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The Number Of Chickens You Have To Forgo To Buy A House Is Unlikely To Keep Plummeting Forever!

A weekend topic starting with The Atlantic. “Timing isn’t the only external factor determining whether homeownership ‘works’ for Americans. Paying off a mortgage is a form of ‘forced savings,’ in which people save by paying for shelter rather than consciously putting money aside. According to a report by an economist at the National Association of Realtors looking at the housing market from 2011 to 2021, however, price appreciation accounts for roughly 86 percent of the wealth associated with owning a home. That means almost all of the gains come not from paying down a mortgage (money that you literally put into the home) but from rising price tags outside of any individual homeowner’s control.”

“At the core of American housing policy is a secret hiding in plain sight: Homeownership works for some because it cannot work for all. If we want to make housing affordable for everyone, then it needs to be cheap and widely available. And if we want that housing to act as a wealth-building vehicle, home values have to increase significantly over time. How do we ensure that housing is both appreciating in value for homeowners but cheap enough for all would-be homeowners to buy in? We can’t.”

From Fortune. “Nationally, home prices rose for 124 consecutive months between February 2012 and June 2022. Now we’re in reverse. Cities like Austin and Phoenix have seen their respective inventory levels soar 160.7% and 176%. When it comes to inventory, the speed of change matters. A sudden inventory spike often marks a housing market that has moved into a full-blown correction. Of course, we now know that’s exactly what happened this summer in markets like Austin and Phoenix, where home values are already down 10.4% and 8.1% from their respective 2022 peaks.”

“‘When demand abruptly falls off a cliff, the absolute level of supply isn’t as relevant. This is where watching the rate of change on both supply and demand separately is critical,’ Rick Palacios Jr., director of research at John Burns Real Estate Consulting, tells Fortune.’Investors accounted for the highest percentage of buyers ever this cycle in many markets. The lion’s share of those buyers are now on the sidelines, with some needing to sell given overleveraged and really were just taking a flyer on home price appreciation continuing to rip higher. Those days are now over, and these sellers don’t exhibit same emotional/behavioral qualities associated with traditional owner-occupiers, which historically keeps home prices somewhat sticky on the downside. Builders also account for roughly twice their historical market share norm when it comes to for sale housing supply in the system (denominator there is resale supply plus new home supply under construction and finished inventory). Builders meet the market on price whereas traditional owners aren’t as quick to drop prices.'”

“‘It’s very likely we see supply rise come spring, which is typical. New home supply in particular should rise, as we know finished homes (completions) are now increasing and builders have a lot more unsold homes still under construction working through the system,’ Palacios tells Fortune. ‘This will be the first spring selling season since 2008 where mortgage rates are ~6%, so we’re expecting a bumpy ride in general for sellers, especially if the economy is officially in a recession.'”

From Money Wise. “It’s a story few could have foreseen: After home flipping reached record heights as 2022 kicked off, the bubble seems to have burst. ‘Anybody that’s flipping right now needs to be looking closely at pricing of property: Price it to sell. Today is not the time to get greedy,’ Noah Brocious, president of Capital Fund I, a hard-money lender that does business in Phoenix, Colorado and Texas, told Bloomberg in October.”

Summit Daily in Colorado. “After a multi-year run in the local real estate market that was unlike anything anyone had ever experienced, a slight sense of reality has returned to both prices and sales activity. ‘We want to reassure sellers that they did not miss the boat, even though the market certainly peaked out by May,’ says Ned Walley of Nelson Walley Real Estate. ‘We are sort of in a hangover phase, but this comes after the craziest market ever. Not that we shouldn’t have seen this downturn coming, especially with inflation and understanding the way that the Fed was going to manage it by hiking interest rates. And interest rates weren’t the primary cause of our market adjustment, it was the stock market.'”

“Sellers are also cautioned to pay much closer attention to disclosures about any pre-existing issues with a home, as there have been more cases of buyers’ remorse – and even legal action – from unresolved problems such as water leaks. ‘I’ve been in this business since 2005 and this was the first year I saw three different deals where buyers said things weren’t disclosed, and demanded some action or compensation from the seller,’ says Debbie Nelson. ‘I had to contact the Colorado Association of Realtors legal team for advice. They said their calls have increased significantly as buyers have complained that they paid too much or jumped into the market too quickly, and didn’t even have time to think about any potential problems.'”

From Magic Valley in Idaho. “The red-hot housing market couldn’t last forever. Recent reports show a rising inventory of homes and dipping prices. Interest rate hikes and other economic uncertainties aren’t helping, either. This follows a trend that saw Twin Falls housing prices increase nearly 30% between 2020 and 2021 in a frantic bidding war. Permit numbers for single-family dwellings in Twin Falls were stagnant in 2022, with just one permit being issued for each of October and November. The city is on track to have the lowest number of single-family dwelling permits issued since 2011, when 93 permits were pulled. In 2021, the number was 368.”

“And prices for existing homes in Twin Falls County have dropped since peaking in April, according to the Intermountain Multiple Listing Service. The median price for existing homes sold in the county in November was $300,000, according to the listing service, down 7% from the $322,500 in November 2021.”

Hawaii News Now. “When Connie Irwin received her real property tax assessments for her Haleiwa home last week, she was shocked. The retiree ― who lives on a fixed income ― said the property tax assessment for her home went from $2,585,000 last year to $3,337,000. Similar increases next year could force her to sell, she said. Irwin is one of thousands of Oahu residents who received their real property tax assessments from the city last week. Many said they are seeing 20 to 30% increases in their assessments. ‘You know, I was mad. I was angry that this is just an arbitrary number,’ said Irwin. ‘It went up almost $800,000 in one year. We’ll probably squeeze by this year … but if it goes up next year, and the next year, we’re out.'”

