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Many Who Chose Mortgages With Cheap Money Are Now Being Forced To Sell At A Significant Loss And Potentially Face Financial Ruin

It’s Friday desk clearing time for this blogger. “In March 2020, Mark Joseph bought his first home: a spacious three-bedroom, 2.5-bedroom house in Saint Louis. He and his wife had recently had their second child. Joseph was convinced ‘someone else would swoop in and take it away if I didn’t make a strong offer,’ he says, so he paid more than the asking price. When Joseph moved in, he noticed the HVAC system, plumbing, and electrical wiring were in need of some costly repairs as he’d skipped having them inspected. Joseph has since had trouble keeping up with his mortgage payments. And despite his home value rising, it hast gone up as much as he initially anticipated.”

“‘Little did I know then that overpaying for my home meant overburdening myself with an increased mortgage payment for years to come—something I could have done without during such a tumultuous time,’ says Joseph, 32. Joseph is not alone.”

“Home sales fell each month in the second half of 2022, according to Pikes Peak Association of Realtors figures. Double-digit percentage increases in home prices during much of 2020 through mid-2022 began to slow last year and actually dropped by 2% in December — the first year-over-year decline in eight years, figures show. Also, some existing owners who bought homes a few years ago with a rock-bottom 3% mortgage can’t afford today’s loans and therefore can’t move up to a bigger home unless prices come down, said Tiffany Lachnidt, a veteran real estate agent. ‘We’re in gridlock right now, which is that the people that are in these really low rates, for them to be able to afford a bigger house, the prices are going to have to come down significantly, which obviously is going to reduce what they can sell their home for,’ Lachnidt said.”

“Local economists are saying a recent report projecting a 2008-like plunge in the Phoenix housing market is no reason to panic. Danny Court, senior economist with Scottsdale-based Elliot D. Pollack & Company, told KTAR News that Phoenix-area home prices have already fallen by over 10% from the May 2022 peak and could fall another 15% this year. That would return prices to the levels from the April or May of 2021. ‘I don’t think anyone thought they were getting a good deal in 2021 on their home,’ Court said. ‘So, really … the reason that the percentages look so drastic is because we had such a drastic run-up in prices. So, this is a small reset.'”

“During the start of the pandemic, sellers in Bakersfield were receiving multiple offers on their home well above the asking price within days of listing it. Now, it’s not nearly on that level anymore. ‘We started the market at about $370,000 median price, and we ended the year at about $370,000 median price,’ said Gary Crabtree, owner at Affiliated Appraisers. He said now buyers expect the seller to make concessions for the interest rate buy down, so they’re able to qualify for the loan. He said last month, 46 percent of all the homes sold in Bakersfield had some form of a seller concession.”

“An investor in solar power — and high-end Chicago real estate — appears braced for a cloudy day, if his 32nd-floor condo in the Palmolive building trades hands. A listing of a unit owned by an LLC controlled by Michael Ahearn at the historic building at 159 East Walton Place along the Magnificent Mile asks $5.9 million, down 7.2 percent from its last sale of $6.3 million 12 years ago. One floor below, a unit owned by Chicago-based money manager Harris Associates’ deputy chairman David Herro is poised to hit the market, after it had been listed for $10.9 million in 2020 before having its price cut down to $8.9 million and getting pulled off market without a sale.”

“On one hand that 2.5% drop in U.S. home prices marks the second-biggest home price correction of the post–World War II era. This ongoing housing correction is hardly one-size-fits-all. In particular, it’s driven by declines in overheated Western housing markets like San Francisco (down 11.9% since its 2022 peak), Seattle (down 13.5%), Phoenix (down 7.7%), and Las Vegas (7%). ‘I expect house prices to fall almost 10% peak-to-trough. I have revised the length of time it will take for house prices to reach their trough, which will likely be 2-3 years from now. Current homeowners are holding off selling, even if experiencing life events that would typically cause them to sell, hoping that mortgage rates come down and market conditions improve. But eventually they will need to sell, inventories will increase, and prices will weaken. But having said this, the current resilience in house prices suggests the adjustment in house prices will not be a serious threat to the financial system or macroeconomic problem,’ Moody’s Analytics chief economist tells Fortune.”

“The housing market just isn’t what it used to be. Residential home sales in the Vancouver area plummeted almost 52 per cent in December 2022 compared to the same month the previous year. ‘Prices are down about 10 per cent of the peak over the past six months and that’s…over the whole market,’ said Andrew Lis, REBGV’s director, economics and data analytics. Final numbers aren’t out yet for the Fraser Valley, but realtors say they’ve seen significant drops there too.”

“‘I mean it’s just down. We’re dramatically down,’ said Del Touet, owner of Royal LePage Preferred Realty in Mission. Touet said sales at his office took a big hit last year, dropping 28-30 per cent. Housing prices fell too. ‘Pricing in the Mission market is down 19 to 21 per cent overall,’ he said.”

“As Canadian homeowners grapple with the Bank of Canada’s flurry of interest rate hikes, one in three say they won’t be able to handle higher rates for long before they are forced to sell their homes. Maru executive vice-president John Wright said the Bank of Canada’s aggressive rate hiking cycle will be challenging for many, particularly those who got into the real estate market in 2020 and 2021 relying on an outlook ‘that in no way suggested rates would be taking the steep upward turn they have. ‘As a result, this quarter will likely witness many Canadians who chose variable mortgages then with cheap money, and who are now being forced to sell at a significant loss and potentially face financial ruin,’ Wright said.”

