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They Thought They Could Never Go Wrong

A report from Houston Agent Magazine in Texas. “Y’all, I hate to lick all the red off your candy, but the days of a super-hot real estate market are behind us (at least for now). While on the surface, that sounds like a bad thing, I have news that will make your day. A recession is your time to shine! Calling your past clients is nonnegotiable. After you exchange pleasantries and the person realizes you might have an inside scoop to share, they will lower their voice conspiratorially and say, ‘So tell me — is the market crashing?’ After all, they’ve seen the news. Be upfront about the current market conditions, and provide them with realistic expectations — even if it means acknowledging a loss.”

Fortune on California. “The mega-realtors and brokers of L.A. are apocalyptic about what the new tax will do. ‘I think that it is the worst thing [to] happen to the real estate market in Los Angeles since 2007, 2008,’ Los Angeles-based realtor Josh Altman told Fortune. At this point, Altman thinks ‘there’s going to be a lot of inventory and that’s going to affect the market,’ a mansion glut, if you will.”

The San Francisco Chronicle in California. “Fueled by the tech boom, downtown San Francisco became the nation’s most expensive office market. Office work, concentrated downtown, accounted for more than 75% of the city’s GDP and the area generated 95% of the city’s business tax revenue in 2021. Now it is the emptiest market in the nation. The office vacancy rate soared to a record high 29.4% this month, nearly eight times the 3.7% vacancy rate at the end of 2019.”

“‘It’s sort of ground zero for remote work’s impacts,’ Arpit Gupta, an associate professor of finance at New York University who co-authored a widely read doom loop paper last year, told The Chronicle during a recent San Francisco visit. ‘There’s a little bit of desolation in the air, so it definitely seems a little bit apocalyptic to me.'”

“‘Before the pandemic, a lot of cities just sort of took an attitude towards their residents that they had no other choice,’ Gupta said. ‘You have to live here, be it in San Francisco or New York or some other high-cost city. And that means you can kind of get away with offering those residents a poor quality of living. You can have very high house prices. You can have poor quality of governance. And people just don’t have a choice. They have to stay there and live in the city. What’s changed now is that people do have a choice.'”

From Bisnow. “Office towers in the heart of the country’s biggest cities had always been the gold standard of commercial real estate. Now, owners of all but the newest and best buildings and the banks holding their debt are locked in a negative feedback loop of sinking value and vanishing liquidity. Without some sort of intervention or assistance from federal regulators or a bailout from elected officials, industry advocates say the office sector could collapse — and drag regional banks with it, causing the sort of broad financial catastrophe that nearly occurred with Silicon Valley Bank.”

“‘We’re at risk of what happened in 2008 and 2009, but this time for commercial real estate rather than mortgages,’ CCIM Institute Chief Economist and former commercial real estate adviser to the Federal Reserve KC Conway told Bisnow. ‘We’re going to see a lot of maturity defaults this year, and if there’s no capital to fill in, you’re going to see price discovery, and the water will drain out of the pool and reveal that people are not wearing swimsuits. The stress from Covid hit, and everyone said, ‘We can’t collapse the economy, so let’s paper over everything we can and make sure that nothing blows up until Covid is solved,’ Conway said. ‘And so now that’s coming due.'”

The Commercial Observer. “‘During my 10-plus years at Signature, we originated over 7,000 CRE loans totaling over $35 billion,’ George Klett, the former head of Signature’s real estate practice, wrote in a column for CO. ‘We had zero losses.’ It was, according to Klett, only when regulators insisted on diversifying Signature’s portfolio that trouble came. ‘We were told that we were heavily concentrated in CRE loans and that that was extremely risky. … As Signature decided to diversify its business, I became concerned. When they opened offices in California and other states, and began accepting deposits from crypto companies, I sold all of my remaining SBNY stock.’ Klett was proven painfully correct in that call.”

The Washington Post. “Flush with cash from a booming tech industry, Silicon Valley Bank executives embarked on a strategy in 2020 to juice profits that quickly triggered an internal alarm. An internal model showed that higher interest rates could have a devastating impact on the bank’s future earnings, according to two former employees familiar with the modeling who spoke on the condition of anonymity to describe confidential deliberations. Instead of heeding that warning — and over the concerns of some staffers — SVB executives simply changed the model’s assumptions, according to the former employees and securities filings.”

