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No One Ever Paid Attention Because It Was When Pigs Fly, Well Pigs Flew Last Year

A report from the Washington Post. “Federal regulators have seized First Republic Bank and sold it to JPMorgan Chase Bank in a deal aimed at quelling renewed weakness in the nation’s banking industry. In a statement issued early Monday, the Federal Deposit Insurance Corporation said that all depositors of First Republic Bank will become depositors of JPMorgan and will have full access to their deposits. ‘Normally, regulators don’t react to stock prices. But this one fell so precipitously. It became a zombie institution,’ said John Popeo, a partner at the Gallatin Group, a financial consultancy, and a former FDIC attorney.”

“Like SVB, First Republic blundered into trouble as the Fed began raising interest rates almost 14 months ago. It invested in long-term assets, such as home mortgages and government securities, when rates were low. Those now earn the bank a return of about 3 percent, even as it is paying around 5 percent to obtain fresh funds for its operations from the Fed and the Federal Home Loan Bank. ‘Both of them essentially committed financial suicide by putting all these fixed-rate assets on their books and exposing themselves to a rising interest rate environment,’ said Bert Ely, a banking consultant in Alexandria, Va.”

5280 in Colorado. “Denver sellers, Times have changed. We know you thought you’d have five above-asking-price offers before the for-sale sign even hit your yard. We know you’d already spent that cash windfall in your heads. And we understand that the whole thing feels like whiplash. Honestly, though, it’s a little difficult to feel sorry for you. OK, it’s impossible to feel sorry for you. Especially because you seemed to relish the position you were mostly just lucky to be in. Yet you bilked us. Well, the situation has evolved, and local real estate agents say that, or the time being, we have all of the choices right now. And, maybe even more importantly, we have time—something there was so little of in 2021 and early 2022. Time to think; time to shop around; and time to make you sweat.”

“‘I had a listing the week before Easter, and the number of showings just dramatically dropped off,’ says Colleen Covell, a broker with Denver’s MileHiModern. That shift led to a steady decrease in the median sales price, resulting in a market that’s more buyer-friendly. ‘In the first half of the year, I had clients who had to bid $350,000 over ask in cash,’ Covell says. ‘In the fall, I got a client who was a twentysomething first-time homebuyer under contract for $440,000 under ask. It was just so diametrically different.'”

The Mountain Democrat in California. “The second quarter of 2022 was likely the peak of the real estate market. Quarterly housing sales for El Dorado County were 821 and the median selling price was $685,000. The market began its decline in the third quarter when sales dropped to 623 and the median selling price fell to $609,000. The fourth-quarter numbers were worse. County sales dropped to 431 with a median selling price of $570,000. During the first quarter of this year the anemic 320 county sales confirmed the recession continued. It was the slowest quarter for sales in the past 20 years.”

“If you are considering selling a home this year, it’s best not to wait much longer. During the 2008 Great Recession sellers who got out of the real estate market early fared much better than those who waited to sell, expecting prices to get better. The median selling price for a county home in 2008 was $373,000. Two years later it was $295,000. Phoenix, Seattle, Austin and Boise have experienced significant price adjustments and high inventory levels. Home prices in San Diego and San Jose continue to fall. There may be buying opportunities in other previously not-price-accessible markets.”

The New York Post. “Mindy Kaling has closed on the sale of her Manhattan home. Kaling parted ways with her two-bedroom, two-bathroom condo at One Kenmare Square, located at the intersection of Soho and Nolita, for $2.4 million, Gimme Shelter has learned. The sale comes seven months after she listed the dwelling for $2.75 million. Kaling purchased the apartment, at 210 Lafayette St. for $3.1 million in 2017.”

From Bisnow. “Lenders are getting impatient. Check-in desks and rooms need a tuneup. These are the kinds of challenges coming to a head in the hotel landscape that are expected to help thaw the recent freeze in the industry’s financing markets, several executives said. ‘The lender is saying ‘I’ve extended you for the last three years, you gotta pay me.’ Brands are saying ‘you haven’t reinvested in your assets, you’ve gotta do that.’ You can’t just keep kicking the can,’ said Peachtree Group Chief Investment Officer Brian Waldman.”

“‘During Covid, the lenders, the brands, I think for the most part, everybody was playing nice in the sandbox. Those days are over with,’ LW Hospitality Advisors CEO Dan Lesser said. ‘There is this wall of maturing debt that’s coming. That’s a fact, that’s not an opinion. And something’s going to have to give.'”

Omaha WOWT in Nebraska. “Vacant lots and high-interest rates hurt more than just the property owners. They could hurt everyone that benefits from county programs. ‘We have one source of revenue, and it’s property taxes,’ said Douglas County Commissioner PJ Morgan. Morgan pointed to 90th and Dodge as an area of concern. ‘You’ll see that almost every building has ‘for lease’ signs on it,’ he said. ‘There are floors in Regency that have been vacant for two to three years.'”

The Vancouver Sun in Canada. “Two years ago, when Canada kept interest rates low to spur on the pandemic-crippled economy, Sarah and Graeme Dueck sold their townhome and bought a house in Langley, one big enough for a basement suite they could rent out at a subsidized price to help vulnerable youth. Everything was going well with their altruistic plan until, spooked by rising inflation, the Bank of Canada jacked up interest rates eight times, from 0.25 per cent in early 2022 to 4.5 per cent a year later. That historic hike created a tidal wave of financial hardship for people with variable-rate mortgages, who signed those agreements at a time when no one predicted lending rates would rise so high and so quickly.”

“Over the last year, the Duecks’ mortgage payments nearly doubled, increasing by $2,600 a month. The Duecks are far from alone. When borrowing rates fell to record lows in recent years, about three out of every five Canadian mortgage holders chose variable rates, up from the typical average of about one-third, said Brendon Ogmundson, the chief economist with the B.C. Real Estate Association.”

