thehousingbubble@gmail.com
Blog

For 30 Years The Fed Has Merrily Fed Us Easy Money Policies, Then Expressed Shock – Shock! – That Those Policies Led To Disaster-After-Disaster

A report from the Seattle Times in Washington. “The failures of Silicon Valley Bank and Signature Bank have reverberated across Seattle’s housing market. Even as regulators rush to stabilize banks, some buyers may wonder if ‘these are just sort of the first cracks in the financial crisis system that could turn into pushing home values down further,’ said Redfin deputy chief economist Taylor Marr. ‘You don’t want to buy a home right before it’s about to crash in value.'”

The Real Deal. “New York Community Bank’s deal to buy loans from the Signature Bank excludes the failed institution’s multifamily mortgages.The snub could signal problems with those loans, which primarily cover the troubled rent-stabilized sector, or simply that NYCB didn’t want to be overweighted in that area. Either way, it may diminish hope for workouts among the many rent-stabilized building owners facing distress. Commercial brokers expect the fallout from resets and maturities to crop up later this year, when loans issued before the 2019 rent law start to come up.”

“‘This is like a train wreck in slow motion,’ said Billy Schur, president of owner group the Bronx Realty Advisory Board said of the rent-stabilized sector. ‘Once someone starts with the default, I don’t see how they’re getting out of trouble.'”

Mansion Global. “Miami Beach is still hot, but the cooling market is translating into price reductions. Of the Florida city’s 86 listings priced at $10 million and up on the market, 34 homes, or 40%, have received a price cut, according to data compiled by The Corcoran Group based on information from the Miami MLS. The average price reduction from the original list price is 14%, according to the data, but ranges from 1% to 36%. ‘In general, luxury properties are staying on the market longer,’ said Eloy Carmenate of the Corcoran Group. During the height of the pandemic, ‘there was a frantic pace of home sales, and this pace was just not sustainable, so we are seeing time on the market normalizing.'”

The Orange County Register. “California home prices are now 18% off their all-time high, but sales activity has risen in three consecutive months. Source: My trusty spreadsheet reviewed the California Association of Realtors’ February home sales report for existing, single-family homes. Debate: Is California’s housing market recovering from its bubble bursting? The California median benchmark is 18% off its $900,000 peak of May 2022, just 10 months earlier. Compare that dip with the 10-month drops off in previous peaks: 1991: Prices fell 6% in 10 months, with losses that grew to 20% over 69 months. 2007: Prices fell 30% in 10 months, with losses that grew to 59% in 21 months.”

Community Impact in Texas. “The housing market in the city of Austin is beginning to stabilize as median sales prices drop and monthly housing inventory climbs toward healthy levels, a February report from the Austin Board of Realtors shows. Throughout the Austin-Round Rock area, monthly housing inventory increased from 0.4 months in February 2022 to 2.6 months of inventory in February 2023. The median home price dropped 12.2% year over year to $436,419. In the city of Austin, the median home price fell 6% year over year from $565,000 in February 2022 to $530,000 in February 2023.”

The Journal Now in North Carolina. “The cost of buying a single-family rental property in Forsyth County has dropped over the past year, according to a first-quarter report released last week by Attom Data Solutions. The average price was $221,000 for a three-bedroom home that had served as a rental property, down 5.9% from $235,000 in the first quarter of 2022. There were 591 homes sold in the five-county Winston-Salem MSA during the first quarter, down from 1,625 a year ago. Those homes likely were owned either by individuals flipping a property or private-equity groups who have been acquired homes in the local market since the Great Recession of 2008-11.”

From AFP. “With its cactus-filled garden and breathtaking views of the rocky peaks of the Arizona desert, Wendy and Vance Walker’s home in the Rio Verde Foothills seemed to be a little slice of paradise. Until the water was cut off. The neighboring city of Scottsdale decided it could no longer afford to sell its dwindling supply from the Colorado River, as a decades-long drought bites the American West. For three months, the couple have eaten from disposable paper plates, had lightning-quick showers only every few days and collected rainwater to flush their toilets. ‘A lot of people don’t take the drought seriously,’ said Wendy, as she stood in the kitchen of their $600,000 home.”

“Fellow resident Rusty Childress said the problem stemmed from head-in-the-sand development. Childress says developers exploit legal loopholes and continue to build in the area, despite not being able to guarantee the luxury homes they sell will have water. ‘Buyer beware! No water in Rio Verde,’ reads a sign he put up in front of his house warning people who come to tour the half-built housing estates nearby. ‘We’re getting drunk on growth here,’ he says.”

From Newsweek. “The road to hell, the proverb goes, is paved with good intentions. And through Jerome H. Powell’s stewardship of the Federal Reserve, it would appear America could soon arrive at that destination. ‘We have a fragile system, there is no doubt,’ Thomas Hoenig, who served as vice chairman of the Federal Deposit Insurance Corporation from 2012 until 2018, told Newsweek. ‘It’s been over a decade of low interest rates. That is part of the problem. It is self-caused.'”

