thehousingbubble@gmail.com
Blog

Traders Now Openly Talk About The Approaching ShitCo Reckoning

A weekend topic starting with The Street. “Martin Pring does an excellent job in his 1993 book Investment Psychology Explained outlining the 12 steps of how a mania or bubble inflates. 1. A believable concept offers a revolutionary and unlimited path to growth and riches. 2. A surplus of funds exists alongside a shortage of opportunities. This channels the attention of a sufficient number of people with money to trigger the immediate and attention-getting rise in price.”

“3. The idea cannot be irrefutably disproved by the facts but is sufficiently complex that it is necessary for the average person to ask the opinions of others to justify its validity. 4. Once the mania gets underway, the idea has sufficient power and compelling belief to spread from a minority to the majority as the crowd seeks to imitate its leaders.”

“5. The price fluctuates from traditional levels of overvaluation to entirely new ground. 6. The new price levels are sanctioned by individuals considered by society to be leaders or experts, thereby, giving the bubble an official imprimatur.”

The Washingtonian. “The average rate for a 30-year fixed mortgage recently rose to over 7 percent for the first time in 20 years. That’s a sharp contrast to where we were in the height of the Covid-era market, when rates dropped as low as below 3 percent. That led to a crazy competitive housing market that left sellers in an enviable position—you’ve likely heard the stories about lines around the block at open houses, buyers waving all contingencies, and homes selling for way above listing prices.”

“So—with rates spiking, are DC-area agents seeing a flip to a buyer’s market? Gone are the days of buyers going way over asking prices, says agent Ericka Black. When pricing your home, it’s important to adjust your expectations to today’s market. Look at what comparable houses near you have sold for in the last two months, says Black, not eight months ago. ‘There just has to be some give-and-take,’ she says. ‘It’s not that the sellers will not make money. They’re just not going to make the exorbitant amount that they were thinking.'”

From KSL in Utah. “Researchers Jim Wood and Dejan Eskic, both from the University of Utah’s Kem C. Gardner Institute — had a friendly debate Friday during Ivory Homes’ annual private gathering of hundreds of homebuilders and other industry partners from across the state. The slate of speakers all sought to help bring clarity to a market that they said has largely been fraught with ‘volatility’ and ‘uncertainty’ as mortgage rates, some days hovering around 7%, have squeezed buyers and have brought a rapid end to what had been over two years of a blazing hot market.”

“Eskic said he agrees with Wood about Utah’s strong job market, ‘we’re operating in a different environment because of the rates and prices.’ Eskic said it all comes down to affordability. ‘We go back to the 70s, for example,’ Eskic said. ‘If you divided your housing price by your annual income, it was 2.6. Right now, it’s close to five.'”

From ABC 15. “According to the Homebuilders Association of Central Arizona, new housing permits are down 17% year to date. ‘For 33 consecutive months, between 2019 and early 2022, the Phoenix market led the nation in home price appreciation. But now we’ve reached an inflection point on affordability, because at the end of that 33-month run, mortgage rates basically doubled,’ said Jackson Moll, VP of Municipal Affairs for the Homebuilders Association of Central Arizona. ‘A 7% interest rate looks very different when the median home price is $250,000, compared to when a medium home price is $450,000 or $500,000, which is kind of where we are in Phoenix right now.'”

New Orleans City Business in Louisiana. “David Favret, board president of New Orleans Metropolitan Association of Realtors, said the increase in inventory is compounded by buyers’ struggles with increasing interest rates and a lack of affordability in the insurance market. ‘It’s taking buyers who could afford to be in one place six months ago (and) not only just decreasing their purchase power but eliminating them from the market completely,’ Favret said. ‘And that’s a tough one to solve and out of our control. We can’t market harder. We’re at the mercy of a different industry.'”

Boise Dev in Idaho. “‘So we’re planning a cold winter, but we’re still going to build,’ said Daniel Fullmer, chief investment officer for Galena Equity Partners. Economists have hesitated to characterize the current economic slowdown as a recession because of low unemployment. But homebuilders cutting back will have a ripple effect on local jobs, Fullmer said. ‘If homebuilders cut back, magically there’s less need for appraisers, less need for title people, less need for self-employed real estate agents,’ he said.”

From Mansion Global. “Although the dust is settling in Austin, Texas, after a two-year home-price explosion, indicators suggest reasons for sellers to be optimistic about the luxury market—even as median prices come down. Among cities where home prices are falling the most, Austin came in at No. 1 in a Realtor.com report. The median home list price in September was $558,275, a 10.3% decline from June, according to Realtor.com data. The percentage of sellers who reduced their list prices was up 252% in September.”

“‘Mid-August was the quietest period I’ve seen since the financial crisis,’ said Gary Dolch, owner of Austin Luxury Group. ‘The phones weren’t ringing. People had that scared look in their eyes. Nothing was going on, on either side.’ But he had a clear message for his brokers and clients: Don’t give in to the panic. Based on what he’s observed in over two decades of selling, Mr. Dolch said hitting the panic button and readjusting prices won’t make the problem go away. ‘There’s nothing you can do when demand destruction starts to happen like that. It doesn’t matter what you price it at,’ he said.”

“Despite timidity in the market, Mr. Dolch said there’s a glut of available homes. They’re just not showing up on the MLS. Agents don’t want the optics of having houses rack up a bunch of days on the market while sales are slow. So instead, they’re relying on private listings, which is a big reason why the MLS has been depleted, he said. ‘Austin is notorious for having a shadow market, with sites where brokers can view off-market inventory that isn’t on the MLS. Those sites right now are full. There are hundreds and hundreds of them,’ he said, adding that many of these homes are priced at $1.5 million and above.”

The Dallas Morning News. “With high interest rates taking a bite out of project profits, apartment builders and investors are expecting a slowdown in their business next year. ‘The last few years have been at a high level of velocity — probably unsustainable,’ said John Sebree, national director of commercial property firm Marcus & Millichap. Dallas-Fort Worth leads the country in apartment building, with about 25,000 new rental units scheduled to open their doors here this year. More than 60,000 apartments are under construction in North Texas.”

“Unlike in previous downturns, there is plenty of money to lend and invest. But the costs of those funds are unworkable for many builders. ‘The capital is out there but they are pricing it for risk — the price is high,’ said Ben Brewer in the Dallas office of developer Hines. Property brokers say that the high cost of borrowing has already caused commercial property prices to decline by 15% to 20% or more. ‘Deals that might trade today might trade below replacement costs of projects starting today,’ said Jason Haun of builder Zom Living.”

Bisnow Philadelphia in Pennsylvania. “Even as its leasing success continues and many of its malls remain profitable, PREIT is running out of time to get out from under its massive debt. PREIT reported a net loss of more than $71M for the quarter, an 87% increase from Q3 2021. At issue is the company’s $2B-plus debt load, which has a weighted time to maturity of 1.1 years, with only a few months’ leeway in the form of extension options. ‘We think the financing challenges that all real estate owners are experiencing is related to more than just interest rates,’ said CEO Joe Coradino. ‘We see tighter underwriting standards, valuation uncertainty and negative undertones regarding certain sectors have led to virtually frozen credit markets.'”

The Winters Express. “It’s the biggest question in real estate: “Should I buy a home right now? As a consumer looking at housing headlines, you’ve probably heard, ‘the boom is over,’ ‘homes will lose value,’ ‘the housing market is about to crash’ and ‘interest rates are too high.’ If you zoom out though, the past 50 years of sales data suggest that the right time to buy a house is actually always now. Housing prices in California have climbed steadily since the 1960s, from median prices of $58,000 in 1960, to well over $800,000 in 2022.”

“Across the country, people are saying, ‘I’m just not sure if I can afford it.’ The recent jerk in rates is a product of the current U.S. economy. It begs the question, ‘When rates were so low, was the money too cheap to borrow?'”

“Here in Winters, we saw home’s days on the market increase by 157 percent from this same time last year. There is less frenzy and panic, fewer multiple offers, and fewer offers over asking. There’s been a significant drop in the competition for homes. Although not advice I typically give as an agent, six months ago many buyers were making offers on homes they had never seen while removing all contingencies. Now you have an advantage, more negotiation power. And as a buyer, we haven’t seen this leverage in some time.”

