The Reality Of Living Through It Is Something Sellers Are Not Prepared For
A report from Geek Wire. “‘We’ve tied up hundreds of millions of dollars in houses that you yourself wouldn’t want to own right now,’ Redfin CEO Glenn Kelman wrote. ‘Even before its overhead expenses, the RedfinNow properties segment will likely lose $22 – $26 million dollars in 2022.’ Kelman said ‘we’ll be ridiculed for thinking’ that RedfinNow could have succeeded. Shares are down more than 90% this year.”
From Yahoo Finance. “Buyers canceled nearly a third of deals in D.R. Horton Inc.’s fiscal fourth quarter, up from 19% a year ago, the Texas-based company said. The company is responding by walking away from land deals that don’t meet certain metrics as the market has shifted, writing off $34 million of deposits and expenses tied to the transactions, and offering more incentives to sellers to close deals. D.R. Horton quarterly results also echoed what Pultegroup previously reported in its latest earnings release. Order cancellations increased 24% in the period, up from 15% in the second quarter and 10% a year ago, while purchase contracts fell 28% from a year ago.”
“‘What it’s going to come down to is we need a stabilization [of] rates — full stop — that’s what we need,’ John Lovallo, an UBS analyst, told Yahoo Finance. ‘If rates were to continue to go up from here, it’s going to be very challenging.'”
From Market Watch. “Even if Federal Reserve Chairman Jerome Powell and his cohorts stopped hiking policy rates soon, the 30-year fixed mortgage rate still would climb to 10%, according to Christopher Whalen, chairman of Whalen Global Advisors. That’s because the Fed’s torrid pace of rate increases in 2022 takes time to seep back into mortgage rates, especially with the fed-funds rate already jumping to a 3%-3.25% range in late September, from almost zero a year before. ‘There is a lag effect in mortgages,’ Whalen said, adding that even if central bankers decided to hit pause on additional rate increases after their December meeting, the 30-year mortgage rate still would ‘easily touch 10% by February.'”
KVVU in Nevada. “New home construction boomed in the Las Vegas valley in 2021, a former field supervisor reveals why homeowners are discovering problems barely a year in. ‘These homeowners at the end of the day to upper management they’re just a number- they are a sale,’ this former field supervisor said. ‘We had to delay one house two months because the framers somehow built the entire second story incorrectly with a bathroom that wasn’t supposed to be there.’ He said they had to work with homeowners who were being pressured by loan lock dates or interest rates rising.”
“‘Homeowners debt to income ratio had fluctuated and if we didn’t close by the end of their loan lock and they were going to have to re-evaluate their credit they would actually no longer qualify for the home that’s been delayed construction for months,’ the field supervisor said. This field supervisor said the business of home building became a rat race. ‘You had to get as many sales in as possible and hope that the trades could keep up with the work,’ the field supervisor said. ‘They you know can compliment themselves about how many houses they close every month and every quarter because to them that’s success but to us out there in the field every day it was a failure.'”
The Houston Chronicle in Texas. “Houston home sales stumbled for the seventh consecutive month in October — with even high-end home buyers taking a step back. Single-family home sales fell nearly 23 percent in October as buyers at almost every price point dropped out of the market, the Houston Association of Realtors reported. ‘We’re just having to readjust our sellers’ expectations,’ said Jennifer Wauhob, HAR Chair. ‘It’s not the same market that it was last year. You need a good marketing plan and you need to plan to be on the market for a month or more.'”
From Moneywise. “Kay Kingsman bought her very first home in the summer of 2021 — but now wishes she hadn’t. Kingsman, a travel blogger based in Portland, Oregon, says she decided to buy since she had plenty of money saved up from not traveling during the pandemic and mortgage rates were extremely low. She and many other pandemic homebuyers rushed into making a purchase that didn’t fully align with their needs — and they’re currently contending with the ramifications. Kingsman recounts finding beard shavings in the bathroom and the carpet smelling of cat urine when the previous owners vacated. The water pressure was weak and the air conditioning was busted.”
“She also discovered she had no parking privileges thanks to a messy lawsuit they left behind. ‘It’s just been a complete headache,’ she says. ‘[Homes] were selling so much above market rate. I didn’t want to wait too long,’ explains Kingsman. ‘And I was kind of swept up in this fast go, go, go motion.’ She hopes to eventually sell or rent out the home. ‘I feel like a lot of people are very sentimental about their first home and stuff, and I just can’t wait to get out.'”
From 425 Business in Washington. “More homes were available for buyers in King and Snohomish counties in October, and though pending and closed sales both declined. Looking at the 26-county NWMLS region, median sales prices for single-family homes and condominiums combined rose in most of the counties. The median sales price hit $595,000, up 3.5 percent from October 2021, though it went down about 9 percent from May, when prices peaked at $660,000, NWMLS said.”
From Bisnow San Francisco in California. “Meta’s dismissal of more than 11,000 employees Wednesday is the starkest indicator yet of a reckoning in the tech industry with ripple effects into the economy and office market in San Francisco and Silicon Valley. Tech industry layoffs have plagued the city and greater Bay Area in recent weeks, with Twitter and Meta’s dismissals being some of the larger examples, along with companies like Stripe and Chime.”
“‘These are companies that were just a few years ago flush with cash and taking on major new real estate obligations. I think what you’re seeing now is these companies, you know, pull back from this and recognize the enormous cost savings associated with hybrid working,’ The Boyd Co. President John Boyd told Bisnow. ‘And developers in New York are really freaking out about this,’ Boyd said of turmoil in tech. ‘I mean, the few bright spots in the office market, San Francisco and San Jose and in New York, that were, you know, major tech leases.'”
From Bloomberg. “Canadian real estate lender Romspen Investment Corp. has halted redemptions on its largest fund after a number of borrowers stopped making payments. The Toronto-based firm will ‘temporarily defer payment’ of redemptions until it’s clearer when borrowers will repay the loans and the fund can get cash from asset sales, according to a letter to investors dated Nov. 8. ‘Loan payoff activity remains suppressed.’ The move underscores the growing stress in the nation’s real estate market as a sharp rise in interest rates changes the economics of commercial projects and disrupts the housing market.”
“The Romspen Mortgage Investment Fund had $2.8 billion invested in 134 mortgages at the end of June, about evenly divided between Canadian and U.S. projects. Managers are now working to accelerate the sale of some assets to free up cash. Private lending funds gained popularity among investors hungry for yield during the era of rock-bottom interest rates. But mortgage finance vehicles have had a difficult year as rates increase. The rise in borrowing costs is also hurting developers as they seek capital to build new projects or refinance existing ones.”
“When developers can’t catch up on their payments, Romspen forecloses and deploys teams to continue work on projects before selling them.”
The Globe and Mail in Canada. “The Toronto-area fall real estate market is entering the final stretch of 2022 with dispirited buyers, a lack of inventory and the table set for an interest rate hike in December. The cautious mood in November follows a sombre October which saw sales in the Greater Toronto Area tumble 49.1 per cent compared with October, 2021, according to the Toronto Regional Real Estate Board. The average price in the GTA dipped 5.7 per cent from a year earlier to stand at $1.089-million at the end of October.”
“Rochelle DeClute, broker at DeClute Real Estate Union Realty, says rising interest rates have offset the drop in average price. House hunters who line up a preapproved mortgage and fail to buy before it expires find out they are approved for less each time they apply for a renewal. ‘They’re preapproved for a certain price and that price keeps dropping,’ she says. ‘That’s been discouraging. Meanwhile, the family money that propelled many first-time and move-up buyers during the run-up in prices during the pandemic is not as readily available.'”
“Some homeowners see a property in their neighbourhood sell quickly and expect the same result, she says. If their own house lingers, it’s hard for homeowners not to take it personally. ‘The reality of living through it is something sellers are not prepared for,’ she says.”
