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If You Don’t Want To Get Stuck, Those Who Have Invested At The Top Should Boldly Cut Their Losses As Quickly As Possible

It’s Friday desk clearing time for this blogger. “Today iBuyers are the ones getting shafted. Laurie Tayrien and her husband bought a home in Phoenix for $485,000 in November. Only five months earlier, Opendoor had purchased it for $646,800. That’s a 25% loss for the iBuyer.”

“The housing market in Georgetown and across Central Texas took a turn to finish out the year as the cost of homes dropped and for-sale signs sat in the ground longer. ‘There were five homes and 400 people out there shopping for them,’ said Michael Howard, branch manager at Main Street Mortgage in Georgetown. ‘Now we’ve got the opposite, where there are five buyers out there looking and 500 homes to choose from.'”

“Purchases of homes by investors in the U.S. fell by 45.8% year over year in the fourth quarter, according to Redfin. The last time investor purchases dropped so significantly was in 2008. ‘A lot of investors are on hold because they still see home prices declining,’ said Elena Fleck, a Redfin agent based in Palm Beach, Fla.”

“Ponder the second half of home pricing in the last six months of 2022 where 90% of 186 U.S. housing markets had price drops, according to my trusty spreadsheet’s review of stats from the National Association of Realtors. In the second half of the year, the national median sales price was off 8.2%, dropping to $379,000. The worst performance nationwide was a 21.9% drop in the formerly red-hot market of Austin, Texas. San Francisco was next (down 20.6%), then Boulder, Colo. (off 18.6%), San Jose (down 17%) and Spokane, Wash., (off 15%).”

“In fact, 13% of these 186 markets had double-digit price drops. Think of the folks who bought early in 2022 in these markets. They’ve lost significant equity in their new home. But the home sales industry is often shy about discussing price cuts. That’s too bad. More widespread admissions that prices are down would likely increase demand from folks who think ownership dreams are hopeless. Also, an increased acknowledgment of recent depreciation might get potential sellers to be more realistic about pricing their sought-after homes. Sadly, I fear, too much emphasis is put on ownership’s investment potential. So, talking up price cuts might scare away folks looking at a home’s wealth-creation prospects.”

“Whatcom County‘s median home sale price fluctuated wildly throughout January, with median home sale prices changing by almost $150,000 in a two-week span. December’s median home sale price was $544,950 on Dec. 19 and skyrocketed to $682,000 in just two weeks on Jan. 2, according to Redfin. Whatcom’s median home sale prices dropped back down in January to $515,000 on Jan. 23., a $167,000 drop in three weeks. Across Washington state, home prices have decreased by 12.8% between June and December, as December reached a median home value price of $552,200, according to RedFin.”

“The median sales price for Maui County single-family homes in January was $1.2 million, a 0.4% increase from the same month last year, according to the Realtors Association of Maui. Meanwhile, Oʻahu’s median sales price decreased nearly 8% to $970,000, Kauaʻi dropped about 14% to $809,500. Maui County median sales prices for condominiums last month decreased nearly 8% to $657,500. O’ahu fell about 3% to $495,000.”

“Fernanda Santos and Gustavo Pereira of London, Ont., knew the housing market was wildly overpriced in March 2022, but felt pressured to become owners, so they bought a three-bedroom home in the east end for $730,000. ‘Everybody said to us you should buy as soon as you can — doesn’t matter if you like it or not, just buy and get into the market,’ Santos, 34, recalled. Today, they’re sitting on a mortgage with a variable rate (currently at 5.6 per cent) on a house that has fallen in value by an estimated $150,000, and paying $4,400 a month — $1,600 more than they had anticipated. ‘That’s not what we dreamed about,’ said Santos. ‘It’s just been a nightmare for us.'”

“As well, housing prices have dropped considerably since the couple bought their home. In fact, sales in January were the lowest for that month since 2009, down 37.1 per cent compared with a year ago, the Canadian Real Estate Association said this week. On the weekends, the couple’s work isn’t done. Both drive for UberEats and Instacart in an effort to offset their bills. ‘When you have like 60 per cent of your full income going toward your mortgage, you pretty much don’t have anything left, plus we have to eat, right?’ said Santos.”

“‘At present, the market has yet to reach its pricing bottom, but it is forming one, which is likely to appear in 2023,’ said Nguyen Thi Bich Ngoc, general director of Sen Vang Group.This year cash flow has been an issue for the real estate market, as many companies are relying mainly on borrowed money, and the market has yet to witness any major merger and acquisition deals. According to Giap Van Kiem, chairman of AVLand Group, when the market entered a difficult period, many investors hit troubles due to the recent land fever in many areas. At this stage, they need to be brave enough to cut losses to protect capital and find profitable opportunities, instead of trying to wait for prices to increase.”

“While land plots are of interest to many, high profits often come with great risks. Therefore, investors need to determine the market sentiment in advance and boldly cut losses to minimise the damages, according to Kiem. ‘If you don’t want to get stuck, you have to reduce the burden and incur fewer losses. Therefore, those who have invested at the top of the cycle should cut their losses as quickly as possible to find new opportunities,’ Kiem stressed.”

“In its marketing materials, Tonu Civil Construction described owner/director Sullivan Halaifonua as its secret weapon. ‘Although he established Tonu Civil only two years ago to fulfil a dream, Sullivan has been in the industry all his adult life,’ one article said. ‘His ability to develop and maintain strong personal and working relationships with clients is legendary. He believes clients should be able to have what they want at a reasonable cost and is constantly looking at ways Tonu can offer reduced prices.'”

“In the end though, he admits he reduced prices too far. The dream turned to a nightmare. By early this year Tonu, which did groundworks and laid pipes and culverts for residential developers in Canterbury, was insolvent. Before calling in the liquidators two weeks ago, Halaifonua reluctantly laid off his staff – at least they wouldn’t be left out of pocket.”

“The likes of Fletcher Concrete, Placemakers, Cirtex Industries, Commercial Vehicle Holdings and A1 Diggers had placed securities over the goods they’d supplied. There’s another $40,000 owed to Inland Revenue. Others aren’t so fortunate: there is $600,000 owed to unsecured creditors. Liquidator Brenton Hunt quickly discovered that some projects in recent months had run at a deficit, which had caused stress on the working capital of the company; a number of trade creditors had the company on stop credit. It’s an increasingly familiar story.”

