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An Investor’s Paradise That Some Thought Would Yield Ever-Increasing Returns

A report from Jackson Hole News and Guide in Wyoming. “‘Everyone’s saying it feels slow. It’s slow, it’s slow. It’s slow,’ said Kurt Harland, a Berkshire Hathaway agent. ‘If you look at the numbers, it’s not. It’s normal. … It just feels weird because we’ve been on this rocket ride the last couple years. Sellers are cautious that they may have missed the peak, and they don’t want to lower their price. Buyers are also hesitant or cautious. They think the market is going to drop some more.'”

“Andrew Ellett, managing broker of Engel and Volkers, said he’s feeling optimistic that sellers understand that the appreciation rates during COVID were unsustainable. ‘I’m actually encouraged by the conversations that I’ve had with sellers for the last year,’ he said. ‘I feel like they kind of get it, and that was not the case in the last recession.'”

KITV 4 in Hawaii. “The number of homes and condos sold on Oahu is still down from a year ago, according to the Honolulu Board of Realtors.The median sales prices for homes and condos is also down. ‘You’re lucky to get one or two offers–a lot of times, it’s just one offer–because of the higher interest rate,’ said principal broker for OahuRe, Bryn Kaufman.”

The Orange County Register in California. “My trusty spreadsheet reviewed the National Association of Realtors’ quarterly report on 221 housing markets. A dash of good news for house hunters is that prices fell in 95% of the metros when comparing the first three months of 2023 vs. last year’s spring quarter. And 27% of those drops were double-digit declines. The biggest nine-month price drops were in Austin (off 24%), San Francisco and Champaign, Illinois, (off 23%), Kankakee, Illinois, (off 22%) and Provo, Utah (off 18%). Nationally, prices were down 10% in the nine months. By region, Western states’ prices were down 13%, the Midwest fell 11%, the Northeast was off 10%, and the South dropped 8%.”

“Los Angeles County: A 9.6% nine-month dip (156th best of the 221 metros) includes a 9.9% loss in the first quarter (No. 218). In 2020-22, a 26% gain (No. 118). Orange County: 8% nine-month loss (No. 129) after a 5.6% gain in the first quarter (No. 9). In 2020-22, a 37% gain (No. 38). Inland Empire: 6% nine-month drop (No. 85) after a 1.9% gain in the first quarter (No. 36). In 2020-22, a 34% gain (No. 57). San Diego County: 8.9% nine-month fall (No. 145) after a 2.7% gain in the first quarter (No. 26). In 2020-22, a 28% gain (No. 97). Ventura County: 9.2% nine-month decline (No. 153) after 0.6% loss in the first quarter (No. 80). In 2020-22, a 26% gain (No. 116).”

The Miami Herald in Florida. “For years, real estate developer Doug Cox has kept buyers locked out of the homes they bought in Coconut Grove. Now his lender is foreclosing on the properties, demanding to take control of two dozen ready-to-move-in houses and prime vacant lots because Cox has failed to repay a $43 million debt. But the buyers got a lifeline Tuesday when Miami-Dade Circuit Court Judge Jennifer Bailey appointed a receiver to oversee a tangled web of lawsuits, purchase contracts and fraud accusations.”

“‘They have been fighting so long to keep everything secret, but their game is finally over,’ said Coconut Avenue townhouse buyer Kevin Ware. ‘We hope the receiver can get into the weeds and find forensic evidence showing if Doug and Nicole misappropriated funds. We hope innocent families will not be wiped out by what all signs point to as a Ponzi scheme falling apart.'”

Patch New Jersey. “A real estate agent defrauded investors out of as much as $4.7 million over five years through an elaborate Ponzi scheme, according to authorities. Chander Singh, the owner of a ‘distressed property’ renovation company, was just sentenced to eight years in prison for perpetrating an investment and mortgage fraud scheme in which he promised investors double-digit returns, Bergen County Prosecutor Mark Musella said.”

“A 2020 investigation revealed that Singh had solicited money from approximately 30 investors through a web of entities under the umbrella of SC Capital Investors. He had operated the scheme since at least 2014, at which time he had rolled losses from FC Investments, another failed distressed property ‘flipping’ company, into his newer firm, the prosecutor’s office said. The Teaneck man had pleaded guilty on March 16 to first-degree money laundering in exchange for the state to recommend a sentence in the second-degree range. On Friday, he was sentenced to eight years in New Jersey State Prison, with a 3-year period of parole ineligibility, prosecutors said.”

CTV News in Canada. “Saskatchewan’s consumer watchdog is seeking to hold two Saskatoon women responsible for the collapse of their real estate company that left investors with millions of dollars in losses. Last year a court-ordered investigation found that $211.9 million dollars invested in the company by multiple investors was mostly gone. The meltdown of Epic Alliance resulted in significant financial losses for more than 120 investors, mainly from British Columbia and Ontario. Last year, a Saskatoon attorney representing some of the investors said the pair were ‘using new money to pay old money.'”