“Pritesh Parekh, real estate agent with Century 21 Legacy Ltd., says he is encouraging prospective buyers to figure out the repercussions for their budget if mortgage rates climb higher or they face economic hard times. ‘They should be asking the questions I don’t think people were asking two years ago,’ says Mr. Parekh, who has a background in finance. ‘As much as the stress test helps, do your own stress test.'”
“The impact of higher interest rates tends to hit borrowers about 12 to 18 months after rates begin to rise, Ms. DeClute says, so she is just now receiving the first calls from concerned homeowners. One buyer who purchased during the pandemic planned to hold onto the house for about five years and then use the profits from a sale to fund his retirement. But the increase in rates has made that plan unviable. ‘He felt strongly the market is going to continue to decline and he wants out.'”
“She is also hearing from families who have tighter cash flow than they had when they bought their house. Some have kids in expensive activities such as hockey and dance and they will have trouble stretching to make mortgage payments at higher rates. Ms. DeClute says some are running the numbers and deciding to simplify their lives. ‘They’re saying, ‘I don’t need to be in this pocket’, or ‘I don’t need this huge house.’”
The Copenhagen Post. “Housing prices are plummeting at the same pace they rose during the Corona Crisis. The Danish housing market is experiencing its steepest downturn since 2011. House prices fell by a whopping 1.6 percent in October and apartment prices by 2 percent to the extent that housing is already cheaper than it was this time last year. For example, in October 2021, the average house cost 17,329 kroner per sqm and apartment 34,431. Today, they cost 17,098 and 33,335 respectively. At this rate, prices will soon fall to pre-pandemic levels.”
“‘In the autumn of 2020, the demand for both houses and apartments had really started to increase, and buyers in many places were almost in line to buy a home,’ housing economist Birgit Daetz told Boligsiden. ‘This created fertile ground for the significantly increasing sales prices, which we especially saw in the spring of 2021. Now we have the exact opposite situation.'”
Newshub New Zealand. “The number of towns, regions, and cities hitting double-digit home value declines this year is growing, new data shows. Wellington – at a value decline of -17.6 percent – led the way for main centres and is alongside Auckland (-11.7 percent), Hamilton (-10.5 percent), Napier (-11.6 percent), Hastings (-11.5 percent), Palmerston North (-13.7 percent), and Dunedin (-10.4 percent).”
“The Auckland region’s average rate of home value decline has now officially hit double figures for 2022. The regional average is now a -11.7 percent decline in the 10 months to the end of October. Only Rodney (-7.2 percent) and Franklin (-8.9 percent) remain in single-digit declines, with the largest average reductions occurring across Auckland’s central suburbs (-12.4 percent), on the North Shore (-12.1 percent), and out west in Waitakere (-11.9 percent).”
“Local QV valuer Hugh Robson said with interest rates continuing to creep up – which is putting large numbers of potential home buyers off – and an increasing number of new listings, the market may start summer with a flood of unsold stock. ‘In fact, some agents continue to report having difficulty convincing sellers that the market is not what it was last year, meaning that their expectations are often well above the reality of the current market.'”
DTI News on Vietnam. “The property market is ‘struggling and risks falling into a slump,’ Lê Hoàng Châu, chairman of the HCM City Real Estate Association, has warned. Many companies were struggling to access bank credit, issue bonds and mobilise funds from customers, and were even resorting to selling their assets or products at large discounts or seeking risky loans at high interest rates, he said. Some had cut their payroll by up to 50 per cent, he said.”
“‘There is an oversupply of premium housing and lack of affordable commercial and social housing, and so more policies to increase the supply of the latter are urgently needed,’ he said.”
From Bloomberg. “China’s deepening property crisis is piling pressure on a $1.6 trillion corner of the country’s onshore bond market, as cities and local administrations step in as white knights to bail out troubled developers in a state-backed bid to aid the sector. After replacing builders as the biggest buyers of land earlier this year, the nation’s so-called local government financing vehicles, or LGFVs, have now become the main purchasers of half-finished projects of defaulters including China Evergrande Group. Their increasing involvement in real estate has analysts raising red flags.”
“David Qu and Chang Shu at Bloomberg Economics estimate total LGFV debt, including bank borrowings, to be as much as 60 trillion yuan, or about half of China’s GDP. Defaults would have major consequences, they said. LGFVs rose to prominence in the wake of the global financial crisis, when they played a crucial role in funding roads, bridges and subways as the central government stepped up stimulus to keep the world’s No. 2 economy humming. The phenomenon of LGFVs buying pending projects is especially acute in the southern Guangdong province.”
“As long as more developers slip into distress with China’s longest-ever home-market slump showing no signs of abating, there will be more pressure on LGFVs to help, said Ivan Chung, an analyst at Moody’s. Cities with strained finances will feel the pinch, he added. ‘LGFVs in economically weaker cities already carry higher credit risks,’ Chung said. ‘If halted projects there have big cash holes to fill, it may bring further risks to the LGFVs overseeing their deliveries.'”
This Post Has 164 Comments
Comments are closed.
we’ll be ridiculed for thinking’ that RedfinNow could have succeeded
Allow me to be the first Glen!
‘Homeowners debt to income ratio had fluctuated and if we didn’t close by the end of their loan lock and they were going to have to re-evaluate their credit they would actually no longer qualify for the home that’s been delayed construction for months,’ the field supervisor said’
Sound lending!
‘This field supervisor said the business of home building became a rat race. ‘You had to get as many sales in as possible and hope that the trades could keep up with the work’
This article is worth reading in full. What a mess.
“He said Nevada residents have four years starting from the day they move in to file a complaint against a contractor.”
That’s a long time to live with a major defect.
‘Kingsman recounts finding beard shavings in the bathroom and the carpet smelling of cat urine when the previous owners vacated. The water pressure was weak and the air conditioning was busted’
‘She also discovered she had no parking privileges thanks to a messy lawsuit they left behind. ‘It’s just been a complete headache,’ she says. ‘[Homes] were selling so much above market rate. I didn’t want to wait too long,’ explains Kingsman. ‘And I was kind of swept up in this fast go, go, go motion’
Well, it was cheaper than renting Kay.
Kay, this is Portland…’ya gotta roll with it!
Kingsman, a travel blogger based in Portland, Oregon,
Why would a travel blogger buy a house. Doesn’t she need to be traveling to have anything to blog about?
Adventure begs a base camp.
‘When developers can’t catch up on their payments, Romspen forecloses and deploys teams to continue work on projects before selling them’
Unleash the flying monkeys!
“Please be assured that we are working diligently to expedite a number of these portfolio transactions and remain confident in the underlying value of the fund’s assets,” Romspen said in the letter, which was signed by eight trustees.
Ladies and top hats to the life boats!
“To preserve liquidity, the firm created a “runoff pool” for investors who want to get their money out as assets are sold. But that didn’t dampen redemption requests, according to the letter, which said the firm may take further measures if conditions worsen.”
Get out before the turnstile is jam-packed with bodies!
‘The average price in the GTA dipped 5.7 per cent from a year earlier to stand at $1.089-million at the end of October’
Another igloo cluster goes negative YOY.
The things that will go down first and most are not on the GTA MLS. They are actually pre-cons. Folks that paid 10% down and a firm commitment to buy. Builders will start to get into trouble with their lenders if there house or condo unit is complete (municipal govt inspection sign-off) and it is still not transferred in 6 months.
Look for price cuts and going after the original purchaser for the difference.
the original purchaser
What about the buyer who no longer qualifies. Do they get gone after?
‘And developers in New York are really freaking out about this,’ Boyd said of turmoil in tech. ‘I mean, the few bright spots in the office market, San Francisco and San Jose and in New York, that were, you know, major tech leases’
How do those 5% cap rates look now John?
Tampa, FL Housing Prices Crater 19% As DebtDonkey Sellers Frantically Slash Prices
https://www.movoto.com/fl/33603/market-trends/
As one Tampa broker advised, “If you’re a seller, you’re out of luck because there isn’t a buyer at any price.”