“On Ryecotes Mead, a cul-de-sac in a south London suburb, there is a three-bedroom flat available as a leasehold that encapsulates the current condition of the British housing market. Trudi, the estate agent, opens the door with a tight smile. ‘You could rent it out to someone with an expensive car,’ says Trudi, extending her arms into the space.”

“In 2002, you could buy a place on Ryecotes Mead for £200,000. Now, the owners want a cool million ($1.74 million). Somehow, just by existing, this flat has spent two decades making more money than the average worker. Last year, lender Halifax offered the cheapest mortgage ever, fixed at 0.83 per cent for two years. But to borrow the same amount today would cost (at the 4.95 per cent Halifax now offers for a two-year fixed) an extra £4916 a year.”

“A young woman from Manchester – the archetypal first-time buyer, the person on whom the whole edifice of housing wealth depends – told BBC Question Time and the country she was being quoted an interest rate of 10.5 per cent for a mortgage. The audience moaned as if witnessing a physical injury.”

“The same is happening across the world, as central bankers make borrowing more expensive in an attempt to curb inflation. In Sweden – where the government is much less active in its support of the market than in the UK – house prices have fallen 17 per cent from last year’s peak.”

“The housing market is hard to predict. Ben Bernanke, as economic adviser to George W. Bush, told Congress in 2005 there was ‘no bubble to burst’ in the US housing market; in 2008, as chairman of the Federal Reserve, he predicted that problems in the sub-prime mortgage sector would be ‘limited,’ and have no effect on the wider US economy.”

“But Britain’s property boom is different; almost everyone involved knows that it is a mass exercise in self-deception, our economy’s biggest lie. Real wages have hardly risen for more than 20 years – and the pensions of today’s workers are mostly paper-thin – but the dizzying rise of the property market has offered a substitute for economic growth. It was a substitute people accepted because it seemed permanent: the expensive house that sucked up a lifetime’s wages became the savings account, the pension, the inheritance. That wealth is now beginning to dissolve.”

“This is reality of the post-2008 economy, where houses have become financial assets rather than goods. The simple laws of supply and demand have ceased to apply, and people have been incentivised to keep an expensive property because it’s their biggest and most dependable asset. In an era of stagnant real wages, the house has become the bank.”

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This Post Has 121 Comments

  1. ‘Everybody said to us you should buy as soon as you can — doesn’t matter if you like it or not, just buy and get into the market…that’s not what we dreamed about…It’s just been a nightmare for us’

    Now Fernanda, it sounds like yer thinking about giving it away. Need I remind you you can paint the walls any color you like? Pride of ownership! It’s still cheaper than renting!!

  2. ‘the home sales industry is often shy about discussing price cuts. That’s too bad. More widespread admissions that prices are down would likely increase demand from folks who think ownership dreams are hopeless. Also, an increased acknowledgment of recent depreciation might get potential sellers to be more realistic about pricing their sought-after homes. Sadly, I fear, too much emphasis is put on ownership’s investment potential. So, talking up price cuts might scare away folks looking at a home’s wealth-creation prospects’

    He’s right you know. It’s much more important to focus on quality if life issue like how long yer lamp post can stand up to bum urine.

    1. Real Estate agents have to keep selling or they go out of business. I can’t believe how few voices are out there advising caution to new buyers. The ten percent drop is just the beginning. No low until 2026.

  3. ‘Today iBuyers are the ones getting shafted’

    Not the steaming piles of dung?! You mean Rich and Glen are getting scholonged as I type?

    Sacré bleu!

    1. When are the iBuyers gonna cut their losses and dump their falling knife inventory? Is it reasonable to guess they are highly leveraged and deeply underwater ln their housing investment HODLings?

      Young families who need an affordable place to live in want to know.

      1. I’m surprised that none of them have locked the doors and fled yet. How long do we have to wait for these f*cktards to bail?

    2. “Purchases of homes by investors in the U.S. fell by 45.8% year over year in the fourth quarter, according to Redfin.”

      In other words, investors are still buying, on leverage, despite rising rates and falling prices, because they know that real estate always goes up (i.e. a high rate of future housing price price inflation is a certainty), and long run wealth gains are guaranteed, no matter how large the highly leveraged nearterm losses.

      When every real estate investing guru shares this insight, the market is primed for out of control real estate price infation. Heroin is a tough habit to break.

      1. The Real Estate Market Is In The Freezer, But Billionaire Grant Cardone Says Investors Will ‘Save The Day’
        Kevin Vandenboss
        Thu, February 16, 2023 at 7:25 AM PST·3 min read

        Economists have been calling for a housing crash for several months. Some even predicted that home prices would fall by as much as 30% in 2023. While these claims are understandable considering that rising mortgage rates have priced many would-be buyers out of the market, it appears that a different scenario is beginning to play out.

        Best-selling author and real estate fund manager Grant Cardone agrees that the housing market is in trouble, but points out that investors will create enough demand to keep the market from crashing.

        “Banks don’t trust borrowers, and those they do trust will have to pay. This will move homeowners to the sidelines and slowly reduce home prices,” Cardone said. “Investors will step in to pick up single-family homes at lower prices with less competition. That being said, there will be no housing crash! Investors, like myself, will save the day and step in to buy the homes, put renters in place and enjoy them for the cash flow, not the kitchens and cabinets.”
        …
        https://finance.yahoo.com/news/real-estate-market-freezer-billionaire-152523976.html

          1. Grant Cardone TV
            Investing in Crypto, Stocks, or Real Estate
            By Grant Cardone –
            March 29, 2022

            Can’t decide whether to invest in crypto, stocks, or real estate?

            Keep these key points in mind that I shared in a Cardone Zone episode at the beginning of this year:

            Investors bought 90,215 homes in the third quarter of 2021, totaling $63.6 billion.

            Single-family homes make up 74.4% of all the investor purchases — the highest percentage on record.

            Since the pandemic, there’s been a trend of people moving from expensive cities to more affordable locales.