“‘Management always wanted to tell a growth story,’ one former employee involved in the bank’s risk management said. ‘Every quarter, there was always this pressure to deliver earnings.'”

“In an apparent bet that interest rates would go down last fall, SVB sold for a profit the financial instruments it used to hedge against the risk of higher rates, according to a company presentation. Instead, the opposite happened. ‘They thought they could never go wrong,’ said a former bank official who spoke on the condition of anonymity to discuss internal business practices, recalling an internal stress test in late 2018 or 2019 that showed SVB could lose at least a third of its deposits over two years. Executives directed that that model also be reworked. ‘If they see a model they don’t like,’ the official said, ‘they scrap it.'”

The Globe and Mail in Canada. “1748 E. 55th Ave., Vancouver. Asking price: $1,990,000 (Nov. 9, 2022). Previous asking price: $2.28-million. Selling price: $1,850,000 (Jan. 12, 2023). Snowy weather was a setback for showings. Listing agent Bryan Yan started off at $2.28-million but didn’t get any offers. He dropped the asking price below $2-million and that triggered interest. He received two offers and the sellers accepted the offer that was subject-free. Last year, Mr. Yan forecasted a price drop of 10 per cent or more this year, and that’s what happened with this house, he says. About a year ago it would have sold for at least 10-per-cent more. The listing was an estate sale.”

“‘It’s a really old, outdated house that needs to be updated,’ Mr. Yan says. ‘But it’s in a good location on a 43-foot lot. And there aren’t many sales around Fraser right now.'”

The Daily Mail. “Yet another construction company has gone into administration as the industry experiences a financial crisis brought on by soaring building costs. The Lloyd Group, a civil design and construction group, went into voluntary administration on Friday with about 59 projects still uncompleted, including 30 in New South Wales and 29 in Victoria. The development came on the same day as one of Australia’s largest construction companies, Porter Davis Homes, went into liquidation with more than 1,500 projects still yet to be finished.”

“An owner of one of the unfinished houses, Sojuy Gosh, was brought to tears after finding out the company went into administration. The father-of-two was told he and his family would be able to move into the home in May last year after giving hundreds of thousands of dollars to Porter Davis. ‘With all the time and energy we invested, it’s not something we expected,’ Mr Gosh told A Current Affair.”

News.com.au in Australia. “Disgruntled tradies have allegedly vandalised a woman’s home in Melbourne’s southeast following the collapse of builder Porter Davis on Friday. The new mum told the Herald Sun about $50,000 worth of damage had been done to her Berwick build after sink and bathroom taps were intentionally left running, flooding the property with 7cm of water. All of the doors and walls were also scratched with a knife. The woman, who did not wish to be named, told the newspaper she believed the damage was caused by subcontractors working on the home.”

“‘I’m completely devastated and shocked,’ she said. ‘We worked so hard and put a lot of money into this house to only hope we could bring our new baby home this week. What they have done has not affected Porter Davis at all but unfortunately only us as now the damages are more than what we had remaining on the house.'”

“According to the Herald Sun, a number of under-construction homes with Porter Davis signage were targeted by heartless looters across Melbourne over the weekend, with clients reporting ripped fixtures, shattered windows, smashed cabinetry and stolen furniture. It comes after another Porter Davis customer shared her distressing story with ABC Radio on Monday morning. Speaking to ABC 774 Melbourne host Ali Moore, the woman named Kayla revealed that she and her husband had paid more than $800,000 for their home, which was just four weeks away from completion.”

“‘We’re supposed to be moving in on April 30 and then all of a sudden my husband and I read it in the paper at 9.30am on Friday morning … complete shock,’ she said. ‘The worry and stress since Friday – we’ve been going to the site three, four times a day, making sure that no one’s going on site, no one’s trying to get in, because we’ve been reading in the papers that people have been breaking in and stealing stuff. We’re just so worried. We can’t even get in because the house is locked. We were told that we can’t get keys, we were told that we can’t enter on site, and so we go there just watching a house that’s just sitting there.'”

“‘Who’s responsible for our site, who’s going to look after our site now? We have an almost complete house, what if somebody breaks in? Who’s responsible for that? And we’ve been just left up in the air,’ she said. ‘We don’t know whether it’s insured, we don’t know who’s responsible if something happens to it. And when you’ve handed out more than $800,000, it’s like we’re vulnerable. What’s going to happen?'”

