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Fault Lines Have Emerged For Investors Who Paid Top Dollar

A report from the Hawaii Tribune Herald. “‘I’m telling sellers that if they get an offer that’s even slightly acceptable, they should take it,’ said Jen McGeehan, Realtor with Coldwell-Banker Island Properties. ‘My sellers are starting to price themselves a little bit better, but they’re not hungry enough yet to set a price that will move within 30 days.’ Through the end of March, 430 Big Island homes have been sold this year, down from the 728 that were sold by the same point last year. Sales in South Hilo and Puna have been particularly tepid. Through March, 59 homes were sold in South Hilo, little more than half of the 104 that were sold in the first three months of 2022. And while Puna saw 289 homes sold in the first quarter of 2022, only 175 sales have been completed by the end of the first quarter.”

From WTOP News. “‘Dr. Terry Clower, director of the Center for Regional Analysis at George Mason University, provided an overview of the region’s economy for the more than 100 attendees. He noted that while the Northern Virginia economy is resilient and the unemployment rate is low, there are headwinds. ‘We’ve lost a bit of our mojo,’ Clower said. Among the challenges is that the Washington region as a whole has seen a significant slowdown in population growth — and Fairfax County’s population actually dropped by 3,400 people between July 2021 and July 2022, according to Census estimates. ‘That’s a scary number,’ Clower said.”

“Prince George’s and Montgomery counties in Maryland, as well as the city of Manassas Park in Virginia, also lost population during that time. ‘In a region this size, that’s a statistical blip,’ Clower said. ‘This problem is getting worse…. We’re losing millennials who’ve decided they can’t afford $1.3 million for a single-family home in Arlington.'”

The Orlando Sentinel in Florida. “In January, sales dropped in January to their lowest point since 2009. Most real estate agents predicted that would happen when the Federal Reserve started raising interest rates last year to curb inflation, said real estate agent Chris Winn of Bloom Home Group Realty in Orlando. ‘People have been sitting and waiting to see what’s going to happen,’ he said. In the last month, Winn says he started getting more calls from people who want to list their houses. ‘It feels like there’s this push coming that is going to put us back on track for what we would see seasonally.'”

“While Winn noted that some sellers are cutting their prices, he said that people who price correctly ‘are getting pretty close to what they’re asking. Those sellers who are maybe overly ambitious … they’re the ones that end up doing the price reductions.'”

The Real Deal on California. “A joint venture between WeWork and Rhone Group has defaulted for not paying its mortgage on an office tower in San Francisco’s Financial District. The venture launched by the coworking and private equity firms, both based in New York, defaulted on a $240 million loan for the 20-story building at 600 California Street, Bloomberg reported.The property, owned by funds managed by a venture formed by WeWork and Rhone in 2019 to buy and oversee real estate, includes WeWork coworking offices as an anchor tenant.”

Yahoo Finance on Texas. “Landlords in Houston and Dallas are having a tougher time filling their empty office buildings with new tenants than any other market in the country, according to office market statistics compiled by CoStar and JPMorgan. Why? One reason: They overbuilt when interest rates were low. Houston and Dallas put up more new office space between 2010 and 2021 than all regions except New York. Despite the disruptions of the pandemic, they still have millions more square feet under construction. Vacancies now are higher than any other metro area, despite attempts to fill the gaps with heavy discounts.”

“‘Refinancing risk over the near term is high and it’s gonna be really tough because interest rates are so high,’ Itziar Aguirre, CoStar’s director of market analytics for Houston, told Yahoo Finance. ‘There’s gonna be a lot of foreclosures. I think there’s gonna be bankruptcies. There’s gonna be a lot of distressed sales.'”

From Business Insider. “While offices have been going through a paradigmatic shift as more workers do their jobs remotely, apartment buildings have experienced robust demand from tenants. But fault lines have emerged for investors who paid top dollar for assets that depended on substantial rent increases and persistent low interest rates to achieve profitability. Those kinds of optimistic projections became increasingly necessary in the booming markets of 2021 and 2022, when investors grew voracious for apartment-building acquisitions, boosting competition and prices.”