I can offer a dollar if the seller agrees to pay closing costs.
The 2022 election was stolen.
Tucker Carlson
@TuckerCarlson
Democrats absolutely cannot lose the midterm elections. And with that in mind, they’re already preparing us for election theft, which if you don’t want a civil war, you must passively accept.
3:43 PM · Nov 8, 2022
·
https://twitter.com/TuckerCarlson/status/1590082670830112768?s=20&t=CGRPBkCszLzGHWN5_DD0sA
https://westernrifleshooters.us/2022/11/10/thursday-brief-edition/
Dominion at work again ….
https://www.bitchute.com/video/hdBuLrVSLMEq/
2:18.
https://raconteurreport.blogspot.com/2022/11/selection-day-post-game-wrap-up.html
With a herd of congressional districts in NY turning from blue to red, its fair to say that Zeldin, a guy with tremendous support across the state wasn’t on Deep States roster.
Another is senate race in NH. The GOP nominee for governor blew the doors of the groomercrat yet the GOP nominee for senate gets trounced by near double digits.
And if you endured the words of the vile pedophile last night, it’s clear deep state isn’t done with President Trump.
There is something really wrong with that video. The data he is showing isn’t possible. We don’t even have 99% of the votes counted, it’s below 95%. Zeldon didn’t get anywhere near the votes they guy shows first, which is Clinton County. He shows 34,311. Right now the count is 15,289. It goes on from there.
I’m referencing the Politico website. I can’t see what site the bitchute guy is on.
Politico=Groomercrat psy-ops. Garbage in, garbage out like NAR, WhoreLogic, etc.
I don’t use them for editorial content, but their interactive map matches the NY State Board of Elections data, which is in tabular format.
I like accusations to be based in fact, not just match my bias.
The chain of custody is broke resulting in defects.
I was just going to post that.
“The 2022 election was stolen.”
The conservatives phuc’d themselves by over-turning Roe v Wade with their bible thumping crusade mentality. I know several ladies who are done having children, and probably sex too, but they’re universally upset with men controlling them.
Do you think it was deliberate knowing it would throw the election? Or are they more concerned with depopulation (open border comes into play here) and how it the ponzi dollar falls apart without new contributors?
“Do you think it was deliberate knowing it would throw the election?”
That’s a great question, and I thought the timing was poor, and I certainly don’t want the church involved in politics. Our forefathers were wise regarding this issue. Lastly, I’m not about to interfere with women’s reproductive judgement calls.
I wasn’t asking about anybodys moral conduct. I’m suggesting the timing was suspect. They had 50 years to make a decision while the issue threw elections….. for 50 years.
I’m suggesting the timing was suspect.
When Ginsburg passed away the religious right was chomping at the bit to overturn Roe v Wade. I don’t know how the supreme court docket is decided, but it didn’t take ’em very long to phuc things up.
As long as housing prices continue cratering, all is well.
Kenmore, WA Housing Prices Crater 28%v YOY As King County Appraisal Fraud Soars
https://www.movoto.com/kenmore-wa/market-trends/
“I’m suggesting the timing was suspect.”
Or maybe the democrats were chumming the right?
Electoral politics matter nothing compared to the lives of unborn children. The moloch worshipers must be defeated.
universally upset with men
Now they can be pissed at their state government, whether it lets people kiII children in their jurisdiction or not. It is not a legitimate power of the Federal Government, so it is a power of the states. That’s all. Constitution thumping.
Constitution thumping.
+1
An abortion is not a constitutional right. If you want one, go to a state where you can get one. Stop using my taxpayer money to fund organizations that then contribute to Democrat candidates.
Since the Constitution is the ultimate law of the land, you would think that people would read it more and try to understand its logic.
The conservatives phuc’d themselves by over-turning Roe v Wade
Yeah, that really pi$$ed off most women I know – young and old alike.
Yeah, that really pi$$ed off most women I know – young and old alike.
I suppose it depends on which circles one runs. I know plenty of women who were very pleased with Roe being overturned.
Hey Colo, did you see Nicole blew that giant moon rocket back another week? Someone should put a blue tarp on it and call FEMA.
I really doubt the SLS will ever fly.
I suppose it depends on which circles one runs. I know plenty of women who were very pleased with Roe being overturned.
Many are in my own family. I would describe them as fiscally conservative but more socially liberal – but definitely not woke. They’re not down with the gender garbage, the identity politics, or any of that nonsense. I think the SCOTUS decision hurt the Rs.
Many are in my own family
Like I said, it depends on which circles. If people are willing to give Brandon two more years of Carte Blanche to wreck the country because they revere the right to murder their own children, then perhaps there is nothing left to save of the Republic.
perhaps there is nothing left to save of the Republic.
There is. Needs a compass though. Libs don’t have one. I’ve checked.
These “ladies” can whine all they want, but removing all boundaries from women has been an enormous mistake. And if we have to start with “no you can’t murder your baby” which seems like a no brainer, well so be it. To make progress we’re simply going to have to put them back in the box.
Some things are more important than an election.
The conservatives phuc’d themselves by over-turning Roe v Wade with their bible thumping crusade
FWIW, “bible thumping” is used in reference to Protestant Fundamentalists, who are famed for being able to quote just about any verse in Scripture. Not a single justice who voted to overturn Roe was a Protestant Fundamentalist.
From what I have observed, Evangs and Fundies have mostly abandoned the pro-life movement, in part because they fear it will scare away future church members. The pro-life movement has become a mostly RC thing. So much so that The Atlantic declared the Rosary to be a weapon.
The rosary is a weapon when wielded by faithful hands.
Youre obviously not Catholic.
For the benefit of the public, RC(roman catholic) is a sleight styled insult against Italians.
The rosary is a weapon when wielded by faithful hands.
Quite true.
All the SC did was throw the abortion issue back to the states where it belongs. The 10th amendment is pretty clear that it’s a state issue, just like murder and most other crimes. Roe had to bend over backwards to try to claim the 14th amendment protected abortion.
Well the ladies are completely ignorant. IGNORANT. The overturn is only dumping Federal [feral] imposition onto states. It is a States rights issue, NOT a federal issue. And NOT a Constitutional issue. Even Sandra Day Oconner said the as did RBG
The 2022 election was stolen.
It’s in the process of being stolen, and it’s just like last time. The remaining pieces that are currently red but not done with counting will magically turn blue – way after the election should have been done and over with.
Check out the election map for the House in California. You will find that there are a number of red districts – 13, 22, 27, 45 – which are solidly red. This is where Gavin Newsom and company come into play. All they have to do is turn those blue and the House goes to the Dems. Then, they work their magic in Georgia again and it’s over with.
I also forgot to mention CA district 41, which is almost done turning from red to blue. This is how you steal elections but try to make it look like you’re just counting votes. This country is finished.
It is already dead. We are experiencing a death rattle. A rigmortus
PPS – It looks like they won’t even need Georgia for the Senate. They’re going to turn Nevada blue. All the late votes are coming in for the blue incumbent. Just like last time, everything that would have to happen for a blue miracle is happening again. That’s why Biden was smiling and celebrating when it looked horrible for Dems – he knew the fix was in.
The delays and fixes never turn red.
Boebert has recovered the lead in her district, though it isn’t over yet.
She and many other pandemic homebuyers rushed into making a purchase that didn’t fully align with their needs — and they’re currently contending with the ramifications.
How’s that emotion-based decision-making working out for ya, Kay? Lemme guess: you’re in the 68% of unmarried wimyn who voted D cuz muh body, muh choice (except when it comes to vaccines).
Not a lot of “choice” for the 12-year old bodies being butchered by the gender identity movement either.
. ‘And I was kind of swept up in this fast go, go, go motion.’
These future cat ladies never accept accountability for their own rash decisions & galactic sense of entitlement.
“And I was kind of swept up…”
If it wasn’t for excitement and hormones guys would need to maintain a recent FICO report and a Dunn & Bradstreet assessment on their smartphone before going out.