“Last January, Laflamme and Thompson hosted a Zoom meeting to inform investors of the company’s imminent demise. According to a transcript of the call included in a court filing, the company’s financial situation was described as a ‘s–t sandwich.’ ‘Unfortunately, anybody who had any unsecured debts … it’s all gone. Everything is gone. There is no business left and that’s what it is,’ the transcription said.”

The Globe and Mail in Canada. “A fourth lender has demanded repayment of millions in loans from troubled Toronto-area land developer StateView Homes. StateView’s lenders have asserted in various court filings that StateView has in recent months missed interest payments, tax payments and municipal fee deadlines and appears to have a cash crisis and no liquidity. On May 5, KSV sent a notice to hopeful buyers who hold agreement of purchase and sale contracts (APS) with StateView warning them that their deposits were gone.”

“Court filings suggest there are dozens, if not hundreds, of buyers who have already paid more than $100,000 in deposits to StateView companies. ‘I couldn’t sleep for two nights. … I literally feel like crying,’ said one buyer in BEA who spoke to The Globe. The Globe is not sharing the buyer’s name because she has not yet informed her husband that for the second time in recent years a preconstruction condo the couple invested in has fallen into receivership. ‘It is very stressful, another builder did the same and held our money for four years,’ she said. ‘They get rich and they don’t care about people like me who give them $80,000. I had to cut my daughter’s gymnastic class to afford it. It’s been hard. Who is going to compensate us for that?'”

The Ross-shire Journal in the UK. “Devestated customers say they have lost their life savings after the collapse of a Highland housebuilder saw their home ownership dream turn into a nightmare. Ptarmigan Homes Ltd, which was based in Inverness and specialised in self-build housing, went into liquidation last week owing hundreds of thousands of pounds to its creditors and leaving an unknown number of customers high and dry in the middle of their plans for a new home. And reaction has been heartbreaking, with numerous affected customers and traders taking to social media in response to the bitter blow.”

“Mag Campbell said: ‘Took our life savings and left us with a shell – not even wind and watertight.’ Another person affected was Lisa Williams, from Nairn, who said her and her husband were months into the design process, have lost their deposit and will now have to start all over from scratch. ‘Sadly we were eight months in with our design stage with Ptarmigan Homes,’ she said. ‘We are left with no drawings, no building warrant (that they claimed had been applied for, and we had paid on account for). We have lost our deposit and having to start all over again with a different architect and company.'”

“Another customer, Sean Johnston, added: ‘Unfortunately we have been affected by this too but not as bad as some people. More than happy to keep taking people’s money up until the bitter end.'”

Urban Developer in Australia. “Brisbane-based Property Solutions Holdings and associated companies are being liquidated as another high-profile property player is laid low. Property Solutions, which was behind a number of landmark developments in south-east Queensland including The Barracks at Petrie Terrace, and Centro on James Street, Fortitude Valley, entered voluntary liquidation on May 4. The planned $500-million Queen Street Village in the Southport CBD on the Gold Coast being developed by Property Solutions’ Nerang Street Pty Ltd failed in September last year. It was reported at the time that Nerang Street Pty Ltd went under owing creditors—including two of Queensland’s biggest builders—more than $80 million.”

“Data also released last month indicated insolvencies in the sector are trending to surpass 2000 for the 12 months to the end of June—the highest in more than a decade. ‘I’d say that the vast majority of builders and construction businesses in Australia are probably borderline insolvent—technically, that is,’ Building Industry Credit Bureau chief executive Wayne Clark, told The Urban Developer’s Phil Bartsch.”

The Guardian. “Another month of slumping New Zealand house prices will do little to bolster the hopes of first home buyers under strain from sharp increases in living costs and interest rates, analysts say. The national average home value was 13.3% lower in April than in the same month of 2022 and sits at NZ$902,501, according to figures from the valuation company QV. New Zealand’s runaway property market has for years created a crisis of inequality and deprivation – while proving an investor’s paradise that some thought would yield ever-increasing returns. At the peak of the boom, houses cost 10 times the median income, with a 43% increase during the first two years of the pandemic.”

“The abrupt reversal of prices and rates has left New Zealand’s housing market more over-leveraged than in many comparable countries, prompting analysts to declare the country a ‘canary in the coalmine’ for a property crash. ‘Right now the talk about negative equity, where people are going to owe more to the bank than their homes could be sold for, is limited to those who bought right at the peak,’ said Michael Rehm, a senior lecturer in property at the University of Auckland. ‘But if things continue for much further, the net that’s catching people in negative equity is going to grow.'”