From The Street. “Higher prices and soaring inflation is leading to major regret among homebuyers. It’s also leading to property and home neglect for even long-term homeowners. According to the 2022 Hippo Housepower Report, which surveyed over 1,000 U.S. homeowners, 2022 was a ‘year of growing economic and financial instability that took a toll on homeowners and their well-being.’ ‘We don’t see any real relief in 2023,’ said Pacwest Funding CEO Joshua Massieh. ‘There might be scenarios where agents and lenders will slap lipstick on the current climate and say, ‘Hey, look, the seller is willing to pay for your closing costs, but that still won’t really make a dent anywhere in the markets.'”

The Oklahoman. “Realtors have more time on their hands lately for marketing, what with the major slowdown in home sales, and it looks like some of them have gotten rusty on how to use the word ‘Realtor.’ I’m seeing ‘realtor’ used a lot even by Realtors. It should be capitalized: Realtor. It’s a trademark for a member of the National Association of Realtors. The actual trademark is REALTOR®, with the symbol for registered trademark. It’s like ‘Rolaids,’ the antacid, which is a brand, and a proper noun, and should always be capitalized.”

“Also, ‘Realtor’ is not interchangeable with ‘real estate agent,’ which means someone licensed by a state to sell real estate for a living, but who may or may not be a member of the National Association of Realtors. Some journalists need a refresher, too. I saw ‘realtor’ — not capitalized — in an AP story the other day. This is not to pick nits. Misuse of a trademark in advertising and marketing can cost you. The National Association of Realtors has fought to protect its trademark for years, lest it go the way of ‘Kleenex’ for ’tissue’ and ‘Xerox” for ‘copy.’ They have a whole manual on it.”

“‘Realtor’ is a trademark, not a plain old word. I get that. So, no matter where it falls in a sentence, “Realtor” gets to be capitalized. It does not command so much obeisance as to get all capital letters, like this: ‘REALTOR,’ although they try to sneak that into print all the time, along with the perky little registered trademark symbol, ®.”

The Globe and Mail in Canada. “After 20 years in tech sales, Duncan has been laid off and is turning to consulting. He figures he can bill about $125,000 a year on average. His wife Lorna, who is self-employed, earns more than $100,000 a year. Duncan is age 53, Lorna is 43. They have two children, ages 9 and 13. Duncan hopes to retire from work completely in about three years, when he will be 56. Lorna wants to retire by 2030, when she will be 51. In the coming year, they plan to complete a $50,000 home renovation, which will be funded by their cash savings, the planner says. They also plan a large vacation each yearith a cost of $10,000.”

“In addition to their Toronto home, Duncan and Lorna own two rental properties worth a total of $1.25-million with about $795,000 of mortgages on them. The properties are cash flow negative, which means they are costing more than they are bringing in, notes Matthew Ardrey, a financial planner. This causes concerns because the mortgages renew in 2024 and 2026, at which time the expected interest rate will be much higher than the 2.66 per cent they are paying now.”

“In retirement they plan to spend $100,000 a year, plus an additional $6,500 wintering in the United States with Lorna’s family. Their current lifestyle spending is about $105,000 a year. They plan to give each of their two children $200,000 toward a down payment for a house in 2033 and 2037. ‘One of the ways we stress test a scenario is by using a computer program known as a Monte Carlo simulation,’ the planner says. This introduces randomness to a number of factors, including returns. Under the Monte Carlo simulation, Duncan and Lorna’s probability of success is only 37 per cent.”

“‘To heighten the chances of success, they could always spend less, save more, work longer or the one everyone wants to avoid, die early,’ Mr. Ardrey says. If they want to avoid these choices, a better option is to improve their investment strategy. This would include liquidating their rental properties in retirement in favour of other investments that produce more income, especially given the expected higher cost of borrowing, he says.”

Crikey in Australia. “House prices are going one way just as every other price in the economy is going the other. This means that if you inflation-adjust house prices, they look even cheaper. House prices are down only about 5-10% in cash terms, but when inflation-adjusted, they are down far more — back to 2017 levels. Inflation-adjusted house prices rose extremely sharply during the pandemic, pulling them out of the lull they fell into during the 2017-18 price correction. That sharp rise is being reversed again now, and if the forecasts of high inflation and falling high prices are correct, it has a way to go.”

“When we inflation-adjust house prices, what we’re really finding is the ratio of the price of housing to everything else in the economy. In recent years, housing has been getting more expensive than everything else. Relative prices are always changing. Chicken, clothing and TVs were once expensive. The number of chickens you had to forgo to get a house was once ludicrously low. You could buy a house for the price of 8000 chickens. Now it’s more than 60,000, as the next chart shows.”

“Same with shoes. A median house in a capital city once cost 900 pairs of women’s shoes. Now it’s 8000. A house once cost as much as four cars, whereas now it’s 20 cars, etc, etc. But the number of steaks you forgo when you buy a house hasn’t risen nearly so much, because beef has, like property, been soaring in price. In steak terms, housing is cheaper than it was in 2010 and has merely doubled since the 1970s. I’d hypothesise that mortgage holders are roasting a lot more chicken than beef these days, compared with the 1970s.”

“The big reason inflation causes house prices to fall is that the central bank reacts. First inflation rises, then the bank hikes interest rates, then house prices fall. It’s notable that if you timeshift the correlation even further, it disappears — beyond a year after a quarter of high inflation, there’s no correlation with falling house prices. This could suggest that Australian house prices will stop falling once inflation is back under control, stabilising and then growing again. After all, while chickens grow in battery cages and land is in fixed supply, the number of chickens you have to forgo to buy a house is unlikely to keep plummeting forever!”

From Stuff New Zealand. “Invercargill has been crowned New Zealand’s Shit Town of the Year for the first time after an online poll found it did ‘absolutely nothing notable’ in 2022. The Southland town was awarded the unprestigious award after tough competition from two-time champions Huntly, which won back-to-back titles in 2019 and 2020. Announcing the winner, the Shit Towns of New Zealand organisers pull no punches in their assessment of Invercargill, a town of about 57,000, and the cloudiest in the country.”