How many Muricans in our oligarch-looted, Brandon-mismanaged, inflation-ravaged economy are in secure jobs earning $88K?
The median income needed to buy a typical home is over $88,000 — $40,000 more than prior to the pandemic
https://www.marketwatch.com/story/the-median-income-needed-to-buy-a-typical-home-is-over-88-000-40-000-more-than-prior-to-the-pandemic-11668089438?mod=mw_latestnews
“‘We’ve tied up hundreds of millions of dollars in houses that you yourself wouldn’t want to own right now,’ Redfin CEO Glenn Kelman wrote. ‘Even before its overhead expenses, the RedfinNow properties segment will likely lose $22 – $26 million dollars in 2022.’”
Is $22 – $26 million dollars alot? Sounds like the value of 22 to 26 homes in my neighborhood as of early 2022.
Someone’s a lion.
‘If halted projects there have big cash holes to fill, it may bring further risks to the LGFVs overseeing their deliveries.’
LGFV, meet FTX.
Money
Bitcoin plunges as Binance walks away from FTX bailout. Is this the new crypto crisis?
This illustration photo shows a smart phone screen displaying the logo of FTX, the crypto exchange platform. – Copyright OLIVIER DOULIERY/AFP
By Pascale Davies • 10/11/2022 – 12:18
Cryptocurrencies across the board are taking a massive hit with Bitcoin reaching a yearly low after the third-largest crypto exchange FTX Trading is reportedly experiencing a liquidity crisis and Binance reversed its decision to bail out the struggling platform.
…
https://www.euronews.com/next/2022/11/09/explained-is-ftx-the-next-crypto-crisis-and-will-there-be-a-binance-bailout
Cryptocurrencies
Street Notes
Bitcoin Could Drop to $13,000 in a Crypto Selloff That Lasts Weeks, J.P. Morgan Says
By Jack Denton
Nov. 10, 2022 7:22 am ET
Cryptocurrency prices have mostly risen from recent lows after a brutal rout that has rocked digital assets in recent days. But investors shouldn’t get optimistic just yet. This selloff could last weeks and push Bitcoin (BTCUSD +10.59%) down to $13,000, according to J.P. Morgan analysts.
Bitcoin plunged to its lowest level in two years as the crisis at distressed crypto exchange FTX sparked panic selling. Fears of spillover from a failure at FTX and a related trading firm, Alameda Research, have pushed Bitcoin as low as $15,550. The largest cryptocurrency was changing hands near $21,000 last weekend, before the troubles at FTX were fully clear.
…
https://www.barrons.com/articles/bitcoin-could-drop-to-13-000-in-a-crypto-selloff-that-lasts-weeks-j-p-morgan-says-51668082940?noredirect=y
$17,753 right now. Looks like some whale boosted the BTC price overnight. Margin calls and issues with Tether (never quite figured that out) kick in at $17000. They really can’t let it go below that.
The question is, how long they can maintain a $17K floor. My guess is not long. Bitcoin maximalists are still banking on institutional investors to come to the rescue (again). But surely pension funds initially invested through an exchange, not the fund manager walking around with a pen drive. No way would they invest via any exchange after this. So no new Ponzi fuel there.
And people forget that those wild predictions for crypto were based on widespread adoption of crypto as a worldwide currency, i.e., supplanting all other government currencies. Instead, crypto is just devolving into an “asset” for private black-market barter. May as well be a share of Apple stock or a Tide Pod or a tulip bulb.
Dead. Cat. Bounce. 🐈
all other government currencies
Not sure the use of “other” is appropriate.
Perhaps a dead cat bounce.
Oh dear….
https://www.news.com.au/finance/business/other-industries/coworking-workspace-victory-offices-collapses-into-administration-chased-for-35m/news-story/65a23c1d7d4070ff4fb6816f2c5b62a9
PMs calling bullshit on our falsified, Soviet-style CPI inflation stats.
https://www.kitco.com/market/
I like gold but I’m not a day trader. To my view gold is still in a major downtrend.
Why is gold and silver cratering day after day? Gold and silver are cheaper today than they were 11 years ago.
Speculators need to cover their margin calls.
Rick Palacios Jr.
Home builder commentary from our survey this month was about as negative as I’ve seen to date. Here’s some of the market color that jumped out…
https://twitter.com/RickPalaciosJr/status/1590447524560908288
There’s a bunch.
The Joe Biden economy.
More older Americans become homeless as inflation rises and housing costs spike (11/10/2022):
“Inflation and rising rents are leaving many older Americans on the brink of ruin. The poverty rate for people 65 and older rose from 8.9% in 2020 to 10.3% in 2021, according to Ramsey Alwin, president and CEO of the National Council on Aging.
Alwin says people who rely on traditional retirement income, such as Social Security, are having trouble affording the basic necessities. “You’ll find that individuals are often coming up short by about $1,000 a month in order to meet their true needs,” she says.
Brian Guyer, housing department director for the Human Resource Development Council in Bozeman says that when his shelter can’t serve a senior, it also must ask the person to leave. A memory that still haunts him, he says, is of an older man who froze to death three days after being denied a spot in the Bozeman shelter because he was incontinent and had mobility problems. “He actually was found outside of a Lowe’s store here in Bozeman,” Guyer says.
https://www.npr.org/sections/health-shots/2022/11/10/1135125625/homelessness-elderly-housing-inflation
This is Joe Biden’s America.
This is Democrat Party.
“Alwin says people who rely on traditional retirement income, such as Social Security, are having trouble affording the basic necessities.”
Savers have been earning schitt on their savings accounts for the past 12-yrs thanks to the fed’s rescue of Wall street banks.
I’m getting 2.75% on a savings account right now and feel lucky. It’s messed up.
I should’ve leveraged up instead of saving and living below my means since I graduated and entered the workforce.
My savings account started earning $120k/yr interest starting 3 weeks ago.
We’ve been getting shafted much longer than 12 years. It’s been well over 2 decades.
Why do people think SS will provide them with enough money to live?
Because SS was and is very generous for prior generations, and they don’t understand that that generosity is not sustainable in the future, and they don’t know what a Ponzi scheme is.
generosity is not sustainable
How much time have I got?
Approximately 24 hours each day.
A reader sent these in:
Regarding crypto: everyone always knew. We knew the mania was unsustainable. We knew there was hidden leverage. We knew there was a dangerously speculative unregulated market segment and it wouldn’t end well. The same is true for housing, and everybody knows it.
https://twitter.com/texasrunnerDFW/status/1590480823337517057
Meat substitute catastrophe as the fantasies of billionaire investors slam into the reality of the supermarket. Sales down 22.5% in the last 3 months. Losses up by 180%. Every $1 of product it sells costs $1.82 to make. It takes a very special talent to run a business like this!
https://twitter.com/JulianMellentin/status/1590569841131655168
Tim Ellis, 🗿 guy
@The_Tim
Well, the housing market contraction has claimed my job. If you know of anyone hiring for any senior data analyst roles or other things that are up my alley, please send them my way.
https://twitter.com/The_Tim/status/1590388224660484096
#Lumber Downside Targets by Edson Gould
May 2021: “There exists the potential to decline as low as $410.90.”