From Reuters. “For many of China’s manufacturers of baby and children’s products, painful reverberations from last year’s historic decline in the country’s population are already upon them. Domestic sales are shrinking and the scramble is on to develop new streams of revenue, whether that be diversifying into products for adults or boosting offerings in overseas markets with younger populations like Southeast Asia and India.”

“Hong Kong-listed Health and Happiness (H&H), which gains nearly half of its revenue from baby products such as infant formula, food and diapers, is one such company. Revenue for its Dodie diaper brand slid 12% in mainland China last year as a fresh decline in the birth rate to a record low exacerbated oversupply and caused prices to drop, says interim Chief Executive Akash Bedi. Fujian-based Hengan International Group Company, a maker of sanitary napkins, diapers and tissues, saw its overall diaper sales fall 1.4% last year as products at the cheaper end of its baby diaper range lost favour. Adult diaper revenue, however, shot up 13% – highlighting how China’s rapidly ageing population is prompting shifts in consumer spending.”

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This Post Has 85 Comments

  1. ‘a Saskatoon attorney representing some of the investors said the pair were ‘using new money to pay old money’

    It’s ponzi scheme Thursday!

  2. ‘Adult diaper revenue, however, shot up 13% – highlighting how China’s rapidly ageing population is prompting shifts in consumer spending’

    There’s a fork stuck in it, it’s not moving. China is done!

  3. ‘she has not yet informed her husband that for the second time in recent years a preconstruction condo the couple invested in has fallen into receivership’

    I’ll have a blue Christmas without you
    I’ll be so blue just thinking about you
    Decorations of red on a green Christmas tree
    Won’t be the same dear, if you’re not here with me
    And when those blue snowflakes start falling
    That’s when those blue memories start calling
    You’ll be doing all right
    With your Christmas of white
    But I’ll have a blue, blue, blue, blue Christmas

    ‘It is very stressful, another builder did the same and held our money for four years,’ she said. ‘They get rich and they don’t care about people like me who give them $80,000. I had to cut my daughter’s gymnastic class to afford it. It’s been hard. Who is going to compensate us for that?’

    Welcome to K-da! It’s a lot like South Florida in that regard.

    1. she has not yet informed her husband that for the second time in recent years a preconstruction condo the couple invested in has fallen into receivership’
      Apparently the first preconstruction condo didn’t cause enough pain to teach them a damn thing. Hopefully they will learn something from the pain this condo causes.

      1. Some people you just can’t reach.

        Also, 80,000 for gymnastic lessons??????????? Ummmmm, does every con artist around see this lady coming?

  4. ‘According to a transcript of the call included in a court filing, the company’s financial situation was described as a ‘s–t sandwich.’ ‘Unfortunately, anybody who had any unsecured debts … it’s all gone. Everything is gone’

    Wait, don’t leave investors! There’s still this sandwich that’s hardly been touched.

  5. A reader sent these in:

    To put the Airbnb market into perspective if 1/3 of the entire homes currently listed were put up for rent, it would be enough to house 71k people based on the average household size. Meanwhile, immigration for 2022-23 came in at 165k above target & 100k over the all time high.

    https://twitter.com/AvidCommentator/status/1656142678311174144

    6 months ago it was the U.S producing stories like this, today its Australia. As international travel normalizes, domestic Airbnbs were always going to suffer. On the bright side it may mean somewhat more rental supply coming back to the market.

    https://twitter.com/AvidCommentator/status/1656131928570081280

    🍿Holiday/Retiree market end. The fear of having to rent to permanents!

    https://twitter.com/aushousingWatch/status/1654406228423114753

    Potentially 2 more RBA rate rises in the coming months 🤔 Doubly so if equity mate picks up further.

    https://twitter.com/AvidCommentator/status/1656110790871777281

    Why housing in US today feels too expensive for many folks. From 1984 to 2021 median household income went up 27% from 55.8k to 70.8k.
    while from 1984 to 2021 median home price went up a staggering 373% from 78.2k to 369.8k. Home to income ratio changed from 140% in 1984 to 522% in 2022. Even with near low interest rates (back in 2020/21) many could not afford to pay mortgage on a home.
    (Data from St Louis Fed)

    https://twitter.com/MohalJoshi/status/1656450803966816257

    The US Government just sold 9.8k of #Bitcoin worth $277 million, causing the prices to plunge. They still own over 200K $BTC – if they decided to sell that, prices would be back under $10K in a heartbeat.

    https://twitter.com/WhaleWire/status/1656353977821196288

    Everything is fine …… 🔥 🔥 🔥 Not a recession 🤨

    https://twitter.com/WallStreetSilv/status/1656431642435518464

    Member of Congress just said the quiet part out loud. “They’ll accuse the U.S. government of making money out of thin air. Maybe we do, but we’re the U.S. government.”

    https://twitter.com/WallStreetSilv/status/1656381916663238658

    1. “Home to income ratio changed from 140% in 1984 to 522% in 2022.”