“‘Congratulations to Invercargill for being voted New Zealand’s Shit Town of the Year for 2022! ‘The arsehole of the world’ did absolutely nothing notable this year to earn the brown crown, which seems strangely appropriate. ‘This is Inbredcargill’s first Shit Town of the Year award following a double for Huntly (2019-20) and victories for Hāwera (2018) and Gore (2017),’ the organisers said.”

“Unsurprisingly, news of the award did not go down too well with Invercargill natives. Mayor Nobby Clark dismissed the poll and said those voting for Invercargill were ‘just trolls.’ He said the town had possibly the cheapest housing in any provincial city in the country. ‘So we’ve got the better quality of life that goes with that, so you’re not spending half your earnings paying off a mortgage.'”

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This Post Has 122 Comments

  2. ‘When demand abruptly falls off a cliff, the absolute level of supply isn’t as relevant. This is where watching the rate of change on both supply and demand separately is critical,’ Rick Palacios Jr., director of research at John Burns Real Estate Consulting, tells Fortune.’Investors accounted for the highest percentage of buyers ever this cycle in many markets’

    Rick and Lance Lambert are doing the best real estate reporting out there.

    ‘Investors accounted for the highest percentage of buyers ever this cycle in many markets’

    It is different this time.

  3. ‘I’ve been in this business since 2005 and this was the first year I saw three different deals where buyers said things weren’t disclosed, and demanded some action or compensation from the seller…I had to contact the Colorado Association of Realtors legal team for advice. They said their calls have increased significantly as buyers have complained that they paid too much or jumped into the market too quickly, and didn’t even have time to think about any potential problems’

    Be honest Debbie, you were telling suckers they HAD to do that to be winnahs!

    1. Along those lines I have never heard anyone in the REIC explain how so many shacks were sold without appraisals.

    2. “I’ve been in this business since 2005…”

      Wow, that’s back when dinosaurs roamed the earth. Glad to have so much experience working on my deal. I’m gonna be rich!

  4. ‘‘Realtor’ is a trademark, not a plain old word. I get that. So, no matter where it falls in a sentence, “Realtor” gets to be capitalized. It does not command so much obeisance as to get all capital letters, like this: ‘REALTOR,’ although they try to sneak that into print all the time, along with the perky little registered trademark symbol, ®.’

    This piece is pretty funny:

    o·bei·sance
    /ōˈbās(ə)ns,ōˈbēs(ə)ns/

    noun: obeisance

    deferential respect.
    “they paid obeisance to the Prince”
    h
    Similar:
    respect

    homage
    worship
    adoration
    reverence
    veneration
    respectfulness
    honor
    submission
    deference

    -a gesture expressing deferential respect, such as a bow or curtsy.
    plural noun: obeisances
    “she made a deep obeisance”

    2. “it looks like some of them have gotten rusty on how to use the word ‘Realtor.’ I’m seeing ‘realtor’ used a lot even by Realtors.”

      relitter
      relitter
      relitter

      I need more practice. One of my goals for 2023.

  6. “obeisance”

    REALTOR® gets the respect and honor🤣for the organization that it is.

    Much like NAMBLA, REALTOR® is an organization that maintains the lowest ethical standards and weakest code of conduct anywhere. Recruiting convicted felons and fugitives on the run, you can count on a REALTOR® to heavily misrepresent themselves, the product they peddle and the value of it. A REALTOR® offers unsolicited investment advice, market forecasting and commentary.

    This my good friends…. is REALTOR®. Enjoy your losses.

    1. NAMBLA seems redundant when the Democratic Party has appropriated its agenda and is promoting it far more vigorously and effectively.

    1. Raising a family is unbelievably expensive as the U.S. shovels its prosperity into the former Soviet block countries and the middle-east while ignoring our infrastructure and family supporting middle-class jobs.

  9. Cities like Austin and Phoenix have seen their respective inventory levels soar 160.7% and 176%.

    Is that a lot?

  10. “It’s a story few could have foreseen: After home flipping reached record heights as 2022 kicked off, the bubble seems to have burst.

    We at the HBB were the most surprised and vexed of them all at the housing bubble bust none of us saw coming. Our grief over the trillions of Yellen Bux struck down in their prime is what unites us.

  11. One of the ways we stress test a scenario is by using a computer program known as a Monte Carlo simulation,’ the planner says. This introduces randomness to a number of factors, including returns. Under the Monte Carlo simulation, Duncan and Lorna’s probability of success is only 37 per cent.”
    If you have a Vanguard account, it has a free Monte Carlo simulation for your retirement testing. I do not find 37% acceptable when I run my simulations.

  13. ‘prices for existing homes in Twin Falls County have dropped since peaking in April, according to the Intermountain Multiple Listing Service. The median price for existing homes sold in the county in November was $300,000, according to the listing service, down 7% from the $322,500 in November 2021’

    Another sh$thole rolls over YOY. From the April peak? 20-30%?

  14. Not that we shouldn’t have seen this downturn coming, especially with inflation and understanding the way that the Fed was going to manage it by hiking interest rates. And interest rates weren’t the primary cause of our market adjustment, it was the stock market.’”

    Yer an idiot & a liar, Ned. The primary cause of the bursting bubble is that speculative asset bubbles fueled by cheap debt & Yellen Bux funny money were never sustainable in the long run. What we’re seeing isn’t an “adjustment”: it’s the long-deferred financial reckoning day that is going to vaporize trillion in fictitious “value” from the Fed’s asset bubbles & Ponzi markets. Long buttered popcorn.