“A major crisis involving thousands of unfinished apartments across China awaits the government. The property loan market in the country is experiencing rising bad debts. They stand at 29 per cent of total loans this year. People are simply refusing to repay their mortgages and price declines in the existing-home market are now the sharpest in nearly a decade. Much capital was locked in semi-finished homes where construction was stalled for months, making unfinished flats near-worthless. Angered homebuyers refused to pay the mortgages in such a situation.”

“According to media reports, the boom encouraged speculative buying, with new homes pre-sold by developers who turned increasingly to foreign investors for funds. Annual sales of ‘dollar-denominated offshore bonds surged from $675 million in 2009 to $64.7 billion in 2020.’ The speculation ‘led to astronomical prices, with homes in boom cities such as Shenzhen becoming less affordable relative to local incomes than London or New York.'”

“Analysts estimate China’s outstanding government debts surpassed 123 trillion yuan ($18 trillion) last year, of which nearly $10 trillion is so-called ‘hidden debt’ owed by risky local government financing platforms that are backed by cities or provinces. As the financial pressure has mounted, regional governments have reportedly been slashing wages, cutting transportation services and reducing fuel subsidies in the middle of a harsh winter. The central government in Beijing has signaled it’s not coming to the rescue. ‘If it’s your baby, you should hold it yourself,’ the Ministry of Finance warned in a statement aimed at local authorities. ‘The central government won’t bail [you] out.'”

“Prestige buyers’ agents claim the market is ‘dead’ as potential buyers hold back in the hope that prices will fall and sellers wait for a lift in market activity that will deliver competitive sales. ‘Buyers are patiently waiting in the long grass like tigers waiting for their prey,’ says David Morrell, director of buyers’ agency Morrell and Koren. But some sellers, such as Judy Magub, a Brisbane historian and author, thinks now is the time to sell ‘because next year could be even worse.'”

“Average national capital prices are down about 10 per cent since their high last April, the biggest and quickest fall since CoreLogic started collating results in 1980. An increase in cash rates to 4.1 per cent by August would increase monthly repayments for a $1 million owner-occupier borrower paying principal and interest on the average variable rate by $2268 to $6937, according to RateCity. Repayments for a $2 million borrower on similar terms would increase by $4536 to $13,875, RateCity says.”

“Phoebe Blamey, a director of Clover Financial Solutions, another mortgage broker also based in Melbourne, adds: ‘There’s a lot of fear. There’s a fear that things are going to get worse.'”

“There are a number of reasons why house prices have soared since the late 1990s but chief among them has been cheap money. Cut-price fixed rates have enabled affordability to become increasingly stretched and facilitated property prices climbing further away from wages. Perhaps one day we will look back on the pandemic boom as the moment of peak madness, a time when Britain’s casino property market went on an almighty bender, fuelled by a heady cocktail of itchy lockdown feet, stamp duty holiday vibes and fixed rate mortgages below 1 per cent. How history treats the lockdown house price beano won’t be known for some time, but what is abundantly clear right now is that rising mortgage rates have well and truly broken up the party.”

“When Britain’s central bankers notched up yet another interest rate rise on Thursday, they added further woes to first-time homeowners like myself who bought nearly two years ago. With interest rates now at four per cent and my mortgage bill set to go up by hundreds every month, it’s hard not to feel a touch of buyer’s regret over my post-pandemic purchase. As we exchanged contracts it was hard to shake the feeling that we were about to fail the first test of home ownership: don’t buy at the top of the market.”

“And now, we are among the estimated one million homeowners who will this year see their fixed-term rates shoot up after the Bank of England’s action to tackle inflation. Hindsight is a wonderful thing but had we known where the inflation headwinds would take us, our decision may well have been different. I must confess that our finances have rarely been in a worse state, owing to the mounting costs of home ownership. What most people don’t often mention is the laughably poor state of Britain’s housing stock, much of which dates to the 19th century.”

“This was something that we soon learnt first-hand as our house began to show every day of its 130 years as soon as we moved in. As winter began to set in, leaks and damp patches appeared when it rained. Windows needed replacing. The boiler, of an indeterminate age, broke down in sub-zero temperatures, needing immediate repair. I still get a pang of jealousy when I meet renting friends who are still living close to the city centre, who can walk home from gigs and enjoy the undeniable buzz of London’s inner boroughs. Footloose and fancy free, they can simply move across the country with just a month’s if they are offered a new job, or simply get sick of city life. What’s more they usually don’t wake up in the middle of the night, worrying that their boiler is going to break down.”

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This Post Has 106 Comments

  1. ‘I don’t think anyone thought they were getting a good deal in 2021′

    But those were my winnahs! Danny.

  2. ‘Perhaps one day we will look back on the pandemic boom as the moment of peak madness, a time when Britain’s casino property market went on an almighty bender, fuelled by a heady cocktail of itchy lockdown feet, stamp duty holiday vibes and fixed rate mortgages below 1 per cent. How history treats the lockdown house price beano won’t be known for some time’

    (ˈbiːnəʊ ) nounWord forms: plural beanos. British slang. a celebration, party, or other enjoyable time.