“The problems could mushroom as more mortgages expire at properties where fix-and-flip strategies have stalled, throwing a growing number into default. The problems could mushroom as more mortgages expire at properties where fix-and-flip strategies have stalled, throwing a growing number into default. There are signals of stress. A Trepp analysis found that in Washington DC, for instance, 71.9% of multifamily properties financed with CRE CLOs didn’t earn enough rent to cover their debts. Trepp attributed some of the pain in that pool of troubled loans, which totals about $1 billion, to the remote-work policies among federal government offices — the dominant tenant base in the city — which have allowed workers to migrate and work from afar, weakening the local rental market.”

“Falling property prices have compounded the problems for investors. MSCI estimated in February that apartment-building prices had fallen on average by about 8.7% year over year. In April, Green Street estimated they’d declined by 21% from a year ago. As these short-term debts come due, they will be difficult to swap with commensurately sized loans today, because of the falling values, higher interest rates, and lender caution. That could force landlords to pour in millions of dollars to pay the difference — cash they may not have.”

The Globe and Mail. “Romspen Investment Corp., one of Canada’s largest private mortgage lenders, is locked in a court battle with its largest borrower after multiple loan defaults allegedly totalling $333-million – unpaid debt that has hindered its ability to fund investor redemptions.”

“Romspen has asked the Ontario Superior Court to appoint a receiver to take control of three properties that underpin the distressed loans. If approved, the receiver could sell the properties as it sees fit and the proceeds would allow Romspen to recoup some, or all, of the money it is owed. The three affected properties are located in Toronto: Woodbine Mall and Rexdale Mall, in the city’s northwest corner, and 1500 Birchmount Rd., in the city’s northeast corner.”

“A growing number of private lenders and funds are grappling with elevated redemption requests. In Canada, Ninepoint Partners LP had to restructure its flagship private-debt fund last year after 25 per cent of investors wanted out. More recently, in December, Blackstone Real Estate Investment Trust, one of the world’s largest private real estate investment funds, had to limit redemptions because so many investors wanted their money back.”

“Private lenders often struggle to fund elevated redemption requests because the very nature of their loans makes it hard to recoup cash quickly. Private loans made to riskier borrowers often cannot be sold easily – and when they are, the sales may be conducted at deep discounts.”

News.com.au in Australia. “Horror stories have emerged from some of the hundreds of customers left in the lurch by collapsed construction giant Porter Davis as the scale of the crisis becomes clearer. Dozens rallied on the steps of Victoria’s Parliament House on the weekend, demanding more robust safeguards to protect consumers from falling into their own perilous situation. Victim and organiser of Sunday’s protest, Mike Tarno, estimates that 800 families have lost between $30,000 and $50,000 and said many were left without insurance. He accused the company of taking deposits right up until it went into liquidation, telling Sunrise: ‘Companies don’t usually go into liquidation overnight.'”

“Another Porter Davis collapse victim, Anil Vemula, wept on parliament steps as he revealed the pain of not knowing whether he’ll see his $33,000 deposit for a build again. ‘They robbed us, they cheated us, they left us in the dark, we don’t know what to do now,’ the father-of-two – who spent three years saving for his deposit – said through tears on Sunday. ‘Three years of our savings. I have two kids, we make a lot of sacrifices. We need help. We need our deposits back.’ He said ‘not a brick’ had been laid.”

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This Post Has 87 Comments

  2. Securitization is hardly mentioned in the boom but is front and center when crater arrives.

    ‘I’m telling sellers that if they get an offer that’s even slightly acceptable, they should take it’

    Now dammit Jen, you are telling them to give it away!

  3. ‘A Trepp analysis found that in Washington DC, for instance, 71.9% of multifamily properties financed with CRE CLOs didn’t earn enough rent to cover their debts’

    In 2014 I decided to start covering the apartment bubble. Why? I started looking closer at it because I helped with a 1031 exchange for a small multifamily. As I went along I could see without even digging into the numbers that these things were cash flow negative. The recent multi-thousand unit walk away in Houston was a guy who bought ‘cash flowing’ apartments. Apparently not enough.

    Things got nuttier and prices went way higher after 2014. One top of the fix and flip (includes value add) you’ve got merchant builders. These guys are really flippers but build new, wait a year or so (called seasoning) and then sell. Problem is they don’t care about overbuilding, long term viability, etc.