“Going with a variable mortgage when interest was so low seemed like a logical choice for people like the Duecks, said Alex Pang, their mortgage consultant. ‘It’s raining right now. We just need to survive today, said Pang, who also has two rental suites in his basement. ‘There’s no shame in having to take a second job.’ A ‘trigger clause’ is hit when the static monthly payment isn’t high enough to cover rising interest costs, and then the borrower has to start paying more or stretch out the amortization of the mortgage.”

“Reaching that point had seemed impossible, Pang said, until last year, when it kicked in for many people. ‘No one ever paid attention to (the trigger clause) because it was ‘when pigs fly’, he said. ‘Well, pigs flew last year.'”

News.com.au in Australia. “A Melbourne woman who was made redundant when failed home builder Porter Davis collapsed, has delivered a rare insight into the company’s ‘mind blowing’ final hours of operation. Lottie Griffin recalled seeing managers in the boardroom ‘crying’ before her CEO informed the remaining staff to attend a meeting. ‘The address from the CEO was basically him bawling his eyes out and apologising,’ she said. ‘It was the grimmest thing I’ve ever seen.'”

“It was in that meeting Ms Griffin learned she had lost her job. The first video was flooded with comments from friends and followers who sympathised with the former Porter Davis employee. One customer whose home was only ‘a couple weeks away’ from being finished, said while they’re now stuck paying rent they felt bad for the workers who lost their jobs. ‘Paying rent and almost a full mortgage is a nightmare. I’m sorry you lost your job as well, very sad for the workers,’ they commented.”

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This Post Has 106 Comments

  1. ‘It’s raining right now. We just need to survive today, said Pang, who also has two rental suites in his basement. ‘There’s no shame in having to take a second job’

    Alex, yer gonna have to give up eating. I know it will be tough to work two jobs on an empty stomach, but you have to be in it to win it!

  2. ‘In the first half of the year, I had clients who had to bid $350,000 over ask in cash’

    This is what winning looks like.

    ‘In the fall, I got a client who was a twentysomething first-time homebuyer under contract for $440,000 under ask’

    That’s the spirit Colleen, low-ball those suckers!

  3. There is nothing logical or reasonable about getting a variable interest rate when rates are at historic lows, yet a whopping 3 out of 5 did so. My God. It’s that bad out there?

    1. Not surprsisingly, it seems like suckers repeated the same dumb mistake that many made in the runup to the 2008 financial crisis.

      FLM (financial literacy matters)

    2. Where did you find that 3 out of 5 went with the Canadian version of variable rate? That is super scary

  4. “If you are considering selling a home this year, it’s best not to wait much longer. During the 2008 Great Recession sellers who got out of the real estate market early fared much better than those who waited to sell, expecting prices to get better. The median selling price for a county home in 2008 was $373,000. Two years later it was $295,000. Phoenix, Seattle, Austin and Boise have experienced significant price adjustments and high inventory levels. Home prices in San Diego and San Jose continue to fall. There may be buying opportunities in other previously not-price-accessible markets.”

    Smart sellers got out over a year ago. We know a LOT of families who cashed out a million dollars +/- in home equity and left California for good before interest rates spiked in 2022.

    If you haven’t sold yet, and are still hoping to sell, you may have got stucco. You missed the peak selling opportunity, but so did the guy whose house you want to buy; just don’t sell before you know what you will pay for the new place.

    Buyers trying to get into the market might want to rent a couple more years first. We’re in 2008, in financial crisis time, and the best buying opportunities last go round didn’t happen until after 2010. Opportunity will reward the patient.

    1. Real Estate Industrial Complex workers will do their best at every opportunity to convince the masses thet the price correction is over and higher prices are just around the corner grom now.

      Maybe this time is different, but the last two real estate busts (1989-1996, 2007-2012) took half a decade or so to bottom out. On a similar timing, we are talking about 2022-2027 this time around, at minimum.

      1. Yahoo Finance
        Housing economist predicts home prices will drop by 10% this year
        Rebecca Chen
        Sat, April 29, 2023 at 10:53 AM PDT·3 min read

        Housing values will drop by double digits this year, one expert is predicting, as tighter lending requirements choke off demand.

        “So we are forecasting that we are going to get a 10% decline in house prices this year,” Abbey Omodunbi, PNC Bank Senior Economist, told Yahoo Finance Live (video above). “There will be more of a balance in the housing market. There will be less demand and more supply. And that will contribute to the decline in house prices.”
        …
        https://finance.yahoo.com/news/housing-economist-predicts-home-prices-will-drop-by-10-this-year-175352953.html

    2. Economy
      IMF warns of ‘disorderly’ house price corrections in Europe as interest rates move higher
      Published Fri, Apr 28 2023 2:01 AM EDT
      Updated Fri, Apr 28 2023 4:58 AM EDT
      Silvia Amaro

      Key Points

      – “House price declines could accelerate if markets reprice inflation risks and financial conditions tighten more than expected,” the IMF said.

      – Data from Europe’s statistics office, Eurostat, showed house prices dropping for the first time since 2015.

      – The European Central Bank is due to meet next week, and one of its members has recently suggested that a 50 basis point hike is not off the table.
      …
      https://www.cnbc.com/2023/04/28/imf-warns-of-disorderly-house-price-corrections-in-europe-amid-high-rates.html

      1. You will own nothing and you will be culled before you can collect your pension

      1. There’s an unusual decline in housing inventory that’s preventing home prices from falling further
        Phil Rosen
        Apr 28, 2023, 9:21 AM PDT
        Home for sale
        People wait to visit a house for sale in Floral Park, Nassau County, New York, the United States, on Sept. 6, 2020. Wang Ying/Xinhua/Getty

        – New listings of homes for sale are down more than 20% nationwide, according to Redfin.