  3. 𝗣𝗼𝗿𝘁𝗹𝗮𝗻𝗱, 𝗢𝗥 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟭𝟴% 𝗬𝗢𝗬 𝗔𝘀 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝘆 𝗦𝗰𝗿𝗮𝗺𝗯𝗹𝗲𝘀 𝗧𝗼 𝗖𝗼𝗻𝗰𝗲𝗮𝗹 𝗖𝗼𝗹𝗹𝗮𝗽𝘀𝗶𝗻𝗴 𝗗𝗲𝗺𝗮𝗻𝗱 𝗔𝗻𝗱 𝗣𝗹𝘂𝗻𝗴𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗔𝗰𝗿𝗼𝘀𝘀 𝗧𝗵𝗲 𝗨𝗦

    https://www.movoto.com/or/97213/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘗𝘰𝘳𝘵𝘭𝘢𝘯𝘥 𝘣𝘳𝘰𝘬𝘦𝘳 𝘴𝘵𝘢𝘵𝘦𝘥, “𝘏𝘰𝘮𝘦𝘰𝘸𝘯𝘦𝘳𝘴 𝘴𝘩𝘰𝘶𝘭𝘥 𝘴𝘭𝘢𝘮 𝘵𝘩𝘦𝘪𝘳 𝘧𝘪𝘯𝘨𝘦𝘳𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘥𝘰𝘰𝘳 𝘵𝘰 𝘥𝘦𝘵𝘳𝘢𝘤𝘵 𝘧𝘳𝘰𝘮 𝘵𝘩𝘦 𝘦𝘵𝘦𝘳𝘯𝘢𝘭 𝘧𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘱𝘢𝘪𝘯 𝘵𝘩𝘦𝘺’𝘳𝘦 𝘢𝘣𝘰𝘶𝘵 𝘵𝘰 𝘦𝘹𝘱𝘦𝘳𝘪𝘦𝘯𝘤𝘦 𝘢𝘴 𝘱𝘳𝘪𝘤𝘦𝘴 𝘤𝘰𝘯𝘵𝘪𝘯𝘶𝘦 𝘵𝘰 𝘱𝘭𝘶𝘮𝘮𝘦𝘵.”

    1. Bill Gates Invested In Artificial Eggs Before Mysterious Egg Shortage and Price Hike |January 30, 2023
      https://newspunch.com/bill-gates-invested-in-artificial-eggs-before-mysterious-egg-shortage-and-price-hike/

      Prescribed for Covid19 positive patients, here is why eggs are so good for your immunity
      TIMESOFINDIA.COM | Last updated on -Apr 17, 2020
      https://timesofindia.indiatimes.com/life-style/health-fitness/diet/prescribed-for-covid19-positive-patients-here-is-why-eggs-are-so-good-for-your-immunity/photostory/75183540.cms

  5. ‘Much capital was locked in semi-finished homes where construction was stalled for months, making unfinished flats near-worthless’

    Wa?

    ‘the boom encouraged speculative buying, with new homes pre-sold by developers who turned increasingly to foreign investors for funds. Annual sales of ‘dollar-denominated offshore bonds surged from $675 million in 2009 to $64.7 billion in 2020’

    That’s all gone.

  6. ‘would increase monthly repayments for a $1 million owner-occupier borrower paying principal and interest on the average variable rate by $2268 to $6937, according to RateCity. Repayments for a $2 million borrower on similar terms would increase by $4536 to $13,875’

    It’ll probably be fine.

  7. ‘Double-digit percentage increases in home prices during much of 2020 through mid-2022 began to slow last year and actually dropped by 2% in December’

    At least two more sh$tholes roll over YOY: Bakersfield and Colorado Springs.

    ‘We’re in gridlock right now, which is that the people that are in these really low rates, for them to be able to afford a bigger house, the prices are going to have to come down significantly, which obviously is going to reduce what they can sell their home for’

    That’s a spicy pickle there Tiffany.

  8. “‘Little did I know then that overpaying for my home meant overburdening myself with an increased mortgage payment for years to come—something I could have done without during such a tumultuous time,’ says Joseph, 32. Joseph is not alone.”

    Stupid should hurt, Joseph. Otherwise fools like you would never learn.

  9. “Local economists are saying a recent report projecting a 2008-like plunge in the Phoenix housing market is no reason to panic.

    Those quack “economists” have their paychecks signed by the REIC. Remember, he who panics first, panics best.

  11. In particular, it’s driven by declines in overheated Western housing markets like San Francisco (down 11.9% since its 2022 peak), Seattle (down 13.5%), Phoenix (down 7.7%), and Las Vegas (7%).

    Is that a lot?

  12. “When Joseph moved in, he noticed the HVAC system, plumbing, and electrical wiring were in need of some costly repairs as he’d skipped having them inspected”

    Watching a few YouTube videos and some Harbor Freight tools are all you need to fix all that.

  13. Maru executive vice-president John Wright said the Bank of Canada’s aggressive rate hiking cycle will be challenging for many, particularly those who got into the real estate market in 2020 and 2021 relying on an outlook ‘that in no way suggested rates would be taking the steep upward turn they have.

    I fear that Canadian FBs who made wrong-way bets on housing could end up turning on Lil’ Fidel & their WEF puppet regime.

  14. PAUL BOIS
    2 Feb 20233

    The U.S. military is currently monitoring a suspected Chinese spy balloon that has been hovering for several days over the northern United States.

    President Biden was reportedly briefed on the matter and advised not to order the balloon be shot down.

    https://youtu.be/k8qjxT1iIAM

    3. President Biden was reportedly briefed on the matter and advised not to order the balloon be shot down.

      Is there anything preventing a governor from ordering the National Air Guard from shooting it down?

    4. “President XYZ was reportedly briefed on the matter’

      This has to be the most useless sentence in the entire world.