  15. Buying a Home in 2023? Here’s How to Get the BEST DEAL
    Kaori Luxury Real Estate
    Dec 25, 2022 KAORI NAGAO
    In this video, we’re going to show you how to get the best deal on a home in 2023. Whether you’re planning to buy a new build or a resale home, we’ve got you covered!

    We’ll take you through all the different steps you need to take in order to find the best deal on a home in 2023. From research to negotiation to closing, I’ll show you everything you need to know in order to buy a home in the next few years!

    https://www.youtube.com/watch?v=vPSy15rd7Yg

    13:36. I’m posting this cuz I can’t figure out what that electronic thing is on her lapel. Is that a pager? Who has a pager anymore? And why wear it like jewelry?

    1. I’m posting this cuz I can’t figure out what that electronic thing is on her lapel. Is that a pager? Who has a pager anymore? And why wear it like jewelry?

      “He was of a slim yet sturdy build, and he wore a well-fitting black suit, which, like a travel outfit, was provided with various pleats, pockets, buckles, buttons, and a girdle, and therefore appeared eminently practical, though one could not be sure what actual purpose it served.”

      Franz Kafka, The Trial

    2. The lapel thing looks like a microphone voice monitor, if there is such a thing. The moving horizontal line appears to be a real-time readout of sound waves, and it matches her speech. (???)

  16. They said their calls have increased significantly as buyers have complained that they paid too much or jumped into the market too quickly, and didn’t even have time to think about any potential problems.’”

    The Colorado NAR needs to partner with Planned Parenthood to offer free sterilization to the cretins who fall into this category.

    1. didn’t even have time to think about any potential problems

      I never considered that risk assessment takes “time” and an effort.

  17. “You know, I was mad. I was angry that this is just an arbitrary number,’ said Irwin. ‘It went up almost $800,000 in one year. We’ll probably squeeze by this year … but if it goes up next year, and the next year, we’re out.’”

    Cry me a river, Boomer. You have no qualms about young couples taking on lifetime debt servitude to buy your insanely overpriced shack at such an “arbitrary number” when you’re ready to sell and have your retirement funded.

    1. Shouldn’t these folks be happy that their house value went up so much? They could sell and probably rent in HI, just on the profits. Or they could move to the mainland and live like kings.

      2. It’s small consolation that the value of your house rose to some whimsical Zestimate when there are no buyers in the market who would pay you that much for it.

    2. It amazes me how many people have most of their retirement beans in the home equity basket. It doesn’t seem like a prudent diversification strategy.

      1. Investing Specialists
        How to Use Home Equity to Fix Retirement
        More strategies to supplement a retirement shortfall.
        Sheryl Rowling
        Mar 28, 2022

        In a previous article, I addressed the issue of retirees whose nest eggs have dropped to the point of threatening their long-term financial stability. I discussed two potential solutions: the Band-Aid approach, in which retirees make small living adjustments, and immediate annuities, which provide retirees a stable income. In this article, I will present a third solution: home equity.

        Why Home Equity?

        Home equity, in many cases, is the largest asset retirees own. Yet most people don’t consider their home an investment that can be used for retirement cash flow. Ignoring home equity might be fine for those with adequate retirement portfolios; it’s not fine for the rest. Tapping into home equity is sometimes seen as financial suicide, much like holding balances in high-interest-rate credit cards. This is not necessarily true.
        …
        https://www.morningstar.com/articles/1085311/how-to-use-home-equity-to-fix-retirement

        1. “Tapping into home equity is sometimes seen as financial suicide, much like holding balances in high-interest-rate credit cards. This is not necessarily true.”

          This somehow doesn’t sound very reassuring.

          What many would-be home equity tappers are soon to learn is the double-edged sword effect of higher interest rates on home equity as a retirement income source, which is to shrink home equity balances at the same time higher rates make it more expensive to tap it as an income source.

        2. We know a family caught in this trap. They are experiencing health care issues now, so selling the shack to liberate what’s left of the retirement nest egg and settling in low cost flyover where health care is lacking is not wise.

  18. According to the 2022 Hippo Housepower Report, which surveyed over 1,000 U.S. homeowners, 2022 was a ‘year of growing economic and financial instability that took a toll on homeowners and their well-being.’

    Ah, but for the D voters among us, you can look forward to reaping the benefits of “Build Back Better” and the Inflation Reduction Act. Oh, but wait: you already are.

  21. Silver Bells · Doris Day

    https://youtu.be/JLYqkscuZkA

    City sidewalks, busy sidewalks
    Dressed in holiday style
    In the air there’s a feeling of Christmas
    Looters laughing, windows crashing
    Meeting smile after smile
    And on every street corner you’ll hear

    No cash bail
    No cash bail
    It’s Christmas time in the city
    Rob a store
    Loot some more
    You’ll still be out Christmas day

    Strings of streetlights
    Even stop lights
    Blink a bright red and green
    As the thieves all rush
    Home with their treasures

    Hear the glass crunch
    Old man is punched
    This is Santa’s big day
    And above all this bustle you’ll hear

    No cash bail
    No cash bail
    It’s Christmas time in the city
    Rob a store
    Loot some more
    You’ll still be out Christmas day

        1. To clarify, the original lyrics were credited to Jay Livingston and Ray Evans back in the 60s. The rewritten current events lyrics belong to the Denier.

  22. I’m seeing ‘realtor’ used a lot even by Realtors. It should be capitalized: Realtor.

    But we don’t capitalize “liar” or “dissembler.”

  23. “In addition to their Toronto home, Duncan and Lorna own two rental properties worth a total of $1.25-million with about $795,000 of mortgages on them. The properties are cash flow negative, which means they are costing more than they are bringing in, notes Matthew Ardrey, a financial planner.

    Applying my Nostradamus-like powers of prophecy, methinks that Duncan and Lorna’s actual retirement plans will bear no resemblance to the rosy scenario they’ve painted for themselves.

