need! 🙂

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

    3 minutes.

  44. “Gov. Gavin Newsom is threatening to cancel a San Francisco toilet that could cost $1.7 million and take more than two years to build”

    “Gov. Gavin Newsom is threatening to halt plans for a $1.7 million toilet in San Francisco.
    The toilet received backlash, and demands to explain the cost and two-year construction timeline.
    The city’s Rec and Park department said the costs included planning, drawing, permits, and reviews.”

    https://www.businessinsider.com/gavin-newsom-threatens-cancel-san-francisco-17-million-toilet-2022-10

    (snip)

    California Gov. Gavin Newsom is threatening to halt plans to build a public toilet in San Francisco after it received huge backlash over its $1.7 million cost and 2-year construction time.

    Newsom’s office told the San Francisco Chronicle Friday that it would intervene to halt funding for a public toilet in Noe Valley Town Square if a cheaper, more efficient means of production couldn’t be realized.

    “A single, small bathroom should not cost $1.7 million,” Erin Mellon, the governor’s communications director, told the Chronicle in a statement. “The state will hold funding until San Francisco delivers a plan to use this public money more efficiently. If they cannot, we will go back to the legislature to revoke this appropriation.”

    The Chronicle first reported Wednesday that Assembly Member Matt Haney had secured $1.7 million in funding for a public toilet in the plaza, after hearing “loud and clear” from the community that families needed a bathroom. Haney was advised on the cost by the city’s Recreation and Parks Department.

    The toilet is required to go through a lengthy planning process before it can be installed, pushing completion as far back as 2025, the Chronicle reported.

    This includes an architect drawing up plans for the city which receive feedback and a “multi-phase review” by five commissioners, before going to the Rec and Park Commission and the board of supervisors. It would then be reviewed under the California Environmental Quality Act, before finally being put to a bidding process.

    The project has inspired a wave of condemnation and calls to explain how the toilet could cost so much, even in a city where it’s more expensive to build things than anywhere else in the world.

    “This is to build one public restroom? What are they making it out of — gold and fine Italian marble? It would be comical if it wasn’t so tragically flawed,” Tom Hardiman, executive director of the Modular Building Institute in Charlottesville, told the Chronicle Wednesday.

    A joint statement from Rec and Park and the Department of Public Works defended the costs, which in addition to materials expenses, included planning, drawing, permits, reviews and public outreach.

    But following the report by the Chronicle, Haney canceled a celebratory press conference for the toilet, and informed the paper he had gone back to the Rec and Park department for further explanation of the cost.

    “When Rec and Park first told us the number, it sounded shockingly high to me, and I think your article has revealed that their process around this is broken and the number is inexplicable,” Haney told the paper.

    1. “threatening to halt plans for a $1.7 million toilet in San Francisco”

      Is it self cleaning? Something like that would be very useful in a city rife with open air excrement like San Francisco.

  45. “Workers who switched jobs during the ‘Great Resignation’ are now worried about keeping their new ones”

    https://fortune.com/2022/10/20/workers-switched-jobs-great-resignation-more-worried-about-job-security/

    (snip)

    Americans who switched jobs during the pandemic did so for better salaries, benefits, and work-life balance.

    Many may have also traded in their job security.

    Nearly 40% of working Americans changed jobs sometime over the past two years, according to a recent poll by Marist, with many taking advantage of the pandemic’s hot labor market to search for better wages and perks.

    But with fears mounting about an impending recession in the U.S., workers who switched jobs during the so-called Great Resignation are aware that they may not be able to hold onto them.

    Nearly 40% of American workers overall are concerned about their job security, according to a new analysis from financial service company Bankrate. But workers who recently changed jobs are twice as likely to be worried about being unemployed in the near future than those who did not change jobs.

    Their fears might not be unfounded. The Fed is trying to slow down the economy with a historic series of interest rate hikes, and more than half of U.S. CEOs are considering layoffs within the next six months.

    A recession trade-off
    Low pay was the leading reason Americans decided to switch jobs last year, with nearly two-thirds of workers who changed jobs doing so in pursuit of higher wages.

    Many Americans were able to find exactly that, with a recent Pew survey finding that as many as 60% of workers who changed employers in the past year saw their earnings rise, a welcome bit of good news as rising inflation has sent prices for food, fuel, and housing soaring this year.

    But the labor market can be fickle. Today’s unemployment rate is 3.5%, a 50-year low, as a tight job market continues to dominate the labor picture. That could change quickly, however, with the Federal Reserve raising borrowing rates to their highest level in more than a decade to fight inflation, and bankers and economists warning that a severe economic slowdown in the next year is virtually set in stone.