The San Francisco Business Times in California. “Layoffs are widening across a range of Bay Area industries, headlined by massive job culls at Meta Platforms and Twitter. The investment climate for startups has gone from balmy to chilly to subzero. While some of the circumstances are different, some of those with long experience see more than a few similarities with the defining collapse of the Bay Area economy: The 2000 end of the dot-com bubble, when the burgeoning new internet tech economy imploded, leaving a wake of failed startups, empty buildings and misery.”

“We thought we’d give our readers a chance to answer a similar question: The current economic situation in San Francisco is drawing some comparisons to the dot-bomb crisis of 20 years ago. What are your memories of the dot-bomb and do you agree with the comparison?“

“Carolyn Shames, CEO Shames Construction Co. ‘Not yet but I expect it to be much worse. 2002 did not have the terrible inflation and interest rates that we have not that will over lap with the down turn in business so I think this will be much worse when it hits! Also the commercial real estate market is in real trouble with offices empty and going to get emptier.'”

“Marc Canas, Canas Realty Inc. ‘It’s drama … badly run startups don’t survive. Egocentric paper billionaires without business acumen don’t survive. The era of free money is over if you are not profitable no one wants to invest. The fastest way to get profitable is to cut heads.'”

“Steven Khuong, CEO, Curacubby Inc. ‘I co-founded and operated RocketStaffing.com, an online technical recruiting platform during the first dot-bomb crisis 20 years ago and I remember precisely the fallout of many ‘cutting-edge disruptive’ companies such as WebVan. This is akin to the many Web3 and crypto companies today crashing and burning. Some businesses were just ahead of their time, while others relied solely on VC money without careful financial planning for profit. The other similarity was the fast infusion of VC money being pushed into these companies with the assumption they would escape regulatory scrutiny in a current unregulated landscape (think Napster and the fast wave of music streaming peer-to-peer platforms).”

The Daily Maverick. “My memory of the pre-financial crisis era of self-delusional hubris will always be epitomised by a lunch I attended in mid-2007. Working as a junior correspondent for The Independent, I was invited to the plush top floor executive dining rooms of Lehman Brothers by their then head of media relations. Over expensive French wines and smoked salmon, with the vast expanse of London stretching below us, my host spent three hours trying to convince me that the bank was inherently well capitalised and the rumours around subprime mortgages were unfounded.”

“Of course, that epoch ended with Lehman’s ensuing collapse in September 2008. Now, as soaring inflation forces the world’s central bankers to hike interest rates, another era – one of ever-low interest rates – is also coming to an end. The interesting question is: What will come to signify this chapter of economic history?”

“According to the OECD club of developed nations, real wages and productivity have been stagnant for 15 years. The Financial Times has calculated that real wages in the UK grew at an average of 33% per decade from 1970 to 2007, but did not grow at all in the 2010s. However, for homeowners, particularly in the US and UK, low rates created a real estate boom. Lower mortgages cushioned the impact of stagnant wages. Sky-high house prices also took the edge off moribund earnings; people who were lucky enough to be on the housing ladder felt better off, even if only on paper.”

“Then, ultralow costs of capital allowed a whole category of companies that made no money to flourish. For such ‘start-ups,’ companies valued on new metrics such as ‘customer acquisition cost’ or ‘burn rate,’ growing revenue was unimportant – let alone being cash flow positive or profitable. WeWork, Uber, Deliveroo and Klarna were among the most famous of these, but there were countless others. Funded by the tsunami of free money, most start-ups were founded not with the purpose of making money or being sustainable businesses, but simply to successfully close the next fundraising round, as venture capital firms and angel investors sprayed capital around indiscriminately.”

“An entire Ponzi scheme industry of ‘founders’ going from one successful ‘series A’ to another proliferated, leaving a string of failures in their wake. It remains to be seen how many, if any, will still be around in five to 10 years. Traders now openly talk about the approaching ‘ShitCo Reckoning.’ But the most pronounced effect was asset price inflation. With the discount rate going ever lower, valuations – of increasingly uncertain cash flows and riskier assets – could only ever go higher.”

“Equities, particularly tech, provided the best example, but there were more extreme illustrations. As rates have risen, the prices of metaverse real estate, crypto and NFTs have crashed – they are all starting to look like anachronistic relics of another age.”

“One moment will forever embody this for me. In November 2021, pretty much at the apogee of the bubble, I happened to be in Dubai. A friend managed to make a quick $20,000 in 20 minutes by trading a few now-worthless NFTs, and then took us for dinner to one of the most expensive restaurants in the city on the proceeds. Looking around at the scenes of excess, one could not help notice that we were not the only table celebrating with the ill-gotten gains of the largesse of central banks.”

“Of course, such artificially generated demand can only mean one thing: higher prices, inflation and inevitably higher interest rates. It should have been evident what was coming, but perhaps we were all too busy celebrating to realise it.”

The Globe and Mail. “Crypto exchange FTX filed for U.S. bankruptcy proceedings on Friday and Sam Bankman-Fried stepped down as CEO after a rapid liquidity crisis at the cryptocurrency group that has prompted intervention from regulators around the world. The distressed crypto trading platform had been struggling to raise billions in funds to stave off collapse after traders rushed to withdraw US$6-billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.”

“‘The shock was that this guy was the face of the crypto industry and it turned out that the emperor had no clothes,’ said Thomas Hayes, managing member at Great Hill Capital LLC in New York.”

“‘The next question is how wide of a contagion effect this is going to have on other exchanges and where the next potential losses can occur,’ said John Griffin, CEO of Integra FEC, which provides consulting to government agencies and law firms investigating financial frauds. ‘So, to what extent when you have a major entity like this that goes down, all the assets tied to that FTX exchange go down.'”

“‘Once Binance walked away from buying FTX after only 24 hours of due diligence, the writing was on the wall for FTX,’ said Antoni Trenchev, co-founder of crypto lender Nexo. ‘Now we enter the next phase of the fallout, where we witness the second order effects and discover which entities were exposed to FTX and Alameda.'”

Related Posts

The Numbers Are Painting Our Future

https://www.youtube.com/watch?v=gHE1TIhglfY https://www.youtube.com/watch?v=xJPWv85RiJ8 https://www.youtube.com/watch?v=hou7Ea7M1jM https://www.youtube.com/watch?v=xymm4o55dfI https://www.youtube.com/watch?v=7sURdPvTeBA https://www.youtube.com/watch?v=quvyuJ-7tmE

This Post Has 176 Comments

  1. I don’t think I’ve ever had a post with so many excellent potential titles.

    ‘Property brokers say that the high cost of borrowing has already caused commercial property prices to decline by 15% to 20% or more. ‘Deals that might trade today might trade below replacement costs of projects starting today’

    Just like that, the apartment bubble popped.

    1. Let’s hope that rents become affordable again, so at least a few less people who can barely pay the monthly end up on the street.

      1. Lets hope the landlords didn’t leverage their properties to pay their property taxes and other expenses during the COVID crisis renter moratoriums.

    2. Yep, good stuff today. It feels like the wheels might finally start coming off. Lots of people getting bankmanfried.

        1. The phones weren’t ringing. People had that scared look in their eyes. Nothing was going on, on either side

        2. There’s nothing you can do when demand destruction starts to happen like that. It doesn’t matter what you price it at

    1. The Financial Times
      FTX Trading Ltd
      How Sam Bankman-Fried seduced blue-chip investors
      Their support helped lend FTX credibility before its sudden collapse this week
      Antoine Gara in New York, Harriet Agnew in London and Tabby Kinder and Richard Waters in San Francisco yesterday

      It was a surprise phone call from an old university professor that launched private equity investor Orlando Bravo into becoming one of the most prominent and vocal supporters of Sam Bankman-Fried and his crypto trading firm FTX.

      The call was from Joseph Bankman, a professor of law and business at Stanford University who had taught Bravo in the late 1990s. At the time, in mid-2021, Bravo’s $122bn private equity firm Thoma Bravo was opening an office in Miami, the city where Bankman’s son Sam had just paid $135mn for a 19-year naming rights contract with the local NBA team.

      Bankman told Bravo his son was looking for guidance on philanthropic projects in Miami to further his “effective altruism” mission. Only after they spoke did Bravo learn that Bankman-Fried was also in the process of raising a $900mn Series B funding round at a $18bn valuation, with a who’s who of investors including Sequoia Capital, BlackRock and SoftBank. He quickly called Bankman back seeking an introduction and a way into the deal, which was progressing quickly and would be the largest capital raising in crypto exchange history.