        – “The lack of new listings is driving an unseasonal decline in the total number of homes for sale.”

        – Nearly half of homes on the market sell within two weeks, the highest portion in almost a year.
        …
        https://markets.businessinsider.com/news/stocks/housing-market-outlook-inventory-redfin-home-prices-sale-economy-downturn-2023-4

        1. Not sure how the rest of the country looks, but we have numerous large areas cleared out nearby to build new subdivisions where there probably shouldn’t be any…right near the freeway in most cases. I feel sorry for whomever ends up living in these undesirable loctions where the land is much cheaper for a good reason.

          1. The Wall Street Journal
            The Building Boom Is Prolonging Market Pain
            Construction employment is higher than ever—undermining bets the Fed will soon pivot
            Home builders are enjoying a relief from skyrocketing lumber prices.
            Home builders are enjoying a relief from skyrocketing lumber prices.
            Jim Watson/Agence France-Presse/Getty Images
            By Ryan Dezember
            and Will Parker
            April 30, 2023 5:30 am ET

            The building boom has helped push unemployment to around its lowest level in more than 50 years. That is perplexing investors who want to see the Federal Reserve switch course on interest rates.

            Construction spending and employment have risen to new records this year, boosted by government outlays for infrastructure, a domestic manufacturing renaissance and a wave of apartment building that got off to a slow start during the pandemic when prices for building materials, such as lumber, were sky high.
            …

          2. Ventura CA is like that. I wonder if that’s why all the homeless seem to have disappeared ? Some deal between builders and city to help sell these condos ?

    4. Local market update: 12904 Stone Canyon Rd, Poway, CA 92064

      02/01/2023 Listed $2,200,000 $763
      11/28/2022 Listing removed
      10/27/2022 Listed $2,200,000 $763
      12/12/2001 Sold $570,000 $198

      Per MLS, the property went pending 4/28/2023. We saw a moving truck the next day, which I find odd given how long the property has been on the market without a price adjustment. It’ll be interesting to see if it closes and for how much.

        1. I like the second house a LOT better. Decor is less ostentatious but still nice, and it’s got a pretty good pool.

          2. No walk-in closets in either of these homes? How about a large pantry too? At those prices I’d like to see plenty of storage space.

          3. I would think Stone Canyon and Huntington Gate would have walk-in closets and a large pantry. Maverick is a remodeled ranch that likely lacks both.

          1. Are the property taxes really that cheap?

            Coming from Long Island myself I’d say a house that size that the taxes would be around $35K or more if on LI.

          2. Are the property taxes really that cheap?

            Last I checked in California it’s 1% of the sale price and growth is capped at 2% per year

          3. Poway’s property tax rate is 1.09969%. Last I checked, yes, growth is capped at 2%.

          4. Just saw a vid which said that California is only the 4th most taxed — total tax — state in the country, behind NY, NJ, and IL.

        1. Zestimates
          July 2020 $776.1K
          May 2022 $1.4M

          < 2 year appreciation
          1400/776.1 – 1 = 80.3%

          Yegads!

  6. A reader sent these in:

    3 of the 4 largest bank failures of all time have happened in the past two months. Washington Mutual amount is adjusted for inflation. The banking issues are not over and the Fed is hiking rates 🤔

    https://twitter.com/WallStreetSilv/status/1652193965834227712

    Ah yes, this housing bubble is obviously the Millennials fault …… 🤡 🌎
    It has nothing to do with the Fed keeping rates at 0% for years and Blackrock buying everything trying to make us all become renters.

    https://twitter.com/WallStreetSilv/status/1652104769740107779

    If a boomer hits you with the “back in my day I had a 15% interest rate on my first home” Hit them with “the average home price was just $55,000, or twice the household income”

    https://twitter.com/DonMiami3/status/1652096665262739462

    We don’t have a housing shortage we have a shortage of good well designed homes because the boomers had horrible taste and didn’t value quality. As a result we have 50M gloried mobile homes like this that nobody truly wants to live in if they didn’t have to

    https://twitter.com/NipseyHoussle/status/1652019298179731456

    The most damaging thing happening to the housing market right now is the media etc working overtime to convince sellers that if they just hold off listing their home, prices will be going up again soon

    https://twitter.com/NipseyHoussle/status/1651925780828438529

    It’s wild how abrupt the “housing shortage” was

    https://twitter.com/NipseyHoussle/status/1651921207543881728

    And they want socialism

    https://twitter.com/WifeyAlpha/status/1652086606428266496

    Small Banks Share of Commercial Real Estate Loans, by Year:

    – 2008: 54%
    – 2009: 53%
    – 2010: 54%
    – 2011: 55%
    – 2012: 56%
    – 2013: 57%
    – 2014: 57%
    – 2015: 58%
    – 2016: 56%
    – 2017: 57%
    – 2018: 59%
    – 2019: 62%
    – 2020: 63%
    – 2021: 64%
    – 2022: 65%
    – NOW: 70%
    Meanwhile, over $1.5 trillion worth of commercial real estate debt is set to mature by the end of 2025. Regional banks are already in trouble and this will add fuel to the fire. This is a much bigger crisis in the making.

    https://twitter.com/KobeissiLetter/status/1652345758148960256

    Retail apocalypse! The full list of brick-and-mortar store closures across America #CMBS

    https://twitter.com/danjmcnamara/status/1652364909152292865

    First Republic’s CEO got $9.2 million last year. Silicon Valley Bank’s CEO got $9.9 million. Is that the market price for someone to send your bank into bankruptcy?