            Bitcoin broke 40k down from 68,000 up from 818 five years ago.

            Tesla — 1000 up from 50 .

            10 Year Treasury is sneaking up 1.7., back to where it was last April. It has been as low as 1.18 in August.

            Robin Hood 70 down to 15.

            GE 100 down from 235 five years ago.

            Single Family home in America 80M limited supply.

            44M LIVE IN RENTED SINGLE FAMILY HOMES… AS OF 2019, average value 319K. Up 19% .

            2019 investors owned 42% of the single family homes in America.
            Watch the video for the real deal on deciding to invest in crypto, stocks, or real estate.
            …
            https://gctv.com/crtypo-stocks-real-estate/

          2. “2019 investors owned 42% of the single family homes in America.”

            These HODLers are so forked, and don’t even realize just yet…

        2. “This will move homeowners to the sidelines and slowly reduce home prices,” Cardone said. “Investors will step in to pick up single-family homes at lower prices with less competition. ”

          HBB discussed this some years ago. Investors don’t have to pay 6.5% mortgage rates. When investors think that the prices have fallen enough, they’ll buy cash and rent the house out, putting a floor under prices. That’s what happened in 2009, but with a difference: between 2009 and now, almost all of the trashed houses and grandma-finally-died houses were snapped up and fixed up. That’s money that investors don’t have to spend this time, so they are likely to buy at an even higher floor.

          Investors aren’t going to prevent a crash, but prices won’t fall as far as it did in 2009. (Not that this is good enough for HBB. Even the 2009-2012 prices weren’t crashy enough to satisfy us.)

          1. Never say never. In some areas prices will plunge more than anyone thinks is possible. In other areas like San Diego, prices will most likely remain elevated. However, even the high flyers will not be immune from big shifts in psychology. The bay area is in for a rude awakening. So is LA.

          2. ” Investors don’t have to pay 6.5% mortgage rates.”

            Where do you think they get this “cash”?

            Yellen Bux! No longer available at 0%!

          3. Investors don’t have to pay 6.5% mortgage rates.

            I think iBuyers have to sell bonds to finance the purchase, so they might have to pay 6%, or more.

            Sure, REITs have investors who buy shares, but I think they are struggling with investors who want out these days.

          4. Investors don’t have to pay 6.5% mortgage rates

            It’s worse than that. Investors need to do some math. They could get 5% risk free return for doing nothing but buy T notes, or buy a risky asset that requires insatiable feeding to balance depreciation and taxes and insurance that isn’t covered by rent. They will only do this if they anticipate prices going up significantly, which makes them speculators, not investors at all.

  4. ‘The worst performance nationwide was a 21.9% drop in the formerly red-hot market of Austin, Texas. San Francisco was next (down 20.6%), then Boulder, Colo. (off 18.6%), San Jose (down 17%) and Spokane, Wash., (off 15%). In fact, 13% of these 186 markets had double-digit price drops. Think of the folks who bought early in 2022 in these markets’

    via GIPHY

    1. “a 21.9% drop in the formerly red-hot market of Austin, Texas”

      I remember about 12-18 months ago multiple Austin Relitters® were guaranteeing that prices couldn’t go down in Austin. Someone needs to interview those clowns again. I’m sure they can be tracked down at the local McDonald’s or Arby’s.

    1. The Financial Times
      Markets Briefing US interest rates
      Stocks fall and Treasury yields rise on fresh US rate fears
      Hawkish comments from Fed officials add to investors’ concerns
      Cleveland Fed president Loretta Mester said there was a ‘compelling case’ for a half percentage point rise
      Martha Muir in London 18 minutes ago

      European stocks fell and yields on US Treasuries rose on Friday as robust economic data and hawkish comments from central bank officials fanned fears that the Federal Reserve would keep interest rates high to combat inflation.

      By late morning the Europe-wide Stoxx 600 was down 0.7 per cent, slightly higher than earlier in the session, while Germany’s Dax was 0.95 per cent lower. France’s Cac 40 had also lost 0.7 per cent, after reaching a record intraday high on Thursday.

      Those declines followed falls overnight on Wall Street, where the blue-chip S&P 500 index had its worst day in a month. Investors were unnerved by producer price inflation data, which tracks wholesale prices, that rose at an annual rate of 6 per cent in January. This was down from 6.2 per cent in December but well above the consensus estimate of 5.4 per cent.
      …

      1. Yahoo Finance
        Retail investors are pouring a record $1.5 billion per day into the stock market
        Tesla remained the favorite among this group, with retail inflows to the stock totaling $9.7 billion year-to-date in 2023 so far.
        Alexandra Semenova
        Thu, February 16, 2023 at 11:38 AM PST·3 min read

        Individual investors have been snapping up stocks at the fastest pace on record as U.S. equity markets have charged higher to start the year.

        Over the past month, retail investors funneled an average of $1.51 billion each day into U.S. stocks, the highest amount ever recorded, according to data from research firm VandaTrack published Thursday.

        “With recent surveys showing the institutional investor community remaining broadly bearish on stocks, it would be unwise to underestimate the importance of the retail cohort,” strategists at VandaTrack said in a note. “That’s in keeping with retail sales and jobs data for January, suggesting that consumers retain impressive levels of buying power.”
        …
        https://finance.yahoo.com/news/retail-investors-record-inflows-us-stock-market-193801422.html

      2. Reuters | Feb 15, 2023 06:52PM ET
        Rise of near-term options trading carries risk of Volmageddon 2.0 -JPM’s Kolanovic
        By Saqib Iqbal Ahmed

        NEW YORK (Reuters) – The rise of trading in near-term U.S. equity options has the potential to deliver a volatility shock to markets, not unlike the “Volmageddon” crash of 2018, J.P. Morgan’s chief global markets strategist, Marko Kolanovic, warned on Wednesday.

        The U.S. equity options market has seen a rise in the trading of options contracts set to expire at the end of the trading day – dubbed 0DTE (zero day to expiry) options – with their daily notional value rising to about $1 trillion, according to J.P. Morgan data.

        On net, these options are sold by investors taking a directional view, and have tended to suppress market volatility, JP Morgan’s Kolanovic said in a note on Wednesday.