    So short sighted greed, fueled largely by guberment guaranteed loans. Because even if they start off with private money, they have their sight set on qualifying for a cheaper GSE loan. It’s all been there for anyone to see.

    1. “As I went along I could see without even digging into the numbers that these things were cash flow negative.”

      – Cheap $ via Fed’s ultra low rates and asset purchases massively distorted markets. Financial repression. Led to malinvestment. The Fed did this intentionally.
      – 5% and sub-5% cap rates. Weren’t going to ever ‘pencil out’. Never go below 7-9%.
      – Now the free $ is gone and not coming back.
      – Another asset bubble blown by the Fed is bursting. This is the mother of all bubbles, the everything bubble, so worser.
      – And the builders are still building, especially MFH. This will, along with the coming recession, suppress rents, further reducing cash flow.
      – I see a perfect storm coming. All bubbles burst. The bigger the boom, the bigger the bust. We’re just getting warmed up.
      – Remember, the Fed did this. Intentionally.

      1. ‘5% and sub-5% cap rates. Weren’t going to ever ‘pencil out’. Never go below 7-9%’

        It’s lower than that in parts of California. 2-3% was the norm for years. This financing was all done in the name of affordable housing, of course.

  4. I hope this blog will permit a contrarian viewpoint. How do you explain the over half a million $ difference in the purchase price and sales price/asking price of the following two houses in light of the general real estate economy? What do you think are the wholesale and retail costs of each interior remodel?

    https://www.redfin.com/AZ/Scottsdale/7979-E-Princess-Dr-85255/unit-4/home/27739504

    https://www.redfin.com/AZ/Scottsdale/7979-E-Princess-Dr-85255/unit-27/home/26921873

    1. $1,450,000 3 bd 3 ba 2,253 sqft

      7979 E Princess Dr UNIT 4, Scottsdale, AZ 85255

      https://www.zillow.com/homedetails/7979-E-Princess-Dr-UNIT-4-Scottsdale-AZ-85255/8015511_zpid/

      Date Event Price
      4/13/2023 Listed for sale $1,450,000+87.8%644/sqft

      10/21/2022 Sold $772,000-3.4%$343/sqft

      10/14/2022 Pending sale $799,000$355/sqft

      10/14/2022 Price change $799,000-3.2%$355/sqft

      10/6/2022 Price change $825,000-2.9%$366/sqft

      9/22/2022 Price change $850,000-2.9%$377/sqft

      9/3/2022 Listed for sale $875,000+58.3%$388/sqft

      7/30/2020 Listing removed $3,000$1/sqft

      7/24/2020 Price change $3,000-7.7%$1/sqft

      7/9/2020 Price change $3,250-8.5%$1/sqft

      6/27/2020 Price change $3,550-5.3%$2/sqft

      6/14/2020 Listed for rent $3,750+50%$2/sqft

      3/12/2020 Sold $552,900+5.5%$245/sqft

      2/13/2013 Listing removed $524,000$233/sqft

      10/18/2012 Listed for sale $524,000+25.1%$233/sqft

      11/18/2011 Listing removed $2,500$1/sqft

      10/13/2011 Listed for rent $2,500-21.9%$1/sqft

      5/29/2011 Listing removed $3,200$1/sqft

      3/4/2011 Listing removed $419,000$186/sqft

      3/4/2011 Listed for rent $3,200$1/sqft

      2/24/2011 Price change $419,000-4.6%$186/sqft

      2/13/2011 Price change $439,000-2.2%$195/sqft

      2/12/2011 Price change $449,000+2.3%$199/sqft

      1/28/2011 Price change $439,000-2.2%$195/sqft
      S
      11/24/2010 Price change $449,000-6.3%$199/sqft

      11/21/2010 Price change $479,000+36.9%$213/sqft

      8/27/2010 Listed for sale $350,000+62.3%$155/sqft

      6/26/1996 Sold $215,604+37.7%$96/sqft

      1/24/1996 Sold $156,550$69/sqft

        1. There is an almost 9 year difference between the last sold date and the current listing on that house. In the houses in my examples, there is an approximately 6 month difference and the price appreciation in that amount of time is astonishing.