Lumber struggling to launch off the $410 in the current environment.
https://twitter.com/NewLowObserver/status/1590477010346078208
Demand for mortgages in the US is collapsing.
https://twitter.com/adam_tooze/status/1590050622992154625
Subprime auto ABS spreads have blown out as delinquencies climb.
https://twitter.com/SoberLook/status/1590287808304132096
The Kobeissi Letter
@KobeissiLetter
The Fed 1 Year Ago:
1. Interest rates will not rise until 2024
2. Inflation is transitory, will fall to 2% in 2022
3. Don’t worry, we are expecting a soft landing
4. A recession is highly unlikely
5. The housing market is not in a bubble
Literally every statement was wrong.
https://twitter.com/KobeissiLetter/status/1590419174488412162
*AMAZON MARKET CAP SHRINKS TO $879 BILLION FROM $1.88 TRILLION*AMAZON BECOMES THE WORLD’S FIRST PUBLIC COMPANY TO LOSE A TRILLION DOLLARS IN MARKET VALUE
https://twitter.com/Investingcom/status/1590481177550344192
3/ Because the monthly budget math of buying a house with a 7% mortgage rate isn’t busted; it’s beyond busted. Busted busted busted.
https://twitter.com/JeffWeniger/status/1590482903112511488
Inflating asset prices covers up so much failure
Quote Tweet
Jeff Weniger
It’s not so much the home prices declining that sends people into credit card trouble; it’s the job losses that come when this massive part of a financialized economy goes sour. Landscaping crews, bricklayers, plumbers, roofers, electricians.
https://twitter.com/GRomePow/status/1590483308454215682
ARK Innovation ETF sell-off deepens as crypto-related stocks like Robinhood, Coinbase, Block & Roblox crash, ARK now down almost 80% from high.
https://twitter.com/Schuldensuehner/status/1590469640085733376
If you’re not holding your crypto Pokémon on 3x leverage, you’re not doing it right.
https://twitter.com/hussmanjp/status/1590495910319964160
#recession … #GFC2 US #Transports edition
#Shipping #Trucking #Freight 📉
https://twitter.com/InvariantPersp1/status/1590499943852433408
Who do you sell the home you overpaid 300k for to when there are no more crypto bros to sell it to
Quote Tweet
Rick Palacios Jr.
Nov 16, 2021
On occasion, 10% to 15% of home buyers are using crypto gains towards down payment on home, namely in higher price points &/or communities w/younger buyers more familiar w/crypto. (4/)
https://twitter.com/NipseyHoussle/status/1590500370576703488
Tom Brady having a rough year.
4-5 football team
Divorce
FTX bagholder.
https://twitter.com/StealthQE4/status/1590519406358327304
FED’S KASHKARI: I WISH WE HAD BEGUN TIGHTENING SOONER.
https://twitter.com/financialjuice/status/1590516631264165890
Home builders in 2021: Walk-in traffic is banned. Website traffic is all that matters. Appts only with a pre-approval letter. Weekend directional signage cut to zero.
https://twitter.com/koakley81/status/1590537103221624832
The best line on crypto that I’ve ever heard is that it’s a multi-level marketing scheme for people who think that they are too smart for multi-level marketing schemes.
https://twitter.com/EdBorgato/status/1590454049706414081
JUST IN: Sequoia Capital to mark down its $213.5 million FTX investment to $0.
https://twitter.com/WatcherGuru/status/1590529082068197385
Peak to October, major real estate markets are down
The biggest decliners are outsized including:
San Francisco
Seattle
San Diego
Denver
Phoenix
Down ~10% or more
https://twitter.com/ParclLabs/status/1590528782724915207
Brazil’s Banco Bradesco SA, Latin America’s second-largest lender by market value, had its worst day since 1998, as much weaker-than-expected profits and souring loans sparked a spate of analyst downgrades.
https://twitter.com/AlessioUrban/status/1590489310108987392
Next 12 months will be a death spiral for builders (profit margins)
https://twitter.com/NipseyHoussle/status/1590412945313263617
The Bank of England’s chief economist has admitted that prolonging quantitative easing during the pandemic may have contributed to the surge in inflation. IT IS A MIRACLE. Finally, some truth.
https://twitter.com/GoldTelegraph_/status/1590072963499712512
Very few are still talking about real estate. Real estate is falling off the Niagara Falls. Few understand the significance.
https://twitter.com/DonMiami3/status/1590453276260331520
CarDealershipGuy
Hate to be the bearer of bad news: Just got word that Capital One is starting layoffs in its Auto division. (Unconfirmed, but reliable source)
https://twitter.com/GuyDealership/status/1590450342080413697
I’m an appraiser and appraised the first sold house in a new community a couple weeks ago. Online ads said it was going for 1.45 mil. Closed at 1.1. And it’s gonna get worse.
https://twitter.com/Jamesjcramer/status/1590426286308327424
The final Crypto meltdown is underway.
Basically what happened is a lot of people realized they were in a Ponzi scheme and all tried to exit at the same time. No luck.
“The crypto industry shook from the collapse of one of its foremost institutions”
https://twitter.com/SuburbanDrone/status/1590341215211638785
What the f*ck is a “Binance”? I would look it up but it will be bankrupt soon anyways. Glad I never wasted one second learning this pseudo-intellectual crap.
https://twitter.com/SuburbanDrone/status/1590513286671257600
Drop everything you are doing and read below. Am ded 🤣🤣🤣🤣🤣
https://twitter.com/INArteCarloDoss/status/1590369450661842944?s=20&t=MlwkE98EgVA2arMIKgP2yQ
Remember this tw*t?
https://twitter.com/INArteCarloDoss/status/1590383518584311808
So yes.. cryptos dudes were saying fiat currencies will collapse since last weeks and now cryptos are in a credit crunch. Put all in cryptos, better than gold.. now many are on suicide watch
https://twitter.com/AlessioUrban/status/1590287144060604416
Buy now pay later (BNPL) transaction volumes soared 500% YoY in US meanwhile delinquencies are increasing – Affirm
https://twitter.com/AlessioUrban/status/1590331492844335106
UK home buyers are pulling out of deals for new-build homes at their fastest rate since markets were roiled by the collapse of Lehman Brothers in 2008
https://twitter.com/AlessioUrban/status/1590385226676477952
an episode of porn hub man gets f***** by liquidity crunch
https://twitter.com/AlessioUrban/status/1590395550733520896
Every day I read about crypto, I understand it less and less. FTX was in talks two months ago to raise 1bn equity at a 32bn valuation. Binance threatens to dump 500mm FTX tokens and the whole thing just collapses? Explain it to me like I’m a 65 year old.
https://twitter.com/boazweinstein/status/1590057305223335936
Fun fact: If you spent $1,000 shorting the 2022 Super Bowl advertisers, you’d be a billionaire today:
▫️ FTX
▫️ Carvana
▫️ DraftKings
▫️ Uber Eats
▫️ Meta Oculus
▫️ Rocket Mortgage
▫️ Coinbase
▫️ Vroom
▫️ Salesforce
▫️ GM
https://twitter.com/ChrisJBakke/status/1590047257256427520
So the ECB doesn’t accept the blame for any of the inflation. The ECB is blaming inflation on climate change … 🤡
https://twitter.com/WallStreetSilv/status/1590355897637023746
Having worked in Silicon Valley through the ‘01 & ‘08 busts, the power structure swings back to the employer
All the employee perks, privileges & entitlements go poof
The cold math of the bottom line takes the wheel
https://twitter.com/menlobear/status/1590350372798750720
PAGING MICHAEL BURRY: Non-QM mortgage loans are in deep trouble
Non-prime is the new subprime
https://twitter.com/texasrunnerDFW/status/1590350772663091200
This is one disturbing housing chart! Source: ?
https://twitter.com/jsblokland/status/1589919659037319168
The collapsing and dead housing market will have huge consequences on the rest of the economy. The lag effect takes time to play out. It’s collapsing faster than during the Great Financial Crisis.
https://twitter.com/DonMiami3/status/1590340164055769088
D.R. Horton, the largest U.S. homebuilder, reported net sales orders in the July-to-Sept quarter fell 15% from a year earlier (and by 10% in value) Cancelled sales orders as a share of gross sales rose to 32%, from 19% in the year-earlier period
https://twitter.com/NickTimiraos/status/1590363373182783488
A stunning rebuke of the Fed’s intervention in the free markets. Buying MBS while Case Shiller rocketed to 20% yoy gains. An absolute failure of monetary policy.
https://twitter.com/trader_mtg/status/1590364790949810177
Homes collectively lost $1.3 trillion or 7.6% of their equity during 3Q, according to $BKFS. These declines represent the largest quarterly drop in dollar volume ever and the biggest falloff on a percentage basis since 2009, said Ben #Graboske of @BKFSdata
https://twitter.com/rcwhalen/status/1590353904172007426
Interesting tone in the mountain towns. Nothing new single family coming on the market, just sheets of condos. Sellers thinking ‘wait for spring and better pricing.’ Good luck with that.
https://twitter.com/Stimpyz1/status/1590375847319699457
The_Tim
Well, the housing market contraction has claimed my job. If you know of anyone hiring for any senior data analyst roles or other things that are up my alley, please send them my way
Hey The Tim, I gotta old truck covered in bird sh$t. I’ll pay tree fitty to clean it up.