        A large intra-day move in the market, however, may result in these options sellers being forced to cover these positions all at once and spark massive volatility, Kolanovic said.

        “These flows could particularly impact markets given the current low liquidity environment,” Kolanovic, who estimates that a large market move would cause these options positions to spark buying or selling to the tune of $30 billion.

        That kind of shock would be similar to the one experienced by markets in February 2018, when a sudden rise in market volatility derailed several volatility-linked products that banked on low market gyrations, dealing investors billions of dollars in losses, an event that was eventually dubbed “Volmageddon.”

        “While history doesn’t repeat, it often rhymes, and current selling of 0DTE daily and weekly options is having a similar impact on markets,” Kolanovic said.
        …
        https://m.investing.com/news/stock-market-news/rise-of-nearterm-options-trading-carries-risk-of-volmageddon-20-jpms-kolanovic-3004890

    3. LIVE UPDATES
      Updated Fri, Feb 17 2023 8:26 AM EST
      Stock futures slip as rates rise to their highest levels in 3 months: Live updates
      Carmen Reinicke
      Hakyung Kim
      The stock market is a little too optimistic about where we go from here, says JPM’s Meera Pandit

      U.S. stock futures slipped on Friday as stubbornly high inflation and a rebound in rates continue to weigh on investor sentiment.

      Dow Jones Industrial Average futures
      fell by 159 points, or 0.47%. S&P 500 and Nasdaq-100 futures dipped by 0.63% and 0.85%, respectively. Yields on the 10-year and 2-year U.S. Treasury bonds hit levels not seen since November, weighing on equities.

      The moves came after major averages shed more than 1% on Thursday, after the Labor Department said the producer price index — an inflation metric that tracks wholesale prices — rose 0.7% last month. That was more than economists expected.
      …
      https://www.cnbc.com/2023/02/16/stock-market-today-live-updates.html

      1. Missing from MSM reporting:

        – The most recent monthly PPI increase at an annualized rate is
        (1+0.007)^12-1 = 8.7%

        – PPI inflation is accelerating

        – PPI inflation is a leading indicator of producer price inflation several months out

        1. A high-ranking Russian defense official in the war against Ukraine was found dead Wednesday after falling from a 16th-floor window in an apartment building. Marina Yankina, 58, was discovered by a passerby at the entrance of a high-rise on Zamshina Street in St. Petersburg, Russian news Telegram channel Mash reported. She is believed to have fallen 160 feet to her death. Her personal belongings and documents were found on a 16th-floor balcony in the building. According to a preliminary investigation, it is believed Yankina committed suicide.

          Her ex-husband indicated that she was afraid of heights.

    2. The Horrifying Endgame in Ukraine (2/14/2023):

      “I’ve written extensively about two facets of the war in Ukraine that you don’t hear from legacy media in the United States or U.K. The first is that Russia is actually winning the war.

      U.S. outlets such as The New York Times (a channel for the State Department) and The Washington Post (a channel for the CIA) report endlessly about how Russian plans have failed, about how incompetent they are about how the Armed Forces of Ukraine (AFU) have pushed back Russians in the Donbass, and how NATO weapons such as U.S. Abrams tanks, U.K. Challenger tanks and German Leopard tanks will turn the tide against Russia soon.

      This is all nonsense. None of it is true.

      In all, credible reports indicate that AFU casualties are nearing 500,000 and are increasing at an unsustainable rate. On the other hand, reports of 100,000 Russian dead are almost certainly wild exaggerations put out by Ukraine. The BBC attempted to verify these numbers and could only find about 20,000 confirmed Russian dead based on extensive searches on funeral notices, public records, etc.

      This Russian army is not the same army that invaded Ukraine a year ago. It’s much better trained, led and equipped. It’s learned from the mistakes it made during its initial invasion last February. Ukraine shouldn’t expect them to repeat those mistakes.

      That analysis leads me to believe that Russia will win the war militarily. Western military assistance may prolong the fighting but won’t affect the ultimate outcome. It’ll just delay the inevitable and get a lot more people needlessly killed.”

      https://dailyreckoning.com/the-horrifying-endgame-in-ukraine/

      Your U.S. taxpayer money is paying for all of this.

      1. It’s learned from the mistakes it made during its initial invasion last February

        Primarily, the assumption that the government in Kiev wouldn’t want to lose all their men needlessly on the battlefield.

      2. I am seeing rumblings online that the US is massing equipment on the polish romanian and Baltic state borders with Ukraine in preparation for a NATO ground war with Russia in the Ukraine in the very near future. Anyone can confirm or deny?.

        NATO is running out of high tech weapons it can afford to lose. US. military was saying last year in the spring that Russian logistics were exhausted. Here we are a year later and Russia is outpacing NATO in artillery. Our green economy of solar panels and windmills though is sure to support the kind of war effort required here.

        NATOs only option is full engagement or Ukraine loses. In other words, NATOs only option is roll the dice and start WW3.

        2. NATOs only option is full engagement or Ukraine loses

          Consider that Ukraine has already lost and it just isn’t acknowledged by the US. It is acknowledged more in Europe. The US could easily pull an Afghanistan and dig into the next proxy war.

          The narrative from the beginning about what Russia couldn’t do has been 100% wrong from the beginning. Our “news” isn’t news at all.

        3. “NATO is running out of high tech weapons…”

          Russia and Ukraine have been fighting a WWI style war with WWII artillery munitions, and Russian has been stock piling them in the region since 2014. Meanwhile the western spy agencies having been quietly noting those stockpile’s coordinates.

          Russian anti-aircraft systems have been previously destroyed by Israel with U.S. HARM munitions, so taking control of the sky won’t be an issue. Air dropped JDAMs are the way forward if the west wants to get serious. Russia lost Crimea back in the 1850s, and it will be where the real fighting happens.

          The start of the muddy season is just weeks away.

          1. Russian has been stock piling them in the region since 2014

            “in the region must mean in Russia? The Ukrainians were stockpiling in Ukraine.

            control of the sky won’t be an issue

            Trying to follow along here. Ukraine will control the sky with ground rockets they don’t have?

            Air dropped JDAMs are the way forward

            So we’ll drop big bombs (that Ukraine doesn’t have) without an Air Force on munitions dumps inside Russia?