Pittsburgh Quarterly. “Is it just me or was there anything about the collapse of Silicon Valley Bank that wasn’t annoying in the extreme? The executive team at SVB behaved more like a couple of bros at the frat house than like bankers who were stewarding Other People’s Money. But then the Fed began raising rates, which was an obvious double whammy for SVB.  As one hedge fund manager who shorted SVB put it, ‘They went for an extra 4 basis points and blew up the bank.'”

“For 30 years the US Fed has merrily fed us easy money policies, then expressed shock – shock! – that those policies led to disaster-after-disaster: the Tech Bust of 2000-02, the Global Financial Crisis of 2008-09, the Crypto Collapse of 2022, and now the second largest bank collapse in our history. Monkeys throwing darts at the Fed’s plot charts could have done better than that.”

“But that’s just for starters. While the slow–motion disaster was rolling itself out at SVB, where were the armies of banking examiners our tax dollars are paying for? Where were the bank stress tests that are required even of small banks like SVB? Where, in short, was the Fed? Under the haystack, fast asleep. Note that this was the Fed’s second colossal blunder in two years – ignoring the inflation threat until it was too late, and now presiding over a major and preventable bank failure.”

“The venture community in Silicon Valley believe themselves to be true Masters of the Universe – smarter, farther-seeing, deeper-understanding than us ordinary mortals. Yet these visionaries blithely deposited billions of dollars of investor capital in the worst-managed bank in America. When that bank inevitably failed, these Masters of the Universe howled for a taxpayer bailout. In conference calls with federal regulators, they whined about what could happen if large depositors lost their money: the venture firms’ portfolio companies wouldn’t be able to make payroll, employees would threaten to quit, the venture firms might have to prop the companies up with cash out of their own coffers!”

“One sage even predicted a ‘bloodbath’ if the regulators didn’t make all SVB’s depositors whole. To which I respond by referring my readers to the immortal word of Eddie Murphy who, when informed that Michael Jackson was furiously angry with him, replied: ‘So?'”

From Bloomberg. “For decades, Switzerland has sold itself as a haven of legal certainty for bond and equity investors. The collapse of Credit Suisse Group AG revealed some unpleasant home truths. In the race to secure UBS Group AG’s purchase of its smaller rival over the weekend, the government invoked the need for stability and emergency legislation to override two key aspects of open markets: competition law and shareholder rights. Then bondholders discovered that $17 billion worth of so-called Additional Tier 1 debt was worthless.”

“‘Foreign investors may wonder if Switzerland is a banana republic where the rule of law doesn’t apply,’ said Peter V. Kunz, a professor specialized in economic law at the University of Bern. The country ‘is not endangered, but there might be the risk of lawsuits’ because authorities ‘intervened here on very thin ice.’ ‘A lot of lawsuits will be coming from this, which will highlight the erratic and selfish behavior of Swiss authorities in this saga,’ said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics.”

South Peace News. “Housing and real estate sales in the Peace River region are expected to pick up in 2023, says one local realtor. Layne Gardner predicts the real estate market in the Peace Country region will be stronger than other areas across Canada. ‘The 2022 real estate market in the Peace Country started out the year carrying over much of the strength we saw in the market in 2021,’ Gardner says. ‘It was not until the fourth quarter of 2022 that we saw declines year over year. But the effects of the negativity surrounding interest rate increases and the talk of a housing bubble started to take hold and the year finished with monthly sales declines from October to December.'”

The Squamish Chief in Canada. “Earlier this week, the British Columbia Real Estate Association (BCREA) dropped their February report on the province’s real estate market. Home sales in British Columbia dropped 46.5% year over year in February, and at $941,575, the provincial average sale price in February 2023 was 14.7% lower than it was a year ago. Squamish is hanging in there. Looking at the overall average price in February, it is still over a million bucks. Over the course of one month, it is down not even 4%. Over three months, it’s not even down 5%. Over a year, it is down about 11%. Over three years, the average price in Squamish is still up 27.5%, which is still kind of unheard-of growth.”

“I think with real estate, and it’s basically how everything in the economy works, it’s really the story of how much money people can borrow. And when it gets harder to borrow money, and when mortgages get more expensive, then those houses just become out of reach. I mean, if you’re taking a $1.2 million mortgage, when interest rates are 5%, it’s a very different story than doing it two years ago when they were 2%. And it really just squeezes the life out of the markets.”

The Globe and Mail. “If history has shown anything when it comes to financial mayhem, it’s that the first draft often gets it wrong. ‘These things always get defined in retrospect, not in the moment,’ said Eric Hilt, a professor of economics at Wellesley College in Massachusetts, who teaches American economic and financial history. The current confusion stems in part from the fact that we don’t yet know what troubles might lurk on the balance sheets of other banks. The sharp increase in interest rates over the past year and other credit tightening measures have brought a great unravelling of the cheap money era.”

“As J.P. Morgan chief economist Michael Feroli said this week: ‘There’s an old saying: Whenever the Fed hits the brakes, someone goes through the windshield.'”