      When Bravo and a partner Tre Sayle began due diligence for the funding round, they were taken aback by FTX’s numbers. The two-year-old start-up led by a relatively small staff of young traders was on course to earn over $200mn in operating profit for the year, unprecedented margins for an early-stage growth company that would normally be losing money. Bravo was blown away. Thoma Bravo invested more than $125mn in the round in June 2021, becoming one of FTX’s largest backers.

      Thoma Bravo is just one of the blue-chip investors, including Singapore state-owned fund Temasek, Tiger Global and the Ontario Teachers’ Pension Plan, whose support helped lend Bankman-Fried’s business empire credibility before its sudden collapse this week, driven by concerns about its links with his Alameda Research proprietary trading group.

      Since its launch in 2019, FTX has raised $1.8bn and was most recently valued at $32bn. Among its shareholders are some of the world’s most-respected hedge fund managers, including Brevan Howard Asset Management’s Alan Howard, Millennium Management’s Izzy Englander and the family of Paul Tudor Jones.

      Now with FTX having filed for bankruptcy, their investments look to be a complete wipeout. Investors including Sequoia, SoftBank and Paradigm, which was co-founded by former Sequoia partner Matt Huang, have marked their holdings in the company to zero, vaporising hundreds of millions of dollars in value.

      These investors will be left facing tough questions from their own clients about how they got it so wrong, why they did not demand seats on FTX’s board, and whether they ever really understood how the business was making money.

      It was not meant to end this way. Investors said that FTX’s eccentric 30-year-old founder, who presented himself as the acceptable face of a wild west industry, was able to capitalise on a desire by people from more traditional corners of finance to invest in cryptocurrencies and also their fear of missing out on the next big thing.
      …

      1. “…and the Ontario Teachers’ Pension Plan…”

        Hehe, the phat cats can’t resist practicing some of that ‘ol European birth control on the little people.

        1. Today’s “teachers” are globalist propagandists and indoctrinators. It won’t bother me one bit to see their pension funds get looted.

          2. Totally agree with this statement. Commies voting and saying commie companies are the wave of the future deserve the shitco coming their way.

          3. And hopefully they are fully vaxxed and double boosted.
            Never mind they were looted by a Dem slush fund that sent hundreds of millions to Ukraine, they/them support BLM and looting so they got looted, something they support.

          1. Putting a giggling 28 y/o moron who’s boinking Sam Bankman-Fried in charge of risk management…what could possibly go wrong?

          3. SEC Chairman Gary Gensler’s boss at MIT was Glenn Ellison, father of Caroline Ellison of Alameda Research.

          4. This is CEO? And you gave it $billions? My God!

            She, SBF and 8 others were living in a commune in the Bahamas. Nobody did any due diligence. This was a classic Ponzi.

      3. This gets better & better. Sam Bankman-Fried donated $40 million to the Democrat-Bolsheviks, so he’s got immunity from any kind of prosecution, but the FTX bagholders, most of whom were probably fellow Democrats, are finding out that hard way that investing with a moral bankrupt – which you have to be to donate to the Democrat-Bolsheviks – can have consequences.

    2. Cryptocurrencies
      Coinbase Stock Plunges Amid Chaos in Crypto. Cathie Wood’s Ark Is Buying the Dip.
      By Jack Denton
      Nov. 9, 2022 7:36 am ET

      A sudden decline in the stock price of cryptocurrency trading platform Coinbase Global might make some investors nervous. Not Cathie Wood, whose Ark Investment Management has just stepped in to buy the dip.

      Coinbase (ticker: COIN) stock shed 10.8% on Tuesday and the stock was another 2.5% lower in U.S. pre-market trading Wednesday.
      …
      https://www.barrons.com/articles/coinbase-stock-plunges-amid-chaos-in-crypto-cathie-woods-ark-is-buying-the-dip-51667997415

      1. Markets
        Cathie Wood’s ARK Innovation ETF surges 14% for its best day ever
        Published Thu, Nov 10 2022 12:23 PM ESTUpdated Thu, Nov 10 2022 4:22 PM EST
        Yun Li

        In this article
        ARKK -0.18 (-0.45%) After Hours

        Cathie Wood’s flagship ARK Innovation ETF staged a dramatic relief rally Thursday on the back of an easing inflation reading. The fund posted its best day ever.

        The exchange-traded fund, with $6.9 billion assets under management, jumped more than 14%, its biggest daily pop since its inception in 2014.
        …
        ARKK, managed solely by Wood, is still down 61% this year. The innovation investor just doubled down on a slew of her favorite stocks this week, unfazed by the turmoil in many of these names.

        Wood snapped up shares of six companies Wednesday, including her largest holdings of Zoom and Tesla. The investor also has been adding to her Coinbase stake for two straight days despite the potential collapse of popular crypto exchange FTX.

        Tesla, ARKK’s second-biggest holding, is still down more than 16% in November alone as Elon Musk rushed to sell billions of dollars worth of stock to help fund his acquisition of Twitter.
        …
        https://www.cnbc.com/2022/11/10/cathie-woods-innovation-etf-surges-13percent-on-track-for-its-best-day-ever.html

    3. FTX may have been a giant money laundering scheme from the start funneling huge amounts of money into Democratic Party coffers and funds ostensibly for military aid aid into and out of Ukraine.

      https://www.coindesk.com/policy/2022/03/14/ukraine-partners-with-ftx-everstake-to-launch-new-crypto-donation-website/

      https://fortune.com/2022/11/10/sam-bankman-fried-ftx-joe-biden-democratic-party-second-biggest-donor/

      Binance could be next on the chopping block as it is being used to launder billions through Iran.

      Remember all those crypto acolytes preaching about how crypto was going to save us from government corruption and the criminal cabal that runs the monetary system?

  4. in one of those never ending “banks hire only the smartest people” stories: Went to the bank the other day. (regional, rural bank, biggest bank in area multiple locations but this is main one) they are building a new building next door. I ask the teller what they are building.

    “oh that’s going to be our mortgage department building”

    kinda missed the whole bubble there didn’t ya fella? I’m thinking of taking my money out with that kind of genius decision making.

  5. I talked about this a few months ago. Sister of a friend bought a old beater house in Long Island NY, for like 475k, stripped it to the foundation built a new house (in 3 months, must have had some serious payoffs) and threw it on the market in April for like 1.1 million. I found out about this in July was down to like 875k. (which was probably break even, or close to it)

    I just found out SHE STILL HAS IT!!!!!!!!!!!!!!!!!!!!! It still hasn’t sold. Dunno what the price is down to, but it’s definitely losing money now. Rates were like 5% in July, they are 7% now.

    This same sister got crushed in 08 too, but the banks never foreclosed, so she ended up living for free for 5 years and never experienced any pain or learned any lessons.

    1. “so she ended up living for free for 5 years and never”

      Yep! As someone who was in the biz during the last crash I can tell you that this was not the exception. So I say to anyone who bought in the last year with minimum down that you’d be an idiot to make another mortgage payment. Seeing how little repercussions there were for those who did this during the last crash, why not?! In fact, I suggest that if you can still qualify for a minimal down mortgage, go buy a house with the idea of never making a payment. Even if you drop 20K in closing costs you’d make that back up in the first year not making payments. The next 3 to 4 years are all gravy!

      2. You have to upgrade your cars and other big ticket items before playing that game because you can dismiss getting any new credit lines.

        1. Interesting you say that because I know many who did just that. I remember an in-law’s brother scurrying to buy all he needed on credit before he pulled the string on the “no payment plan”. This the same dude that when the bank finally did throw them out (in his case almost three years later) he ended up leaving with all the jet skis, dirt bikes, fancy rock-crawler truck, another fancier street truck…..I could go on….all of which he and his wife had purchased through serial cash out refinancing that he did on the house in the years prior to the crash. Now don’t get me wrong – I think this kind of behavior abhorrent. But let’s face it….you are a sucker to play by the rules!