  15. A reader sent these in:

    “35% of Canadian homeowners say they can handle the current benchmark rate of 4.5% for an average of <10 months before they would be forced to sell/vacate their homes. "

    If even a small fraction of those sell, Canadian housing is going to have a bad time

    https://twitter.com/AvidCommentator/status/1621305236588748800

    I’ve been doing this 45 years and between the pandemic, the war and the crazy policy response in US and worldwide, this is the hardest environment I have ever encountered to try and have any confidence in a forecast 6 to 12 months ahead. — Druckenmiller

    https://twitter.com/WifeyAlpha/status/1621239238460063749

    One person’s “worn-out” is another’s goldmine!

    https://twitter.com/ShlomoChopp/status/1621296898207260673

  16. “Phoebe Blamey, a director of Clover Financial Solutions, another mortgage broker also based in Melbourne, adds: ‘There’s a lot of fear. There’s a fear that things are going to get worse.’”

    Fear? What is this fear you speak of? I’m calm as a cucumber in the comfy serenity of my reasonably-priced rental shack.

    1. He’s paid $4 million a year. Knowing that he will never make that kind of money again might make him testy.

      1. He checks in all the right boxes. I doubt he will ever have a problem finding a high-paying job in corporate amerikka.

        1. Sad thing is, I don’t watch TV…I don’t watch CNN…haven’t seen a single second of his tv show, but I still know who this guys is.

  19. “‘Little did I know then that overpaying for my home meant overburdening myself with an increased mortgage payment for years to come—something I could have done without during such a tumultuous time,’ says Joseph, 32. Joseph is not alone.”

    School should’ve taught you basic finance skills rather than telling you that boys can be girls.

    1. basic finance skills

      Wasn’t taught in school, unless you consider Home Economics class (for the girls). His kids will probably be well home schooled on the subject.

      1. “Wasn’t taught in school”

        That’s what I meant. I guess I should have written “YOUR school should have taught you basic finance skills rather than teaching that boys can be girls.”

        “His kids will probably be well home schooled on the subject.”

        I hope they’re quick learners. Something tells me he will be engaged in some jingle mail in the near future, after which point speaking about this period will be verboten.

    2. “Joseph, founder of Parental Queries, a website devoted to pregnancy and child rearing, ”

      Wait, is this his full-time job? Good thing he didn’t get a 2006-style I/O or he’d be rearing his child from the sidewalk.

    3. Girls will be boys and boys will be girls
      It’s a mixed up, muddled up, shook up world, except for Lola
      La-la-la-la Lola”

      kinks lola

    1. The Financial Times
      Cryptofinance Cryptocurrencies
      Crypto is back with $300bn frenzy
      Bitcoin puts post-FTX collapse behind it with 40% rise so far in 2023
      Crypto assets are rising again after last year’s crash, with even Solana rising 140% this year
      Scott Chipolina in London
      3 hours ago

      Hello and welcome to latest edition of the FT’s Cryptofinance newsletter. This week, we’re taking a look at crypto’s January market recovery.

      With bankruptcies, job cuts and arrests packed into the first few weeks of the year, the crypto industry looked set to pick up right where it left off after a disastrous 2022. But it’s not all doom and gloom for the tumultuous world of digital assets.

      In just a month and change, roughly $300bn has been tacked on to the market value of crypto assets, sending it back above $1tn. Bitcoin has surged more than 40 per cent to roughly $23,000, rebounding from the drop to $16,000 per token, which marred the flagship cryptocurrency in the wake of FTX’s bankruptcy last year.

      Bitcoin’s chief rival token ether is also firmly in the green, while Solana — the beleaguered “ethereum killer” that all but died last year — has registered an eye-popping 140 per cent increase in value so far in 2023.

      CryptoCompare figures also show the total assets under management for digital asset investment products increased almost 37 per cent in January to more than $26bn, the highest since May 2022 — the month when crypto’s unprecedented crisis of confidence began. Grayscale’s GBTC — an investment trust designed to track the price of bitcoin — last month notched up $38.9mn in average daily volume, a 23 per cent rise from December, according to the crypto data provider.

      The recent digital asset surge hasn’t taken place in a vacuum, but amid a wider rally for other speculative assets.

      So-called meme stocks GameStop and AMC Entertainment Holdings are up roughly 20 and 30 per cent so far this year, and investor and bitcoin evangelist Cathie Wood’s ARKK exchange traded fund has posted over 25 per cent gains, buoyed by HODLing Coinbase shares, which in turn have more than doubled in 2023.

      Jim Bianco, president and co-founder of macro research firm Bianco Research, texted me to say we’re “back to 2021”, referring to that year’s red-hot bull run fuelled in large part by retail excitement and a fear of missing the crypto boat.

      “Log back into your Reddit account and YOLO into meme stocks,” he said.
      …

    2. The Financial Times
      US employment
      US unexpectedly adds 517,000 jobs in January
      Unemployment rate slides to historic low of 3.4% in sign of labour market resilience
      A man walks past a “Hiring” sign at a McDonald’s restaurant in Garden Grove, California
      The jobs report comes as the Federal Reserve debates how much more it needs to tighten monetary policy to bring inflation back down to its longstanding 2% target
      Colby Smith in Washington and Kate Duguid in New York 2 hours ago

      US jobs growth unexpectedly rebounded in January, as the economy continued to perform strongly despite the Federal Reserve’s efforts to damp down demand.

      Employers in the world’s largest economy added 517,000 jobs in the first month of the year, nearly double December’s figure, which was revised up to 260,000. Economists had expected 185,000 positions to be added.