Related Posts

Prices Plummeting Back To Earth

https://www.youtube.com/watch?v=aElSbUG8S9Y https://www.youtube.com/watch?v=iFa5MnlSY7k https://www.youtube.com/watch?v=q7WMCZ9wZSQ https://www.youtube.com/watch?v=zRnvKVwc4Lw https://www.youtube.com/watch?v=1ieFBmWDTaI

This Post Has 105 Comments

    1. +1

      “Given that the system is already on shaky ground, some point out that, “It won’t take much right now to crash the entire monetary system.”

      Let it burn 🔥

    2. And put it where?
      And for the guy, even if he makes it, so that he can help lower the interest rates further? Let’s be honest, this guy’s economic policies weren’t helping the middle class or lower class.

        2. 2016: We almost got him!
          2017: We almost got him!
          2018: We almost got him!
          2019: We almost got him!
          2020: We almost got him!
          2021: We almost got him!
          2022: We almost got him!
          2023: We almost got him!
          2024: Augh! He’s been re-elected!

          2. That compilation is 3 years old! Add in “insurrection” and “threat to democracy” and we’re current.

    1. LOLZ@ if truckers stopped delivering FOOD to New York City.

      Add to that, just imagine if every plumber, HVAC technician, electrician et cetera just stopped doing ANY work in New York City.

      This is how the “national divorce” could start to snowball, without a single shot being fired…

      1. “LOLZ@ if truckers stopped delivering FOOD to New York City.”

        It would get pretty damn ugly pretty damn fast.

  6. . ‘You don’t want to buy a home right before it’s about to crash in value.’”

    Statements like this are problematic for “Always Be Closing.”

  7. ‘The California median benchmark is 18% off its $900,000 peak of May 2022, just 10 months earlier’

    And these sh$tholes are still sitting on huge CCP virus airpockets. How could this not end with yuuge numbers of foreclosures? We all know K-fornans whine and twist and turn at the first sign of the money river drying up.

      1. It takes time…over five years from the onset of the bust to the bottom in the last two episodes (1990-1996, 2007-2012, 2022-?).

  9. Of the Florida city’s 86 listings priced at $10 million and up on the market, 34 homes, or 40%, have received a price cut, according to data compiled by The Corcoran Group based on information from the Miami MLS.

    Get to sawin’ and slashin’ like you mean it, greedheads. This is as good as it gets for you before the bottom drops out of the Fed’s Housing Bubble 2.0.

  10. You live in a fooken desert.

    ‘A lot of people don’t take the drought seriously,’ said Wendy, as she stood in the kitchen of their $600,000 home.”

    2. Just drama. They get over an inch of rain a month and already have rain catchment. There’s at least 20 gallons per day in the tank. Five gallons is more than enough for a nice long shower. Two or three gallons per person/day covers drinking, cooking and dish washing just fine. It’s not rocket science to make rain water potable for what little you need to drink. I manage life from a modest water tank for a good part of the year.

      There’s a river just down the street. Is it illegal to fill a carboy and make off with it?

      1. There’s a river just down the street. Is it illegal to fill a carboy and make off with it?

        Only if you get caught.

    2. With noninflationary / nondevaluationary use of the Fed’s electronic printing press, perhaps?

  12. It’s 100% of the problem.

    ‘It’s been over a decade of low interest rates. That is part of the problem. It is self-caused.’”

  13. Socialism for the rich, and bootstrappin’ capitalism for the poors, that’s the way it’s always been, and it’s the way it will always be.

    CNBC — Treasury Secretary Yellen says the government could backstop more deposits if necessary to stop contagion (3/21/2023):

    “Treasury Secretary Janet Yellen said Tuesday the government is ready to provide further guarantees of deposits if the banking crisis worsens.

    In remarks prepared for a speech to the American Bankers Association, the former Federal Reserve chair said authorities believe they have taken appropriate actions to stem liquidity problems in the sector, but will do more if needed.

    “The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader U.S. banking system,” Yellen said. “And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

    The comments come in the wake of several bank failures, most notably Silicon Valley Bank and Signature Bank. Customers worried that liquidity problems caused by duration risk with the banks’ holdings could cause similar institutions not to be able to meet deposit requirements.

    In response, regulators said they would guarantee all deposits, going beyond the previous $250,000 level for the two banks. Yellen’s comments indicate that the authorities are prepared to do the same for other institutions that need it.”

    https://www.cnbc.com/2023/03/21/treasury-secretary-yellen-says-the-government-could-backstop-more-deposits-if-necessary.html

    “This sucker could go down” — George W. Bush, 2008

  14. For three months, the couple have eaten from disposable paper plates, had lightning-quick showers only every few days and collected rainwater to flush their toilets. ‘A lot of people don’t take the drought seriously,’ said Wendy, as she stood in the kitchen of their $600,000 home.”

    One of these things is not like the other. A $600K home when you need rainwater to flush the toilets? Dream on!

    1. “Arizona state officials stepped in last month to urge Scottsdale — run by the Democratic Party — to offer an accommodation to Rio Verde Foothills, an unincorporated settlement in Republican Party-run Maricopa County.”

      Now that’s a Pickle!

  15. Russia Today — Russia now China’s biggest oil supplier (3/21/2023):

    “Russia became China’s largest oil supplier in the first two months of 2023, overtaking Saudi Arabia, Reuters reported on Tuesday, citing data from China’s General Administration of Customs.