            Russia lost Crimea back in the 1850s

            Yet it was part of the USSR for like most of the 1900s?

            the muddy season is just weeks away

            Safe to expect Ukraine will have to do with what they actually have?

          2. Ukraine doesn’t have the wherewithal for the next level of this conflict, neither the equipment nor the training. The NATO alliance doesn’t want a Russian success in Ukraine as Poland will likely be next and so on.

            Consider that the Russians are approaching the largest percentage of their military deployment in this theater, so the opportunity to deal a crippling strike that will take decades, if ever, for them to recover from is here.

          3. Poland will likely be next and so on.

            What if they have no desire to conquer Poland and then the rest of Europe?

    3. How big a threat does the hard right pose to US support for Ukraine? (2/17/2023):

      “Two weeks before the first anniversary of the full-scale invasion on 24 February, a group of Trump-supporting Republicans led by Matt Gaetz introduced a “Ukraine fatigue” resolution that, if passed, would “express through the sense of the House of Representatives that the United States must end its military and financial aid to Ukraine, and urges all combatants to reach a peace agreement”.

      The resolution is sponsored by 11 Republican members of Congress on the far right Freedom Caucus faction, and is highly unlikely to pass. But it marks a shot across the bows of the leadership, which has mostly vowed to stay the course in supporting Ukraine.

      “The divide in the US is now more tangible than in Europe. The Republican leadership is absolutely adamant that there will be no lessening of support for Ukraine, but it’s just words,” one European diplomat said. “With such a narrow Republican majority in the House, the Freedom Caucus has a lot of influence. And you don’t need to cut off help overnight. You just need to slow it down with procedure. That’s the danger.”

      https://www.theguardian.com/world/2023/feb/17/how-big-a-threat-does-the-hard-right-pose-to-us-support-for-ukraine

      What “The West” is fighting for is Christian genocide, white genocide, the total destruction of the national sovereignty of the United States, the enrichment of Blackrock and defense contractors (i.e. the right people), and the establishment of Marxist globalist domination.

      Zelensky is not a Christian, and he’s not even ethnically Ukrainian.

      Henry Ford was right about all of this a century ago.

  7. 𝗟𝗮𝘀 𝗩𝗲𝗴𝗮𝘀, 𝗡𝗩 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟮𝟳% 𝗢𝗻 𝗣𝗹𝘂𝗻𝗴𝗶𝗻𝗴 𝗗𝗲𝗺𝗮𝗻𝗱 𝗔𝗻𝗱 𝗦𝗼𝗮𝗿𝗶𝗻𝗴 𝗖𝗿𝗶𝗺𝗲

    https://www.movoto.com/nv/89120/market-trends/

    𝘈 𝘥𝘪𝘴𝘵𝘪𝘯𝘨𝘶𝘪𝘴𝘩𝘦𝘥 𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘴𝘵 𝘲𝘶𝘪𝘱𝘱𝘦𝘥, “𝘞𝘩𝘺 𝘣𝘶𝘺 𝘢 𝘩𝘰𝘶𝘴𝘦 𝘸𝘩𝘦𝘯 𝘺𝘰𝘶 𝘤𝘢𝘯 𝘳𝘦𝘯𝘵 𝘰𝘯𝘦 𝘧𝘰𝘳 𝘩𝘢𝘭𝘧 𝘵𝘩𝘦 𝘮𝘰𝘯𝘵𝘩𝘭𝘺 𝘤𝘰𝘴𝘵. 𝘉𝘶𝘺 𝘪𝘵 𝘭𝘢𝘵𝘦𝘳 𝘢𝘧𝘵𝘦𝘳 𝘱𝘳𝘪𝘤𝘦𝘴 𝘤𝘳𝘢𝘵𝘦𝘳 𝘧𝘰𝘳 70% 𝘭𝘦𝘴𝘴.”

  8. “This is reality of the post-2008 economy, where houses have become financial assets rather than goods. The simple laws of supply and demand have ceased to apply, and people have been incentivised to keep an expensive property because it’s their biggest and most dependable asset. In an era of stagnant real wages, the house has become the bank.”

    In an era of falling home prices, the bank has sprung a massive leak, with home equirty wealth spilling into the streets.

  9. “Ponder the second half of home pricing in the last six months of 2022 where 90% of 186 U.S. housing markets had price drops, according to my trusty spreadsheet’s review of stats from the National Association of Realtors.”

    Gotta love Relitters®. Check out the first sentence from the link to the NAR web site:

    “Single-family existing-home sales prices climbed in almost 90% of measured metro areas – 166 of 186 – in the fourth quarter. The national median single-family existing-home price increased 4.0% from one year ago to $378,700.”

    How can you tell when a Relitter® is trying to shaft you?

    1. “The national median single-family existing-home price increased 4.0% from one year ago to $378,700.”

      How many months from now will the year-on-year price change tip to negative?

  10. A reader set these in:

    The Bank of England is going to pause with inflation at 10.1% – let that sink in

    https://twitter.com/DonMiami3/status/1625965872748584960

    Ben Rabidoux

    Canadian house prices have now seen the largest cumulative decline from peak since the 1970s

    https://twitter.com/BenRabidoux/status/1625885438396231682

    12,000+ families on Ottawa’s social housing waitlist. Hundreds sleeping in shelters or on the street. And the federal government wants us to celebrate 48 units. Is there a single adult in the Trudeau government who understands how badly they’ve mismanaged the housing file?

    https://twitter.com/DeanTester/status/1625191396096331776

    Ben Rabidoux

    Is this idea of buying deeply cash flow negative investment properties and holding for “future cash flows” a thing in the US or other countries or is this a uniquely Canadian phenomenon. I see this all the time.

    https://twitter.com/BenRabidoux/status/1624780110241968129

    Danielle DiMartino Booth

    The beat(ing) goes on…Starwood Real Estate Income Trust Inc. said shareholder redemption requests continued to mount in January, as investors filed notices to withdraw more than $700 million from the property fund.