          2. Gotta agree. List price doesn’t mean sale price. The flipper is looking for a $300K profit for a plain-jane paint job. Are Arizonans really paying a million dollars for a zero-lot-line shacks?

    2. “How do you explain the over half a million $ difference in the purchase price and sales price/asking price of the following two houses in light of the general real estate economy?”

      – Doubled in price in < 6 months. That’s completely normal. /s
      – In my view, we’re in the “return to normal” phase of the bubble. Investors think the “all clear” has sounded, and “soft landing” or “no landing “ dead ahead. This is incorrect in my view.
      – BTW, Phoenix, AZ is ground zero for speculative frenzy of Housing Bubble 2.0.
      – Let’s check price again in a year or two.
      – “Trees don’t grow to the sky.” – German proverb

      1. Red Pill Economics,

        Based on statistics, it is difficult to believe that prices have doubled in less than 6 months. According to Redfin, home prices were down 2.8% year over year (March 2022-March 2023) in Scottsdale. Hence, why I am perplexed at these two units sold/asking prices.

        1. I am perplexed at these two units sold/asking prices

          Asking prices in all markets are at or near the peak, sometimes even higher. They mean nothing.

  5. BTW, there are some posters here with nothing but culture war/political stuff. I’m sick of it and will delete most if not all of these.

    4. Thank you Ben!! Seriously, thank you. It’s been exhausting scrolling through more than half the content here. Bring it back to what it was 10, 15 years ago.

      1. “Bring it back to what it was 10, 15 years ago.”

        I’m pretty sure that is a racist homophobic comment.

      2. “It’s been exhausting scrolling through more than half the content here.”

        Take offense if you must, but those of you besides Ben, and there have been quite a few through the years who complain about how exhausting it is scrolling through posts on this blog. You must have had a pretty damn easy life.

        I have to guess you never loaded freight on Roadway trailors from 11 pm to 7 am and then went directly to a North American agency to move furniture for the day. Only two double shifts a week back then but they were “exhausting”.

        Ever spent eight hours on a jack-hammer taking up tile and thinset? Ever framed, hung or finished drywall in a house or commercial building piece work for ten hours a day? That’s “exhausting”.

        I could go on and on but of all the things in life I have found “exhausting” scrolling one or two lines or eventually just looking at a handle and moving on wasn’t one of them.

        However I will take this time to thank Ben Jones the ONE person who does need to clear all the content, for his time and his blog which has helped so many including myself.

        1. loaded freight on Roadway trailors from 11 pm to 7 am and then went directly to a North American agency to move furniture for the day

          Exhausting just thinking about that!

          1. “Exhausting just thinking about that!”

            1980 – 1981

            $11.71 an hour loading for Roadway and $7.50 an hour plus a tip moving furniture which made for close to a $200 day.

            Of course I would go home and pass out from about 6 pm until 6 am the next day when it was time to get up and move furniture again which was my full time job at the time.

          2. 1974 – 1977

            Tuesday. Thursday, Saturday & Sunday sawing, splitting and stacking firewood 10 hrs. $4/hr plus a hearty meal in the farmhouse. The other days I was in school. Slept well but never slept in!

          3. “The other days I was in school. Slept well but never slept in!”

            I’m sure with the help of good parents along the way it sounds like you entered adulthood with one hell of a work ethic.

          4. entered adulthood

            That’s a wonderful compliment except,

            I went to college twice. The first time on my father’s dime. I majored in fraternity parties. Got married before I finished. Went broke. Dropped out. Got a crap job.

            It was the second time I wrote about above. No financial aid from home, but lots of encouragement. I didn’t have any more time to waste. Had to start over as a freshman. Graduated with high honors. Mom was shocked.

            I had great parents. Doing what you know in principle isn’t always natural.

    5. I wouldn’t mind SOME political posts to spur meaningful discussion. I learn so much from that. But we’re not getting meaningful discussion, just cut-and-paste propaganda. And it’s Ben’s blog, so delete away, I guess.

      1. “And it’s Ben’s blog, so delete away, I guess.”

        I completely agree even if it’s me.