    Crude deliveries from Russia amounted to 15.68 million tons in January-February, roughly 1.94 million barrels per day (bpd). It marked a 23.8% increase compared to the same period in 2022.

    In response to Western sanctions and the G7 price cap on its oil, Russia has been pushing to secure new buyers in Asia. China has gradually boosted oil imports from Russia over the past year. By the end of 2022, Russia had become China’s second-largest supplier with 86.2 million tons. Saudi Arabia was only slightly ahead with 87.49 million tons.

    Trade turnover is on pace to hit $200 billion this year after jumping by double digits in the first two months. In January, Russia also became China’s largest supplier of natural gas, Chinese customs data showed on Monday.”

    https://www.rt.com/business/573354-russia-china-biggest-oil-supplier/

    What does The West actually have to offer the rest of the world?

    Not much. Russia was supposed to have collapsed by now, according to our betters. Turns out that withholding i-phones, Disney, McDonalds, Marvel Comics, drag queen story hour, and A.I.D.S. hasn’t had quite the economic outcome they expected 🙁

    1. McDonalds

      I still remember rolling my eyes when Mickey D’s pulled out of Russia. It didn’t take long for a Russian knock off to take its place.

    2. “What does The West actually have to offer the rest of the world?”

      A lot if you ask me:

      1. Can bomb their infrastructure
      2. Can drone their wedding parties
      3. Voyeur media & surveillance tech
      4. Crypto scams

  16. Joe Biden’s America.

    Violent youth fights at popular SF mall prompt police presence (3/20/2023):

    “Multiple large-scale violent fights among several dozen children occurred last week at Stonestown Galleria, near San Francisco State University, SF police said.

    The series of chaotic altercations gained attention online through cellphone videos on various social media platforms, including TikTok, Instagram and Twitter.”

    Children?

    I’m so confused. Are they children? Youths? Students? Spring breakers?

    “One cellphone video captured a large-scale brawl in which multiple juveniles can be seen punching each other. One child was repeatedly kicked while lying on the floor.

    Robert Rueca, an SFPD public information officer, told SFGATE that the department is aware of at least three incidents between March 15 and March 17 in which groups of children assaulted each other at the shopping center.

    Rueca said some children were pepper-sprayed by other children Friday, and officers responded to the scene. He said one child was transported to the hospital for non-life-threatening injuries.”

    https://www.sfgate.com/bayarea/article/youth-fights-at-sf-mall-prompt-police-presence-17850649.php

    “They’re not sending their best”

  17. Los Angeles Times — From red bastion to blue bulwark: What political shift in Colorado and West means for U.S. (3/21/2023):

    “The transformation is part of a larger political shift across the West: along the Pacific Coast, through the deserts of Nevada and Arizona, into the Rocky Mountain states of Colorado and New Mexico. Once a Republican bulwark, the region has become Democratic bedrock. That, in turn, has reshaped presidential politics nationwide.

    With a big chunk of the West — California, Colorado, New Mexico, Oregon, Washington — seemingly locked up, Democrats are free to focus more heavily on the perennial battlegrounds of the Midwest and venture into once-solidly Republican states such as Georgia.

    Patrick Winkler helped change the political complexion of Colorado.

    In the last 20 years, the state has gained more than 1.3 million residents, most settling — like Winkler — in Denver or the suburbs strung endlessly along the Rocky Mountains’ Front Range.

    Winkler moved three years ago from California, in part because the 29-year-old real estate agent wanted to own a home and knew his money would go further in Colorado.

    The political views he imported are typical of Winkler’s youthful cohort, which tends toward left of center. He voted for Biden in 2020 and Democratic Gov. Jared Polis last November, largely because of his contempt for the GOP — too narrow-minded, in Winkler’s view — and a particular dislike for Donald Trump.”

    https://archive.ph/kx1Gk

    California equity locust (who is also a REALTOR) with Trump Derangement Syndrome, just what we need more of.

    Thanks, Patrick, for helping make us NUMBER ONE IN THE COUNTRY for auto theft. Denver District Attorney Beth McCann is grateful for your vote.

    “They’re not sending their best”

    1. And no matter how bad it gets, Patrick will continue to vote D. And when Colorado, like California before it, becomes unbearable to Patrick he will just move on to another state and vote to ruin it as well.

      1. They only move because they can’t afford the house prices. That’s why they turn every place blue that they infest.

    2. hahahahahah he still thinks voting matters.

      The PTB decided that Colorado would be a commie state. They legalized pot by a very small pretend majority and from there they just got bigger and bigger “majorities” as they “counted” the votes.

      Now they don’t even pretend it’s close. 70-30 in favor of every single tax raise in ’22. Yeah that totally makes sense.

      1. FWIW, the state income tax rate decrease vote did pass and it was reduced from 4.55% to 4.4%

        1. oh boy, 0.15% gosh, that should buy me 2, maybe 3 eggs and it barely passed IIRC. like 53/47 something
          Vs. the gallagher amendment being repealed and your (cuz I”m gone) property taxes going up 50%. the sidewalk tax, the bag tax, I forget the others. Didn’t matter the town, city, state, it all passed and by huge margins. The 0.15% was just to let the rubes think their vote matters.