    https://twitter.com/DeanBaker13/status/1652462836835303425

    “The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy.” — Ludwig von Mises

    https://twitter.com/BP_Rising/status/1652413261629861888

    Simple math says your house is worth 35% less at 6.5% mortgage rates than it was at 3%.

    https://twitter.com/GRomePow/status/1652402236285386752

    In March, 31% of homes sold by investors in Phoenix were sold at a loss, the highest % of any metro area in the country.

    https://twitter.com/charliebilello/status/1652334425848549381

    Fed data has too much latency. Mild recession is already here. It’s not like just the canary in the coal mine (SVB) died, one of the staunchest miners (Credit Suisse) died too & the cemetery is filling up fast! Further rate hikes will trigger severe recession. Mark my words.

    https://twitter.com/elonmusk/status/1652550791310237696

    BREAKING: Jeffrey Epstein’s private calendar leaked
    Epstein met with:
    – current CIA Director, William Burns
    – Joshua Ramo, board member of $FDX and $SBUX
    – Noam Chomsky many times
    – Kathryn Ruemmler, White House counsel
    None appeared in Epstein’s black book or flight logs.

    https://twitter.com/unusual_whales/status/1652812826342195203

    San Francisco Right Now:
    1. Median home price down 33% from high
    2. Record 30% of offices vacant
    3. 30M sq feet of office space on market
    4. Cell phone activity down 70% since 2020
    5. 10M sq feet of office space listed for sublease
    Real estate crisis is an understatement.

    https://twitter.com/KobeissiLetter/status/1652757705487011840

    “People are careful with their money when they buy a refrigerator or plane ticket. But they hear about a stock on a bus and they’ll put 5k, 10k behind it,” says Peter Lynch. “What is the reason the stock should be higher? The sucker is going up is not a good reason.”

    https://twitter.com/unusual_whales/status/1652689514396000256

    MUNGER: “Every bank in the country is way tighter on real estate loans today than they were six months ago .. We have a lot of troubled office buildings, a lot of troubled shopping centres .. There’s a lot of agony out there.”

    https://twitter.com/carlquintanilla/status/1652666513688543234

    82% of homeowners wanting to move now feel trapped with their 3% mortgages and are waiting for rates to drop. The narrative last year was people were thrilled they locked in with a low rate.

    https://twitter.com/StealthQE4/status/1652681129269313537

    Soon to be trapped by negative equity

    https://twitter.com/GRomePow/status/1652730296520024066

    Friend turned me onto real estate investing reddit and now I’m obsessed with watching these people goad one another into dumping every bit of leverage available to them into assets as the market rolls over.

    https://twitter.com/coloradotravis/status/1652696926704246786

    1. 82% of homeowners wanting to move now feel trapped with their 3% mortgages

      you never ever hear after 10years i have too much stuff, and need to downsize instead of getting a bigger house with a bigger mortgage,………….. never

      1. “82% of homeowners wanting to move now feel trapped with their 3% mortgages”

        Get us out of here Scotty!

        It won’t let us out Captain, they’ve got their 3% mortgages up.

      2. Not sure where you live, but I hear this from EVERYbody ALL the time: “I’m tired of home ownership and I need to get rid of this stuff and I just wanna go live in a condo and walk to the store every day.”

        1. Just to mix things up for you Oxy:

          I’m entirely happy with my modest house, no rent, no debt. I can walk to the store if I want to, just a few blocks to everything. The grocery and hardware deliver for free if you need.

        3. I live in a nice, expensive apartment near a city with high-paid jobs. While many here are younger professionals with small children, there is a good sized cohort of people over 55.

          No lawn maintenance. No replacing the roof/HVAC/etc. No shoveling in winter.

    2. If a boomer hits you with the “back in my day I had a 15% interest rate on my first home” Hit them with “the average home price was just $55,000, or twice the household income”

      I don’t understand this comment. Prices and interest rates are inversely related. I’d take high rates and low prices over low rates and high prices any day.

      1. When people complain about interest rates on Twitter (remember the predominate demographic there), boomers often make that comment, neglecting astronomic prices and many multiples of annual income.

        1. Not to mention that those high interest rates produced a MASSIVE tax refund every year. You could apply that refund to the mortgage principle and pay the house off pretty quick. And then years later get on Twitter and brag how you paid off your house by skipping the soy latte at SUBX.

          1. And still expect the younger generation to pony up top dollar on a shack that’s mostly appreciated because of low interest rates. @GRomePow has a favorite chart that I can’t find now. I’ll post it when I do.

          2. Things weren’t so easy back then when the minimum wage was $2/hr. What prevented lots of people from buying a house was that it was almost impossible to come up with a down payment–if your parents couldn’t help, you were out of luck. This was the situation with lots of people. $5000 was considered a fortune back then. It’s not true that life was much easier and better back in “the old days”.

          3. when the minimum wage was $2/hr

            That was 1974. Of course, if you had some sort of skill you could do better than that. IIRC, you could buy a house in SoCal in the mid twenties. That was $130 a month for P&I at 5%. For an FHA loan you needed 3% down, $750.

            I remember that the neighbors in our tidy Orange County neighborhood were ordinary people: grocery store clerks, postal workers, auto mechanics, machinists, etc. You didn’t need to have a masters in electrical engineering to live there.

          4. That was 1974. Of course, if you had some sort of skill you could do better than that. IIRC, you could buy a house in SoCal in the mid twenties. That was $130 a month for P&I at 5%. For an FHA loan you needed 3% down, $750.

            I remember that the neighbors in our tidy Orange County neighborhood were ordinary people: grocery store clerks, postal workers, auto mechanics, machinists, etc. You didn’t need to have a masters in electrical engineering to live there.