    https://twitter.com/DiMartinoBooth/status/1626325038054907906

    Americans are financial morons that will take any payment they can make in a month. Only payment matters Ignore price

    https://twitter.com/GRomePow/status/1626461491410137090

    RBA: 10% OF MORTGAGEES HAVE NO EXTRA CASH AFTER PAYMENTS AND COSTS.

    https://twitter.com/financialjuice/status/1626358788855824384

    It’s not a good sign when the largest office landlord in Downtown L.A. is suffering body blows from dissolving demand and rising interest rates.

    https://twitter.com/commobserver/status/1625914340950802437

    Investors in the vehicle, controlled by Barry Sternlicht’s Starwood Capital Group, asked to pull a total 5.2% of its December 31 net asset value, exceeding monthly limits

    https://twitter.com/danjmcnamara/status/1626332937196118018

    It’s painful to witness the hypocrisy of an institution that uses it’s tools in such an asymmetrical way. If price stability is their mandate how come they are much swifter, and go bigger, when it comes to containing asset price drops than when it comes to fighting inflation?

    https://twitter.com/INArteCarloDoss/status/1626361724960907264

    The US median CPI is above 7% for the first time in decades.

    https://twitter.com/SoberLook/status/1626175950151901186

    preposterous coordinated campaign between all mouthpiece outlets with a petty angle of attack on @elonmusk. WaPo, FT,…establishment is all riled-up. But no one did any investigative journalism on FTX, SBF and how @jack allowed Twitter to be a crypto scam whorehouse

    https://twitter.com/INArteCarloDoss/status/1626231660281987072

    *BULLARD SAYS HE WOULDN’T RULE OUT SUPPORTING 50-BP MARCH HIKE

    https://twitter.com/JLinWins/status/1626312126435401729

    1. “Is this idea of buying deeply cash flow negative investment properties and holding for “future cash flows” a thing in the US or other countries or is this a uniquely Canadian phenomenon. I see this all the time.”

      ‘With a big enough down payment, any property can be a positive cash flow investment!!’ Candi the Relitter® (check out my OF too!).

      1. “…With a big enough down payment, any property can be a positive cash flow investment!!..”

        Is this the REIConplex new math?

        If rents/owners can’t cover holding costs. (prop tax, insurance, maint, HOA, etc) then how about a down payment of 120% or 150%?

        Then you can cook your own books for a few months or year or two…

        Don’t worry, be happy. REIConplex new math will save you.

    2. “The Bank of England is going to pause with inflation at 10.1% – let that sink in”

      Seems like a bad time to HODL GBPs.

    3. “…how come they are much swifter, and go bigger, when it comes to containing asset price drops than when it comes to fighting inflation?”

      This time is different, as too many risk asset HODLers are now investing based on their faith that the Fed put will make them whole. This deeply ensconsed market driver is inflationary. The necessary punch bowl removal process will be difficult, protracted, and painful.

      Heroin is a tough habit to kick.

    4. “*BULLARD SAYS HE WOULDN’T RULE OUT SUPPORTING 50-BP MARCH HIKE”

      I call it a total BS. Why did they do 25-BP just 2 weeks ago?

      1. That was before the most recent employment and PPI data releases, which showed little progress to slow inflation.

      2. “*BULLARD SAYS HE WOULDN’T RULE OUT SUPPORTING 50-BP MARCH HIKE”

        Imagine you’ve had your eye on a beautiful woman, so you finally approach her and ask her out on a date and she says “I won’t rule it out.” How confident are you? They’re not going 50 basis points. It’s 25 from here on out, then pause.

        1. you’ve had your eye on a beautiful woman

          Not to disparage your uncanny ability to predict the future, but I can’t wrap my mind around the analogy.

        2. Not to disparage your uncanny ability to predict the future, but I can’t wrap my mind around the analogy.

          Feel free to just move along.

    5. The Bank of England is going to pause with inflation at 10.1% – let that sink in

      We are living in unprecedented, dangerous times where the entire world’s central banks have decided to engage in a money-printing orgy, having learned nothing from the past. They are trying to, in concert, devalue and debase their respective currencies whereby capital flows remain consistent since they’re all stinking up the joint equally.

      Pausing rate hikes with double digit inflation is insanity. The higher the inflation number, the more difficult it becomes to bring it down and the easier it becomes for runaway inflation to take hold. With a stable prices mandate, they are in direct violation of their mandate and have “gone rogue.”

      When you look back at Weimar Germany, the mark went from 4.2 to 7.9 marks per dollar between 1914 and 1918. By late 1919, it had gone to 48 marks per dollar. It had “stabilized” at 90 marks per dollar by early 1921, but by the end of 1921 it had dropped to 330 marks per dollar. By the end of 1922 it was 7,400 marks per dollar, and from there it just collapsed. By the end of 1923 it was 4,210,500,000,000 marks per dollar.

      These central bankers think that they have found some new magic money tree where they print their way to prosperity, ignoring history. In my opinion they are deranged maniacs who need to be forcefully removed from office.

  11. “The housing market is hard to predict. Ben Bernanke, as economic adviser to George W. Bush, told Congress in 2005 there was ‘no bubble to burst’ in the US housing market; in 2008, as chairman of the Federal Reserve, he predicted that problems in the sub-prime mortgage sector would be ‘limited,’ and have no effect on the wider US economy.”

    And then what happened?

    1. In my 30-plus years of watching real estate I can tell you that RE bubbles are easy to predict. Timing them might be a bit tricky, but identifying a bubble is just a whole lot of common sense.

  13. “More widespread admissions that prices are down would likely increase demand from folks who think ownership dreams are hopeless.”

    Not if they realized that it took over five years for prices to bottom out in the last two real estate busts…

    1. Looking out for two housing market bottoms
      February 14, 2023 By Ryan Lundquist

      There is so much talk about the housing market bottoming out, and I want to give some perspective on what to watch for. I hope this helps.

      Old plank of wood isolated on white background with Clipping Path. The heading says, “Two housing market bottoms.”

      WATCH FOR TWO DIFFERENT BOTTOMS:

      The previous housing downturn had two different bottoms. There was a bottom for sales volume and a bottom for prices. Can you see that on the visual below? The concept of two bottoms comes from Bill McBride of Calculated Risk, though he talked about watching for a bottom in new home sales and a bottom for residential investment. For local markets, I recommend watching for a price and volume bottom (may not happen at the same time).