    1. The logical side of data recovery is easier these days with modern formatting schemes that include parity algorithms.

  7. A reader went these in:

    Good thread on some typical CPI model nonsense that no MSM Fed reporter will look into. They’re all publicists, not journalists. And of course most investors as always prefer comforting lies to unpleasant truths.

    https://twitter.com/RudyHavenstein/status/1591070965810634753

    FTX is a World Economic Forum “partner” because of course it is.

    https://twitter.com/RudyHavenstein/status/1591219057822666752

    I’m not a crypto guy, but this guy set my b.s. meter spiking. Come on, @CNBC “It’s important for people to be able to operate in the ecosystem without being terrified that unknown unknowns were gonna blow them up somehow.” – Sam Bankman-Fried

    https://twitter.com/RudyHavenstein/status/1590460221688016896

    The Interest Expense on US Public Debt rose to $747 billion over the past year, a record high. At the current pace it will soon be the largest line item in the Federal budget, surpassing Social Security.

    https://twitter.com/charliebilello/status/1591087878901309441

    Crypto Guru Sam Bankman Fried got wiped out overnight. Tom Brady lost his wife, his crypto wealth and his football magic in one month. Elon Musk is on the brink of total collapse. The world’s elite are on the brink of their Kanye West moment as Ponzi schemes fall.

    https://twitter.com/SuburbanDrone/status/1591086583448752133

    History informs us that what brings down high interest rates are recessions or housing collapse. Whichever comes first.

    https://twitter.com/SuburbanDrone/status/1591069024032784384

    Musk keeps dumping Tesla stock to plow money into Twitter. $44 billion later, Twitter may be going bankrupt. “Twitter has $13 billion in debt and interest payments totaling close to $1.2 billion…exceeding Twitter’s most recently disclosed cash flow”

    https://twitter.com/SuburbanDrone/status/1591076076452974593

    The Kobeissi Letter

    BREAKING: Just as things seemed like they couldn’t get worse, FTX just announced they have been hacked. The confidence lost in the crypto industry by retail and institutional investors over the last 72 hours may never be restored. This is a catastrophe for everyone involved.

    https://twitter.com/KobeissiLetter/status/1591304052272308224

    Ali Wolf

    Builder: we used to say we could sell every home we wanted but couldn’t build them. Now we are saying we can’t sell homes and we can’t build them

    https://twitter.com/AliWolfEcon/status/1591140271827615744

    BINANCE CHIEF CHANGPENG ZHAO: THE $1 TRLN DIGITAL ASSET MARKET FACES A CRISIS AKIN TO THE 2008 FINANCIAL CRASH – FT.

    https://twitter.com/financialjuice/status/1591063727188586496

    Steve Saretsky

    Roughly 125,000 out of 310,000 variable rate mortgage holders at RBC have reached or are nearing their trigger point.

    https://twitter.com/SteveSaretsky/status/1590789950337089536

    Tether looks to be something like 35:1 levered long on “other assets” and “secured loans”, by the way, according to their transparency report dated Nov 10th. The snapshot was taken on September 31st, so they have *again* become undercollateralized.

    https://twitter.com/patio11/status/1590910918938218496

    I feel sorry for SBF. He is gonna end up doing at least a dime, while all the main stream pirates skate every time. Gonna be hell in cutoffs and Maybelline.

    https://twitter.com/Stimpyz1/status/1591089431406350336

    Crypto market.

    https://twitter.com/TechAmazing/status/1591141549152342043

    Realtor.com Economics

    Fed Chair Jerome Powell “made it clear that data suggest there is still more to do, and noted that December’s projections will likely show a higher fed funds rate path than was expected in September,” says Danielle Hale

    https://twitter.com/RDC_Economics/status/1591152531182391315

    CarDealershipGuy

    People asked for specifics:
    – Mercedes
    – BMW
    – Audi
    – Lexus
    – Cadillac
    These Makes are getting wrecked in the Wholesale markets.
    (With minor exceptions for certain rare Models)

    https://twitter.com/GuyDealership/status/1590895346024341504

    CarDealershipGuy

    2021 Tesla Model Y trade-in value down over 30% in 4 months
    July: $66,143
    Now: $45,252 (!!!)

    https://twitter.com/GuyDealership/status/1591137814280044545

    Big companies often sneak the worst news out on Friday evenings. This is a sign ‘Services’ is slowing, not just ‘Goods.’ @Quillintel
    clients know, stay long long-duration Treasuries. via @WSJ

    https://twitter.com/CT_Osprey/status/1591210140107161600

    Could this be the ‘credit event’ markets have been pricing in for weeks @DiMartinoBooth?

    https://twitter.com/JimMonet1/status/1591209610634883072

    Truck brokerage giant C.H. Robinson Worldwide Inc. laid off approximately 650 employees this week 🚨 If freight is not moving, the economy is not moving. But ignore all of that. Not a recession.🧐

    https://twitter.com/WallStreetSilv/status/1591186029012451328

    Next week PPI.. high utility bills, higher fuel prices, and higher labour costs may give the right signal to the market..

    https://twitter.com/AlessioUrban/status/1591165883501928448

    The sh*t show has just begun

    https://twitter.com/AlessioUrban/status/1591176521829748736

    Housing conditions deteriorate first, THEN you see it in consumer confidence. What happens is that homebuilders — who are paying attention — become sour, then there is a lag before the public realizes it. Consumer confidence down in 2023, IMO.

    https://twitter.com/JeffWeniger/status/1591098861862670337

    CarDealershipGuy

    Best used car bargains right now: 1-2 year old used luxury cars and SUVs. And it will likely keep getting better.

    https://twitter.com/GuyDealership/status/1590873271251398659

    National Association of Realtors: “The median income needed to buy a typical home has risen to $88,300 – that’s almost $40,000 more than it was prior to the start of the pandemic, back in 2019.”

    https://twitter.com/donnelly_brent/status/1591055234750894083

    the lehman moment for crypto is here.. FTX bankruptcy
    Binance CEO warned there will be a ”CASCADE” of failures… let’s find out

    https://twitter.com/AlessioUrban/status/1591082940305649664

    SPX rallied +15% in one day during 2008
    Exit liquidity

    https://twitter.com/AlessioUrban/status/1591010120649297920

    1. “I feel sorry for SBF. He is gonna end up doing at least a dime, while all the main stream pirates skate every time. Gonna be hell in cutoffs and Maybelline.”

      With Stanford law professors for parents and high level Democratic politicians who received his campaign donations, he’s connected up the wazoo. So he might not face serious time.

        1. $40 million in campaign contributions to the Democrat-Bolsheviks means SBF is untouchable.

          Right. Once the steal is done and the Dems control the Senate and the House, doughboy walks.

          1. He robbed Larry F’n Fink and a long list of other people with tons of money. I wouldn’t count out retribution just yet.

    2. Big companies often sneak the worst news out on Friday evenings.

      WSJ (no link):
      Disney Details Plans for Cost Cuts, Layoffs and Hiring Freeze in Memo
      Plans include a review of spending at all divisions and follows large losses in its streaming business

      1. Per their quarterly statement, the only business line making a profit are the theme parks, with $1,514 million in operating income. Everything else combined made a paltry $83M operating income. Net income is even more paltry, just $160 million for the entire year.

        As inflation continues to eat whatever disposable income the middle class still has, I’ll bet theme parks will take a hit next year, as they have become a pricey luxury item.

        1. That’s the Disney boycott for you. I only have the streamer for the kids, but we stopped going to Disney movies, we stopped buying Disney branded products, and we aren’t ever going to Disney world. This is great news. most conservatives I know with kids have also avoided Disney entirely.

          1. I received some emails about “year end” Disneyworld sales,include Christmas. They must be very worried, as at year end there is typically no room at the Inn, and thus no reason to discount.

            Given the uncertainty of the next two years I will probably be sticking to staycations and saving the money in the bank.

    3. Could this be the ‘credit event’ markets have been pricing in for weeks @DiMartinoBooth?

      FTX bankruptcy shows the company had 134 affiliates spread across the globe and may have liabilities of up to $50 billion.

      Enron had liabilities of $23 billion.

      FTX may be worse than Enron.

    5. “Crypto Guru Sam Bankman Fried got wiped out overnight. Tom Brady lost his wife, his crypto wealth and his football magic in one month.”

      Tom can still throw a pass with HIMARS accuracy, but for how much longer is the question.

    6. The Tesla chart from the dumping Tesla link above is VERY ugly. This is a classic head and shoulders pattern and it has a generally accepted textbook predictability. If you measure from the top of the head to the bottom of the shoulders you get an expected price drop of the same distance on the chart. This means the chart is telegraphing that all of the gains starting from 2020 are about to go poof. This could be problematic for Mr. Musk.