            I know this is a RE blog, but life is not defined on whether or not a person can afford to buy a house/home. Or I guess my memory is defective when I remember how easy my parents and their generation had it. After all they bought their W L.A. home for $12,500 after The War. Easy Peasy, right?

            And the life of us Boomers was filled with riches, luxuries and comfort paid for with full employment economies where all one needed to do to succeed is fall off a rock.

            The problem with all forums on the Internet is that they all turn into an angry rant about how easy previous generations had it compared to the “hardships” facing people today. Yeah right.

          5. And the life of us Boomers was filled with riches, luxuries and comfort

            I wouldn’t go that far. But at least shelter wasn’t a luxury and the only homeless were a few hobos.

          6. Easy, right!

            My grandparent built a house right after WWII for $10,200. Cash. Grandma saved every single one of Grandpa’s checks from the US Army while he spent 3 years doing maintenance on the Panama Canal locks. She didn’t spend one penny of it. Neither did he. How could life be any easier?

            1974…I wrote here that around that time I was out at the farm splitting firewood for 10 or so hours a day. It was like falling off a rock, and I didn’t even need a gym membership! My wife had a book about 99 ways to use hamburger.

            Thanks for the laugh zzy.

          7. Grandma saved every single one of Grandpa’s checks from the US Army while he spent 3 years doing maintenance on the Panama Canal locks.

            Yeah, your granddad was in the “Rear Echelon”, a pejorative term meaning one step above being in Fort Leavenworth.

            My dad sent all of his pay back home to his parents so they could get out of Manzanar Relocation Center and move to Idaho where they farmed for the duration. My dad was too busy throwing hand grenades at the Germans and dodging the 88’s and MG42 bullets. But he was only partially successful at that since a piece of shrapnel and a machine gun bullet got him. He was lucky since over 40 men in his company never came home and my dad all of his best friends.

            He came home on a hospital ship and spent a year in an Army Hospital after the War. The government made up for all of these inconveniences by giving him a permanent disability check. By the time he died, he was rated 100% disabled.

            So yeah, you and your family were laughing all the way to the bank. It’s great to know that your dad was a Genuine War Hero doing guard duty down in Panama. Americans love War Heroes like George Washington, Audie Murphy and the Marines who fought at Iwo Jima.

            If you were a little smarter, you wouldn’t EVER brag about your granddad serving for the duration down in Panama. That’s like bragging about how you stole the Salvation Army kettle from a bell ringing invalid stationed in front of Walmart.

          8. It’s great to know that your dad was a Genuine War Hero doing guard duty down in Panama.

            Oh hell, that was my Grandpa. He never even joined up. They took him off a ship because he was a mechanic. Born in Scotland. They told him to “volunteer” or get deported. Three years later…

            My dad didn’t have such an adventure. He was on Iwo Jima. He had a scar all the way around his head from a bullet that got through the helmet and then spun around the inside. He wasn’t disabled but the malaria was an inconvenience. Also told me he stopped exchanging names with the guys on the landing crafts, because they were always mostly all cancelled in five minutes. He was only 17.

      2. Prices and interest rates are inversely related. I’d take high rates and low prices over low rates and high prices any day.

        I said this to a Boomer once when housing costs came up and my lack of ownership despite ability to borrow seemed to upset them.

        They told me higher interest rates are bad for me. I smiled and left it at that; I like that my liquid cash savings accounts are actually growing right now relatively risk-free.

        1. “I like that my liquid cash savings accounts are actually growing right now relatively risk-free.”

          Yes, finally. Savers have getting screwed for too long.

        2. The house you buy when you’re working is basically enough to pay housing during your retirement. If you know you have enough other income streams to pay rent for the remainder of your life, then you don’t need to buy.

          1. The house you buy

            Keeping in mind that a decade ago your book was: Buying a house with borrowed money will make you rich and rent is cash in the trash.”

            For me, housing has just been an expense, though minimal.

          2. Keep in mind that I have a memory, thank you very much. My book was never “get rich.” It was to have a paid off house so that my monthly housing expense would drop at about the same time that my income dropped.

          3. My book was never “get rich.”

            It was. Borrowed money and rent cash in the trash. You’ve done better than we expected, for sure. Maybe you were right. Let’s watch and find out.

          4. If you know you have enough other income streams to pay rent for the remainder of your life, then you don’t need to buy.

            Right now I need to live near a decent job center to be gainfully employed in my field. That means a larger metropolitan area. Where I am now, the cost to rent is significantly lower (like 50%+) compared to buying a house.

            I save each month. I will continue to do this for a few more decades.

            Then I can move somewhere affordable with a poor job market for my older years. That’s the plan at least.

    3. “gloried mobile homes like this”

      A 3-bed ranch, along with its brothers the small Cape Cod, the split level, and even the dreaded raised ranch, are all extraordinarily well-designed for their obvious purpose of raising families. Lots of bedrooms in small square footage to save on materials, and leftover green space for the dog and 2.5 kids.

      I would like to see what the Tweeter has in mind for the ideal dwelling. A sardine air-box in a 15-minute city?