          1. I was very disappointed when Gallagher was repealed in 2020. The voter’s guide clearly explained that repealing it would shift property tax burden from commercial to residential. I have spoken to some people who are angry this will happen, yet voted to repeal it. “Did you read the voter pamphlet? It said that residential taxes would increase”. Them: “Uh, no. But from the TV ads it sounded like the right thing to do.”

            Anyway, my TABOR refund this year was over $2000

  18. From CNBC just now:

    “Higher mortgage rates have been cooling home prices since last summer, and for the first time in a record 131 consecutive months — nearly 11 years — prices were lower on a year-over-year comparison. The median price of an existing home sold in February was $363,000, a 0.2% decline from February 2022.”

    https://www.cnbc.com/2023/03/21/february-home-sales-spike.html

    1. Given the mania from last spring, in just a few months that number is going to be at least 10%. Will they have the guts to report that?

  20. Here’s my new DFW real estate update called markets in about a minute 3/20/203
    Darrell Self Your Collin County Real Estate Expert
    20, 2023
    Darrell Self is your Collin County Texas real estate expert. If you are looking to buy, sell, rent a home in Plano Texas, Frisco Texas. Allen Texas, Little Elm Texas, Prosper Texas, Mckinney Texas, Richardson Texas, Luca Texas,Parker Texas,Fairview Texas, Lavon Texas, Wylie Texas, Princeton Texas, Anna Texas, Melissa Texas, Farmersville Texas, Murphy Texas, Blue Ridge Texas,Nevada Texas, Lowry Texas, Weston Texas, New Hope Texas, Saint Paul Texas, Westminister Texas, Celina Texas, Royse City Texas, Sachse Texas.

    https://www.youtube.com/watch?v=qZa0OtOTixI

    1. The Financial Times
      Credit Suisse Group AG
      Wry humour, grief and Bear Grylls all on show at Credit Suisse conference
      ‘Embracing Reality’ is the prescient theme of stricken bank’s Asian Investment Conference in Hong Kong
      Participants at the Credit Suisse conference in Hong Kong
      Credit Suisse’s conference in Hong Kong began on Tuesday, just two days after a forced takeover of the bank by rival UBS
      Kaye Wiggins and Cheng Leng in Hong Kong 17 minutes ago

      As Credit Suisse entered weekend crisis talks that would end in its forced takeover, a group of its bankers embarked on a different sort of survival challenge: an outdoor adventure trip that they were filming for Bear Grylls.

      The executives spent Friday night on a camping retreat in Sai Kung, a picturesque town in Hong Kong known for its hiking trails, said three people with knowledge of the matter.

      Grylls, the TV adventurer, will use their filmed material in a presentation he is giving at Credit Suisse’s flagship investor conference in the city this week. The subject of his talk is “lessons learned from navigating some of the harshest environments”. The staff paid for the trip themselves, Credit Suisse said.

      It is just one element of the bank’s Asian Investment Conference that is unintentionally prescient: this year’s theme is “Embracing Reality”. Months in the making, the gathering began in Hong Kong on Tuesday just two days after a forced takeover by rival UBS at the behest of regulators that ended its 167-year independent history.

      “We must all continue to work as normal,” Credit Suisse’s chief executive Ulrich Körner and chair Axel Lehmann wrote in a memo to staff on Monday, the day after the sale.

      About 1,600 executives from asset managers, hedge funds, family offices and other investment groups arrived at Hong Kong’s five-star Conrad hotel to watch shell-shocked Credit Suisse executives attempt to follow that instruction.
      …

    2. The Financial Times
      Credit Suisse Group AG
      Asia investors ‘gobsmacked’ by $17bn Credit Suisse bond wipeout
      Risky AT1 debt was popular in the region and a sell-off has sparked margin calls
      Credit Suisse’s offices in Hong Kong
      The wipeout of Credit Suisse’s AT1s stunned investors because it forced bigger losses on bondholders than shareholders, upending the traditional hierarchy of creditors
      Mercedes Ruehl in Singapore, Leo Lewis in Tokyo and Kaye Wiggins in Hong Kong 5 hours ago

      The wipeout of $17bn of Credit Suisse bonds has sparked panic among rich Asian investors who had loaded up on the risky bank debt.

      Under the terms of the UBS takeover of Credit Suisse, orchestrated by the Swiss government on Sunday, Credit Suisse’s additional tier 1 bonds were written down to zero while shareholders received $3.25bn.

      The surprise decision stung some retail investors in Asia who are exposed to AT1s, a class of debt designed to take losses when institutions run into trouble but generally believed to rank ahead of equity on the balance sheet.

      “We haven’t slept since Sunday,” said one Singapore-based private banker. “People are completely gobsmacked.”

      In other parts of the world, the bonds are typically owned by institutional investors. Pimco, Invesco and Legg Mason are among the top holders of Credit Suisse’s AT1 bonds, according to Bloomberg data. Asia’s AT1 market is estimated to represent about $46bn out of the global total of $260bn.

      The wipeout of Credit Suisse’s AT1s stunned investors because it forced bigger losses on some bondholders than shareholders, upending the traditional hierarchy of creditors.