      2. This could be problematic for Mr. Musk.

        All of these billionaires were sitting upon fake wealth. It’s merely digits on a screen. If all of them tried to liquidate at the same time, all of their wealth would evaporate. It’s based upon a fantasy.

    7. “Best used car bargains right now: 1-2 year old used luxury cars and SUVs. And it will likely keep getting better.”

      I’m waiting on a 2022 VW Golf R with blood on the upholstery!

      1. Not too many of those floating around. Per motrolix dot com, only 27 were sold last year and about 1600 so far this year. You will have your pick of 2022 Hyundai Elantras, but a cheap Golf R might be hard to find.

        1. There are several Golf R blogs and even a sub on reddit, but most of these enthusiasts rely on credit to power their fantasies. The cracks will appear, eventually. 🙂

      2. I’m waiting on a 2022 VW Golf R with blood on the upholstery!

        What does that mean? Car wreck? Suicide with a hole through the roof?

  8. Mass Formation Psychosis.

    Majority of Canadians support return of face masks in indoor public spaces if deemed necessary (11/9/2022):

    “The poll conducted for CTV News found seven in 10 Canadians said they would support the return of face masks mandates to some extent. Fifty-two per cent said they would support the return of such mandates, 17 per cent said they would “somewhat support” them, while 22 per cent would be against them. Eight per cent would be “somewhat” opposed to the idea.”

    https://beta.ctvnews.ca/national/coronavirus/2022/11/9/1_6144419.html

    They are not and will never know what it means to be free.

    These people have pictures of the Queen (and soon, King Charles!) on their money.

    During the truckers convoy not only did the truckers have their assets frozen / confiscated, but so did the people who donated money to them.

    1. California is the least free state in the country.

      LA County health officials will ‘strongly recommend’ masks indoors if COVID cases continue rising (11/11/2022):

      “Los Angeles County is continuing to experience increases in COVID-19 infection and hospitalization rates, the public health director said Friday, warning that two newly emerging variants of the virus are threatening to fuel a fall and winter surge in cases.

      Barbara Ferrer said the county had an average of about 1,300 new COVID cases per day last week, up from about 1,000 per day the previous week. She said the daily average case numbers have been “slowly but steadily increasing” since the beginning of November.

      The rate of infections is also rising, reaching a weekly average of 86 cases per 100,000 residents last week, up from 65 per 100,000 residents two weeks ago, Ferrer said. If that average rises to 100 cases per 100,000 residents per week, the county will again “strongly recommend” that people wear masks indoors. Indoor mask wearing is currently only a matter of personal preference, unless an individual location or business opts to require them.”

      https://abc7.com/la-county-public-health-covid-19-cases-in-los-angeles-mask-wearing-rules/12442687/

      Los Angeles County is where people got arrested for paddle boarding alone at the beach, because TheScience™.

  10. (Warning: This four minute video has absolutely nothing to do with the housing bubble.)

    A former CIA agent explains how they planted stories.

    https://twitter.com/Snowden/status/1589606899569377282?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1590364698159251461%7Ctwgr%5Eca7caba4378dbe0a9ae7c78dd9afdc7911544fd8%7Ctwcon%5Es3_&ref_url=https%3A%2F%2Fjoannenova.com.au%2F2022%2F11%2Fthe-illusion-of-the-free-press-in-1983-a-former-cia-agent-explains-how-they-planted-stories%2F

    2. A former CIA agent explains how they planted stories.

      The prior head of the FBI, James Comey, publicly admitted he was a leaker.

  11. Re: Housing prices in California have climbed steadily since the 1960s, from median prices of $58,000 in 1960, to well over $800,000 in 2022.”

    It is quite understandable because before 1970 (the Bretton Woods era) prices were quoted in gold-backed dollars with a measurable intrinsic value whereas after 1970 prices are being quoted in unbacked dollars with zero intrinsic value (like the stock certificate of a defunct company) and, as a result, all prices have risen roughly tenfold to date and rising.

    Any price quoted in dollars is just an illusion created by smoke (fiat currency created from thin air) and mirrors (fractional reserve system) so all discussion about dollar prices is totally meaningless. It is not the prices that are rising, it is the dollar which is sinking like a building standing on quicksand . . .

    1. Yes dollar sinking being diluted and given away for free to certain favorites why should workers work then ? FED raising interest rates is a last ditch effort to try and save the value of the dollar against real good and services. I don’t think it will end well for at least half the country.

      1. The dollar might be the least STD-ridden whore on the street corner, relative to other currencies, but how long can the dollar maintain its world reserve status when we’ve become a corrupt banana republic, and the military power that underpinned the petrodollar has been seriously corroded from within by “wokeness”? Now that the Brandon regime has designated 75 million Americans – the people who perform the essential services, provide jobs, & pay the bills – to be de facto Enemies of the State, what is that going to do to our economy or internal stability?

    2. from median prices of $58,000 in 1960

      My parents bought a brand new shack in Orange County in the early sixties and paid mid twenties for it. $58K median in 1960? I seriously doubt it.

        1. My folks bought their first home in the city of Orange in the mid sixties with a down payment obtained from selling an old truck and a litter of pure bred golden retriever pups. In ‘94 they sold it for 180K. That house recently sold for 1.2 mil.

          1. I know that my parents bought it with an FHA loan, meaning their down payment was about $700. Not chump change back then, but it didn’t take years of saving either.

    3. There was a lot of population growth, and growth limits on land use.

      But now people are leaving the state in droves, which helps explain falling home prices.

      1. I found a flier a local used home seller left on my lawn yesterday — the kind that lists recent sales. I’m tempted to call her to ask how come she didn’t include any since July.

      1. My comment above is specifically in regards to “…so all discussion about dollar prices is totally meaningless. It is not the prices that are rising, it is the dollar which is sinking like a building standing on quicksand”

        Check out Wilbur By the Sea (near Daytona) for lots of housing doom porn. So many houses broken in half and strewn on the beach.

  12. While some of the circumstances are different, some of those with long experience see more than a few similarities with the defining collapse of the Bay Area economy: The 2000 end of the dot-com bubble, when the burgeoning new internet tech economy imploded, leaving a wake of failed startups, empty buildings and misery.”

    That’s when my company started and almost didn’t make it but the VC was stubborn. 2 bubbles ago. I think this one will be worse because of exploding inflation.

    1. The WEF crowd must have devised a plan for the world to start housing the poor in hotels, paid for by taxpayers. I see it all up and down the west coast now.

      I don’t know about anybody else, but nothing screams “vacation” quite like paying close to $200 per night to sleep in a hotel loaded with meth heads who are cruising the parking lot while you sleep, breaking into cars.

    2. These hotels are owned by the wealthy who are being rewarded handsomely, and when the programs expire they’ll get construction upgrades, all new beds, furniture and linens, etc., all on the public’s dime.

    3. Replacement is a euphemism.
      There is no way these inocoming populations could EVER “replace” the civilization in which they now inhabit. They can barely comprehend it.

  14. Will It Ever End? Yale Requires Spring ’23 Students to Get New COVID Boosters (11/11/2023):

    “The Ivy League institution has issued a message to enrollees of the Spring 2023 semester. All must take a shot of the bivalent COVID-19 vaccine booster in order to attend.

    The purpose of the requirement seems unclear, since neither the vaccine nor the booster prevents anyone from getting COVID, much less transmitting it.

    https://redstate.com/alexparker/2022/11/11/will-it-ever-end-yale-requires-spring-23-students-to-get-new-covid-boosters-n657808

    Blood clots, heart attacks, and strokes.

    1. Epoch Times — Why Spike Protein Causes Abnormal, Foot-Long Blood Clots, 200 Symptoms (11/5/2022):

      “In this two-part paper, we aim to give an overview on COVID-19 related abnormal blood clots, how they form, how to detect them early, and how they’re being treated”

      https://archive.ph/SVZba

      100% safe and effective.

      1. Mass Formation Psychosis.

        The Atlantic — Annual COVID Shots Mean We Can Stop Counting (11/8/2022):

        “A couple of weeks ago, a friend asked me how many COVID shots I’d gotten so far. And for a brief, wonderful moment, I forgot.

        “Three,” I told them, before shaking my head. “No, actually, four.”

        Here comes the turbo-cancer, Katherine Wu.