    5. So much of what the Government is doing is just outright unconstitutional.
      This government was not founded on the “law of equity” and sustainable earth in which the Government is in charge of dictating this .
      This Republic was founded on Constitutional protection for the individual.
      More and more the Gov. is dictating the Communist//Facism ideology, that is literally snuffing out the Constitution for Government tyranny.
      Free speech ,right to bear arms , religious freedoms,political rights, parents rights to protect their Kids, medical tyranny, climate change tyranny, Government redistribution of wealth, , discrimation against the whites, unequal justice under the law , transgenders are soul of nation,no right to privacy,, failure of Gov to protect borders, ,Gov bailing out rich private party Corporation, taxed for endless foreign wars,Unconstitutional “Treason by Treaty” giving unelected United Nations power to supersede US Constitution,signed by Biden and 195.
      other Countries selling out to One World . Order.
      Our Government got captured and corrupted and sold out to a invasion by One World Order and CCP.
      The United Nations heads are riddled with CCP members,and the WHO Head Tedros is a Commie terrorist, who isn’t even a Doctor.Klaus Schwab is often seen with these people as well as Bill Gates who partially funds the WHO.
      The news won’t report on the true issues of the day, which is a invasion of our Country by forces that mean harm and destruction to the Constitutional Republic of US..
      Unbelievable!

  7. You have to admire a 99-year old who is still sufficiently engaged to sound warnings on commercial real estate investing risk. We should all hope to live out our lives at a similar level of awareness.

    1. CNBC
      MARKETS
      Charlie Munger says the U.S. commercial property market is in trouble: FT report
      PUBLISHED SUN, APR 30 2023 10:13 AM EDT
      UPDATED 55 MIN AGO
      Ashley Capoot

      KEY POINTS

      – Charlie Munger reportedly believes there is trouble ahead for the U.S. commercial property market.

      – The 99-year-old investor told the Financial Times that U.S. banks are packed with “bad loans” that will be vulnerable as “bad times come” and property prices fall.

      – “It’s not nearly as bad as it was in 2008,” he told the Financial Times in an interview. “But trouble happens to banking just like trouble happens everywhere else.”
      …

      1. Charlie should take a look at the plunging M2 if he thinks it’s not nearly as bad as 2008

        1. Like I said over the weekend, it’s a fool’s errand to push the narrative that this time is different, and won’t be as bad.

          Given that home prices in our neck of the woods went up by 80% from summer of 2020 to a comparable point in 2022, it seems like mean reversion to trend could be a real bitch, which might include overshooting of trend to the downside.

          1. I think CRE and MFR will be the real disaster this time. Of course SFR prices will crash too.

          2. “I think CRE and MFR will be the real disaster this time.”

            These are main street’s pension funds.

    2. *”You have to admire a 99-year old who is still sufficiently engaged to sound warnings on commercial real estate investing risk. We should all hope to live out our lives at a similar level of awareness.”

      had a similar reaction to 99 yr old Munger’s comment.

      . . . as I just discover a gallon of spoiled milk in the pantry at my “advanced” age of 60.

        1. *”please consider investing in a refrigerator”

          Got one. two, in fact. why, that’s where I discover the cereal boxes, peanut butter batteries etc all neatly tucked away.

    3. If you need another reason to avoid financial advisors, take the advice of a 99-year old sage.

      1. Finance ·Charlie Munger
        Warren Buffett’s right-hand man Charlie Munger says most money managers are little more than ‘fortune tellers or astrologers’
        BY Will Daniel
        May 1, 2023 at 10:20 AM PDT
        Charlie Munger, vice chairman of Berkshire Hathaway, speaks to members of the media on May 3, 2019, the day before the company’s annual meeting in Omaha.
        Houston Cofield—Bloomberg/Getty Images

        Charlie Munger has never been known to mince words, but lately he’s stepped up his patented wry criticisms of the financial world. In a little over a year, the Berkshire Hathaway vice chairman has likened Bitcoin to “rat poison,” blasted “gambling parlor” stock brokerages for encouraging risky investing, and compared meme stock traders to heroin addicts. And over the weekend, he continued a long-running tradition of criticizing his own industry.

        Investment managers are nothing more than “fortune tellers or astrologers who are dragging money out of their clients’ accounts,” he told the Financial Times in a wide-ranging interview published Sunday, arguing there’s currently a “glut of investment managers that’s bad for the country.”

        Munger, now age 99, has spent 45 years as Warren Buffett’s right-hand man at Berkshire Hathaway, growing the firm into one of the world’s largest global conglomerates and becoming a billionaire in the process. But on Sunday, he noted that the company’s success was “by and large [a result of] low interest rates, low equity values, ample opportunities,” arguing he lived during “a perfect period to be a common stock investor.”

        “We were a creature of a particular time and a perfect set of opportunities,” he said.

        Investment managers of today face a much more difficult environment owing to stubborn inflation, higher interest rates, and rising competition, according to Munger.

        “It’s gotten very tough to have anything like the returns that were obtained in the past,” he said, noting that at the “exact time that the game is getting tougher we’ve got more and more people trying to play it.”
        …
        https://fortune.com/2023/05/01/charlie-munger-most-money-managers-just-fortune-tellers-astrologers-berkshire-hathaway/

      2. A financial advisor is someone who invests and reinvests your money, until it’s gone.

  8. San Francisco’s Famed California Street Is Selling at a Deep Discount
    Written by Kevin Truong
    Published Apr. 28, 2023 • 12:34pm
    Sun rises over the Bay Bridge and California Street during the so-called “California Henge” in San Francisco on April 8, 2023. | Tayfun Coskun/Anadolu Agency via Getty

    California Street, one of San Francisco’s major east-west thoroughfares, cuts through the heart of Downtown and previously contained some of the most exclusive—and expensive—commercial real estate in the country.

    But troubles in the city’s commercial real estate market, marked by a huge and seemingly permanent drop in occupancy due to remote work, are beginning to hit building values.

    Commercial mortgage-backed securities (CMBS) loan delinquencies, considered a sign of distress in the market and a sign of building owners’ inability to pay back their mortgages, are expected to more than double by the end of the year, according to a report from Fitch Ratings.