“‘We’ve been very patient. We’ve been renting for two years, we’ve got a mortgage, now interest rates are going up. We’re paying a mortgage for a house we don’t have or we don’t know what’s going to happen to.’ She added, ‘This house was meant to be our forever home, we poured all of our savings into it and now we don’t know what’s going to happen.'”

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This Post Has 95 Comments

  1. ‘you’re going to see price discovery, and the water will drain out of the pool and reveal that people are not wearing swimsuits. The stress from Covid hit, and everyone said, ‘We can’t collapse the economy, so let’s paper over everything we can and make sure that nothing blows up until Covid is solved,’ Conway said. ‘And so now that’s coming due’

    They did collapse the economy KC. Have fun! Don’t say you weren’t warned.

    1. BTW, lest anyone forgot why they collapsed the economy: orange man bad. They purposefully did this to wreck the economy before the election. We had one long time poster from California who was overjoyed when the lockdowns started.

      2. Overjoyed to be treated like a criminal and have the economy wrecked. The correction would have come, but now it will be 3x as bad.

    2. At least they had the good grace to wait until Covid was solved to blow it up. They blew it up real good!

          1. Its deadliness was highly exaggerated. A lot of people were conned into believing it was the black death, and thus rolled up their sleeves for an unproven and experimental “vaccine”.

            It was the biggest psyop in history.

          2. Its deadliness was highly exaggerated.

            Mortality rates in the US didn’t go against the trend in 2020, or in 2021. Not even a visible bump or blip in the curve.

            Lies were told. Whoppers!

          4. It went from a bad flu to a mild cold. For that, billions of people have experimental mRNA injected into their bodies to create billions of cytotoxic spike proteins that damaged their organs and cardiovascular system.

          5. experimental mRNA injected

            But she didn’t have an mRNA injection so it’s TOTALLY different. Never mind the spike protein is the problem.

  2. ‘Management always wanted to tell a growth story,’ one former employee involved in the bank’s risk management said. ‘Every quarter, there was always this pressure to deliver earnings.’

    So they were just greedy. That’s never bit anyone in the a$$ before!

  3. ‘Who’s responsible for our site, who’s going to look after our site now? We have an almost complete house, what if somebody breaks in? Who’s responsible for that? And we’ve been just left up in the air,’ she said. ‘We don’t know whether it’s insured, we don’t know who’s responsible if something happens to it. And when you’ve handed out more than $800,000, it’s like we’re vulnerable. What’s going to happen?’

    Soju, Kayla, new mum, you have to look on the bright side. It’s still cheaper than renting. And you can paint those knife scratched doors and walls, flooded floors and broken windows any color you like!

    1. And you can paint those knife scratched doors and walls, flooded floors and broken windows any color you like!
      On the bright side, at least you don’t live in Chicago otherwise those walls would be full of bullet holes.

      1. Only on the south and west sides. The north and northwest and suburbs have murder rates comparable to Western Europe. No one ever talks about that because Austin and englewood have some of the highest murder rates in the world.

  4. ‘It was, according to Klett, only when regulators insisted on diversifying Signature’s portfolio that trouble came. ‘We were told that we were heavily concentrated in CRE loans and that that was extremely risky. … As Signature decided to diversify its business, I became concerned. When they opened offices in California and other states, and began accepting deposits from crypto companies’

    Diversify into imaginary coins: sound lending!

    1. Bitcoin seemed like a great investment when it bubbled to $65K a token. Many still cling to the hope of dollar collapse and discovery that Bitcoin was an inflation hedge with fundamental value after all, even though it abysmally failed last year when inflation shot up and interest rates followed, collapsing to circa $20K. And it doesn’t seem like SBF’s efforts to develop bipartisan support for cryptocurrency as a legitimate asset class has come to fruition.

      What kind of dope are the cryptobois token?

    2. Diversify into imaginary coins: sound lending!

      And people are still buying these e-tulips. I don’t get it.

      1. They haven’t figured it out the vicious cycle yet:

        1. The price of Bitcoin will only increase to hundreds of thousands if there is still hope of widespread adoption as a currency.*
        2. When that didn’t happen, the price of bitcoin increased ONLY due to hope of institutions and pension funds throwing trillions into Bitcoin.
        4. Pensions funds will only buy into Bitcoin if it gains stability from regulation. They can’t afford another FTX.
        5. Regulation will instantly class Bitcoin as an asset and not a currency.