  25. “House prices are going one way just as every other price in the economy is going the other. This means that if you inflation-adjust house prices, they look even cheaper.

    The mental contortions these REIC shills have to engage in to convince the gullible & stupid that shacks are still sound “investments” are jaw-dropping. One good thing about the pending Great Muppet Reaping: the sheeple who trusted globalist propaganda outlets for their news and information are going to be forever inoculated against reliance on such mendacious agenda-pushers.

      1. When not on sale, in my neck of the woods steaks are $10-15/lb, depending on the cut. I can get free range chicken breasts for under $4.

        Now in Oz I have no idea what prices are.

        2. I was thinking of a pound of ground beef which I can get for $4.99 on sale. Chicken breasts never go on sale, and are about the same per pound.

          But yes, steak is always expensive.

      2. The ground turkey shelf was stripped clean except for the 93% free range, steroid free birds priced at $7.99/lb a couple of weeks ago as our mountain passes were closed for avalanche control and snow removal.

        1. I grilled prime rib for my sons’ visit yesterday. Couldn’t believe my wife didn’t complain about the $80 sticker price. She must have missed the receipt.

          But if she had complained, I would have politely explained to her that the nominally high price is the reason the store had some on the shelf two days before Christmas.

          2. not as fussy

            I was to have dinner with my cousins in Angola NY. The Thruway was blocked so I was on the Mohawk Trail to avoid Buffalo. I got halfway there when I was told the wind had shifted and was dumping snow on the South Shore. Four foot drifts in a matter of hours and they weren’t clearing the streets. So I turned around and came home. I had some ham sandwiches with me for any just in case. Turned out to be my not so fussy dinner.

            I’ll try not to make it a tradition.

          3. Sounds like our attempt to see Niagara Falls and Canada. Weather turned and we only got a glimpse of the Falls. Pressed on and got to the Canadian border. Realized we might not get back to Rochester (visiting a friend) and turned back. Funny when the border agent asked us how long we were in Canada. Answer – 10 minutes.

          5. I had two friends in law school from Buffalo, both of whom settled in Boston afterwards. I can’t imagine living in either place indefinitely. Everything’s relative.

    2. Did it sell at the discounted price? I suppose not, as otherwise that would have been mentioned in the story.

      1. They are also California’s fantasy car of the future. A friend of ours who works for Chevron told us that nobody in the know believes California’s pipe dream all-electric timeline.

        1. Big Oil doesn’t want EVs to succeed! Never mind the environmental and electric grid problems with EVs.

          1. Big Oil doesn’t want EVs to succeed! Never mind the environmental and electric grid problems with EVs.

            Teslas are made from crude oil. Tires, plastic interiors, wiring harnesses, bumpers, trim, etc., not to mention the fact that all of the other materials were mined with diesel powered earth movers. It’s virtue signaling on another level to suggest they are stepping away from fossil fuels.

          2. Big Oil doesn’t want EVs to succeed!

            What an odd thing for you to say. Maybe you mean they’re looking out for your better interests? They are by necessity a practical bunch.

        2. Ah, but will the gooberment back off when it becomes painfully obvious that it won’t work, or will they just double down?

        3. that nobody in the know believes California’s pipe dream all-electric timeline.
          They would have to be building/getting the permits to build gas power plants all over CA to EVs work. (NIMBY) This Arctic blast has rolling power outages all over the Carolinas. Apparently we don’t have a whole lot of spare electric power to handle a big influx of EV’s either. Plus, My ICE car buddy says everyone would need to be retrained and the equipment to fix them is expensive as he$$. Scotty Kilmer mentioned $1.0MM for the equipment for repairing EV’s

  35. The greedheads of Manitou Springs (barometer for the larger Colorado Springs housing market) are clinging to their delusional wish prices, and their shacks are sitting unsold with days on market piling up. You stick to yer guns, greedheads…surely the green shoots of Spring will burst forth in all their glory as Build Back Better and the Inflation Reduction Act usher in the Spring Miracle Revival for the housing market.

    https://www.realtor.com/realestateandhomes-search/Manitou-Springs_CO?source=web

  38. Does it seem like cryptocurrency is a solution in search of a problem?

    And does anyone have an inkling of how much money was lost on cryptocurrency investments during 2022? Not to suggest that HODLers won’t line up for more losses in 2023…

    1. Billionaires
      These Crypto Founders And Bitcoin Moguls Lost $116 Billion In 2022
      John Hyatt
      Forbes Staff
      I write about wealth, billionaires and their companies.
      Dec 24, 2022, 08:21am EST

      The embattled cryptocurrency industry and its wealthy pioneers face a moment of reckoning after the collapse of crypto exchange FTX and hedge fund Alameda Research

      In January 2022, Sam Bankman-Fried was riding high. His Bahamas-based FTX had just raised $400 million from prominent venture capitalists at a $32 billion valuation. A few weeks later, when Forbes published its annual World’s Billionaires list, SBF, as he’s known, was crypto’s second-wealthiest person, worth $24 billion.

      Now, Bankman-Fried is likely broke, and awaiting trial. Before he was arrested in the Bahamas, SBF told several media outlets his bank account was down to $100,000, and that he was “not sure” how he’ll pay his lawyers. Gary Wang, FTX’s other cofounder and the company’s former chief technology officer–who entered a plea deal with the Securities and Exchange Commission–has also seen his fortune, once estimated at $5.9 billion, wiped.

      FTX’s demise was a fitting end to a year of wealth destruction in the cryptocurrency and blockchain sector. The post-pandemic economic shock, which triggered inflation and rising interest rates, sucked capital out of the speculative crypto ecosystem. Prominent firms imploded, from the $40 billion collapse in May of algorithmic stablecoin TerraUSD, to the crypto hedge fund Three Arrows (which declared for bankruptcy in July), to the bankruptcies of interest-bearing lending businesses Voyager Digital, Celsius and BlockFi. Bitcoin, the largest cryptocurrency and an industry bellwether, is down 65% from its $69,000 peak in November 2021. Meanwhile some $2 trillion of market value has fled digital assets for safer pastures.