        “By this point in the pandemic, a lot of people must be losing track. “I actually think this is a good thing,” says Grace Lee, a pediatrician at Stanford, and the chair of the CDC’s Advisory Committee on Immunization Practices. Now that so many Americans have racked up several shots or infections, she told me, the question is no longer “‘How many doses have you gotten cumulatively?’ It’s ‘Are you up to date for the season?’”

        The flip is subtle, but it marks a rethink of the COVID-vaccination paradigm. We’re at a define-the-relationship moment with these shots, when people are trying to commit—to normalize them as a routine part of our lives. At a September ACIP meeting, CDC officials noted that “we are changing the way we are thinking about these vaccines,” and trying to “get on a more regular schedule.” If COVID shots are here for good, then at least we can be rid of the bother of counting them.

        https://archive.ph/TOSt7

        Make sure your will and direct beneficiaries are all up to date, Katherine Wu.

    2. Yale churns out America-hating globalist elites. I’m all for vaccine mandates at centers of subversion like our Ivy League colleges.

    3. I just heard a story about a baseball player who was forced to be vaxxed in order to play for the college team. He did it and got the heart ailment. In turn, they told him he was no longer qualified to play because he had a heart condition.

    4. So what you are saying is that Yale is giving an intelligence test? If you pass, not only do you live but you save the 60k or so a year of tuition.

  16. ‘It’s not that the sellers will not make money. They’re just not going to make the exorbitant amount that they were thinking.’”

    With each passing month, more sellers are going to be slipping underwater. I’ve got all the time in the world, greedheads. You don’t.

  17. “It’s important for people to be able to operate in the ecosystem without being terrified that unknown unknowns were gonna blow them up somehow.”

    Incidentally prophetic words from SBF…

    1. Pretty sure this fraudster & his cohorts knew they were pushing a Ponzi, which is why he had the foresight to take out a $40 million insurance policy with the DNC to ensure there would be no consequences for the architects of the fraud.

        1. Hanlon’s Razor: Never Attribute to Malice That Which is Adequately Explained by Stupidity

          As the details emerge it is looking more and more like extreme jaw dropping stupidity. This one is sure to become a classic!

          1. The entire crypto space is infested with intelligence agencies and criminal mafias.

            https://www.coindesk.com/policy/2021/11/18/crypto-heavyweight-moshe-hogeg-reportedly-arrested-in-israel/

            https://news.bitcoin.com/israels-mossad-hiring-cryptocurrency-specialist/

            https://www.vice.com/en/article/dyp7vw/the-cia-is-deep-into-cryptocurrency-director-reveals

            https://www.reuters.com/business/finance/exclusive-crypto-exchange-binance-helped-iranian-firms-trade-8-billion-despite-2022-11-04/

            https://www.coindesk.com/policy/2022/07/13/ukraine-seizes-assets-from-otc-crypto-brokers-for-working-with-russians/

  19. ‘We go back to the 70s, for example,’ Eskic said. ‘If you divided your housing price by your annual income, it was 2.6. Right now, it’s close to five.’”

    Nixon took us off the gold standard in 1971. That gave the Fed free rein to dial up its fiat currency fraud to 11. It’s been all downhill for the 99%’s standard of living ever since. The Fed’s orgy of money-printing since 2008 and the Brandon regime’s fiscal irresponsibility have only accelerated our terminal velocity towards Venezuela del Norte.

    1. Nixon took us off the gold standard in 1971

      Nixon took France off our gold standard. The rest of “us” were taken off it in 1933.

  20. Prisoners in their own country… Wealthy Chinese are desperate to flee the country!
    China Fact Chasers
    Nov 12, 2022
    The Chinese government are making sure nobody can leave the country and that includes the rich and entitled Chinese citizens!

    https://www.youtube.com/watch?v=pIBtT0J9kdg

    12:27. These are the ADV China guys.

    2. The Chinese government are making sure nobody can leave the country
      A friend of mine was going back to China earlier this month.
      I Hope she can get out when she wants to. It Took over a year for her to get the ability to go back to China.

    1. 20 hours ago
      Bankrupt Crypto Lender Celsius Network Says It Lent Alameda Research $13 Million
      By Vicky Ge Huang

      Bankrupt crypto lender Celsius Network said it lent $13 million to Alameda Research , which itself filed for bankruptcy along with its sister company FTX and more than 130 affiliated companies on Friday.

      The loans are currently undercollateralized primarily by FTX’s FTT token, Celsius said in a Friday tweet. The value of FTT tokens has steadily declined since a CoinDesk report found that the majority of Alameda’s balance sheet was made up of FTT tokens.

      The FTT token has plunged 89% in the past week to $2.71 apiece, according to crypto data provider CoinGecko.

      Celsius said it also has about 3.5 million SRM tokens on FTX. SRM token is a small-cap token with a market capitalization of $146 million. It has tumbled 47% in the past week, according to CoinGecko.

      Celsius’ tweets do not specify when the loan to Alameda was made.

      Celsius paused withdrawals in June, freezing billions of dollars of customer assets on its platform. The company filed for bankruptcy in July.

      https://www.wsj.com/livecoverage/stock-market-news-today-11-11-2022/card/bankrupt-crypto-lender-celsius-network-says-it-lent-alameda-research-13-million-jTnI38SvOBOB7JCy8DmJ

      2. But…but I don’t understand. FTX had a stellar ESG score and a 28-year-old giggling empowered special snowflake to handle risk management.

    2. Cryptogeddon has arrived.

      E-tulips have been HODLing up quite well the past few days. Methinks there are a lot of billionaire globalists partaking in this giant PONZI. We found out that even Kevin O’Leary from Shark Tank and CNBC was invested in FTX. Larry Fink and Blackrock were neck deep. The entire system is rotten to the core.

      2. That’s all fine. Whales and minnows alike have lost a bundle so far in Cryptogeddon, with more to come on the SBF implosion.

      1. Tether stablecoin loses its dollar peg as contagion from FTX’s collapse spreads through the crypto market
        Matthew Fox
        Nov 10, 2022, 9:49 AM
        Tether dropped to well below $1 Thursday as crypto markets showed signs of stress.
        Justin Tallis/Getty Images

        – Tether briefly lost its dollar peg on Thursday after the implosion of FTX shook the confidence of the entire crypto market.
        – Tether is the third largest cryptocurrency with a current market value of about $70 billion.
        – The stablecoin fell to a low of $0.98 Thursday morning before recovering most of its losses.

        Tether lost its dollar peg on Thursday after the ongoing implosion of Sam Bankman-Fried’s FTX shook confidence in the entire cryptocurrency market.

        The development is unsettling because it adds to concerns of contagion spreading throughout the crypto market as trust declines considerably. For example, bitcoin has seen volatile trades, falling more than 20% to below $16,000 earlier as a cascade of margin calls threatens to unwind much of the leverage seen in crypto markets. It’s now back above $17,000.

        Tether, which is the third largest cryptocurrency and the world’s largest stablecoin, fell to a low of $0.98 in Thursday morning trades before it recovered most of those losses.

        The stablecoin has a market value of just under $70 billion, which is down 16% from its peak of about $83 billion. The decline has come amid an ongoing bear market in cryptocurrencies, and as concerns grew about the balance sheet holdings of Tether following the collapse of stablecoin TerraUSD in May.

        But while the leaders behind Tether have repeatedly reassured investors that their stablecoin is indeed backed by reserves at a one-to-one exchange ratio, they have continued to push back the timeline on being independently audited.

        Responding to the downfall of FTX, Tether co-founder William Quigley told CNBC on Wednesday that crypto exchanges and currencies shouldn’t lever up highly volatile assets with debt.

        “Everyone thought that the major exchanges were not susceptible to any kind of serious meltdown. And once again, we keep going back to whether it’s 3AC, or Voyager, or Celsius or Luna, and it’s the matter of debt. Debt is toxic with crypto,” Quigley said.

        “And it just violates a basic principle of finance; you don’t lever up highly volatile assets,” he continued. “When Wall Street came into this market last year big time … I think one of things they dragged in was their fascination with leverage,” he later added.
        …
        https://markets.businessinsider.com/news/currencies/tether-stablecoin-loses-dollar-peg-ftx-collapse-hits-crypto-trust-2022-11

          1. It was dipping recently but everything is fine now. Please don’t run the numbers on their own best case published data that shows they are undercapitalized and will most likely become insolvent at some point. Nothing to see here.