    6. “BTW, there are some posters here with nothing but culture war/political stuff. I’m sick of it and will delete most if not all of these.“

      Thank you, Ben. This is housing bubble blog (everything bubble blog) and only comments that have a direct correlation to same should be on here. I have found myself scrolling down past other comments.

      2. If you don’t have it installed, consider using the JoshuaTree extension to ignore users who find yourself scrolling past:

        Chrome
        Firefox

        It also has features that make it easier to come back and read new comments on posts throughout the day.

        And as always, anyone who uses and likes the extension, I don’t charge for it so please donate to Ben to keep this blog alive!

  8. Ben,

    There is currently a $678,000 difference between the listing price and the purchase price. How much $ do you think the upgrades in this unit cost wholesale (if a flipper/contractor did it themselves) vs retail (what a homeowner would pay a contractor? Are certain areas immune to economic downturns?

    1. It’s not possible to know what they spent without inside info. IMO no place is immune if there’s a bubble. What was spent on the single-wide, 1 bed trailer in Bullhead City to go from 24k to 125k?

    2. Where is the BFB to answer this? It’s appraisal fraud. You have just noticed some scamming as well as proof that there is no regulation of this stuff. The price is whatever the market fantasizes it should be. This is the problem with the government backing all of the loans, there is no accountability. This will begin to change soon however, as the defaults begin to pile up. Be patient and that same house will probably be at least 50% off in a few years. It’s hard for people caught up in the moment to see it but these interest rates are eating away at the supports like termites. Everything seems fine until it collapses.

    3. 1) listing prices mean nothing
      2) the description says they made it more “open and modern”. If they had to take out load bearing walls and did it well, that would cost $$$$.

      1. listing prices mean nothing

        Agreed. And a lot has changed since the other one closed on January 12th (e.g., bank failures, credit tightening, global de-dollarization).

  9. Wish this could happen here in the U.S.

    Russia Today — Czechs rally against ‘warmonger’ government (4/17/2023):

    “Thousands protested in downtown Prague on Sunday, arguing that the Czech government is devoting too many resources to helping Ukraine fight Russia rather than tackling the energy crisis and high inflation at home. Many are calling on Prime Minister Petr Fiala to resign.

    The ‘Czechia Against Poverty’ rally was spearheaded by the opposition party Law, Respect, Expertise (PRO 2022). Protesters gathered at Wenceslas Square, condemning what one called “the lying government” and carrying banners that said “No to war” and “Get out of NATO.”

    Addressing the crowd, Jaroslav Foldyna, an MP from the Freedom and Direct Democracy party, said that “the government needs to go before it destroys the country.”

    A protester named Renata Urbanova told AFP that the government is “full of warmongers” who “are making us suffer economically.”

    The monthly cost of living has increased for most Czechs and up to 70% of households were forced to resort to austerity measures, according to a survey released by pollster Median in January.

    https://www.rt.com/news/574864-prague-protests-economy-ukraine/

    In case you forgot, Zelensky’s parents live in a $8 million house in Israel with a $12,000 a month security detail, all paid for by U.S. taxpayers.

    “As long as it takes” = American taxpayers, you are being robbed blind.

    1. That’s not true….kid rock started that rumor back in October. The house shown is a house that’s still for sale in Southerby.

    1. ChatGPT and ‘AI’ in general are going to be problematic for most things cultural as they can easily be trained to provide any viewpoint the trainer wants, however, for science and general information that no one has an agenda for, it is extremely powerful. I have been getting amazing results on all kinds of different things with it. It’s so good we had to subscribe to it because we make less money without it.

          2. Frightening discussion regarding Google AI.

            I wonder if we are being hoodwinked. Say in a few years AI’s will start saying that the only way to save the world will be to embrace the great reset. And hey, AI’s will have IQ’s of 10,000, or something like that, so they are always right and we have to do as they say, right?

        2. Point taken but I was thinking more along the lines of settled science, however, in the wrong hands it can all be misrepresented. Hopefully we will figure out a way to keep it honest.

      2. I like the idea of AI being used, for example, in the medical field where someone could plug in a list of symptoms and the AI would spit out possible diagnoses suggest testing. Kinda like House MD without the attitude. Actually, they probably have this already.