      As a result, 17 of crypto’s wealthiest investors and founders have collectively lost an estimated $116 billion in personal wealth since March, according to Forbes’ estimates. Fifteen of them have lost more than half their fortune over the past nine months. Ten have lost their billionaire status altogether.

      “We’re now at the breaking point in crypto where everyone will have to take a pause and say, ‘Okay, we’ve seen a ton of economic wealth destroyed in the last couple of months, we need to start taking this seriously,’” says Matt Cohen, founder of Ripple Ventures, a venture capital firm. “A lot of blockchain technologies and crypto companies built solutions for problems that didn’t need fixing, and I think we’re now going to have a hard reset.”

      The man with the most to lose is Changpeng Zhao, CEO of Binance, crypto’s largest exchange, a sprawling global network of murky subsidiaries. CZ, as he’s known, has an estimated 70% stake in Binance, which Forbes’ values at $4.5 billion–down from $65 billion in March.

      CZ helped set FTX’s demise in motion on November 6 when he tweeted that Binance would sell its remaining FTT, the native cryptocurrency of FTX. That triggered a run on FTX’s coffers as customers scrambled to withdraw their money, only to discover it was gone. FTX declared bankruptcy a few days later. Zhao prevailed over his rival, but now he must contend with the consequences. That could include the clawback in bankruptcy court of the over $2.1 billion that Binance made from selling its stake in FTX back to Bankman-Fried in the summer of 2021. (Zhao helped seed FTX in 2019.)

      CZ also faces increased skepticism of centralized exchanges, particularly Binance, and ongoing investigations of him and his company by authorities in Europe and the United States over allegations of facilitating money laundering and other financial crimes. (Binance has denied wrongdoing.) In recent weeks, CZ has sought to reassure Binance users that their crypto deposits are fully backed, commissioning accounting firm Mazars to produce “proof of reserves” reports. These statements, which do not include liabilities, were widely criticized as insufficient for providing an incomplete snapshot of a company’s financial health. Mazars has since paused its work with crypto companies, adding to the uncertainty around Binance’s finances–and the exchange’s future.

      “I don’t believe a business can persist, operating in this amorphous way, not governed by anyone or anywhere, especially when it’s run by a public individual,” says Lisa Ellis, an equity analyst at MoffettNathanson, a division of SVB Securities. Binance’s “dodgy operating model” would be a “non-starter for many investors, public or private,” adds Ellis.

      CZ stated in a webinar on December 23 that Binance has zero liabilities: “We are quite a unique organization, we don’t have loans from any other organizations,” he said. “We will prove all the FUD [fear, uncertainty and doubt] is wrong.” A spokesperson for Binance said that Forbes’ estimate of CZ’s net worth “not an important metric for CZ. What’s more important is creating meaningful use cases for crypto.”

      Barry Silbert, head of crypto conglomerate Digital Currency Group, is at the heart of crypto’s market contagion. One of DCG’s key assets, crypto lending unit Genesis Global Capital, owes creditors at least $1.8 billion, according to a source familiar with the matter (and as Reuters first reported). Additionally, DCG is saddled with debt. It assumed a $1.1 billion liability from Genesis, which stemmed from a bad loan Genesis had made to the now-bankrupt Three Arrows hedge fund. Separately, DCG owes Genesis another $575 million, which is due in May. DCG also owes $350 million to investment firm Elridge if Genesis goes under, the Financial Times reported.

      To stay afloat, Silbert will likely have to raise outside capital or dismantle his DCG crypto empire, which includes some 200 investments in crypto firms and tokens, including crypto news site CoinDesk, bitcoin mining firm Foundry and Grayscale Investments, an asset management business that offers shares in a publicly traded Bitcoin trust. Forbes estimates the value of DCG’s outstanding liabilities are greater than the fair market value of its assets in the current market environment; DCG may also struggle to offload illiquid bets. For these reasons, Forbes estimates the current value of Silbert’s 40% stake in DCG to be approximately $0. Silbert’s personal investments could not be determined. A spokesperson for DCG declined to comment.

      “They had a solvency issue at Genesis, which transformed into a liquidity issue. But those losses don’t disappear,” says Ram Ahluwalia, CEO of crypto-focused Lumida Wealth Management, who points out that Genesis creditors will have claims on DCG assets even if Genesis declares bankruptcy. “If DCG doesn’t raise fresh equity capital it will be perceived as a zombie business.”

      Cameron and Tyler Winklevoss, the bitcoin billionaires immortalized in The Social Network for their role in Facebook’s founding, are also caught in Silbert’s lending web. Gemini, the twins’ privately held crypto exchange, offered their users returns as high as 8% during the bull market through their Gemini Earn product, which outsourced the loanmaking to Genesis; now Gemini customers are owed some $900 million by Genesis. On November 16, Genesis suspended withdrawals, leaving customers outraged. Gemini Dollar, the exchange’s stablecoin and a key component of Gemini Earn’s lending program, has experienced large outflows. The Winklevii have remained quiet, apart from sparsely worded Twitter updates about Gemini forming a creditor committee.

      For Brian Armstrong, who is the CEO of publicly traded exchange Coinbase, FTX’s collapse presented an opportunity to strike. On November 8, in the chaotic hours after Binance announced its tentative takeover of FTX, Armstrong trumpeted his vision for crypto while dissing Binance’s Zhao. “Coinbase and Binance are following different approaches. We’re trying to follow a regulated, trusted approach,” Armstrong said on the Bankless podcast. “To look at it intellectually honestly, we’re choosing to follow the rules. It’s a more difficult path and sometimes your hands are tied, but I think that’s the right long-term strategy.” In a 13-tweet thread that same day, Armstrong reiterated those themes.