      A line graph to show prices and volume in Sacramento County from 2005 to 2012. The price peak was in 2005, but prices didn’t bottom until 2009 mostly (and then the very bottom at the end of 2011). Volume peaked in 2005 and bottom in 2007.

      VOLUME GOT TO A BOTTOM FIRST

      It took just over two years for volume to reach a bottom after the peak in 2005, but it took another fourteen months after the volume bottom for the price decline to slow way down in Sacramento County. Technically, prices declined for multiple years after volume hit its low point, but it was only modest after 2009, which is why I said “near price bottom.” Keep in mind there was a federal buyer tax credit introduced in 2009 that supercharged the housing market and basically helped slow the decline at the time.
      …

  14. Re: Ben Bernanke . . . told Congress in 2005 there was ‘no bubble to burst’ in the US housing market; in 2008 . . . he predicted that problems in the sub-prime mortgage sector would be ‘limited,’ and have no effect on the wider US economy.

    And for these accomplishments he was awarded the Nobel Prize last year.

    Among all humanity, their Economists are the stupidest and, among all Economists, their Nobel Laureates are the stupidest.

    To wit:
    “Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.” – Irving Fisher, New York Times, Oct 16, 1929

    And then there was Powell’s transitory inflation . . .

    1. “And for these accomplishments he was awarded the Nobel Prize last year. ”

      Not really. In the economics profession, it’s all about publications record and professional status, not the ability to correctly predict what will transpire in the real world economy.

      1. True, but In that case, what passes for Economics these days is nothing more than voodoo because the ability to logically, correctly, measurably and consistently predict is the acid test of all science.

        “When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts, advanced to the stage of science, whatever the matter may be.” – Lord Kelvin.

        Now, stupidity is no crime but getting paid for it, not to mention receiving undeserved accolade, is what is objectionable . . .

        1. There are many people who, in the light of the crisis, have questioned the principles of economics, particularly the idea that people behave rationally, or that we will naturally return to a state of equilibrium. But their solution seems to be that the mathematics used wasn’t good enough, that you just need to change the assumptions upon which the models were based or do harder maths.

          I think better maths will help, but what will help more would be to go back to the political economy roots of economics, to emphasise the importance of history, of institutions, of philosophy, to allow it to become more of an eclectic subject again. Better maths may be part of the solution, but more maths is not the only solution to the problem of bad maths.

          Being able to do hard maths doesn’t explain why some people are poor. It can give you insights, but it’s not enough. You need some talented mathematicians, but they need to be talking to people in the real world. Very few economists predicted the crisis, either because their framework didn’t allow banks to fail or because their econometrics didn’t predict it.

          There’s no imagination in modern economics: it’s just mathematics. And this lack of imagination will remain as long as economics remains tethered within the confines of mathematics.

          I am not convinced that the failure of mathematical economics can be repaired by doing more maths. The gains from doing more complex maths will be, at best, marginal. And there is the risk of economics digging itself into a bigger hole of irrelevance. Economics needs to stop clinging to the notion that the complexities of human behaviour can be explained by algorithms or mathematical proofs.

          https://www.jbs.cam.ac.uk/insight/2014/economics-art-not-science/

          I have a minor degree in economics. Some of it is unquestionably sound. I’ve mentioned that hand plotting supply/demand curves taught me a lot about how this marvelous machine works through human choice. In short, going from Greenspan to Bernanke and after was:

          via GIPHY

          Around 2011, IIRC, I did an interview with the financial times for an article they were doing on the housing bubble. This reporter called me several times and we spoke for about 3 hours altogether, about what caused what, etc. I said pointedly that what the central bankers were doing was more like witch doctors. They ran the article, I wasn’t in it.

          1. Here’s an example:

            ‘In 2002, you could buy a place on Ryecotes Mead for £200,000. Now, the owners want a cool million ($1.74 million). Somehow, just by existing, this flat has spent two decades making more money than the average worker’

            So how many degrees and fancy schmancy does one need to see this is batsh$t crazy?

        2. True, but In that case, what passes for Economics these days is nothing more than voodoo

          Well, some people call it the “dismal science”

  16. plus we have to eat, right?’ said Santos.”
    But do you?
    Didn’t the WSJ suggest that people could save money by not eating

  17. The area I am monitoring—Verde Valley and Sedona—are pretty sticky still on pricing. It’s going to take a while to unwind from the peak. Meanwhile, I pay rent and wait…

  18. “Today iBuyers are the ones getting shafted. Laurie Tayrien and her husband bought a home in Phoenix for $485,000 in November. Only five months earlier, Opendoor had purchased it for $646,800. That’s a 25% loss for the iBuyer.”

    It was only Yellen Bux.

  19. Forbes
    Forbes Digital Assets
    Going ‘Parabolic’—Analyst Who Called 2020 Crypto Boom Issues Huge Bitcoin Price Prediction After $100 Billion Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon And Solana Rally
    Billy Bambrough
    Senior Contributor
    I write about how bitcoin, crypto and blockchain can change the world.
    Feb 16, 2023, 08:56am EST

    Bitcoin (BTC -3.8%) has rocketed higher over the last 24 hours, flying in the face of fears the U.S. could be trying to “quietly” ban bitcoin and crypto.