        But I really don’t like the data-mining aspect of AI. For example, who’s going to comb through thousands of years of security camera footage looking for infractions? AI will do it. So much for the right to face your accuser.

        1. who’s going to comb through thousands of years of security camera

          Don’t worry. AI will just make up its own footage showing you doing what the programmer desires.

          1. As I mentioned above, I think we are being set up to blindly accept what AI’s say is the truth.

          2. AI = Fake Intelligence, just like Artificial Sweeteners are fake sweeteners. The fundamental problem with AI is that there’s no way to know WHY an answer/output was made. I saw a show on NHK (Japanese public broadcast) on AI and uses in medicine. A physician said that they can’t use a diagnosis from AI since it isn’t possible to know how AI came to a decision.

    1. The Financial Times
      State Street Corp
      Schwab and State Street report bank deposit outflows as savers seek higher returns
      Results come as investors expect to hear from regional and mid-sized banks in wake of SVB’s collapse
      State Street’s office in Canary Wharf
      Assets under management in State Street’s investment arm fell 10% to $3.6tn
      Brooke Masters and Madison Darbyshire in New York 5 minutes ago

      Big US financial groups Charles Schwab, State Street and M&T reported deposit outflows from their banking arms as investors continued to pull money out in search of higher returns.

      Schwab said on Monday that deposits fell 11 per cent – or $41bn – in the first quarter and 30 per cent year on year. The broker, whose shares have plunged nearly 40 per cent since January, also paused share buybacks but reported better-than-expected adjusted earnings per share of 93 cents, up 21 per cent year on year.

      Custody bank State Street’s shares opened down more than 15 per cent as quarterly profits missed expectations and fees were hit by subdued markets and reduced assets under management in its investment arm. Total deposits fell 5 per cent in the first quarter to $224bn.
      …

    2. The Financial Times
      Financial & markets regulation
      Global regulators consider wider net to catch smaller US banks
      Demise of Silicon Valley Bank and Signature fuels concerns that existing focus on largest lenders is outdated
      Silicon Valley Bank branch in Santa Monica, California
      The collapse of Silicon Valley Bank sent tremors across global markets, leading to sharp plunges in the value of bank stocks
      Laura Noonan in Washington yesterday

      Global regulators are considering imposing tougher rules on smaller lenders and requiring all banks to ready themselves for faster runs on deposits as officials search for lessons from the recent turmoil that led to the failure of several midsized US institutions.

      The Basel Committee on Banking Supervision, which sets global standards, promised in March to examine whether additional rules were needed in light of a string of recent banking collapses.

      No timeframe has been set for the work. But policymakers gathered in Washington for the IMF spring meetings last week told the Financial Times that attention would focus on issues exposed by the demise of Californian institution Silicon Valley Bank.
      …

  13. Yellen says sanctions may risk hegemony of US dollar

    AFP
    Sun, April 16, 2023 at 12:37 PM EDT

    Economic sanctions imposed on Russia and other countries by the United States put the dollar’s dominance at risk as targeted nations seek out an alternative, Treasury Secretary Janet Yellen said Sunday.

    “There is a risk when we use financial sanctions that are linked to the role of the dollar that over time it could undermine the hegemony of the dollar,” Yellen said on CNN.

    “Of course, it does create a desire on the part of China, of Russia, of Iran to find an alternative,” she told the network’s Fareed Zakaria in an interview. “But the dollar is used as a global currency for reasons that are not easy for other countries to find an alternative with the same properties.”

    https://www.yahoo.com/lifestyle/yellen-says-sanctions-may-risk-163713593.html

    3. As someone who is not American and has no reasons for over patriotism, I’d say that replacing the US dollar is possible but highly improbable. There are no alternatives. Yes US, dollar bad but anything else, way worse.

      I’ll believe that’s a possibility when I’ll see a few millions illegal immigrants from the S, you know where, lined up at the south border of China, or Iran, or Russia, trying to jump the fence.

      Euro could be a viable option, but they won’t do it for political reasons, defense, etc.