      Other regulators including the European Central Bank have since stressed that they would not follow the Swiss method in resolving a failing bank in their jurisdiction. Some investors are threatening legal action.

      Asian private bank clients led selling on Monday, where some panicked sellers pushed down AT1s issued by banks in Asia by between 2 and 10 points, depending on the country. The market for the bonds recovered on Tuesday but Asia AT1s were still lower than last week.

      The selling included wealthy clients who owned the AT1s with leverage and were receiving margin calls, said two private bankers.
      …

  23. “For 30 years the US Fed has merrily fed us easy money policies, then expressed shock – shock! – that those policies led to disaster-after-disaster: …”

    We watched Casablanca on TV last weekend. The movie definitely ages well.

  24. “2007: Prices fell 30% in 10 months, with losses that grew to 59% in 21 months.”

    Not sure what numbers this guy is looking at but prices in California did not fall 59% in the last bubble. They should have, but they didn’t.

    1. You’re correct, my mother sold the family home in Riverside for 650k in late ‘05, it sold in ‘09 for 175k——— that’s a 73% decline. But, only an anecdote, albeit an accurate one.

      1. The “homeowners” who lost it to foreclosure probably trashed it, dumped concrete down the drains, took the kitchen cabinets, etc etc. So not really apples to apples. Plus, it is Riverside, so barely even California.

  25. “I think with real estate, and it’s basically how everything in the economy works, it’s really the story of how much money people can borrow.”

    Not a wise plan in a country with actual fixed mortgage rates. In a country like Canada where the “fixed” rate lasts a couple of years, it’s beyond stupidity. Hope you all learn the lesson.

  26. “When that bank inevitably failed, these Masters of the Universe howled for a taxpayer bailout. In conference calls with federal regulators, they whined about what could happen if large depositors lost their money: the venture firms’ portfolio companies wouldn’t be able to make payroll, employees would threaten to quit, the venture firms might have to prop the companies up with cash out of their own coffers!”

    I don’t think the ‘Not a Bailout’ propaganda campaign from on high is gaining much traction.

    1. I don’t think the ‘Not a Bailout’ propaganda campaign from on high is gaining much traction.

      Does it matter? Will it deter them from bailing out the people who matter? Sure, the bank stocks will crater, but that will mostly affect 401Ks and IRAs.

      1. Exact my thoughts when they were babbling about how it’s not a bailout and bondholders and stockholders will lose their shirt. You are the bagholders, the criminals have already cashed out, which was actually bailed out.

    2. Gavin Newsom got bailed out because he has millions in SVB. Now he get to stick it to CA with 368Billon in reparations expenses. See how that works.

      1. Seriously, how will that be funded? That’s about $10,000 per every resident. More than half can’t come up with $500

  27. “As J.P. Morgan chief economist Michael Feroli said this week: ‘There’s an old saying: Whenever the Fed hits the brakes, someone goes through the windshield.’”

    It often turns out to be a drunk banker wearing no seatbelt.

  28. For three months, the couple have eaten from disposable paper plates, had lightning-quick showers only every few days and collected rainwater to flush their toilets. ‘A lot of people don’t take the drought seriously,’ said Wendy, as she stood in the kitchen of their $600,000 home.”

    No one could’ve seen it coming!

  29. Could a New York Judge deny Trump bail by saying he’s a flight risk because he has a jet?
    Remember when they were transporting Oswell from jail was when he got killed by Jack Ruby.
    Trumps recent statements about the One World Order/ Deep State, need to stop Ukraine War ,Congressional hearings on Covid cover ups, release of tapes on Jan 6 evidence, etc. gives motive for this arrest.
    For a Presidential candidate to actually declared a platform of declaring the real issues is something the Powers that be have to stop from being a narrative even debated.
    Now the narrative is ” Nobody is above the law”, while we watch high crime not being addressed, and street crime off charts
    Trump said ” Take back The Nation” which implies a invasion or capture of Nation US that needs to be taken back from the Takers.
    Just saying

  31. I would like to introduce you to your new governors, mayors and city planners.

    Griff Jenkins
    @GriffJenkins

    BREAKING: FOX News captures exclusive video of Chinese nationals being released publicly to an NGO in Brownsville, TX. CBP sources say they are being released w NTAs (notices to appear) because there are so many crossing and no more space to house them @FoxNews

    https://twitter.com/GriffJenkins/status/1638159847597256704?s=20

    Griff Jenkins
    @GriffJenkins

    NEW: FOX News cameras were rolling as more Chinese nationals illegally cross into the RGV sector this morning… this group of 5 would not say how much they paid to smugglers. The RGV sector seeing a more than 900% increase in Chinese nationals since last year… @FoxNews

    https://twitter.com/GriffJenkins/status/1637822818371919872?s=20

    1. You gotta love it. On one hand we are rattling sabers with China. Then we release men captured at the border who are likely Chinese agents and who will disappear into the woodwork until it’s time for them to perform.

      1. You were warned.

        PROPERTY TAXES. I can not emphasize that enough.

        Despite recent actions in some Republican controlled state legislatures, in Democrat Party states the promotion of this is part of the public school curriculum.