        And we return to
        1. Bitcoin WON’T be widespread adoption as a currency so
        2. The price WON’T increase, so
        3. Pensions fund WON’T buy into it, so
        Bitcoin will no value. It will take a while to get to this point.

        ——–
        * Adoption doesn’t mean accepting Bitcoin (or some stablecoin token substitute) as an additional currency on top of the currencies we have.
        In order for “widespread adoption” to increase the worth of Bitcoin, Bitcoin has to SUPPLANT other currencies such as the dollar or yen or euro, like when the Euro supplanted the Mark and the Lira and the Franc.

        1. You’re most likely right, but that doesn’t mean the ponzi can’t go on for years or decades. It’s lasted over 10 years already.

      2. The Everything Bubble is a very appropriate name. 90% of crypto is crashing or has crashed. Stocks still have to hit capitulation this October. Housing still has 3 down years, and finally, the most anticipated recession in history grinds its way forward.
        The fun is just starting!

    1. What happens if European voters start electing nationalist candidates

      I would wait to see if the new Finnish government is truly nationalist, or is just a bit less globalist than the previous one.

      I remember there was much rejoicing when Brit voters chose Brexit, but if you fast forward to the present, even though their government is allegedly Tory the UK is clearly under the thumb of the WEF and globalists.

  6. Be upfront about the current market conditions, and provide them with realistic expectations — even if it means acknowledging a loss.”

    But…but…always be closing!

  7. SVB . An internal model showed that higher interest rates could have a devastating impact on the bank’s future earnings,
    Every bank has these models. Apparently the Powers that Be (were) at SVB decided they were “smarter” than the risk models and thought they could actually predict interest rates (yeah, GFL on that.) During the GFC at a closed door financial meeting at my former TBTF bank, the CFO credited our risks modeling for saving us and the reason for us not needing the Fed money (we apparently took in any way because, IIRC, all banks needed to take it so no one would know which banks needed it.) Anyway, these risk models give you some variance that you manage your business from. Apparently SVB just said, F the risk models, we don’t need no f’in risk models..
    I think the BOD at all banks for the next 10-15 years will be asking serious question about Risk Models and Fixed vs. variable rate assets and liabilities. (Rhymes with 1980 S&L crisis.) Will the NASDAQ soon start to rhyme with 2000?

    1. An internal model showed that higher interest rates could have a devastating impact on the bank’s future earnings

      Computer models? Your grandma could have told you what would happen.

      1. Exactly Blue, I grew up next door to my Grandma, she was born in 1903, and she would have made a great risk manager.

    2. There are those who claim that tech will be immune to a financial recession. Who do they think buys the online ads, software, and hardware? It’s people who are getting laid off, small businesses that are getting crushed, and big businesses that are slashing spending. People with no job will not be spending. Small businesses that don’t start up or that shut down will not be buying anything. Big businesses that are cutting headcount will need fewer computers and software licenses.

      1. Big businesses that are cutting headcount will need fewer computers and software licenses.

        Keep a close eye on the cloud biz, especially SaaS. There’s a reason firms like Salesforce are pre-emptively laying off people.

        1. In case of salesforce, the S is the SaaS is pretty $hit tbh. They should be belly up by now if not for the zirp.

  8. The office vacancy rate soared to a record high 29.4% this month, nearly eight times the 3.7% vacancy rate at the end of 2019.”

    Gosh, I fear this could result in severely impaired collateral for the lenders holding the notes on those white elephants. Not sure Yellen the Felon & BlackRock Jay are gonna be able to print this away.

  9. . An internal model showed that higher interest rates could have a devastating impact on the bank’s future earnings,
    That is the beauty of models. Don’t like the result, change the assumptions. I had management more than once tell me to change the assumption on the Proforma because the current proforma wasn’t giving us the “required” ROE to proceed and management wanted this project. To be fair, a proforma on new business initiatives is pretty much an educate (Uneducated in some cases) guess so there lots of opinions on what the assumptions should be.

  10. And when you’ve handed out more than $800,000, it’s like we’re vulnerable.

    Gosh, I hope no one vulners you.

    1. I thought U.S. citizens were largely irresponsible, but the Aussie are an order of magnitude worse.

      1. Having lived outside the US I can assure you that we don’t have a copyright on that. And I suspect that mass immigration has affected us in that manner and shifted us away from being a “high trust” society.