      The unemployment rate fell to a historic low of 3.4 per cent. Average hourly earnings edged up another 0.3 per cent since December, translating to a 4.4 per cent annual pace.

      US government debt extended a sell-off following the release of the data by the Bureau of Labor Statistics. The two-year Treasury yield, which tends to move with interest rate expectations, was up 0.14 percentage points to 4.23 per cent — a big move that took yields back near highs hit earlier this week. The 10-year yield, which moves with economic growth expectations, rose 0.1 percentage point to 3.5 per cent, also within this week’s trading range.
      …

    3. The Wall Street Journal
      Economy
      Beneath the Surface, Fed Sees No Letup in Inflation Pressure
      While acknowledging much of recent inflation proved transitory, Fed sees no reason to pause rate increases in wage, labor data
      Federal Reserve Chair Jerome Powell said Wednesday the central bank will raise interest rates a quarter-percentage-point. Powell said more increases will likely be needed to continue lowering inflation. Photo: Kevin Dietsch/Getty Images
      By Greg Ip
      Feb. 1, 2023 6:18 pm ET

      Recent readings on wages and prices have markets increasingly optimistic inflation can be brought down without a recession.

      The Federal Reserve would love to agree, but it can’t. Not yet, anyway. In its quarter-percentage-point rate increase Wednesday, the accompanying statement and Chair Jerome Powell‘s press conference, the central bank made it clear its views had not changed. Inflation is still too high and won’t return to its 2% target without higher interest rates and a weaker labor market.
      …

    4. Any thoughts on why Mr Market was so glum today? I thought with the Fed about to reduce interest rates any day now, happy days were here again.

      1. Bloomberg
        Newsletter
        Wall Street’s Bears Are Coming Out to Play

        Expect choppy markets ahead, say the fund managers who profit from them.
        Jim Chanos.

        Jim Chanos.
        Photographer: Misha Friedman/Bloomberg
        By Sonali Basak
        February 3, 2023 at 10:03 AM PST
        Hi, this is Sonali! If we haven’t met before, I’m Bloomberg Television’s global finance correspondent. If you’ve followed me on LinkedIn or Twitter, you may have seen everything from investment banking chatter to the latest breaking news on the crypto crash. I’m excited to write for you now every Friday for Bw Daily. You can sign up for the newsletter here, and send me an email with your feedback.

        The S&P 500 swung higher for the second straight week, and the US unemployment rate has hit a 53-year low. But some of the most prominent hedge fund managers are sounding the alarm: More than a decade of easy money could lead to an unruly unwind.

        “Anybody who’s basically under the age of 40 hasn’t really been investing professionally in a bear market,” Jim Chanos, the short seller and founder of Kynikos Associates, told me this week on the sidelines of the iConnections Global Alts 2023 conference in Miami.

        Chanos says the unwinding of fraudulent behavior in markets tends to lag behind financial cycles, and so investors are likely to get more discerning about lending and investing with clients whose businesses are suspect or incomplete. Yet his main concern ahead is that companies are minting profit margins 50% higher than what’s normal—and that market prices are still too lofty.

        Paul Singer, in a private event hosted by the Managed Funds Association in Miami, told investors he expects disorder as the markets unravel. He thinks valuations are higher than they were during the dot-com bubble or even in 1929.

        Nassim Taleb, author of the The Black Swan and adviser to tail-risk hedge fund firm Universa Investments, told me in an interview this week that tumors are pervasive across the market, including in crypto, real estate and cash-burning companies that are still limping along. “Things won’t be fine for a while,” he said. “We have the weirdest valuations in history.”

        A day earlier, Universa’s Mark Spitznagel went so far as to call the market a “tinderbox-timebomb” that may wreak havoc that rivals the Great Depression given how long and how much the Federal Reserve was propping it up.

        There’s a strange air of excitement when it comes to many of these money managers. Often, these funds profit when markets get choppier or even go south. (Singer’s Elliott Investment Management just raised $13 billion last year, the most in its history, in anticipation of new opportunities.) We could see a big resurgence of the activist investors, tail-risk funds and short sellers that had become extraordinarily unpopular in the pandemic-fueled meme-stock craze.
        …
        https://www.bloomberg.com/news/newsletters/2023-02-03/wall-street-bears-paul-singer-nassim-taleb-jim-chanos-sound-warning

  23. Here’s a guy who will blow through his multi million $ paychecks and need reparations soon.

    Video of Oklahoma’s Joe Mixon punching girl in face released

    2014

    https://youtu.be/nm1IYtVuRXk

    Arrest Warrant Issued for Bengals Running Back Joe Mixon for Allegedly Pointing Gun at Woman

    PAUL BOIS
    2 Feb 2023

    An arrest warrant has been issued for Cincinnati Bengals quarterback Joe Mixon after he allegedly pointed a gun at a woman last month.

    The arrest warrant from police says that Mixon pulled a gun on a woman in downtown Cincinnati in late January, at which point he said, “You should be popped in the face, I should shoot you, the police [can’t] get me.”

    “The warrant was issued for one count of aggravated menacing, a charge in Ohio that states a person shall not knowingly ’cause another to believe that the offender will cause serious physical harm to the person or property of the other person, the other person’s unborn, or a member of the other person’s immediate family,’” reported Yahoo Sports.

    In 2014, video captured Mixon punching a woman in the head at a restaurant, breaking several bones in her face just as he began his freshman season at Oklahoma. As SB Nation reported at the time:

    Mixon was arrested and charged for punching a woman in the face at a cafe, breaking four bones in her face, in July 2014, before his freshman season with the Sooners began. He entered an Alford plea, maintaining his innocence but recognizing the evidence against him, and received a deferred sentence. He was also suspended for his entire freshman season, but he was allowed to remain in school.