        And you have ZERO say in the matter. NONE.

        Big Pharma and all the tranny medical “experts” are making Too Much Money for it to stop, because it’s a guaranteed income stream for them.

        The virtue signal aspect of it (i.e. Jazz’s alleged mother) is a whole other level of sickness and depravity that is tangential to property taxes, but as long as all The Right People are making money, it will never stop.

    1. “Court documents from the eviction used she/her pronouns to refer to the person living in the apartment, and a friend of the tenant said she was transgender. The Stranger is not publishing her name at this time.”

      That $6,300 in rent arrears was never going to be paid, and (she?) didn’t want to surrender the apartment to a paying tenant.

      1. didn’t want to surrender the apartment to a paying tenant

        So he committed suicide and the apartment will be rented out to a new tenant anyway.

        I feel a little sorry for him. He was messed up and instead of being helped the Medical Industrial Complex just effed him up even more.

    1. Yahoo
      Business Insider
      Brace for the S&P 500 to plunge 50% and a painful recession to strike as the ‘everything bubble’ bursts, elite investor Jeremy Grantham warns
      Theron Mohamed
      Tue, March 21, 2023 at 6:45 AM PDT·2 min read

      – Jeremy Grantham expects stocks to plunge and a recession to hit as the “everything bubble” bursts.

      – The investor warns the S&P 500 could halve in value to around 2,000 points in a worst-case scenario.

      – Grantham advised against betting on US stocks for the short term, and touted emerging markets.

      Jeremy Grantham has warned the implosion of an “everything bubble” could tank the S&P 500 by up to 50%, and plunge the US economy into a painful recession.
      …
      https://finance.yahoo.com/news/brace-p-500-plunge-50-134507664.html

    2. – Jeremy Grantham and Nouriel Roubini are well known for their bearish views on the market and economy.
      – In a new PBS documentary about the Fed’s decade of cheap money, Grantham and Roubini ring the alarm for stocks.
      – These are Grantham’s and Roubini’s top quotes from the Age of Easy Money.

      Jeremy Grantham of GMO and economist Nouriel Roubini are well known for their ultra-bearish views on the stock market and the economy.

      A new PBS Frontline documentary, Age of Easy Money, chronicles the Federal Reserve’s monetary policy decisions over the past decade and explores the potential financial consequences going forward.

      Starting in 2009, the Fed embarked on a decade-long policy of providing cheap money to the economy by buying trillions of dollars of debt securities and keeping interest rates near zero. But last year, the Fed aggressively reversed its monetary policy by hiking interest rates and reducing the size of its massive bond portfolio.

      – Michael Burry and Jeremy Grantham have both warned the stock-market crash is well underway.
      – Nouriel Roubini, Robert Kiyosaki, and Harry Dent also expect asset prices to plunge further.
      – Here’s a roundup of what five market doomsayers are predicting.

      Michael Burry, Jeremy Grantham, and other market experts have warned the stock-market downturn this year is far from over.

      Nouriel Roubini, Robert Kiyosaki, and Harry Dent are among those predicting asset prices will plunge further. They have cited excessive valuations, stubborn inflation, a potential recession, pandemic disruptions, and food and fuel crises as some of the reasons they expect a devastating crash.

      Here’s what 5 doomsayers have said about the stock market:

      Both Grantham and Roubini offered their views on what the Fed did to markets in the documentary, and what could happen next.

      Here are their top quotes:

      1. Roubini on the $1,400 fiscal stimulus paychecks in 2021

      “People like myself, like Larry Summers and others, saw that that massive stimulus — it was unprecedented, an order of magnitude greater than the one we had after the [2008] global financial crisis — would lead to excessive demand, overheating and inflation,” Roubini said.

      “We had bailout checks sent to everybody — every household, every firm, every financial institution. It was too much and should have been more selective.”

      2. Roubini on central banks driving bubbles

      “We have had literally a few decades of ever-increasing bubbles that have been fed and supported by central banks. And not only have we had bubbles, but we’ve had bubbles that have been fed by excessive leverage, excessive private and public borrowing and excessive risk-taking,” Roubini said.

      3. Roubini on central banks popping bubbles

      “The party is over. Inflation is high and rising. Central banks have to increase rates. That is bursting the asset bubbles. It’s increasing the amount of the debt servicing of everybody who over-borrowed like crazy. So we lived in a bubble, in a dream, and this dream in a bubble is bursting and is turning into an economic and a financial nightmare,” Roubini said.

      4. Grantham on the Federal Reserve bailing out investors

      “Over the years, we’ve been trained to believe that the Fed is on our side. What the Fed has trained us to believe is that if we make a bet in the market and we win, we’re on our own. We get to keep the profits. If we lose, they will bend every effort and every dollar they can get their hands on, one way or another, to bail us out. This is asymmetry of the most splendid kind,” Grantham said.

      5. Grantham on speculation and euphoria marking the top of bubbles

      “It’s the burst of euphoria that typically brings these things to an end… The housing market, the stock market and the bond market, all overpriced at the same time. If the Fed knew what it was doing it would not allow bubbles of this magnitude to take place,” Grantham said.