    2. Meanwhile US homebuilder stocks are still near all-time highs. Are they that well hedged?

    1. In Wyoming of all places. From her bio on wikipedia, she sounds like a mini AOC:

      “She has previously worked as a waitress, photographer, and private investigator.”

  13. A reader sent these in:

    Stages of a Super Bubble (using S&P 500 chart since 2009 bottom).

    https://twitter.com/BP_Rising/status/1641949944041943041

    The only people bullish are people working in real estate who have lives that depend on it turning bullish again

    https://twitter.com/NipseyHoussle/status/1641945387018715141

    Maybe taking interest rates to 0% for years and reducing reserve requirements to zero was a bad idea ?

    https://twitter.com/WallStreetSilv/status/1642499134534963201

    Anyone want to have a guess what this chart is? No, it’s not your favorite meme stock. It’s AUM in money market funds in trillions, up $77 billion the last week. src: Fed You tell me: is the banking crisis over?

    https://twitter.com/AxelMerk/status/1641896869730349056

    A tax center in France was set on fire overnight from Thursday to Friday. Protesters suspected. Things are getting intense 🚨

    https://twitter.com/WallStreetSilv/status/1642233325187223554

    YOU KNOW ITS BAD WHEN THE COMPANY WHICH IS SUPPOSED TO HELP YOU FIND A JOB IS LAYING OFF ITS EMPLOYEES

    https://twitter.com/gurgavin/status/1642178919355883521

    Median Home Value by State:
    1. Hawaii: $835,000
    2. California: $719,000
    3. Washington: $553,000
    4. Massachusetts: $545,000
    5. Colorado: $530,000
    6. Utah: $496,000
    7. Oregon: $474,000
    8. New Jersey: $440,000
    9. Idaho: $431,000
    10. New Hampshire: $421,000
    11. Montana: $421,000
    12. Nevada: $409,000
    13. Arizona: $406,000
    14. New York: $405,000
    15. Florida: $377,000
    There are now 26 states with a median home value of $300,000 or more. Meanwhile, the median home sales price in the United States is up over 45% in 3 years to $468,000.

    https://twitter.com/KobeissiLetter/status/1642276961115308032

    Crazy we suddenly started using the listing price instead of closing prices. Nice

    https://twitter.com/NipseyHoussle/status/1642401933381054464

    100k is the new minimum wage

    https://twitter.com/StealthQE4/status/1642373374683799552

    Literally nobody other than realtors, lenders and “mom and pop” investors are calling for him to lower rates. Nobody else wants to see him capitulate. RE folks think normal people care about their portfolio

    https://twitter.com/NipseyHoussle/status/1642314308406112261

    The company that failed at predicting home prices predicts home prices

    https://twitter.com/GRomePow/status/1642314428514463744

    Spoke to Miami realtor. Says special assessment tsunami is killing the condo market. Deals falling though left and right. DOM sky rocketing. 🚀

    https://twitter.com/NipseyHoussle/status/1642264852096843780

    Tech’s PE has now jumped so much that it now trades at a 38% premium to the S&P. This is even higher than at the pandemic bubble peak in late 2021! Wild to think that pre-Powell pivot in 2019, tech traded at just a 4% premium to the market.

    https://twitter.com/CameronDawson/status/1642230879505334272

    “UK house prices fall at fastest annual rate since 2009”

    https://twitter.com/JohnWake/status/1642288183567351809

    Another ZIRPBOYZ prodigy barking up the free money tree…Can Federal Government have a clawback on your past profits, when they were artificially inflated and effectively handed out to you on a tray by your ex colleagues at the Fed?

    https://twitter.com/INArteCarloDoss/status/1642583611902656512

    $UBS is slashing 30% of staff while prosecutors are looking at the $CS deal in greater detail

    https://twitter.com/unusual_whales/status/1642620443801825280

    BREAKING: 🚨 🚨 🚨 McDonald’s layoffs … everything is fine 🔥🔥🔥

    https://twitter.com/WallStreetSilv/status/1642663968777879556

    Woman carjacks an elderly woman and goes on a rampage trying to get away in Agoura Hills, CA

    https://twitter.com/ClownWorld_/status/1642192583467372544

    2. “A tax center in France was set on fire…”

      We could learn something from the bourgeoisie.

      1. The media tries to portray the French riots as being a bunch of lazy boomers who don’t want to work two more years, when in fact most of the protestors are young and it’s actually a continuation of the yellow vest revolt, who are fed up with watching their country being destroyed by globalists.