    Here’s a look at office buildings along the famed street on sale or in distress.
    …
    https://sfstandard.com/business/san-franciscos-famed-california-street-is-selling-at-a-deep-discount/

  9. The Financial Times
    Markets Briefing Markets
    US regional lenders fall after second largest American bank failure
    Equities broadly subdued ahead of Federal Reserve rate decision this week
    Montage showing mixed picture for US markets
    The deal for First Republic marks one of the biggest bank failures in America’s history — second only to Washington Mutual in 2008
    Harriet Clarfelt in New York 2 hours ago

    Shares in US regional banks were under pressure on Monday after regulators mobilised a deal for JPMorgan Chase to buy struggling lender First Republic.

    Citizens and PNC both dropped more than 5 per cent shortly after the opening bell, while shares in PacWest traded choppily. The KBW regional bank index slid by 0.8 per cent.

    Trading in First Republic shares was halted, having tumbled more than two-fifths in pre-market trading. The bank’s market value had slid sharply last week as fears intensified about its ability to survive.
    …

  11. Whole Foods workers at shuttered San Francisco store witnessed knife attacks, a deadly fentanyl overdose, customers trying to defecate on the floor, and other chaos, report says”

    Is this WOKE ? Just asking…

    1. My employer used to hold its annual convention in San Francisco. But then attendees began to complain about the vagrants and the sidewalk feces, so my employer moved the convention to Las Vegas, and they weren’t the only ones to leave. And this was 5+ years ago.

      Today San Francisco is one step away from anarchy. While tax paying businesses flee and the city is engulfed in crime, civic leaders yammer about paying reparations with money they don’t have to people who were never slaves.

      1. “…paying reparations with money they don’t have to people who were never slaves.”

        Funded by people whose ancestors never owned slaves…

        1. Who exactly are they going to tax to pay for it? Whole Foods? Oracle? Prop 13 won’t allow them to raise property taxes. What will they tax,incomes? Wouldn’t every renter pack up and leave if they tried to create a City of San Francisco income tax? And it would have to be an onerous tax to pay those proposed reparations, which makes it obvious that they are virtue signaling and have no real intention of ever paying those reparations.

          1. Very surprised Oracle still has a presence in SF.

            I know Larry has a very nice home in the SF foothills, but then again he owns 98% of the Island of Lanai.

            I doubt he is in the SF office very much.

          2. “who are they going to get to pay for it?”
            in CA the politico/school/public hero unions easily sidestep prop13 by passing “Bonds and/or Studies” property tax fees, which hoodwink voters.
            it gets worse.

            * school districts play “leaky roof” card every 3 years
            * police/fire/hospital unions use the fear angle
            * politicians divert better road taxes to the general fund which then evaporate untracked into kickback causes.

            this will continue forever as no one wants to stop the scratch-my-back, I’ll-scratch-yours, money train.

          3. Very surprised Oracle still has a presence in SF.

            Quite a few employees still live in the bay area.

            From what I have heard Ellison rarely leaves the island. Whenever he attends an “all hands” meeting, he does it from Lanai. I can’t say that I recall seeing any footage of him at the Austin HQ.

          4. in CA the politico/school/public hero unions easily sidestep prop13 by passing “Bonds and/or Studies” property tax fees, which hoodwink voters.
            it gets worse.

            Correct that show they do it

          5. Will California voters agree to doubling or tripling their taxes to pay reparations?

            Here in the Centennial state there is a Prop 2A vote every year to fix “leaky roofs”. In my little burg it always get shot down

  12. BARRON’s
    Real Estate
    Blackstone Limits Breit Withdrawals for Sixth Straight Month
    By Andrew Bary
    May 1, 2023 10:24 am ET

    Blackstone (BX –0.22%) $70 billion retail real estate fund limited withdrawals for the sixth straight month in April after seeing no letup in outsize redemption requests.
    …

  13. Moochelle doesn’t seem to have very good rhythm.

    Watch: Michelle Obama Takes the Stage at Bruce Springsteen Concert

    ALANA MASTRANGEL
    O1 May 2023

    Former First Lady Michelle Obama and Steven Spielberg’s wife actress Kate Capshaw took the stage at a Bruce Springsteen concert in Barcelona, Spain, where they were seen singing into a microphone and shaking tambourines.

    Michelle Obama was seen on stage playing a tambourine during Springsteen’s hit song, “Glory Days,” and signing into a microphone with Capshaw and Patti Scialfa, Springsteen’s wife and E Street bandmate, at her side.

    https://www.breitbart.com/entertainment/2023/05/01/watch-michelle-obama-takes-the-stage-at-bruce-springsteen-concert/

    1. Nice to see that Bruce is in touch with the common man.

      Hey Bruce….sing us your new hit “Vaxxed in the USA.”

      Sellout.

  14. Are you you wasting time and energy fretting over the potential fallout of the First Republic CR8R event?

    Why worry? Sit back and enjoy the journey.

    Got popcorn?

    1. The Financial Times
      US economy
      Investors warn of First Republic aftershocks at gloomy Milken gathering
      Attendees at financial conference fear credit crunch and sharper slowdown after banking turmoil
      David Hunt, chief executive of PGIM, warned that recent US bank failures would ‘further hinder the supply of credit’
      Jennifer Hughes and Antoine Gara in Los Angeles 2 hours ago

      Top investors attending the annual Milken conference have warned against complacency following the rescue of First Republic, arguing the third seizure of a bank by US regulators since March threatens to constrain credit and worsen an economic slowdown.

      The seizure of First Republic and the rapid sale of the remains of the bank to JPMorgan was thrashed out in the early hours of Monday morning as investors and financiers descended on Beverly Hills for the Milken Institute conference, one of the biggest gatherings of its kind.