    The Fed is doing its best to engineer a “soft landing” for the economy, wherein inflation subsides without a significant increase in unemployment. But some observers are warning that may no longer be an achievable target as inflation persists, even after several interest rate hikes. Earlier this month, former Treasury Secretary Larry Summers warned that the U.S. is unlikely to reduce inflation without “a recession of a magnitude that would take unemployment toward the 6% range.”

    The Great Resignation has a ‘double-edged sword’
    If unemployment does rise to those levels, newer hires might feel they’re the most at risk for layoffs, according to Bankrate.

    Nearly 60% of American workers who switched employers to a higher-paying job say they’re concerned about their job security, the survey found, with 19% saying they are “very worried.” Meanwhile, only 28% of employees who did not change employers and got a pay raise instead say their job security is at risk.

    Bankrate found that job switchers received the biggest wage increases over the past year, but noted that this could be a “double-edged sword” if an employer decides to go ahead with layoffs.

    “Employees do often become more valuable the longer they stay at the company, and if you’re going to cut someone, you’d rather cut someone who hasn’t accumulated all the firm-specific knowledge,” Julia Pollak, chief economist at online job marketplace ZipRecruiter, told Bankrate.

    Bankrate found that employees who get laid off have been at a company an average of 1.2 years, while workers tend to stay at a company for 2.5 years on average, citing data from workforce analytics firm Revelio Labs.

    While newer hires might be at greater risk, not all companies are expected to resort to layoffs during a recession. Tech companies including Netflix, Meta, and Snapchat parent Snap have been hit hard by this year’s market downturn and have already turned to layoffs and hiring freezes, but many other companies have employed different means to reduce expenses in preparation for a recession, including cutting back on marketing budgets and reducing business travel.

    “Some companies do take the last-one, first-out approach, but it’s definitely not the rule across the economy,” Pollak said.

  48. What is taking place is the Rockerfeller Monopoly model of elimination of all competition until a One World Order of Power takes over.
    They had to destroy capitalism , or any sovereign state where the individual can act in their own interest , with Constitutional protections to do so.

    This is nothing more than the Rockerfeller model of eliminating competition to have one big Monopoly of One World Order rule by Corporate Governance of unelected Private Parties. They corrupted and infiltrated Governments to collude with their take over.
    They view the human race as some kind of competition to their power, and they have a depopulation agenda. They openingly call the populations “useless eaters” and they want to alter and hack humans and use technology to enslave. They want you to eat bugs and fake food, and they are withdrawing energy without replacement.
    They just pulled off a pre-planned Pandemic of Covid , where the objective was to get fake toxic vaccines in as many arms as possible, with booster after booster pushed or mandated.
    They destroyed small business by the lockdowns, which just put more power and wealth in their hands.
    They are looting tax dollars , as they have always have done.
    Rockerfeller created the Medical Monopoly to begin with, and now big Pharmaceutical in conjunction with corrupted health agencies shut down the globe , to force fake vaccines in the masses , and medical tyranny as a weapon. Climate Change as a weapon of mass destruction of our current systems .
    A monopoly on the news narratives, to destroy and censor the competition of dispute to their fraudulent narratives.
    So, I’m just saying this is Monopolyism , on a grand scale , translated into a One World Order by unelected private party wealth holders.
    The people have to take back the World from these Entities that are dangerous and evil and are probably psychopaths. We have to take back the governments that are so corrupted , that they act in collusion with this take over.
    The Globalists have shown their hand, after operating in a more covert manner before.

  49. WEF founder: Must prepare for an angrier world

    Jul 14, 2020

    Professor Klaus Schwab, founder and executive chairman of the World Economic Forum, discusses his new book “Covid-19: The Great Reset.”

    15,309 Comments

    Lou Kay
    8 months ago (edited)
    Klaus’ father, Eugen Schwab, led the Nazi-supported German branch of a Swiss engineering firm into world war 2 as a prominent military contractor. That company, Escher-Wyss, would use slave labor to produce machinery critical to the Nazi war effort as well as the Nazi’s effort to produce heavy water for its nuclear program. Years later, at the same company, a young Klaus Schwab served on the board of directors when the decision was made to furnish the racist apartheid regime of South Africa with necessary equipment.

    The irony is that we ask where did the nazis escape to? They’re right in front of you, controlling the world, featured on networks like cnbc

    https://youtu.be/LJTnkzl3K64

  50. Revolving credit deed of trust a.k.a. HELOC, a.k.a. financial time bomb.

    Summary: I think everyone is broke and refusing to cut back on expenditures.

    In Kootenai County Idaho, I can view recorded documents online. Since May, every few weeks on a Saturday, I search the prior week’s recorded mortgage deeds, mortgage defaults, liens filed, and recorded judgments.