          1. Not enough virbants, correct?

            I’m sure Macron would love to import more Moroccans and Algerians.

    3. 719k for a house in California. That already shows a healthy 11% decline. The panic hits when this Spring and Summer bear nothing but dead shoots.

  17. Is the banking contagion risk at least contained now?

    And how about inflation, which is what drove up interest rates so fast. Is that under control?

    1. 9 weather alerts in effect
      U.S. bank closures raise concerns in South Dakota
      Financial regulators closed California’s Silicon Valley Bank in early March in what is the largest U.S. bank failure since the global financial crisis in the late 2000s.
      Photo: Shutterstock(Shutterstock)
      By Stu Whitney
      Published: Apr. 2, 2023 at 8:50 AM PDT | Updated: 22 hours ago

      SIOUX FALLS, S.D. (Dakota News Now) – At first glance, the forced closure of California-based Silicon Valley Bank and New York’s Signature Bank on March 10 – and the government action to quell the ensuing financial crisis – seemed worlds away from South Dakota’s regional banks.

      Silicon Valley and Signature were coastal entities servicing mainly technology startups, with billions of dollars in deposits from venture capitalists vested in long-term government bonds, a far cry from the business model of most Great Plains community lenders.

      But fiscal tremors have spread wide enough to put South Dakota bankers and politicians in a tough position, vouching for the security of the state’s financial systems and mindful of the notion that when it comes to potential bank runs, perception is reality.

      “The key thing is for people to remain calm,” South Dakota Bankers Association president Karl Adam said from Washington, D.C., where he met with Sens. Mike Rounds and John Thune as part of a previously scheduled banking summit. “This is no time to take out your money to bury in your backyard or put it under your mattress.”
      …
      https://www.dakotanewsnow.com/2023/04/02/us-bank-closures-raise-concerns-south-dakota/

      2. Many more banks under 250B threshold about to go down Remember the Implode-o-meter? We are going to need a new one for banks-with-the-runs.

    2. The Financial Times
      an hour ago
      Blackstone hit with $4.5bn in redemption requests at property fund in March
      Mark Vandevelde in New York

      Blackstone received $4.5bn worth of redemption requests from investors in its Breit real estate fund in March, but paid out just $666mn of the total, as the firm maintains restrictions on withdrawals from the investment vehicle geared towards wealthy individuals.
      …

    3. Oil
      Explainer
      Why are oil prices rising and what does it mean for inflation?

      All you need to know about the Opec+ decision to cut production and the potential knock-on effects

      Oil price surges after surprise Opec+ production cut

      Larry Elliott Economics editor
      Mon 3 Apr 2023 07.37 EDT
      Last modified on Mon 3 Apr 2023 16.36 EDT

      Oil prices jumped on Monday after some of the world’s biggest producers agreed to cut production. Here we explain what happened and what it might mean for inflation and interest rates.

      Why are oil prices rising?
      …
      https://www.theguardian.com/business/2023/apr/03/why-are-oil-prices-rising-opec

    1. Finland election result a ‘clear rejection of EU

      Here’s hoping, but as I mentioned above, Britain quit the EU and now they are even more dominated by the globalists than ever.

        1. I am sure the new Finish party have enough mcconells or romneys on their roaster. Braindead can ‘whip’ them in line.

          1. My understanding is that they will have to form a coalition with the “centrists”, who despite the label are socialists (as opposed to the full bore communists on their left). There will be a lot of “compromising” with legislation. I’m sure the rainbow flags will still fly and taxation will remain onerous. Their VAT is currently 24%. I once told a liberal oldster how much sales tax is in Europe and his eyes almost popped out.

            And it’s not just in Europe. Mexico has a 16% VAT. Brazil 18%, Argentina 21%, Chile 19%, etc.

    2. So basically, all the many tomes full of banking regulations that have been enacted from the New Deal to the present should all be thrown out and replaced with a simple rule: Banks shall be run by competent executives, and if they aren’t, and bad stuff happens as a result, we’re going to get really peeved.

      1. Fauxahontus, self-proclaimed champion of the middle class, has collected more than $2M in “consulting fees” from TBTF banks.