      Investors don’t seem to care. Coinbase’s stock is down 64% since August and more than 95% from its $100 billion IPO in April 2021, wiping out much of Armstrong’s fortune.

      Meanwhile, Coinbase’s other cofounder, Fred Ehrsam, got burned by Bankman-Fried. His crypto venture firm Paradigm invested $278 million in FTX equity. Ehrsam has not issued any public statements about the investment. Matt Huang, Ehrsam’s partner at Paradigm, said on Twitter: “We feel deep regret for having invested in a founder and company who ultimately did not align with crypto’s values and who have done enormous damage to the ecosystem,” adding that Paradigm’s equity investment in FTX “constituted a small part of our total assets” and that Paradigm had never entrusted FTX to hold any of its digital asset investments.

      Private crypto firms that raised capital in 2021 or earlier this year at high valuations are being traded at significant markdowns on secondary markets and in over-the-counter deals, says Matt Cohen of Ripple Ventures, who expects to see larger markdowns for the fourth quarter as companies prepare year-end investor reports. “Q4 audit season is going to be the time when the rubber meets the road on what funds are going to be marked down properly,” he says.

      For example, shares of NFT exchange OpenSea are trading at a 75% discount since January, when OpenSea hit a $13.3 billion valuation, according to data from private market exchanges ApeVue and CapLight. Daily trading volumes on OpenSea’s NFT exchange have been under $10 million in the last month, compared to over $200 million back in January, according to crypto site DappRadar. OpenSea’s 30-something cofounders, Devin Finzer and Alex Atallahh, are no longer billionaires.

      Nikil Viswanathan and Joe Lau, the founders of Alchemy, a crypto software firm that powers other Web3 ventures, have also departed the three-comma club, based on estimated markdowns of their stakes in Alchemy, which last raised outside capital in February at a $10.2 billion valuation. According to Viswanathan, FTX’s collapse “hurts the consumer perception of the [crypto] space. We’ve seen this play out in the Lehman Brothers and Bernie Madoff collapses in 2008 — it takes time to recover.” Alchemy, however, has continued growing throughout the bear market, says Viswanathan. “The difference is in Web3 we’ve seen developer activity accelerate during even the most tumultuous times, which points to an incredibly strong, mission-driven community of builders.”

      Jed McCaleb, cofounder of crypto firm Ripple, is believed to be the only person who made their fortune in crypto to have retained most of his fortune through the downturn. But that’s because he sold out almost entirely before the crash. McCaleb offloaded some $2.5 billion worth of XRP, Ripple’s native token, between December 2020 and July 2022, fulfilling the separation agreement he signed with Ripple’s other founders back in 2013. Today, XRP trades around $0.40 per coin, down around 50% from earlier this year, when McCaleb was dumping millions of dollars’ worth of XRP tokens each week.

      Chris Larsen, Ripple’s other founder and its chairman, has lost over $2 billion this year, due to XRP’s declining price and Forbes’ estimated discount on Ripple’s equity valuation. Ripple, which last raised capital in 2019 at a $10 billion valuation, bought back shares from an investor last year at an inflated $15 billion valuation after that investor had sued Ripple in connection with a Securities and Exchange Commission lawsuit filed against Ripple in December 2020; that case is still working its way through courts.

      Tim Draper, a venture capitalist who holds around 30,000 bitcoins, dropped from the billionaire ranks earlier this year, when Bitcoin hit $33,000. As ever though, Draper remains optimistic about bitcoin’s future, even though his oft-repeated $250,000 price target looks more fanciful by the day. “I suspect that this is the beginning of the end of the centralized tokens,” Draper tells Forbes. “If a token is centralized, you’re at the mercy of the person who controls the currency. And that was definitely the case with FTX.”
      …
      https://www.forbes.com/sites/johnhyatt/2022/12/24/these-crypto-founders-and-bitcoin-moguls-lost-116-billion-in-2022/?sh=54221e1542b2

      1. “…even though his oft-repeated $250,000 price target looks more fanciful by the day.”

        I’d like you all to know that the 2015 Honda Civic sitting in my garage also has a $250,000 price target.

      2. $116 billion ÷ 17 = $6.8 billion on average per individual crypto mogul.

        It almost seems like these losses were endemic to cryptocurrency, rather than idiosyncratic to this particular group of individuals.

    1. “The instinct to borrow under these circumstances makes perfect sense, but it’s unfortunate given that borrowing has gotten considerably more expensive due to rising interest rates, Rossman said. The average rate on a credit card is now 19.55%, according to the latest Bankrate data, the highest it’s been.”

      Mr. Banker is celebrating!

  40. 𝗦𝗰𝗮𝗿𝘀𝗱𝗮𝗹𝗲, 𝗡𝗬 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟑𝟖% 𝗬𝗢𝗬 𝗔𝘀 𝗣𝗹𝘂𝗻𝗴𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗕𝗹𝗮𝗻𝗸𝗲𝘁 𝗡𝗬𝗖 𝗦𝘂𝗯𝘂𝗿𝗯𝘀

    https://www.movoto.com/scarsdale-ny/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘕𝘠𝘊 𝘣𝘳𝘰𝘬𝘦𝘳 𝘴𝘵𝘢𝘵𝘦𝘥, “𝘚𝘦𝘭𝘭𝘦𝘳𝘴 𝘢𝘳𝘦 𝘸𝘢𝘯𝘵𝘪𝘯𝘨 𝘵𝘰 𝘴𝘦𝘭𝘭 𝘧𝘢𝘴𝘵𝘦𝘳 𝘵𝘩𝘢𝘯 𝘸𝘦 𝘤𝘢𝘯 𝘭𝘪𝘴𝘵 𝘵𝘩𝘦𝘮. 𝘉𝘶𝘺𝘦𝘳𝘴? 𝘕𝘰𝘵 𝘴𝘰 𝘮𝘶𝘤𝘩.”