    Cassy Arsenault
    @CassyArsenault
    ·
    Follow
    BREAKING: there is a warrant for Joe Mixon of the @bengals arrest. He allegedly pointed a gun at a woman and said “you should be popped in the face. I should shoot you now. The police can’ get me”. @Local12

    https://twitter.com/CassyArsenault/status/1621301009652793344?s=20&t=VdVrTFl5SuUwEOBGZbHkUA

    Kelsey Conway
    @KelseyLConway
    ·
    This just in: When I reached out to #Bengals RB Joe Mixon for a comment on the warrant, his mom answered and said:

    “Did he do it, no he didn’t.”

    Referenced the term “money hungry” and said “you guys know Joe” and then hung up.

    @Enquirer
    8:16 PM · Feb 2, 2023

    https://twitter.com/KelseyLConway/status/1621316780810436608?s=20&t=m8SbaxYf5lqVrNEvcj2PGQ

    1. I wonder how many of these “girls” are pole dancers he was paying for, as opposed to women with actual careers?

  25. He and his wife had recently had their second child.

    Any bets on when the third one will arrive? Keep digging the hole deeper Mark.

  26. I have a friend who is really down. He says everything he touches lately just turns to Biden.

  27. “Local economists are saying a recent report projecting a 2008-like plunge in the Phoenix housing market is no reason to panic.”

    “2008 will never happen again”
    “Buy now or be priced out forever”
    “We are getting back to normal”
    “There has been a shift”
    “It won’t be like 2008”
    “Okay, it will be like 2008, but don’t worry about it” – You are here
    “Nobody could have seen this coming, give us a bailout”
    “Holy —- we’re f—-ed”
    “2024 will never happen again”

    1. “Local economists are saying a recent report projecting a 2008-like plunge in the Phoenix housing market is no reason to panic.”

      They are correct…so long as you didn’t buy a home in Phoenix during the parabolic blowout phase of the pandemic mania.

      1. “…home prices have already fallen by over 10% from the May 2022 peak and could fall another 15% this year.”

        Wouldn’t a 25% plunge over less than two years actually exceed what happened in 2008?

        “That would return prices to the levels from the April or May of 2021. ‘I don’t think anyone thought they were getting a good deal in 2021 on their home,’ Court said. ‘So, really … the reason that the percentages look so drastic is because we had such a drastic run-up in prices. So, this is a small reset.’”

        What these ‘experts’ seem to miss is that for prices to go crazy high in the pandemic, a lot of real estate investors had to go crazy with low interest loans in order to overpay at pandemic era prices. These highly leveraged buyers are now sitting on underwater loans which they cannot repay by selling at today’s prices.

        They got stucco.

    1. Of course not. Then again we don’t believe in the official inflation rate. Nor we do believe in Fakebook’s MAU or DAU numbers…so goes for # of youtube clicks. Somehow every aspect of society openly lies, but life still goes on.

    2. These stats don’t seem to pass the smoke test.

      If 500K is anywhere accurate, they must of been McJobs.

      My company (Fortune 50) has implemented a freeze (except for mission critical) on all engineering positions since last summer.

      1. Same where I work. Hiring has been frozen for months. Getting an offer out the door requires the CEO to approve it, in a company with 140K employees.

        1. And, factor in all the recent layoffs at Google, Twitter, Microsoft, etc.

          Unless all these new hires have a very solid 6 figure+ salary plus benefits, there is no way to currently afford a home.

          1. The tech layoffs won’t show up for a couple months. Those “laid off” employees at Twitter are technically still employed. Companies pay two months severance to comply with the WARN Act, and Elon is giving the Twitter guys a third month to be nice. I think they get cut off in the beginning of March. I guess the other laid off techs will get at least two months too.

          2. “The tech layoffs won’t show up for a couple months.”

            Some of their “hot hatches” are already up for sale, but no deep discounts, so they likely still owe as much or more than the KBB value.

          3. so they likely still owe as much or more than the KBB value

            They didn’t use their RSU’s to pay cash?

    4. The number is fake because it’s seasonally adjusted to make up for the seasonal layoffs that happen this time of year. They smooth out the up’s and downs with seasonal adjustments. So there were actually a lot of jobs lost, not all of which were seasonally but they get smoothed out too, so thats the reason for the discrepancy. At least thats my layman’s understanding.

  30. This is an article advocating for medical genocide.

    The Atlantic — AMERICA IS TOO DEPRESSED ABOUT VACCINES (2/3/2023):

    “Vaccinologists, pediatricians, and public-health experts routinely warn that confidence is wavering for every kind of immunization, and worry that it may collapse in years to come.

    In other words, America is mired in a paradoxical and pessimistic moment. “We’ve just had a national vaccination campaign that has exceeded almost all previous efforts in a dramatic fashion,” says Noel Brewer, a psychologist at the University of North Carolina who has been studying decision making about vaccines for more than 20 years, “and people are talking about vaccination as if there’s something fundamentally wrong.”

    It’s more than talk. Americans are arguing, Americans are worrying, Americans are obsessing over vaccines; and that fixation has produced its own, pathological anxiety. To fret about the state of public trust is rational: When vaccine adherence wobbles, lives are put in peril; in the midst of a pandemic, the mortal risk is even greater. More than 60 million Americans haven’t gotten a single COVID shot …

    No crunching of the numbers can excuse the spread of vaccine misinformation, or suggest that those who peddle it are anything but a hateful scourge on individuals and a threat to public health.”

    tps://archive.is/1i2Be

    A hateful scourge? That’s a crown I’ll wear proudly.