      Although the failure of the ailing California bank resulted in a sell-off in some lenders’ shares on Monday, it did not spark the same degree of market mayhem as the earlier collapse of Silicon Valley Bank and Signature Bank, prompting relative relief among financial executives and Biden administration officials.

      However, several prominent investors used the opening day of the conference to predict aftershocks following the recent turmoil. They argued banks would be forced to comply with tougher rules that could crimp their ability to lend just as the US economy is starting to feel the full force of the Federal Reserve’s aggressive interest rate rises.

      “There is a little bit of a tendency to kind of breathe a sigh of relief on mornings like this,” David Hunt, chief executive of $1.2tn asset manager PGIM, told Milken attendees digesting the First Republic rescue. “Actually, we’re just starting the implications for the US economy.”

      “First of all, we’re going to see a real ratcheting-up of regulation in the banking system, particularly on many . . . regional lenders,” said Hunt, adding that the impact of new rules would be “quite constraining”.

      “What that will do is . . . further hinder the supply of credit that’s going into the economy. And I think that we are going to see now a real slowing that begins to happen to aggregate demand.”

      Rishi Kapoor, chief executive of Bahrain-based Investcorp, said there was “no doubt that the second- and third-order effect on the banking sector . . . is going to cause constraining financial conditions”.
      …

      1. Don’t fret….Jamie Demon says it’s all good! Banking crisis over!

        1. Now that JPMorgan snapped up one of the biggest bamks in the country at a fire sale price, things are indeed looking good for Jamie. Supersized Democrat campaign contributions are soon to follow.

  15. The odds of a recession in the next year are 70% and the US has a stagflation problem brewing, former Treasury Secretary Larry Summers says
    Jennifer Sor May 1, 2023, 11:22 AM ET
    Larry Summers
    Former Treasury Secretary Larry Summers speaks at the Spring Meetings of the International Monetary Fund and the World Bank in Washington, DC, on April 16, 2015. NICHOLAS KAMM/AFP via Getty Images

    – The US has a 70% chance of tipping into a recession in the next year, Larry Summers said.

    – The ex-Treasury Secretary pointed to rising wages, which attest to stubborn inflation in the economy.

    – The Fed is unlikely to get inflation back down to 2% without sparking a slowdown, he warned.
    …
    https://markets.businessinsider.com/news/stocks/recession-outlook-odds-stagflation-economy-inflation-larry-summers-treasury-2023-5

  17. Yahoo
    TipRanks
    ‘Investment opportunity of a lifetime’: Cathie Wood says the robotaxi market could be worth trillions — here are 3 stocks to invest in it (besides Tesla)
    TipRanks
    Mon, May 1, 2023 at 6:31 AM PDT·8 min read
    In this article:

    Advances in technology often come loaded with financial opportunities and scanning the one presented by the nascent autonomous driving sector, Cathie Wood thinks there is a huge one at play.

    The Ark Invest CEO has not been shy about making some bold predictions in the past and thinks investors should not underestimate what’s in store for this up-and-coming industry.

    “We think that the robotaxi opportunity globally will deliver $8 to $10 trillion in revenue by 2030 and is one of the most important investment opportunities of our lifetimes,” Wood said. “One of the reasons for this is that it will save lives; 80-90% of auto fatalities and accidents are caused by human error, and autonomous driving is going to take away the human error.”
    …
    https://finance.yahoo.com/news/investment-opportunity-lifetime-cathie-wood-133106830.html

  18. The Financial Times
    IPOs
    China dominates global IPO market as Wall Street fails to rebound
    US companies raise less than a fifth of Chinese total this year as banking turmoil dulls enthusiasm for new listings
    A bottle of ZJLD baijiu
    There was lacklustre demand for shares in Chinese liquor maker ZJLD, which listed in Hong Kong last week
    George Steer in London, Nicholas Megaw in New York and Hudson Lockett in Hong Kong 54 minutes ago

    Chinese initial public offerings have raised more than five times as much money as those in the US this year as a crop of fresh listings in the world’s biggest economy failed to appear after a dire 2022.

    Rising interest rates, stubbornly high inflation and the recent turmoil in the US banking sector have dashed hopes of a recovery in companies floating on Wall Street.

    European markets have also been moribund, leaving Asia — and particularly China — as the clear global leader in IPO markets this year, helped by an end to the tough pandemic restrictions and a new streamlined listings regime for the Shanghai and Shenzhen stock exchanges.

    “It’s not so much that Asia has exploded, it’s just that the US and the rest of the world have died down so much that China and other markets end up accounting for a lot of activity,” said Avery Spear, an analyst at Renaissance Capital. “China has been somewhat resilient thanks to government involvement.”

    The US’s poor performance is set against a lacklustre 2022. The number of US IPOs has plunged 40 per cent year on year in the four months to the end of April, with 56 offerings raising just over $3.8bn, data from Dealogic shows.

    That compares with more than $12.3bn raised during the same period last year as financial markets were selling off, and the $130bn total in the first four months of the bull run of 2021.

    “While there will be some activity, the idea that we’re going to have a quick snapback in the regular-way US new issue market has come and gone,” said Seth Rubin, head of US equity capital markets at Stifel.
    …

  19. From a painful credit crunch to a meltdown in the commercial real estate market, here’s what top economists are predicting for the coming months
    Morgan Chittum
    Apr 30, 2023, 5:45 AM PDT
    Wharton professor Jeremy Siegel. Getty Images

    – Top economists see a painful credit squeeze and crash in the commercial real estate market.

    – David Rosenberg predicted the US will tip into a recession by September.

    – “A recession is a very big call because it’s a haircut to national income,” he said.
    …
    https://markets.businessinsider.com/news/stocks/economic-outlook-siegel-rosenberg-recession-credit-crunch-real-estate-meltdown-2023-4

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