Ahhh one of my old good friends. I’m so glad to see he’s losing his ass more now than he was years ago.
Knock knock.
Come in.
Human resources?
Yes, have a seat.
My name is The_Tim, Ima data anaylis.
Where did you work previously?
Redfin.
Do you mind leaving by the back door?
Wasn’t he the guy who ran the Seattle housing bubble blog?
Yep, that’s him.
Buy now pay later (BNPL) transaction volumes soared 500% YoY in US meanwhile delinquencies are increasing – Affirm
We are still at the peak of the most massive credit bubble in history. They still haven’t shut off the credit.
meat substitutes were a farce anyway, and usually double the price of the real stuff …………Tip Jus egg made from pea protein, while it did taste good we both never had so much gas in our lives, glad we ate on a Saturday morning no work and no appointments and we just bought a big can of Lysol that week
You actually ate that slop?
well sort of, i had a coupon for 2 free jars.
I wouldn’t eat it even if they paid me.
Online ads said it was going for 1.45 mil. Closed at 1.1.
OC California
If you’re not holding your crypto Pokémon on 3x leverage, you’re not doing it right.
The first comment:
“Why so conservative?”
LMFAO.
“The best line on crypto that I’ve ever heard is that it’s a multi-level marketing scheme for people who think that they are too smart for multi-level marketing schemes.”
I liken it to a digital chain letter. Ponzi isn’t quite accurate because in a Ponzi people are lied to that there is a real investment occurring in something tangible. In the current scheme everyone understands that there is no tangible investment and that the whole thing is an illusion just like chain letters back in the day. It was always based on a greater fool concept. Apparently when money stops being free, you start running out of greater fools.
Another good description of crypto is “A limited supply of nothing”
BTW
Bitcoin is down 11+% for the week.
According to CoinMarketCap, the number of cryptos available to purchase as of today is: 21,714.
That’s up from 21,709 just yesterday.
Buy now before they run out of crypto sites and words to name them!
“Apparently when money stops being free, you start running out of greater fools.”
Correction: You start running out of greater fools THAT HAVE MONEY.
We will never run out of greater fools. If this were so then we bankers would either starve or be forced to look for a real job.
Bellevue, WA Housing Prices Crater 16% YOY As Housing Prices Plummet Across Seattle And Vancouver, BC
https://www.movoto.com/bellevue-wa/market-trends/
As a noted economist said, “If you bought a house in the last 20 years, you’re screwed.”
The Fed cannot step in to provide stimulus this time, says Mohamed El-Erian
CNBC Television
Nov 9, 2022
https://www.youtube.com/watch?v=obDCq2u6b3s
3:16.
Revolving credit debt up 9% to a new record high. Charge!!
What kind of rates are these folks paying by now? Ouch!
Besides cryptos, one other thing in unlimited supply is consumer stupidity.
“The Romspen Mortgage Investment Fund had $2.8 billion invested in 134 mortgages at the end of June…”
That is nearly $21 million per mortgage.
“Kingsman recounts finding beard shavings in the bathroom”
Horrifying!!! The next time I sell a house, I’ll spend the money to restore the house to NEW condition after the no-inspection sale.
What are people thinking?
Homeless Woman Interview – Kristin used to be Mortgage Broker
https://youtu.be/6_WWMC-H5QE
In Orange County, CA. But this is where the Housing Crime Syndicate operators come from…. directly from the sewers and gutters…. and to the sewers and gutters they return.
Loan “officer”? 🤣
She lost a custody battle then turned to fentanyl. Sad.
When you’re pimping mortgages and houses, you’re already on a slippery slope considering those types do anything for money.
You can’t lose what you never had from the get go.
“There but for the grace of God go I”
Machine . . . There But for the Grace of God, There Go I
https://www.youtube.com/watch?v=o_lPHjn0Aqk
A woman losing a child custody battle goes against the odds, so she has some aggravating problem that she cannot overcome.
D R U G S
She didn’t just start them after she lost. She was “parenting” while high.
…. and executing legal documents.
Never mind the CPI was 7.7% instead of 8+, so we are all systems go.
NASDAQ +6%, S&P 4.65.
What maroons ….
Inflation was cooler than expected in October, although household staples like shelter, food and energy remained among the largest contributors to consumer prices still rising at a historically fast pace, the U.S. Bureau of Labor Statistics said Thursday.
Inflation measures how quickly the prices consumers pay for a broad range of goods and services are rising.
The consumer price index, a key inflation barometer, jumped by 7.7% in October relative to a year earlier — the smallest 12-month increase since January 2022. Economists expected a 7.9% annual increase, according to Dow Jones. Basically, a basket of goods and services that cost $100 a year ago costs $107.70 today.
a basket of goods and services that cost $100 a year ago costs $107.70 today
It might not be. The rate for October is month over month. Annualized is just 12 times that. Doesn’t speak to what happened the previous 11 months. I could be wrong.
I cannot name one thing that is up ONLY 7% in the last year. Probably the cheapest is 10% and some things (esp food) are more than double.
7% is a joke
Rally on Wayne!!!!!!!!! bullish
That’s because the Fed’s torrid pace of rate increases in 2022 takes time to seep back into mortgage rates,
I don’t buy this. I would sit in meetings at 8:30 and the jobs report would come out, 10 year rates would rise 12 bps and almost INSTANTLY the decision would be made to increase rates 1/8. Pricing engine changed and ready to go with new rates. What lag?
the 30-year mortgage rate still would ‘easily touch 10% by February.’”
Yes, I suspect margins are very thin in Mortgage right now and they will be raised once a lot of the competition is “eliminated”, but increasing margins are not going to bring rates up 2.5%. Makes absolutely no sense to me unless the 10 year spikes 200+bps.
“Pricing engine changed and ready to go with new rates. What lag?”
The lag reference regards how long it takes the effect of rate hikes to impact the real economy, not the time required to make a decision on rates.
lag reference regards how long it takes the effect of rate hikes to impact the real econom he says:
torrid pace of rate increases in 2022 takes time to seep back into mortgage rates,
No he specificaly says they will take time to seep into mortgage rates. No they don’t, that is instantly.
He is not referring to the time lag in the economy which I obviously agree with as rates/cash flow changes take time to change behavior
Ok, I catch your drift.
“The collapsing and dead housing market will have huge consequences on the rest of the economy. The lag effect takes time to play out.”
For a related example, the subprime mortgage lending industry collapse played out over most of 2007. Wall Street panic didn’t happen until fall 2008.
The housing market lost a record $1.3 trillion in equity in the 3rd quarter as prices continue to fall, new data shows
Brian Evans Nov 7, 2022, 12:38 PM
US home prices, property market, housing
The housing market boomed in 2020 and 2021 but is now cooling rapidly. AFP/Getty Images
The housing market lost a record $1.3 trillion in equity in the third quarter, according to Black Knight.
That’s the largest quarterly dollar-value decline on record, the mortgage software and analytics company said.
Median home prices also fell 0.52% in September, continuing a three-month streak of declines.
…
https://finance.yahoo.com/news/housing-market-lost-record-1-203832559.html
“$1.3 trillion”
Is that alot?
Supposedly we are about to have another basket full of nuts from the NE dumped on us in Florida.