  20. Nice map of the migration from blue states to red states.

    https://www.census.gov/content/dam/Census/library/stories/2023/03/domestic-migration-trends-shifted-map-1.jpg

    Trends that I see:

    California is dying
    Florida, WOW.
    Appalachia, Delaware, and AZ are gaining like crazy!
    Lots of new white(?) flight from vibrant downtowns to burbs: Houston, Dallas, Atlanta, Denver and Miami. Possibly Philly. Telework?
    People fleeing drugged-out cities entirely: San Fran, LA, Portland, Seattle, NYC, and Boston. Even the burbs are dying.
    Surprising: Net migration OUT of the DC area. So much for expanding government. A surprising number of people moving to the Mason-Dixon line. Fedgov telework probably.

    1. Lots of new white(?) flight from vibrant downtowns to burbs: Houston, Dallas, Atlanta, Denver

      Larimer and Weld counties aren’t Denver suburbs, exurbs perhaps. Interesting that both have blue dots right up to the Wyoming border. Also, I would have expected to see a lot of blue dots around Cheyenne. And metro Denver is shedding people to Larimer (Ft. Collins, Windsor and Loveland) and Weld (Greeley, Ault, Evans). Shacks are still selling in both counties.

      The southeast sure is on fire.

    2. Mike Davis could very well be DJT’s Acting Attorney General if/when DJT is back in office. He’s half-joked about it with both Steve and Don Jr. He’s the former chief counsel on nominations for the Senate Judiciary Committee under Chairman Chuck Grassley and clerked for Justice Neil Gorsuch.

  23. Eastern Oregonians are fed up with the direction of the state. We went to find out why
    KGW News
    Mar 27, 2023
    The “Greater Idaho” movement has been gaining steam throughout eastern Oregon in recent years — and while the goal of that movement is far from likely to happen, there are grievances fueling it that warrant attention. The Story’s Pat Dooris headed out east to ask residents why they want to leave.

    https://www.youtube.com/watch?v=2fBGDQN05HE

    12:39.

    1. Yeah, but where else can you buy a 1400 sq ft two story, built 120 years ago for less than 300k, that sold for 10k a few years ago, pay 600 a month in prop taxes, and enjoy the wonderful weather on one of the great lakes?

    1. Opinion
      Government bank rescues never went away. Just don’t call them bailouts
      Eric Reguly
      European bureau chief
      Rome
      Published April 1, 2023
      Listen to article

      The term bank “bailout” has disappeared from the financial lexicon. It implied taxpayer-funded rescues equivalent to the GDP of a small country, rescuing the rich from the fallout of hopeless investments and protecting inept executives from lynchings at the hands of wronged depositors, clients and shareholders.

      The Swiss government and central bank were careful not to label UBS’s takeover two weeks ago of hellbound Credit Suisse a bailout, calling it a “merger.” Only days earlier, the U.S. Federal Deposit Insurance Corp. (FDIC) seized Silicon Valley Bank as fleeing clients and depositors handed it a death sentence. Nor was SVB technically a bailout.

      But both bank crises had the elements of one, suggesting bailout culture never fully disappeared. No bank of any size is allowed to implode overnight, lest it wipe out depositors, even rich ones, and infect the enormous and eternally fragile interconnected banking network worldwide. The value of the financial services sector is conservatively estimated at a quarter of the global economy, and some estimates put it far higher.
      …
      https://www.theglobeandmail.com/business/commentary/article-government-bank-rescues-never-went-away-just-dont-call-them-bailouts/

      1. The Financial Times
        Opinion Markets Insight
        Hedge funds caught off guard again in turmoil
        Sharp moves after the implosion of SVB have left many in the red for the year
        Laurence Fletcher
        A pedestrian passes a Silicon Valley Bank branch in San Francisco, US
        When the collapse of SVB sent investors rushing into the haven of government debt and sent the US two-year Treasury yield tumbling, funds found themselves in exactly the wrong position
        Laurence Fletcher 3 hours ago

        Hedge funds have hardly been covering themselves in glory during a tumultuous few weeks for markets.

        Sharp moves in the US government bond market and in bank stocks, driven by failures in the US regional banking sector and the fall of Credit Suisse, have left numerous funds in the red for the year.

        Many managers were found to be sitting in trades that seemed obvious at the time based on the perfectly rational belief that interest rates had to move higher to combat stubbornly high inflation. Unfortunately, this also meant that these trades became crowded, and therefore dangerous if funds all rushed to the door to reverse them.
        …

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