      2. “…a cascade of margin calls threatens to unwind much of the leverage seen in crypto markets.”

        And so it begins.

        Got popcorn?

        1. Is it fair to give the Fed credit for sticking with it on inflation while doing its part to restore affordability to US housing prices?

          1. The Fed has smashed the housing market and killed rampant speculation – and that means ‘we’re almost there’ with inflation, former PIMCO chief economist says
            Jennifer Sor
            Nov 11, 2022, 7:31 AM

            – The Fed has smashed the housing market and killed rampant speculation, according to PIMCO’s former chief economist.
            – He pointed to the doubling of mortgage rates and trouble in crypto as signs the Fed has sufficiently tightened.
            – “I think we’re almost there,” he said in regards to reining in inflation.

            The Federal Reserve has smashed the housing market and killed the rampant speculation that was pervasive during the pandemic—and that means “we’re almost there” with inflation, according to former PIMCO chief economist Paul McCulley.

            In an interview with CNBC on Friday, the former PIMCO chief economist reiterated his view that inflation had already peaked and was on the downtrend, pointing to signs of damage in the economy inflicted by the Fed’s aggressive rate hikes this year.

            Mortgage rates have doubled and home buying activity is set to slump, meaning the housing market is “down for the count,” McCulley said. Speculative bubbles in the market have also burst, he added, pointing to the recent turmoil in crypto markets set off by the collapse of FTX.

            “The housing market is smashed, the enthusiasm for speculation in the marketplace [that] was rampant in 2021 has been removed,” McCulley said. Those are signs the central bank have already tightened conditions significantly.
            …
            https://markets.businessinsider.com/news/stocks/fed-inflation-stock-rally-cpi-rate-hike-housing-crash-market-2022-11

    4. Cryptocurrency
      Investing
      Banks
      Real Estate
      Finance ·cryptocurrency
      The historic crypto bubble: Bitcoin is now the fifth-biggest wipeout of all time, BofA says, with a shocking chart of the last 50 years in finance
      BYAlena Botros
      November 11, 2022 at 11:19 AM PST
      Bitcoin has dropped 77% from its trading peak in November of last year.
      Courtesy of Bank of America

      The crypto industry is once again feeling the chill of winter.

      Bitcoin is experiencing one of the biggest crashes in history—that’s apparent. But Bank of America Research’s Flow Show research note has crunched data and put it in historic terms: It’s the fifth-worst collapse of an asset in financial history, nearly as great in scale as the Mississippi & South Sea Co. History buffs would know that episode better as the South Sea Bubble, and it was so long ago—the early 1700s—that the United States did not yet exist and the U.K. was involved in the War of the Spanish Succession.

      Bitcoin, which makes up 41% of the crypto market, hit lows unseen seen since the depths of the pandemic two years ago. And although it rallied after May’s Crypto Winter, a market downturn is back in full force with FTX’s implosion that’s led the crypto exchange to file for bankruptcy, and founder and CEO Sam Bankman-Fried to resign—a far cry from a few months ago when he was likened to J.P. Morgan for his attempted rescue missions of distressed firms.

      BofA’s research, based on Bloomberg data, finds that Bitcoin’s fall is the fifth largest on record—and by far the biggest crash since the 1970s.
      …
      https://fortune.com/2022/11/11/crypto-bubble-bitcoin-fifth-biggest-all-time-bofa-ftx/

  22. ‘There’s nothing you can do when demand destruction starts to happen like that. It doesn’t matter what you price it at,’ he said.”

    That’s the stupidest thing I’ve read all day, and it’s not even noon yet.

    1. Every asset has its price. But most HODLers would prefer to hold out hope for another round of Fed bailouts than discover what that price is, following a doubling of interest rates over a few months.

  23. “Even as its leasing success continues and many of its malls remain profitable, PREIT is running out of time to get out from under its massive debt.

    Malls in most Democrat-Bolshevik malgoverned municipalities have become no-go areas for white suburbanites due to unchecked state-sponsored vibrancy. This is going to have a calamitous effect on the underlying loan collateral.

  25. Can’t cheat in Florida.

    Carville on Democrats running in Florida: ‘Better off looking harder at Mississippi’

    BY JARED GANS – 11/11/22 10:15 AM ET

    Democratic strategist James Carville said the party would be “better off looking harder at Mississippi” than Florida following the overwhelming GOP success in the Sunshine State in this year’s midterm elections.

    https://thehill.com/homenews/campaign/3730950-carville-on-democrats-running-in-florida-better-off-looking-harder-at-mississippi/

      1. The fake inflation numbers trotted out earlier this week are a pretext for the Fed to go wobbly on interest rate hikes. Globalist mouthpiece Paul Krugman “suggested” that the Fed should ease off on further hikes, which means BlackRock Jay has been given his marching orders.

        1. If they don’t stick with it on their inflation containment campaign, it’ll come back and bite ’em in the @$$.

  31. Body Cam Video Shows Paul Pelosi Opened Door for Police, Despite DOJ Saying Otherwise: Source
    NBC Bay Area
    Nov 12, 2022
    The NBC Bay Area Investigative Unit spoke with a source familiar with the Pelosi investigation, who personally viewed body camera video recorded by officers responding to the Pelosi’s San Francisco home.

    https://www.youtube.com/watch?v=toBEGv2pMkU

    3:46.

  33. ‘My memory of the pre-financial crisis era of self-delusional hubris will always be epitomised by a lunch I attended in mid-2007. Working as a junior correspondent for The Independent, I was invited to the plush top floor executive dining rooms of Lehman Brothers by their then head of media relations. Over expensive French wines and smoked salmon, with the vast expanse of London stretching below us, my host spent three hours trying to convince me that the bank was inherently well capitalised and the rumours around subprime mortgages were unfounded’

    If he had run out the door, sold everything he had and shorted LB he’d have had a movie made about it.

  34. ‘it turned out that the emperor had no clothes’

    That’s not true Tom, he has one dirty, probably smelly tee shirt with the neck collar stretched out.

  35. What Does Your Gut Tell You About The Midterm Chaos?

    Jon Bowne
    November 12th 2022, 1:26 pm

    All Americans must now prepare for more chaos and economic pain for the remainder of Biden’s dictatorship.

    After the midterms, a lot of fed-up Americans were left dazed by the resilience of the message of the Democratic Party: “your increasing poverty doesn’t exist. The machete attacks, daylight homicides and subway rapes never happened. If you insist on not killing your children, we are coming for your children whether you like it or not…domestic terrorist.”

    “Rampant homelessness and skyrocketing drug deaths aren’t a mental health crisis — it is the new norm. We will make owning a home and retirement impossible for subsequent Generations. The overwhelming evidence of vaccine deaths and injuries are a figment of your conspiratorial imagination. And don’t mind the 5 million illegal aliens that we are chomping at the bit to use to finally decimate your American Dream. They will be voting for our New World Order before you can say President Antichrist.”

    This was their message.

    What factors led to this trainwreck of the Corporacratic District Of Criminals Country Club mirage of a Constitutional Republic?
    Was there a Generational factor? Gen Z, the 18-29 age group gave 28 points to the Democrats. Swayed by the fear mongering and the Abortion distraction, they were happy to trade what’s left of their future to their Marxist Boomer counterparts who promised them student loan forgiveness and now wage slavery in the form of universal basic income.

    Did Trump’s shadow loom too large over a Republican party rising from his ashes? Or are these merely excuses to distract the CNN exit polls that revealed that 75% of voters said the country is on the ‘wrong track’ and an overwhelming majority are ‘angry’ about inflation and the economy.

    Biden and company will now ramp up the threats on anyone with an unshakeable gut feeling after witnessing once again the blatant antiquated and openly rigged via “incompetence” voting system.

    https://www.infowars.com/posts/what-does-your-gut-tell-you-about-the-midterm-chaos/

    1. All Americans must now prepare for more chaos and economic pain for the remainder of Biden’s dictatorship.

      As I told my sibs: “buckle up and hold on tight”. Fortunately, none of us lives in a major metro, so we will be less exposed to vibrancy than otherwise. But it’s going to get ugly, and maybe it will take $10 gas, hyperinflation and even more crime and deviancy to wake some fence sitters up.

      1. But it’s going to get ugly, and maybe it will take $10 gas, hyperinflation and even more crime and deviancy to wake some fence sitters up.

        Nah. If they haven’t realized by now, they’re hopeless.