Kari Lake joins Charlie Kirk to give the Latest Election Updates in Arizona
Nov 10, 2022
https://www.youtube.com/watch?v=v8LhjsxNmCQ
14:19.
Kari Lake Joins The Glenn Beck Program
Nov 10, 2022
https://www.youtube.com/watch?v=GflkcRHgWOA
12 minutes. Good to hear Pima County and Tucson are getting with the program.
Watch News Analyst’s Face as He Sees a Dem County Flip to Solid Red
The Rubin Report
Nov 10, 2022
Dave Rubin of “The Rubin Report” shares a clip of MSNBC’s Steve Kornacki reacting to the shock flipping of Miami-Dade county for Republicans during the midterm elections.
https://www.youtube.com/watch?v=zmqGT3lO0wA
2:25.
Meanwhile in Arizona…
https://www.youtube.com/watch?v=0qfvhA1eXKY
45 seconds.
Rep. Lauren Boebert takes lead over challenger Adam Frisch in U.S. House District 3
CBS Colorado
Nov 10, 2022
For the first time since election night, incumbent Rep. Lauren Boebert, a Republican who represents Colorado’s 3rd Congressional District, has a lead over over Democratic challenger Adam Frisch.
https://www.youtube.com/watch?v=IUvDXezCerM
1 minute.
Kari Lake: These ballots will be a strong Republican vote
Fox Business
Nov 10, 2022
Arizona Republican gubernatorial candidate Kari Lake reacts to thousands of votes being left to count in Arizona
https://www.youtube.com/watch?v=Xd3pv17K8PU
6:32.
The cryptosphere is imploding, and Walll Street is celebrating like there is no tomorrow.
So much for the bogus systemic cryptorisk claims…
Business
Crypto Stocks Continue Drop as Binance Walks Away from FTX Deal
Concerns around FTX’s health along with the broader crypto ecosystem spilled into the stock market Wednesday.
By Michael Bellusci
Nov 9, 2022 at 4:00 p.m. PST
Updated Nov 10, 2022 at 7:28 a.m. PST
…
https://www.coindesk.com/business/2022/11/10/crypto-stocks-continue-drop-as-binance-walks-away-from-ftx-deal/
Bitcoin: The Lower Low – They’re Ruining Us | Gareth Soloway Bitcoin Update
Crypto Informed
Nov 9, 2022
https://www.youtube.com/watch?v=VuDOpsjHAr4
8:23.
So sad these kids living in a virtual world. A strong wind could blow them out of their computer monitor dens into a real world which they might find they are not equipped for.
Bow wow…
The Financial Times
Opinion The FT View
FTX’s $8bn crunch exposes a dog-eat-dog cryptosphere
The near-collapse of Sam Bankman-Fried’s empire leaves Binance dominant
The editorial board
Spooked customers of Sam Bankman-Fried’s FTX withdrew as much as $6bn from the exchange in three days, eroding the value of its FTT tokens from $22 to $5
The editorial board 10 hours ago
The trajectory from hero to zero can be swift and brutal, as Sam Bankman-Fried can attest. The 30-year-old boss of FTX, who last year aspired to buy Goldman Sachs, this week saw his on-paper $24bn fortune crumble, as his crypto exchange suffered an $8bn liquidity crunch. SBF marketed himself as the friendly face of crypto, who was — at least ostensibly — engaging with regulators, and attracting celebrities and blue-chip investors. His empire’s downfall leaves a dog-eat-dog cryptosphere that ordinary investors, regulators and politicians should treat with caution.
SBF’s woes began on November 2, when CoinDesk revealed that his hedge fund, Alameda Research, was full of the tokens FTX prints out of thin air, FTT. Of Alameda’s $14.6bn in assets, nearly $6bn was FTT, with $2.2bn of it pledged as collateral against loans. Four days later, FTX’s arch-rival, Binance, said it would sell its $580mn of FTT in light of the revelations. This spooked customers, who withdrew as much as $6bn from FTX in three days, eroding FTT’s value from $22 to $5. FTX appealed to Binance to rescue it on Tuesday. In a surprise to precisely no one, Binance killed the deal less than two days later, citing inquiries by US securities and futures watchdogs into FTX, and allegedly mishandled customer funds. FTX limps on to find other white knights.
Its travails leave many questions, not least how an exchange, valued in January at $32bn, could suffer a liquidity crisis if correctly managed. One view is that if a project is based on little more than the greater-fool theory, quite aside from what seems like circular accounting, sooner or later the facade will come crashing down. In April, SBF likened “yield farming” — a complex crypto lending practice FTX offered — to a box whose value is determined by others’ willingness to contribute more dollars to it, prompting his Bloomberg interviewer to suggest that this sounded much like a Ponzi scheme.
…
Economy
Stock market surges after inflation report shows the pain of high prices may ease
Updated November 10, 2022 4:28 PM ET
Scott Horsley 2010
People shop for bread at a supermarket in Monterey Park, California on October 19, 2022. Grocery prices were up 12.4% last month from a year earlier, a government report showed.
FREDERIC J. BROWN/AFP via Getty Images
Stocks surged in their biggest rally in two years on Thursday, after a better-than-expected inflation report showed that the galloping price increases that consumers have endured all year are beginning to slow.
The Dow Jones Industrial Average rose 1200 points, or more than 3.7%, over the course of the day to close at 33,715.37, the highest since the middle of August. The Nasdaq soared more than 7% and the S&P 500 more than 5%.
Consumer prices in October were 7.7% higher than a year ago, according to the Labor Department. That’s a slower pace of inflation than September’s 8.2% rate. It’s also the smallest year-on-year increase in prices since January.
And the price hikes between September and October were significantly smaller than forecasters had expected.
…
https://www.npr.org/2022/11/10/1135755585/inflation-prices-october-stocks-economy
“Stock market surges after inflation report shows the pain of high prices may ease”
I expect the pain of high stonk and shack prices to ease quite a bit before it’s over.
Starting to feel more like 2007 than 2006 now. Bubble economy is visibly coming apart, stonks still saying “this is fine.”
They are so hungry for any good news, that what could be mere noise in the inflation dip makes the market soar.
“…mere noise in the inflation dip…”
My thought exactly! The HODLers are grasping at straws.
The Federal Reserve
Fed officials back slower pace of rate rises after inflation data
Investors expect shift down after better-than-expected consumer price figures
Jay Powell
Fed chair Jay Powell signalled his support for smaller rate rises at the US central bank’s meeting last week
Colby Smith in Washington 4 hours ago
A growing cohort of Federal Reserve officials have thrown their support behind slowing the pace of future interest rate rises, as investors increased bets on such a move following the release of slower-than-expected inflation data on Thursday.
Patrick Harker, president of the Philadelphia Fed, was the latest official to back the US central bank breaking its months-long streak of supersized increases, joining his counterparts at the Boston, Chicago and Richmond branches.
“In the upcoming months, in light of the cumulative tightening we have achieved, I expect we will slow the pace of our rate hikes as we approach a sufficiently restrictive stance,” Harker said on Thursday. “But I want to be clear: a rate hike of 50 basis points would still be significant.”
Lorie Logan, president of the Dallas Fed, also endorsed a shift down from 0.75 percentage point rises, which the Fed has implemented at every meeting since June, but emphasised the central bank’s commitment to stamping out inflation.
“While I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving, I also believe a slower pace should not be taken to represent easier policy,” she said at a Fed event on Thursday.
According to CME Group, traders place the odds that the Fed will opt for a smaller move next month at 85 per cent, up from roughly 50 per cent on Wednesday.
The shift in expectations — which was accompanied by a sharp rally in the S&P 500 — was propelled by fresh evidence that inflationary pressures are beginning to level off in some sectors. October’s consumer price index showed prices rising by 0.4 per cent for the month, in line with September’s increase, which translates to the smallest annual rise since January.
…
Much is made of their Public Relations comments. Take it to the bank if you want to. They’re just calculating the best way to skim off the wealth of the nation IMO.