    1. The Financial Times
      Capital markets
      Big investors warm to bonds after historic 2022 sell-off boosts yields
      Role of debt has failed in many portfolios, but some fund managers expect resurgence
      Traders on the floor of the New York Stock Exchange
      A broad gauge of fixed-income assets across the globe has lost 15% this year as high inflation spurred interest rate rises in developed economies
      Tommy Stubbington in London and Kate Duguid in New York
      December 22 2022

      Big investors are wading back into the bond market after this year’s historic sell-off, with fund managers favouring debt relative to other asset classes for the first time since the wake of the 2008 financial crisis.

      A broad gauge of fixed-income assets across the globe has lost 15 per cent this year as high inflation spurred interest rate rises in developed economies, by far the weakest performance in data stretching back to 1990.

      The resulting rise in yields is drawing in buyers who argue that bonds have not looked so attractive for years. The yield on the Bloomberg global aggregate index climbed as far as 4 per cent in October, up from 1.3 per cent at the start of the year and the highest level since 2008.

      Investors are overweight bonds relative to other asset classes in their portfolios for the first time since 2009, according to the December edition of Bank of America’s monthly survey of fund managers who collectively oversee more than $800bn of assets.

      But it is not only the prospect of actually receiving some income from highly rated bonds — an increasingly rare phenomenon over the past decade — that has rekindled interest in the asset class. Some fund managers argue that fixed income is set to regain its role as a portfolio ballast to riskier assets that rise as stocks fall — a typical correlation that vanished in the simultaneous sell-off of 2022.
      …

    2. The Financial Times
      Markets
      Investors rush out of equity funds to end rough year
      Weekly net outflows accelerate after upbeat run in markets
      Fed building
      Scale underscores how Fed’s plan to keep interest rates high next year even as the US economy slows has dented optimism
      George Steer December 23 2022

      Investors rounded off a bruising year of rising interest rates and high inflation by retreating from equity funds at the fastest pace in more than two decades.

      New data from EPFR show a net withdrawal of nearly $42bn from global equity funds in the week to Wednesday, with the Federal Reserve’s subsequent warning that borrowing costs are unlikely to fall until 2024 denting what little festive cheer remained.

      Analysis of the data by Barclays shows this is the biggest outflow from products including exchange traded funds in the asset class since 2000, and marks only the second example, after the same week last year, of weekly outflows exceeding $40bn, despite the 15 per cent jump in global stocks from mid-October to the start of December.

      “Widespread de-risking” before the end of the year suggested investors are “highly sceptical of the recent rally, and seem to have used it as an opportunity to sell”, said Emmanuel Cau, head of European equity strategy at Barclays. Global stocks have fallen by 20 per cent in 2022.

      Taking some profits in the run-up to the new year is not uncommon, but the scale of last week’s moves underscore how the Fed’s plan to keep interest rates high next year even as the US economy slows has dented optimism fuelled by the past few months of slowing inflation figures.
      …

    3. The Financial Times
      ETF Hub ARK Investment Management LLC
      Cathie Wood’s Ark sheds almost $50bn in assets since 2021 peak
      Flagship innovation strategy represents ‘canary in the coal mine’ for regime shift in markets, says Morningstar
      Cathie Wood has tried to identify the handful of companies that can make exponential gains by shaping the future
      Harriet Agnew, Asset Management Editor December 21 2022

      Cathie Wood’s Ark Investment Management has lost almost $50bn in assets from its stable of exchange traded funds since its 2021 peak, highlighting the scale of this year’s losses in speculative tech stocks.

      Total assets across Ark’s nine ETFs have slumped to $11.4bn from a peak of $60.3bn in February last year, according to Morningstar data. This was led by steep declines in its flagship Ark Disruptive Innovation ETF, known by its ticker ARKK, which has lost around two-thirds of its value this year and is on track for its worst annual performance.

      “Ark Innovation’s results have been horrendous this year and very disappointing for investors,” says Robby Greengold, a strategist at Morningstar, which in April downgraded the ETF from ‘neutral’ to ‘negative’.

      The steep fall highlights how growth investors such as Wood have been wrongfooted this year as the US Federal Reserve and other central banks globally called time on a decade-long period of cheap money with interest rate rises to combat inflation.

      This has prompted a sell-off in tech stocks, notably fast-growing and lossmaking companies, which are seen as especially susceptible to rises in interest rates that diminish their potential future returns. Investors have rotated in to value stocks that look cheap compared with metrics such as book value and profits.

      ARKK is the largest of a group of strategies that combine an ETF structure with an ability to pick stocks. Wood seeks to identify the handful of companies that can make exponential gains by shaping the future, covering areas ranging from including space exploration and fintech, to robotics and the genomic revolution.

      The flagship ARKK’s shares are down roughly 65 per cent this year, lingering at a five-year low and underperforming the technology-heavy Nasdaq Composite, which is down 32 per cent in the same period.

      ARKK’s losses have led a decline in its assets under management from a peak of $27.9bn in February 2021 to $6.4bn today, according to Morningstar. The drop in assets was purely driven by valuation decreases in its portfolio of investments: overall the ETF has actually hoovered up $1.4bn in new client money this year, Morninstar data show, as investors bought the dip.

      “A huge driver of the underperformance has been stylistic in nature . . . globally, growth stocks have suffered and value stocks have been more resilient,” said Greengold.
      …

      1. “Total assets across Ark’s nine ETFs have slumped to $11.4bn from a peak of $60.3bn in February last year, according to Morningstar data.”

        The dollar loss is much less interesting than the percentage loss:

        1-11.4/60.3 = 81% loss.

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