      6. Grantham on the financialization of the economy

      “In my career in America, the percentage of GDP that goes to finance has gone from 3.5% to 8.5%. In a way, we’re like a giant bloodsucker, and we have more than doubled in size and sucking more than twice the blood out of the rest of the economy. And we do not generate any widgets. We do not generate any real increase in income. We are just a cost,” Grantham said.

      Interviewer James Jacoby: “When you say ‘we,’ you mean you and other members of the financial community have been this kind of bloodsucker on the economy? Is that what you’re saying?”

      “Yes. Collectively we fulfill a completely necessary service, but what we have done is created layers upon layers of more and more convoluted, expensive financial instruments. And that’s what makes all the profits for the financial industry. It’s taken a lot of ingenuity and salesmanship to make this happen, and a lot of lobbying in Congress, and we have imposed on the rest of the economy the idea that banking and finance are utterly important at all times. If you do anything wrong to us, the entire economy will collapse in ragged disarray,” Grantham responded.
      …
      https://www.msn.com/en-us/money/markets/nouriel-roubini-and-jeremy-grantham-sound-the-alarm-for-stocks-in-a-new-documentary-here-are-the-bearish-market-pros-best-quotes/ar-AA18UeYH?ocid=hplocalnews

  36. If anyone wanted to “idenify” as a blind man they could rack up some gold medals.

    USA Blind Soccer team makes debut in South Bay

    The U.S. will participate in the blind soccer competition for the first time when the Paralympic Games come to Los Angeles.

    Author: Jasmine Ramirez
    Published: 10:15 PM PDT March 19, 2023

    CHULA VISTA, Calif. — History was made in the South Bay with the USA Blind Men’s Soccer Team debuting in Chula Vista and winning against Canada’s team Sunday.

    The team has eight athletes with visual impairments and two sighted goalkeepers. Alvaro Mora Arellano started playing soccer at five, just a few years after losing his eyesight.

    https://www.cbs8.com/article/news/local/usa-blind-soccer-team-makes-debut/509-3eef9a9c-348c-4964-9421-12bc6576de79

  37. “The big winners of the pandemic: 2% mortgage rate holders”

    Too early to tell! Wait until they try to sell before deciding if they won something…

    1. Yahoo
      Fortune
      The big winners of the pandemic: 2% mortgage rate holders
      Alena Botros
      Tue, March 21, 2023 at 2:26 PM PDT·6 min read

      There were a few good things to come out of the pandemic—remote work for one, to-go cocktails, and historically low mortgage rates. And the homeowners who locked in mortgage rates around 2% or 3% may just be the big financial winners of the pandemic, as rates are currently hovering around 7%. As of Tuesday’s reading the average 30-year fixed rate came in at 6.75% and the average 15-year fixed rate at 6.17%.

      As Fortune has previously reported, the low mortgage rates of the past are keeping some homeowners from selling and also triggering a wave of “accidental landlords,” because they don’t want to sell and lose their low rates. For some, they’re simply feeling lucky to have locked in lower rates for, what they say are, their “forever homes.” Either way, there’s pressure on both sides of the market, as 99% of borrowers have a mortgage rate below the current market rate, according to Goldman Sachs.

      “High interest rates are constricting both buying, obviously because people can’t afford these higher mortgage rates, and selling because homeowners want to hold on to their low interest rates,” Redfin’s chief economist Daryl Fairweather previously told Fortune. “There are fewer buyers and there are also fewer sellers, but the decline in buyers is what’s dragging down prices and the combination is what’s contributing to the decline in sales.”
      …
      https://finance.yahoo.com/news/big-winners-pandemic-2-mortgage-212632862.html

      1. “…the decline in buyers is what’s dragging down prices and the combination is what’s contributing to the decline in sales.”

        It amazes me how many professional economists don’t understand how budget constraints constrain home purchase prices.

    1. Yahoo
      Bloomberg
      Ark’s Cathie Wood Sees Silver Lining in $2 Billion Loss
      Emily Graffeo and Caroline Hyde
      Tue, March 21, 2023 at 11:02 AM PDT·2 min read

      (Bloomberg) — Cathie Wood highlighted one silver lining of the brutal run her exchange-traded funds suffered through last year: those billions of dollars in losses will help offset future tax bills on gains.

      The founder and chief executive officer of ARK Investment Management told Bloomberg TV Tuesday that she has over $2 billion in losses from selling stocks during the market rout. By selling stocks at a loss, those losses can now lower, and potentially offset the tax bill Wood’s funds could receive on future capital gains.

      “It’s over $2 billion right now against which we can take future gains and then concentrate towards our highest-conviction names,” Wood told Bloomberg Technology.

      Wood explained that as her flagship fund fell from its February 2021 peak, it reduced the holdings from more than 50 to just 28 stocks. Selling stocks at a loss to offset a portfolio gain is a popular strategy investors use during market downturns to soften the blow of a rout.
      …
      https://news.yahoo.com/ark-cathie-wood-sees-silver-180229789.html

      1. Selling stocks at a loss to offset a portfolio gain is a popular strategy

        Only idiots celebrate losses for the sake of tax relief.

Comments are closed.