    Subscribe now to Forbes’ CryptoAsset & Blockchain Advisor and successfully navigate the latest bitcoin and crypto market crash

    The bitcoin price has added 8% since yesterday, leading an ethereum, BNB BNB (-4.4%), XRP (XRP -3.2%), cardano, dogecoin, polygon and solana price rally and adding around $100 billion to the combined crypto market over the last few days.
    …
    https://www.forbes.com/sites/billybambrough/2023/02/16/going-parabolic-analyst-who-called-2020-crypto-boom-issues-huge-bitcoin-price-prediction-after-100-billion-ethereum-bnb-xrp-cardano-dogecoin-polygon-and-solana-rally/?sh=1f5b98f7ef82

    1. There sure are a lot of negative price changes for an asset class undergoing a parabolic price blowout.

  20. 𝗦𝗮𝗻 𝗗𝗶𝗲𝗴𝗼, 𝗖𝗔 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟭𝟳% 𝗬𝗢𝗬 𝗢𝗻 𝗦𝘂𝗿𝗴𝗶𝗻𝗴 𝗙𝗼𝗿𝗲𝗰𝗹𝗼𝘀𝘂𝗿𝗲𝘀 𝗔𝗻𝗱 𝗥𝗮𝗺𝗽𝗮𝗻𝘁 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗙𝗿𝗮𝘂𝗱

    https://www.movoto.com/ca/92108/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘚𝘢𝘯 𝘋𝘪𝘦𝘨𝘰 𝘣𝘳𝘰𝘬𝘦𝘳 𝘦𝘹𝘱𝘭𝘢𝘪𝘯𝘦𝘥, “𝘛𝘩𝘪𝘴 𝘤𝘰𝘳𝘳𝘦𝘤𝘵𝘪𝘰𝘯 𝘮𝘢𝘬𝘦𝘴 2009 𝘭𝘰𝘰𝘬 𝘭𝘪𝘬𝘦 𝘢 𝘸𝘢𝘭𝘬 𝘪𝘯 𝘵𝘩𝘦 𝘱𝘢𝘳𝘬.”

  21. Officials Remind Residents Of East Palestine To Protect Themselves By Getting Their COVID Booster (2/15/2023):

    “Government officials are warning residents of East Palestine to protect themselves from deadly health risks by making sure they’ve received the latest COVID booster.

    “In light of the ongoing environmental and health crisis in rural Ohio, we are urging all citizens to make sure they are up to date on their vaccinations,” said Ohio Health Department spokesperson Danze Pickleton. “The chemicals being spilled into the water and burned into the air are nothing compared to the deadly power of the latest variant XBB.1.5. Get your booster, East Palestinians!”

    The Ohio DOH reiterated that it’s essential to get vaccinated, especially if you are traveling to a new place after losing your home to a deadly chemical spill and are being forced to leave under threat of arrest.

    “If there’s one thing we care about here in government it’s your health. Please get vaccinated,” said Pickleton.

    https://babylonbee.com/news/officials-remind-residents-of-east-palestine-to-protect-themselves-by-getting-their-covid-booster

    1. “Their lies are enormous,” Moreno said in a recent interview , describing some of the claims made by his critics. “You will be locked in your neighbourhood; cameras will signal who can go out; if your mother lives in another neighbourhood, you will have to ask for permission to see her, and so on,” adding that they “sometimes post pictures of concentration camps.”

      IIRC, Oxford announced that they are considering doing this.

      you know new f*ckery is afoot.

      It definitely is. And the masses will happily agree to this, even though NOTHING the WEF wants is for their good.

      So where did the fear come from? Many of the UK conspiracy theorists highlight that these “un-British” ideas of urban walkability emanate from France, so they must be distrusted on principle.

      What are they talking about? British cities are very walkable. They have excellent mass transit. Getting around London is easy.

      Worse than that, they point out, the ideology has been driven by a bearded Colombian scientist with radical roots. The ideas had been around since the 1920s, but the 15-minute city phrase was coined by Carlos Moreno, esteemed professor at the Panthéon-Sorbonne in Paris, who was once a member of a leftwing guerrilla group in the 1970s.

      Holy Red Flag, Batman.

    2. securing 736,000 square feet over 15 years in the city’s Mission Bay neighborhood

      Empire building is fun, until it isn’t. I don’t know anyone who uses DropBox.

      1. I don’t know anyone who uses DropBox.

        It reminds me of Photobucket, which turned into an extortion outfit where they hold everybody’s photos hostage and try to get them to pay money to get them back.

  24. ‘You could rent it out to someone with an expensive car,’ says Trudi, extending her arms into the space’

    This is why you make the big bucks Trudi.

  26. ‘There were five homes and 400 people out there shopping for them…’

    Shortage.

    Shortage!

    ‘Now we’ve got the opposite, where there are five buyers out there looking and 500 homes to choose from’

    GLUT!

    2. The state population has dropped by half a million people over a two-year period.

      Same as last time. When you get massive housing bubbles, the Clownifornians spread their disease far and wide across the country, plowing their equity into cheaper markets while pocketing the rest.

      As is evidenced by commenters right here on this blog, large numbers move right back to CA after the greener pastures go up in smoke.

      1. large numbers move right back to CA

        If you are saying the the Leftist Missionaries decide to go home, that is fine with me.

      1. Mark Wahlberg Says He Moved from L.A. to Nevada to Give His Kids a ‘Better Life’: It Made ‘Sense for Us’

        Another black eye for California.

        1. Mark Wahlberg Says He Moved from L.A. to Nevada to Give His Kids a ‘Better Life’: It Made ‘Sense for Us’

          Las Vegas is the aszhole of the US. He moved from the colon to the rectum.

    1. SBF could be locked up if he continues encryption use, judge declares
      By Ben Feuerherd
      February 16, 2023 4:26pm Updated

      A Manhattan federal judge on Thursday suggested he’d lock disgraced FTX founder Sam Bankman-Fried up pending trial if the accused fraudster continues to improperly use electronic devices while out on bail.

      Judge Lewis Kaplan asked federal prosecutors and Bankman-Fried’s attorneys why he should allow the alleged crypto crook to return to his parents’ California house, where he’d be surrounded by unmonitored electronic devices.
      …
      https://nypost.com/2023/02/16/sbf-could-be-locked-up-if-he-continues-encryption-use-judge/

  32. PERSONAL FINANCE
    Average 401(k) balances dropped 20% in 2022 — but few investors flinched, Vanguard research shows
    PUBLISHED FRI, FEB 17 2023 2:14 PM EST
    UPDATED FRI, FEB 17 2023 2:20 PM EST
    Sarah O’Brien

    The average participant account balance at Vanguard was $112,572 at the end of 2022, down 20% from the close of 2021.

    The median balance was $27,376 at the end of last year, an annual drop of 23%.

    Hardship withdrawals ticked up slightly, but remain a low share of all participant activity at 2.8%.
    …
    https://www.cnbc.com/2023/02/17/401k-balances-dropped-20percent-in-2022-but-investors-barely-flinched.html

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