      One way to test it is to go to Argentina, Brazil, Colombia, Peru, Kenya, or any similar country and ask the guys on the street if they’ll take your rubles or yuan or whatever else. If they won’t laugh at you, they’ll punch you in the face for sure. Those guys got burned over and over again with real FIAT currency. Like the ones that loose 90% within a few months. They’ll know what works and what not. Of course, dollar bad, but man, who is going to trust their savings with the Chinese government?
      Things may work quite nicely for some local exchanges in a very short time range, e.g., I’m selling you this much of this and take your money because I need to buy this month exactly as much of yours, but I doubt anyone wants to be caught with a surplus of Rubles in the long haul. Ask the regular people of Iran if they prefer saving in Rubles, Yuan or Dollar, and I guarantee most will say Dollar, regardless of how much they claim to hate US. They hate it until they need it.

      1. I would love to know which country you’re from because you speak such slang-heavy American English. Or you might be a very well-traveled Brit/Aussie/Kiwi?

        People are screaming “BRICS” all the time, but do you really see countries so separated by distance and culture staying friendly to each other for the long term? Sure, it’s easy to unite against a common enemy in a globalized world where food and fossil supply chains are still largely intact and good are still being shipped around unimpeded. But take that away, and good luck maintaining ANY kind of alliance, much less a common currency.

        1. “where food and fossil supply chains are still largely intact and good are still being shipped around unimpeded”

          Isn’t that what we gave them going back to Bill Clinton through Let’s go Brandon administrations?

          1. Isn’t that what we gave them going back to Bill Clinton through

            Farther back than that. Per the writings of Peter Zeihan: globalization started right after WWII, when the US made a deal with Europe: we’ll protect the shipping on the oceans if you help us fight the Russians. Later on, Asia was brought into the fold, and boom: container ships, just-in-time, and (eventually) suicide nets.

            But what happens if you take away that protection? Imagine there’s an oil tanker in the Indian Ocean bringing oil from Saudi Arabia to India or a container ship bringing wheat from Brazil to China. Pirates take over the boats and the US says “meh, they’re anti-American BRICS using yuan, not our problem anymore.” Suddenly the whole shipping industry is turned on its head and entire countries can’t import food or fuel or cell phones. You’ll have multiple regional wars in a matter of weeks that will make Ukraine a walk in the park.

        2. Sorry! I shall clean up my language if that pleases you.
          It is true, I have some relatives in England, but I’m nothing of the above, except well traveled.

          To give you a hint, our languages share a common linguistic root, and probably 1500 years ago we would have indulged in the same slang, while drinking the same putrid beer by the campfire, and planning to cross into the civilized world for another memorable raid.

          Anyway, I’ve spent extensive time in the US, and it’s definitely not perfect. Many areas could be improved, but the problems pale compared to most of other countries I have visited. I still believe most Americans preserved a practical sense of ” I can do something about it if I don’t like it”, while most others lost hope long time ago, and live within the bounds of their cultures and societies, without even thinking about much change at all.

          1. No, your language is fine! It’s just that foreigners who speak English are much more formal. “Raid” sounds like Vikings. And since Latin-based people didn’t raid much post-Rome, the “common linguistic root” is probably Germanic. My guess is original Anglo-Saxon, i.e. northern Germany/Denmark, possibly Sweden.

            But you are right that most of America still has the “I can do something” attitude. The idea is, if you’re not successful, it’s at least partially your fault, and you can get off your butt and do something. At the very least you can organize and vote. We all make each other better than way. But yes, in other countries so many people just sit around and feel that can’t do anything. We’re only just starting to see that hopelessness in the US — homeless camps and some political activism come to mind.

            That’s one of the reasons I think the dollar will survive. Even with the social division, both sides are still doing something instead of laying down to die. That alone will keep the dollar going.

      2. replacing the US dollar is possible but highly improbable

        Not reading further because it’s already happening.

        1. replacing the US dollar

          Already happened when I was younger. Now people pass around Federal Reserve Notes, which are definitely not US Dollars. Calling stuff by the wrong name leads to misunderstanding.

          I have some US Dollars. I won’t spend them until the present farce is over.

  14. There are now two semi-permanent structures under the Santa Fe bridge over westbound Hampden Blvd. Structures, not random tarps and sheets of plastic. The encampment a mile or so north of there burned out some 50′ of fencing last week. Garbage everywhere, bad smells.