    I did this back in 2011 through 2013; I don’t have hard data, but there are a lot more helocs now.

    The number of mortgage deeds filed per week has been steady at around 150. Over the last couple of months, I started looking at the actual documents. Over 85% each week are some sort of HELOC or cash-out refi. Amounts range from $15,000 to today’s high of $836,000, usually with an adjustable rate rider.

    There is one house near me; the owner has taken out three helocs over the past year. The first one was $250,000 the second one was $400,000 and the last one was $136,534.58. Without digging any deeper into the owner it sure looks as if he took out every penny of equity that he could with the last heloc.

    Notices of default are only about 2-3 per week. Interestingly, these foreclosures are being filed for missed payments from only a few months ago compared to 2013, when banks didn’t foreclose for at least a year.

    IRS liens are up; a lot of businesses don’t seem to pay their 941 (employee withholdings), the remainder are individuals with 1040 filings, some massive from just 2021.

    The largest increase was recorded judgements. A local “credit corp”, a collection, agency filed 17 judgments last week.

    I think we just got started.

    1. “There is one house near me; the owner has taken out three helocs over the past year. The first one was $250,000 the second one was $400,000 and the last one was $136,534.58 Without digging any deeper into the owner it sure looks as if he took out every penny of equity that he could with the last heloc.”

      That’s a lot of money for Kootenai County. Anyway, it looks like he’s already sold it to the bank.

    2. I’m seeing a lot of clickbait urging people to take equity out of their homes “before it’s too late”

      1. If the folks who spent all their accumulated home equity before the Great Recession got bailouts last time, isn’t it reasonable to assume that they would get the same treatment again?

    4. “… a.k.a. financial time bomb.”

      I am certain that bailouts were offered to those who HELOCked to the hilt last time. I have no data on how many were able to actually take advantage of the government relief payments.

  52. I will be sticking with ZZ Top this weekend. A group which our gracious host learned me something about last night.

    ZZ Top – La Grange

    https://youtu.be/rG6b8gjMEkw

    Anyone wishing to see what I learned can refer to the post on yesterday’s “We’ve Just Listed The Property And The Phone Hasn’t Rung Yet” thread October 21, 2022 at 6:56 pm

    1. TIME
      We’re Heading for a Stagflationary Crisis Unlike Anything We’ve Ever Seen
      By Nouriel Roubini
      October 13, 2022 1:52 PM EDT
      Roubini, a professor of economics at New York University’s Stern School of Business and the founder and chairman of Roubini Global Economics, is the author of MegaThreats: Ten Dangerous Trends That Imperil Our Future, and How to Survive Them, from which this essay is adapted

      Inflation is back, and it is rising sharply, especially over the past year, owing to a mix of both demand and supply factors. This rise in inflation may not be a short-term phenomenon: the Great Moderation of the past three decades may be over, and we may be entering a new era of Great Stagflationary Instability.

      Unless you are middle-aged and gray-haired, you probably hadn’t heard about the term stagflation until very recently. You may have barely heard about inflation. For a long time, until 2021, inflation—the increase in prices year to year—was below the advanced economies’ central banks’ target of 2%. Usually inflation is associated with high economic growth. When aggregate demand for goods, services, and labor is strong, coupled with positive animal spirits, optimism about the future, and possibly loose monetary and fiscal policies, you get stronger than potential economic growth and higher than target inflation. Firms are able to set higher prices because demand outstrips supply, and workers receive higher wages given a low unemployment rate. In recessions, on the other hand, you have low aggregate demand below the potential supply of goods, which leads to a slack in labor and goods markets, with ensuing low inflation or even deflation: prices go down as consumers’ spending declines. Stagflation is a term that refers to high inflation that happens at the same time as stagnation of growth or outright recession.
      …
      https://time.com/6221771/stagflation-crisis-debt-nouriel-roubini/

      1. “…possibly loose monetary and fiscal policies, you get stronger than potential economic growth and higher than target inflation…”

        How long can stronger than potential economic growth continue before a Day of Reckoning is at hand?

        It seems like we are about to find out.

      2. “For a long time, until 2021, inflation—the increase in prices year to year—was below the advanced economies’ central banks’ target of 2%.”

        Except for houses, cars, college degrees and health care, but those are luxury expenses, not necessities.

      3. This rise in inflation may not be a short-term phenomenon: the Great Moderation of the past three decades may be over, and we may be entering a new era of Great Stagflationary Instability.

        Well, isn’t he a Debbie Downer.

    2. The Financial Times
      Investing in funds
      Retail investor portfolios down 44% year to date
      Higher borrowing costs make more speculative companies less appealing
      People walk past the Nasdaq MarketSite in New York City in October
      The Nasdaq Composite has fallen by almost a third this year
      Madison Darbyshire in New York and Joshua Oliver in London
      October 22 2022

      Retail investors are nursing steep losses this year, leading many to shun individual stocks in favour of funds that track the biggest high-tech companies on the Nasdaq in the hope of clawing back losses.