The Financial Times
Markets Briefing Equities
US stocks record best day in over 2 years on cooler inflation data
Yield on two-year Treasury note drops the most since 2008
A shopper at a grocery store in San Francisco
Core US CPI, which excludes food and energy prices, rose 6.3% year on year in October, below expectations of 6.5%
Jaren Kerr in New York, George Steer in London and Hudson Lockett in Hong Kong 2 hours ago
US stocks roared ahead on Thursday in their strongest day in more than two and a half years, with investors emboldened by inflation data that showed decelerating increases in consumer prices and set the stage for a slower pace of interest rate rises by the Federal Reserve.
Wall Street’s benchmark S&P 500 index gained 5.5 per cent, while the tech-heavy Nasdaq Composite closed 7.4 per cent higher.
In government bond markets, the yield on the two-year Treasury note, which is particularly sensitive to interest rate moves, fell 0.25 percentage points to 4.33 per cent, its largest drop since October 2008. Yields fall as prices rise.
The yield on the benchmark 10-year Treasury note fell 0.27 percentage points to 3.82 per cent, its sharpest move since March 2020.
…
“…rose 6.3% year on year in October, below expectations of 6.5%…”
Doesn’t seem like much of an expectations shock to latch onto… could easily reverse next month.
As I mentioned above, the market seems desperate for any good news, no matter how trivial.
US stocks record best day in over 2 years on
cooler inflation dataFED’s speculative mania due to trillions in money-printingFixed it.
The Financial Times
FTX Trading Ltd
FTX turmoil destroys clout of crypto’s Washington spokesman
Sam Bankman-Fried sought digital asset legislation and donated heavily to Democrats
Sam Bankman-Fried of FTX testifying before a Senate committee
Stefania Palma in Washington and Scott Chipolina in London 3 hours ago
In less than four years, Sam Bankman-Fried rose from founding crypto exchange FTX to becoming the industry’s tousled de facto spokesman in Washington. In less than a week, crypto’s politician whisperer has witnessed the collapse of his empire and the evaporation of his influence on Capitol Hill.
Bankman-Fried’s FTX — and sister trading firm Alameda Research — were until this week considered a rare oasis of stability in an otherwise teetering crypto market. In a summer of market turmoil the chief colloquially known as “SBF” built stature by coming to the aid of flailing crypto companies such as lending platform BlockFi.
But this week a liquidity crisis enveloped Bankman-Fried’s own companies, leading the chief executive of arch-rival Binance to announce his exchange was set to acquire FTX.com. The deal — which was subject to due diligence — disintegrated a day later. Bankman-Fried desperately searched for a saviour as regulatory probes swirled around his businesses.
In Washington, Bankman-Fried had testified before powerful congressional committees, publicly supported crypto legislation and become a major political donor. The fall of crypto’s most prominent American spokesman would affect more than just FTX; it could make things harder for an industry that for years has raised the ire of policymakers.
“If you’re not at the table, you’re on the menu,” said Charley Cooper, managing director at R3, a blockchain firm. “I would suggest that members of the crypto community who realise how bad this looks for the industry should be going out of their way to engage with policymakers.”
…
The Financial Times
FTX Trading Ltd
FTX assets frozen by Bahamas regulator as crypto exchange fights to survive
Investors describe chaotic race by Sam Bankman-Fried to secure up to $8bn to bail out his group
Montage of Sam Bankman-Fried and the logo for his trading arm Alameda Research
Sam Bankman-Fried’s trading firm, Alameda Research, is said to owe $10bn to the FTX exchange
FT reporters 49 minutes ago
The Bahamas securities regulator has frozen the assets of part of Sam Bankman-Fried’s crypto empire and moved to appoint a liquidator for one of his entities, as the entrepreneur raced to raise as much as $8bn to save FTX.
The Securities Commission of The Bahamas took the action on Thursday against FTX Digital Markets, the Bahamian subsidiary of FTX. No assets belonging to the business can be transferred without the approval of a provisional liquidator, the regulator said. FTX moved to the Bahamas in 2021 from Hong Kong, where it was launched.
“The commission is aware of public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research,” the announcement said. Alameda is Bankman-Fried’s crypto trading business.
Bankman-Fried was seeking to raise as much as $8bn to save his crypto company on Thursday as more of his former backers wrote down their investments in FTX.
The crisis prompted contagion in the crypto sector as BlockFi, a digital assets lending platform, paused client withdrawals.
BlockFi said on Thursday that it could not operate its business as usual because of the “lack of clarity on the status” of FTX and Alameda. Amid a meltdown in cryptocurrencies this year, the FTX chief had bailed out BlockFi with a $250mn loan.
The 30-year-old conceded on Twitter that the FTX trading platform had an insufficient store of readily accessible funds to meet client demands. Investors described a chaotic appeal from the humbled crypto chief executive to plug his company’s financial hole.
The outcome of Bankman-Fried’s dash for cash will determine the fate of FTX amid mounting doubt about its ability to remain afloat without an injection of capital, and anxiety for customers with money stuck on the frozen exchange.
In a sign of how pressures are rising across businesses affiliated with him, FTX US, which is separate from the international exchange, said it may halt trading on its platform in the coming days.
FTX’s Australian business was placed into administration on Friday. Its customers were advised not to deposit any money or make any trades. Japan ordered FTX’s local subsidiary to suspend some of its operations.
Investors estimate Bankman-Fried is seeking $6bn-$8bn. Alameda Research, his trading firm, owes $10bn to FTX, said two people familiar with the matter.
…
It ain’t turtles all the way down any more in the cryptoverse.
Slinging Sammy Bankman-Fried should have pushed more of that donor cash to Hunter then maybe the “Big guy” and the globalists would have bailed him out like they did for Goldman Sachs.
Oops. Sam Bankman-Fried’s implosion took down Democrats’ second-biggest donor with it as the party gears up to regulate crypto
BYSTEVE MOLLMAN
November 10, 2022 at 4:01 PM EST
The 30-year-old Bankman-Fried has been a major force in Democratic politics, ranking as the party’s second-biggest individual donor in the 2021–2022 election cycle, according to Open Secrets, with donations totaling $39.8 million. That ranks only behind George Soros (about $128 million) but ahead of many other big names, including Michael Bloomberg ($28.3 million). What’s more, he had promised to spend far more on Democrats moving forward, predicting in May that he’d fund “north of $100 million” and had a “soft ceiling” of $1 billion for the 2024 elections.
https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-biden-democratic-party-second-biggest-donor/
Per ZH comment FWIW: Kid’s parents are both stanford law professors and his mother was the co founder of ‘get out the vote’ and two other organizations that are instrumental in democrat voter fraud and dem donor money laundering…not to mention he is the second biggest private donor to biden’s campaign next to michael bloomberg… It doesn’t matter if this kid’s crime eclipses Bernie Madoff’s scam, he won’t see a day in jail… Maybe 6 months probation and then automatic contract employment at goldman.
How is a fraud like FTX allowed to exist? Easy, you just have the right connections:
https://twitter.com/JagoeCapital/status/1590751676105125888
Did you know: Alameda CEO @carolinecapital’s Dad, Glenn Ellison is the Department Head of Economics at @MIT?
And…
Prior to getting appointed to the SEC, @GaryGensler was a Professor for the Practice of Global Economics & Management at @MIT
…
So essentially:
Gary 🤝 Glenn 🤯
The Twitter soyboy who was playing God and banning people who didn’t parrot the Fauci narrative has been sh!tcanned. Good riddance:
https://mobile.twitter.com/yoyoel
This is shaping up just like 2020, where Rs had it in the bag until the fix was in days later. Dems just keep a countin’ and a countin’ until everything comes up roses. They’ve whittled the Senate deficit in NV down to 8,000 when it was like 30,000. There was a picture of the election headquarters and some 50 year old woman with pink and blue hair was at the helm. You just can’t make this sh!t up.