    This is Denver 2023.

  15. “Prince George’s and Montgomery counties in Maryland … also lost population during [July 2021 to July 2022]”

    Tax-wise, Maryland is well-known as a bad state for retirement, and because of that, the state is losing boomers all the time. That alone could account for the population loss. Then there’s the work@home movement. Both MoCo and PG are are nanny counties, and a lot of people moved redder Frederick or Howard or Anne Arundel counties and commute to the office twice/week.

  16. Say what?

    Breitbart Business Digest: Home Builders Not Seeing a Credit Crunch

    JOHN CARNEY
    17 Apr 2023

    This Sure Doesn’t Feel Like a Recession Yet

    No one wants to sell their house—which is helpful for people in the business of building new homes.

    In retrospect, it seems pretty obvious that one of the consequences of extremely low-interest rates would be a reluctance of people to part with homes. A huge proportion of American homes are now financed by long-term mortgages attached to interest rates that are three percent or even lower. This means that most home-sellers need to find a buyer willing to pay a far higher rate and must accept paying a higher rate on their next home.

    While this is a drag on existing home sales, it appears to be a boon for home builders. Builder confidence rose again in April, according to the National Association of Home Builders (NAHB). This is the fourth consecutive month of improving confidence for builders.

    https://www.breitbart.com/economy/2023/04/17/breitbart-business-digest-home-builders-not-seeing-a-credit-crunch/

  18. Could jumping into the housing market at the onset of a housing bust cost you?

    I am sure this time is different, but my recollection is that many who bought in the 2005-2007 period soon found themselves underwater and walked away, despite having lost all their home equity.

    But not to worry, as it’s different this time.

    1. Waiting for a housing market crash could cost you
      By The Stern Team | Posted – April 16, 2023 at 8:00 a.m.
      Estimated read time: 5-6 minutes

      There are certain things you can wait out in life. You can wait for a storm to pass. You can wait for your favorite name-brand jeans to go on sale. You can skip the movie theater and wait to stream that blockbuster at home in a few months.

      One thing you can’t wait out is the housing market.

      Unfortunately, if you were hoping for a drastic change to current conditions, the only bubble that’s about to burst is your own. Here’s why the market isn’t likely to crash anytime soon — and why you might want to move up your plans to find that dream home.
      …
      https://www.ksl.com/article/50621201/waiting-for-a-housing-market-crash-could-cost-you

      1. Utah home prices fall after nearly 11 years of increases
        Mar 24, 2023, 8:17 PM | Updated: 8:21 pm
        BY LADD EGAN
        KSLTV.com

        SANDY, Utah — The Utah Association of Realtors reports that after 129 months of price increases, January marked the first, year-over-year decline in statewide home prices. And in February, prices dropped again.

        “Home prices are down,” said Deanna Devey, the association’s director of communications. “That’s good because affordability has really been an issue for buyers.”

        The median sales price in Utah was $464,000 in February, according to the realtor group’s monthly report. That’s a 7.6% decline from last February’s median sales price of $502,000.

        Utah home prices reached their peak of nearly $540,000 in May of 2022.
        …
        https://ksltv.com/534979/utah-home-prices-fall-after-nearly-11-years-of-increases/

        1. 1-(464/540)^(12/9) = 18.3% annualized rate of decline in Utah’s median home sale price since last May.

          It’s already crashing, but there is no need to rush into a home purchase. There is a lot of air between here and the bottom of the CR8R.

          Try not to catch yourself a falling knife.

      2. ‘In a recent Utah housing market forecast for Norada Real Estate Investments, Marco Santarelli wrote, “There are still not enough houses. Even though homebuilding soared in Utah in 2021, putting the state on the national map for its housing boom. It made a decent dent in Utah’s housing shortage, but not enough to erase it.”‘

        Did Marco’s forecast acknowledge that Utah’s median home sale price has fallen at over an 18% annualized rate since last May?

        It seems like investors who don’t want to lose boatloads of money while prices are crashing might soon dump their Utah housing HODLings, alleviating the inventory shortage.

  19. Saw this in ZH’s comments and had to post: FJB FBUD FFED FMBA FEPA FCIA FFBI FUKRAINE FISRAEL FDC

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