    Covid vaccines are poison.

    1. Trust in big pharma is lower than the bottom of a submarine.

      60 million never got the jab? I’ll bet it’s a lot more than that.

      And yeah, I skipped the flu shot this year. Why? Because I don’t trust them anymore. I wouldn’t put it past them to include a little something extra in the flu shot going forward.

      And this isn’t my fault, it’s their fault. They tried to force me to have an experimental substance injected into my body. Trust is hard to earn, but easy to lose. And their b!tching about it won’t make me or millions of others trust them again.

      1. Last I heard, 85% of Americans raised their middle finger to the bipolar injection. That’s a lot of no more Simon Says.

        1. Come to think of it, I haven’t heard as many radio ads for the bivalent injection lately. I guess they gave up, especially now that most of the country is turning “green” (low cases/hospitalizations) again.

  31. “‘Little did I know then that overpaying for my home meant overburdening myself with an increased mortgage payment for years to come—something I could have done without during such a tumultuous time,’ says Joseph, 32. Joseph is not alone.”

    Why do people like to overpay for housing?

  32. Large Chinese reconnaissance balloon spotted over the US, officials say
    The vessel is described as the size of three buses.

    ByMartha Raddatz, Luis Martinez, and Karson Yiu
    February 3, 2023, 9:23 AM

    The Biden Administration has the perfect person already on board to handle a crisis like this…

    https://youtu.be/-K7sJs9IPjY?t=81

      1. Why is it loitering at 60,000-ft in the stratosphere where 93% of the atmosphere is lower, the air pressure is 7% of sea level, the air density is 9.5% of sea level, the average temperature is -75 F and it could easily be downed and recovered by air force JSOC teams?

        1. Because it can.

          Probably a party balloon or a school project. USAF knows what it is and is ignoring it. Our press is jumping on the “Be Afraid” and many are buying it. The tag says “If you find this…”

  33. “According to media reports, the boom encouraged speculative buying, with new homes pre-sold by developers who turned increasingly to foreign investors for funds. Annual sales of ‘dollar-denominated offshore bonds surged from $675 million in 2009 to $64.7 billion in 2020.’”

    What is that growth as a multiple of the initial level?

    64,700 / 675 = 96 times original

    In percentage terms?

    64,700 / 675 – 1 = 9,485%.

    Is that alot?

  35. Yahoo
    Fortune
    Warren Buffett’s right-hand man Charlie Munger, who once called crypto ‘rat poison,’ says we should follow China’s lead and ban cryptocurrencies altogether
    Will Daniel
    Thu, February 2, 2023 at 10:11 AM PST·3 min read

    Charlie Munger is no fan of crypto. As vice chairman of the nearly $700 billion megaconglomerate Berkshire Hathaway, Munger has helped Warren Buffett make billions for investors since 1978 using a strict fundamentals-based approach to acquiring “high-quality businesses.”

    And he believes cryptocurrencies represent the opposite strategy, arguing that the entire industry is “partly fraud and partly delusion.” In 2021, Munger famously called the world’s leading digital asset, Bitcoin, “rat poison,” and likened other cryptocurrencies to a type of “venereal disease.” Now he says the federal government should step in and ban the entire industry.

    “A cryptocurrency is not a currency, not a commodity, and not a security,” Munger argued in a Wednesday Wall Street Journal op-ed. “Instead, it’s a gambling contract with a nearly 100% edge for the house… Obviously the U.S. should now enact a new federal law that prevents this from happening.”
    …
    https://finance.yahoo.com/news/warren-buffett-hand-man-charlie-181131653.html

    1. Yahoo
      Fortune
      Silvergate at center of DOJ fraud investigation for hosting FTX and Alameda accounts
      Ben Weiss
      Fri, February 3, 2023 at 7:44 AM PST·3 min read
      In this article:
      David Dee Delgado—Getty Images

      The criminal investigation that has enveloped the now-bankrupt cryptocurrency exchange FTX continues to spread its scope. Prosecutors in the Justice Department are reportedly investigating Silvergate, a crypto-focused bank, for hosting accounts connected to FTX’s disgraced founder, Sam Bankman-Fried, according to Bloomberg.

      The probe is in its initial stages and hasn’t led to any criminal accusations, sources familiar with the matter told Bloomberg. The prosecutor’s inquiry also encompasses other businesses linked to Bankman-Fried beyond FTX, including Alameda Research.

      Representatives for Silvergate and the Justice Department declined to comment when reached by Fortune. After reports of the Justice Department’s investigation were published Thursday afternoon, Silvergate’s stock price crashed 28% in after-hours trading.
      …
      https://finance.yahoo.com/news/silvergate-center-doj-fraud-investigation-154405968.html

    2. Sam Bankman-Fried’s Emergent Fidelity Technologies Files for Bankruptcy
      Emergent is owner of 56 million shares of online brokerage Robinhood.
      By Nikhilesh De
      AccessTimeIcon Feb 3, 2023 at 2:16 p.m. PST
      Updated Feb 3, 2023 at 2:23 p.m. PST
      Sam Bankman-Fried sticking his tongue out while at Crypto Bahamas
      (Danny Nelson/CoinDesk)
      Consensus 2023 Logo
      Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
      Secure Your Seat

      Emergent Fidelity Technologies, a firm co-founded by FTX founder Sam Bankman-Fried and former executive Gary Wang, filed for Chapter 11 bankruptcy protection late Friday.