  36. French Foreign Legion In Heavy Combat With Taliban In Afghanistan
    WarLeaks – Military Blog
    Aug 5, 2021
    Video footage from the War in Afghanistan shows fighters of the French Legion in heavy combat with Taliban in Afghanistan.

    The scenes show the elite units of the French Foregin Legion in several intense firefights and engagements with Taliban fighters.

    The French Foreign Legion (Légion étrangère) is a military branch of the French Army.

    Legionnaires are considered highly trained elite infantry soldiers.

    What makes the Legion unique is that it is open to foreign recruits willing to serve in the French Armed Forces. French citizenship may be applied for after three years’ service.

    After joining the French Foregin Legion every recruit will recive a new name and nationality by the Legion.The selection process is notoriously harsh, and only one in nine candidates will be allowed to serve in the French Foregin Legion.

    Consequently, training is often described as not only physically challenging, but also very stressful psychologically.

    Applicants must be between 17 and 40 years old.
    They must be foreign, though this rule is often glossed over. About 16 percent are French nationals who join posing as citizens of other French-speaking countries, such as Belgium or Canada.

    The world’s most cosmopolitan military force comprises soldiers from about 140 countries. Recruits tend to come in waves — Germans in the 1940s and ’50s and English-speakers in the 1980s. After the Cold War ended, many volunteers came from Russia and Eastern Europe. They have now been replaced by a surge of applicants from Latin American and Asian nations such as Nepal.

    Unlike France’s regular armed forces, the Foreign Legion is a male-only unit. And during the first five years of service, a legionnaire is banned from marrying.

    https://www.youtube.com/watch?v=7_zDiZiZqSg

    15:43.

  37. FTX collapse ‘worse than Theranos, worse than Madoff,’ expert says
    Yahoo Finance
    Nov 10, 2022

    John Reed Stark, lecturing fellow at Duke University Law School, and Neel Maitra, partner at Wilson Sonsini Goodrich & Rosati and former SEC senior special counsel, join Yahoo Finance Live anchor Akiko Fujita to discuss the blowup of crypto exchange FTX, ramifications for the entire industry, and the outlook for SEC enforcement and a regulatory crackdown on digital assets and exchanges.

    https://www.youtube.com/watch?v=SwXruCO3lXI

    10 minutes.

    1. Reports are that this whole FTX group who were living in a commune in the Bahamas are/were trying to escape to Dubai to avoid extradition to the US.

      Apparently dear daughter of MIT economist is in Hong Kong on the run, trying to get a flight to Dubai. Bankrupt-Fraud and a couple of buddies are being held in the Bahamas.

      I’d bet anything these swindlers have hundreds of offshore accounts set up around the world to draw out of. When you steal over $10 Billion, there’s plenty to go around. They have enough money to live off of for the rest of their lives.

      1. Apparently dear daughter of MIT economist is in Hong Kong on the run, trying to get a flight to Dubai.

        I’m gonna guess that she stopped giggling.

        1. With all the money her & her “altruistic” BF looted from FTX account holders, I’m guessing the girlish giggles from both of them have turned to belly laughs. Kind of like I’m having at the thought of his groupies getting ripped off.

      2. Check this out:

        Well, the FT report goes on to notes that until Friday afternoon, Bankman-Fried was looking to sell the $472MM of Robinhood shares, the largest liquid asset listed for FTX Trading, in privately negotiated deals he was arranging on the messaging app Signal, according to an FT source. As a reminder, SBF acquired a 7.6% stake in Robinhood in May, a transaction which delayed (but did not halt) the company’s collapse into oblivion. As part of the attempted firesale, Bankman-Fried was entertaining offers at a 20% discount to Robinhood’s VWAP price, or about $9 per share, said an FT source, who ultimately declined to buy due to perceived legal risks.

        But what is remarkable, is that the proceeds from the HOOD stock offering would not have gone to the now bankrupt FTX estate to satisfy prepetition claims; instead the Robinhood shares were held by an Antigua and Barbuda entity called Emergent Fidelity, which is personally controlled by Bankman-Fried, according to US securities filings. Emergent Fidelity is not among the entities listed in Friday’s bankruptcy filing.

        In other words, SBF – who is most certainly on the run at this moment – was hoping to fill up his personal bank account by dumping his HOOD holdings, while giving FTX creditors the finger (again).

        1. SBF – who is most certainly on the run at this moment

          I don’t think he and Miss Giggles are going to get a pass. Good luck getting to Dubai.

          2. With all the $$$ SBF funneled to the Democrat-Bolsheviks, he can probably count on covert Deep State assistance to stay ahead of any token DoJ efforts to apprehend him.

      3. I can’t wait for the movie about SBF and the FTX implosion to come out.

        Suggested title: “The Richest Guys in the Room”

    1. Democrat Catherine Cortez Masto wins reelection to U.S. Senate from Nevada

      AP
      Updated: 10:04 PM EST Nov 12, 2022

  39. As I mentioned days ago, the steal was on. The Dems have just manufactured a miracle in Nevada where suddenly a wall of blue votes come in late and then the blue MSM declares them the winner in the Senate race.

    And they are doing the same with the remaining House seats. All of the remaining votes are, miraculously, blue. Nobody anywhere has explained how this phenomenon can occur, where for some reason all the late votes are blue. There’s no explanation other than election fraud.

    1. They even came up with a cute name and Wiki page for their fraud:

      Blue shift (politics)

      In American politics, a blue shift, also called a red mirage, is an observed phenomenon under which counts of in-person votes are more likely than overall vote counts to be for the Republican Party (whose party color is red), while provisional votes or absentee ballots, which are often counted later, are more likely than overall vote counts to be for the Democratic Party (whose color is blue). This means that election day results can initially indicate a Republican is ahead, but adding provisional ballots and absentee ballots into the count can eventually show a Democratic victory.

      Only the dumbest of the dumb would believe such tripe. This country appears finished.

    2. fraud
      noun

      1 a : DECEIT, TRICKERY
      specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right
      was accused of credit card (voter) fraud

      b : an act of deceiving or misrepresenting : TRICK
      automobile insurance (voter) frauds

      2 a : a person who is not what he or she pretends to be : IMPOSTOR
      He claimed to be a licensed psychologist (Director of Election Services and Early Voting) , but he turned out to be a fraud.

      also : one who defrauds : CHEAT

      b : one that is not what it seems or is represented to be

      https://www.merriam-webster.com/dictionary/fraud

    1. The Financial Times
      Property sector
      The global housing market is heading for a brutal downturn
      A pandemic-induced property boom peaked at the end of 2021 but the sector is now braced for the broadest slowdown since the financial crash
      Valentina Romei and Alan Smith in London 21 hours ago

      At the end of 2021, things looked rosy for the global housing sector. Across the 38 countries in the OECD, house prices were growing at the fastest pace since records began 50 years earlier.

      Analysis of data from Oxford Economics, a consultancy, shows a similar trend. In 41 countries, from Norway to New Zealand, house prices were rising, bolstered by record low borrowing costs and buyers with savings to spend. Arguably, there had never been a better time to own a home.

      Not even a year later, and the picture is completely different. While homeowners around the world are reckoning with increasingly unaffordable mortgage payments, prospective homebuyers are facing house prices that are rising faster than incomes. In the background, a global cost of living crisis deepens.

      What has changed, of course, is the spectre of rising prices and the economic shock of Russia’s invasion of Ukraine.

      This fuelled a surge in inflation — now at multi-decade highs in many countries — which prompted central banks around the world to sharply tighten monetary policy. The OECD also predicts that real-term wages are likely to fall next year.

      The upshot is that a pandemic-induced housing boom in the world’s richest countries is likely to be followed by the broadest housing market slowdown since the financial crash. This, in turn, could add further pressure on to flagging economies.

      Now, nearly all of the countries in the Oxford Economics database are expected to experience a slowdown next year, marking the most widespread deceleration in housing price growth since at least 2000. More than half are likely to register an outright price contraction — something last seen in 2009.

      “This is the most worrying housing market outlook since 2007-2008, with markets poised between the prospect of modest declines and much steeper ones,” says Adam Slater, lead economist at Oxford Economics. “The ongoing surge in mortgage rates in advanced economies threatens to push some housing markets into steep downturns.”

      The IMF agrees. It warns the global housing market is at a “tipping point”.
      …

Comments are closed.