      Personal portfolios in the US fell 44 per cent between early January and October 18, according to data compiled by JPMorgan Chase, in a reflection of the acute pressure applied to highly valued equities by rising interest rates and a darkening economic outlook.

      “Retail investors have been conditioned to invest into growth categories,” said Jose Torres, senior economist at brokerage IBKR. “But as the money supplies contracted, there’s less liquidity driving up asset prices.”

      The Federal Reserve has tightened monetary policy aggressively this year in a bid to tame inflation — lifting rates by an extra-large 0.75 percentage points at each of its past three meetings to a target range of 3 per cent to 3.25 per cent.

      Higher borrowing costs lessen the appeal of more speculative companies for whom cash flows are often projected further into the future. The move by the Fed and its global peers to jack up rates has also intensified concerns about a protracted economic slowdown.

      Wall Street’s S&P 500 has lost more than 20 per cent so far in 2022, and the technology-heavy Nasdaq Composite has tumbled almost 33 per cent over the same timeframe — knocking the indices into so-called bear market territory earlier this year.

      Interactive Investor, which runs one of the UK’s largest platforms for self- directed investors, said its clients lost an average of 12 per cent since the start of the year.

      Burnt by the sell-off, many retail investors have sold down shares in a bid to protect themselves from further pain. Investors this past week registered their longest weekly selling streak since the bank began measuring the market in 2016, JPMorgan noted.
      …

    1. Investor’s Business Daily
      The Federal Reserve Race To Take Down The S&P 500 And Break The World
      Fed chief Jerome Powell may keep raising rates to fight inflation until he breaks the world.
      JED GRAHAM 05:00 PM ET 10/14/2022

      As the Federal Reserve hastily withdraws the powerful tide of easy money that kept the U.S. economy buoyant through the worst of Covid, the deepening bear market for the S&P 500 and other stock indexes is revealing, as Warren Buffett famously said, “who’s been swimming naked.”

      The Fed’s fastest rate-hiking since the early 1980s and unprecedented pace of balance-sheet tightening has been wrenching for U.S. investors. But the sudden dearth of liquidity is wreaking even greater havoc via international currency markets.

      With global recession looming and Vladimir Putin threatening to resort to nukes, investors are finding safety in the highest U.S. Treasury yields in 13 years. The endless flow of cheap dollars, which whetted risk appetites and afforded low borrowing costs around the globe since the 2008 financial crisis, is now rushing back to the U.S., pushing the greenback to 20-year highs. That’s exacerbating inflation outside the U.S., forcing most central banks to follow the Fed’s lead to protect their own currencies and making their economies even sicker in the process.

      Though evidence of financial fragility is growing, Fed policymakers seem determined to continue their interest rate-hike sprint until something actually breaks.

      A History Of Fed Reserve Policy Pivots

      When the Fed’s need to tighten to meet its domestic inflation mandate creates problems for the rest of the world, markets can quickly come unglued. That happened in early 2016 and late 2018. In both cases, the Federal Reserve quickly pivoted away from its tightening plans.

      Speculation is rising on Wall Street that the Fed could again turn dovish earlier than expected, partly because of the global reverberations.

      Yet in an Oct. 6 appearance, Federal Reserve Gov. Christopher Waller sought to assure markets that this time will be different.

      “I’ve read some speculation recently that financial stability concerns could possibly lead the FOMC to slow rate increases or halt them earlier than expected,” Waller said. “Let me be clear that this is not something I’m considering or believe to be a very likely development.”
      …
      https://www.investors.com/news/federal-reserve-races-to-take-down-sp-500-and-break-the-world/

    2. 3 minute read
      October 21, 2022 2:54 PM CDT
      Last Updated 2 days ago
      U.S. yields slide from multi-year highs on hopes of Fed pivot
      By Herbert Lash
      and Gertrude Chavez-Dreyfuss
      FILE PHOTO:
      The United States Department of the Treasury is seen in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly
      Summary
      – U.S. two-year, 10-year yields hit 15-year peak
      – U.S. 30-year yields rise to 11-year high
      – Fed thinking of shifting to 50 bps in December -report

      NEW YORK, Oct 21 (Reuters) – U.S. Treasury yields fell from multi-year highs on Friday after a report suggesting the Federal Reserve is likely to debate in two weeks whether to signal plans for a smaller interest rate hike in December.
      …
      https://www.reuters.com/markets/us/us-yields-slide-multi-year-highs-hopes-fed-pivot-2022-10-21/

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