      Emergent Fidelity was the company which held 56 million shares of Robinhood Markets (HOOD) stock, an asset that quickly became a subject of key interest among several companies for the value it could bring FTX creditors. The shares were also pledged as collateral to bankrupt crypto lender BlockFi, which placed its own claim last year.

      Bankman-Fried has argued he should retain control of the shares. Nevertheless, federal officials moved to seize control of the assets in January.

      Those 56 million shares of Robinhood are worth more than $600 million at today’s closing price. Bloomberg reported the only other asset owned by Emergent Fidelity was $20.7 million in cash.

      Bankman-Fried is the owner of 90% of Emergent Fidelity, and with FTX co-founder Wang owning the remaining 10%.
      …
      https://www.coindesk.com/business/2023/02/03/sam-bankman-frieds-emergent-fidelity-technologies-files-for-bankruptcy/

      2. Black dude killed by black cops leading to recent riots. That’s the extent of my understanding.

  37. ‘he noticed the HVAC system, plumbing, and electrical wiring were in need of some costly repairs as he’d skipped having them inspected. Joseph has since had trouble keeping up with his mortgage payments’

    How do you get a loan without an inspection?

  38. I tried to find out (via DuckDuckGo) what the estimated military casualties/deaths both Russia and Ukraine for 2022. No matter how I searched the results were all about touting Russian casualties with wildly different estimates; nothing anywhere about total Ukraine military casualties/deaths. I restricted time for articles in last month. Many articles about Ukrainian civilian casualties. Bit of censorship and propaganda I think.

    1. I am neither pro-Putin nor pro-Russia but I do not believe the media nor US Government is being factual.

    2. The video clips with background music tracks glorifying Russian soldiers being engaged by Ukrainians should be removed. They’re really the epitome of low ethical and moral standards.

    1. The Financial Times
      The Big Read Adani Group
      The Adani affair: the fallout for Modi’s India
      Allegations of stock manipulation at one of the country’s largest conglomerates presents a challenge to its institutions
      Indian billionaire Gautam Adani and Prime Minister Narendra Modi
      John Reed and Benjamin Parkin in New Delhi 7 hours ago

      On Tuesday the Indian billionaire Gautam Adani was shaking hands with Israeli prime minister Benjamin Netanyahu to mark what should have been a proud moment for his conglomerate.

      Adani’s ports division completed a deal to take over Haifa’s port for $1.2bn, a landmark foreign investment for Israel and an emblem of a rising and globally expansive Indian business with solid enough credentials to run critical infrastructure in a deeply security-conscious rich country.

      But back in India, on the Bombay Stock Exchange and in Adani’s headquarters of Ahmedabad, the financial future of his eponymous group was on the line.

      Hindenburg Research, a New York-based short seller, had the previous week published a bombshell report accusing the 60-year-old’s businesses of engaging in “brazen stock manipulation and accounting fraud”.

      The Adani group rejects those allegations absolutely. But even as he was preparing to sign the Haifa deal, a $2.4bn share offer by his flagship Adani Enterprises was doing little to stem the collapse in his companies’ share prices.

      By Friday, the tycoon’s listed companies had lost more than $100bn of their value and the share sale was off. Adani, once the world’s third-richest man, had fallen to number 17 on Forbes’ list of billionaires.

      Apart from the future of the billionaire and his business empire, something bigger is on the line: India’s probity in corporate governance and pursuit of a development model in which the state has entrusted a few ultra-rich men with running India’s infrastructure and pioneering investments abroad.
      Line chart of Infrastructure investment* as a % of GDP showing India has struggled to match Chinese levels of investment

      The Adani Group acknowledged as much when it portrayed the short seller report as “not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India”.
      …

    1. Mortgage rates are falling back near 6%, reopening the housing market for 3 million home buyers, according to Freddie Mac
      Jennifer Sor
      Feb 3, 2023, 2:12 PM

      – Mortgage rates have eased closer to 6%, a sign the housing market is cooling off.
      – Lower rates open the market to 3 million borrowers who’d been priced out, according to Freddie Mac.
      – Markets expect the Fed to stop hiking rates, which could help mortgages become more affordable.
      …
      https://markets.businessinsider.com/news/commodities/us-housing-market-mortgage-rates-fall-fed-interest-rates-inflation-2023-2

  41. Gavin Newsom’s Wife Earned $1.4 Million Charging Schools to Screen Her Documentaries

    PAUL BOIS
    3 Feb 2023

    Jennifer Siebold Newsom, who boasts a net worth of $18 to $22 million in unison with her husband, California Gov. Gavin Newsom (D), earned roughly $1.4 million charging public schools around the country to screen her documentaries.

    The watchdog group Open the Books reported on their findings, which showed Newsom and her nonprofit, The Representation Project, raised up to $1,483,001 in film licensing fees since 2012.

    Per Fox News:

    Siebel Newsom’s non-profit released four films, for which she is credited as a writer and director, advocating for “gender justice.” Siebel Newsom’s “gender identity” films are produced through her for-profit operation, Girls Club Entertainment, which is then licensed by the nonprofit The Representation Project, to public schools. The Representation Project claims that they fight “sexism through films education, research and activism.”

    https://www.breitbart.com/entertainment/2023/02/03/gavin-newsoms-wife-earned-1-4-million-charging-schools-to-screen-her-documentaries/

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