      How did interest rates change over the period?

      So long as interest rates and inflation stay low, home prices can stay elevated relative to incomes forever.

      1. People who buy the monthly payments are fine until they need to shell out $100K to sell because they’re underwater.

      2. “So long as interest rates and inflation stay low…”

        That’s like defunding the police and having low crime rates.

    2. The US Government just sold 9.8k of #Bitcoin worth $277 million, causing the prices to plunge. They still own over 200K $BTC – if they decided to sell that, prices would be back under $10K in a heartbeat.

      Why does the gooberment own buttcoin?

    3. The US Government just sold 9.8k of #Bitcoin worth $277 million, causing the prices to plunge. They still own over 200K $BTC – if they decided to sell that, prices would be back under $10K in a heartbeat.

      Participating in the scam. What does the US gov not have their hooks in?

      1. PS – whatever happened to FTX grifter boy Scam Bankfraud? He’s daytrading crypto while hanging out at home. He’ll likely walk. Same with his little hussy sidekick.

          1. Tribe membership can have its benefits.

            Decades ago a friend tried to recruit me to where he worked. His boss seemed very positive about me and the offer seemed like a done deal. For some reason the boss thought I was a member of the tribe. After he found out that I wasn’t (he was) all I got was radio silence. Anyway, that was a big wakeup call for me.

          2. “Tribe membership can have its benefits.”

            Until they’re herded into the train’s cattle cars.

          3. Until they’re herded into the train’s cattle cars.

            That seems unlikely anytime soon in the US. In the global south it could be different.

            From my time in Mexico, I met a few members of the tribe. From what I have heard, many have left Mexico, some going to Israel, others to the US.

  6. “the appreciation rates during COVID were unsustainable”

    Remember “two weeks to flatten the curve” and how long those two weeks lasted? Only three years and just shy of two months, and TODAY the alleged CCP Flu emergency is finally officially over.

    I’ve had hangovers that were worse than COVID.

      1. When I had the coof in 2021 my extended family, who are mostly jabbed, we astounded at how mild my case was. At work we had a generous “take two weeks off if you have Covid” policy, and I took some of them. It was nice to sleep in those days.

        1. My 84 year old unjabbed mom didn’t have any problems. My sister and her jabbed family all got sick like dogs. It was a 2 day headache and fatigue for me.

          1. Both of my jabbed siblings caught it and it hit them harder than it hit me, even though they had the more mild Omicron variant. My brother was sick as a dog for two weeks. He was a big believer in the jab. Since then he hasn’t been boosted.

  7. ‘A dash of good news for house hunters is that prices fell in 95% of the metros when comparing the first three months of 2023 vs. last year’s spring quarter.”

    Is 95% a lot?

    “Nationally, prices were down 10% in the nine months. By region, Western states’ prices were down 13%, the Midwest fell 11%, the Northeast was off 10%, and the South dropped 8%.”

    1 – (1-0.1)^(12/9) = 13.1% annualized national rate of price decline.

    It seems quite unusual for the NAR to report double-digit rates of price decline. I wonder how those look if translated into home equity losses and residential real estate investing losses?

    1. Another interesting question to ponder: How many recent buyers are now in a negative equity position, thanks to low downpayments that resulted in high loan-to-value ratios at purchase, and more recently, with falling prices, to underwater mortgages?

    1. On the other hand, the PTB want to discourage family formation, and this goes a long way to achieving that goal.

    3. Glad to see some youngsters refusing the koolaid.

      When I told my dad our household income he was shocked I don’t immediately get a mortgage.

      Our rent is 16% gross income. A house in our metro that isn’t in a section 8 illegal immigrant slum would run us 30% of our income after a 6-figure down payment. I’d rather keep my savings growing and earning some interest for the time being.

      I refuse to fund someone’s retirement.

      1. If you have a 6 figure savings account, US Treasuries will pay over 1/3 of your rent in most places.

  9. “…prompting analysts to declare the country a ‘canary in the coalmine’ for a property crash.”

    The comment suggests a global property crash, which seems right, given the globally synchronized action by central banks to raise interest rates.

  10. Economist who predicted the 2008 housing crisis warns property prices will plummet by another 15 percent before they recover
    By Helena Kelly, Consumer Reporter For Dailymail.Com 09:58 EDT 10 May 2023 , updated 11:41 EDT 10 May 2023

    – Ian Shepherdson said prices would crash 15 percent before they recover

    – Shepherdson predicted the 2008 crash three years beforehand in 2005

    – It comes after prices tumbled 5 percent in a year while new listings plunged 21 percent in April

    An economist who predicted the 2008 housing crash claims US property prices will fall a further 15 percent – after already tumbling 5 percent in a year.

    Ian Shepherdson said a recession and credit crunch will drag down the value of properties while rising unemployment will also deter would-be buyers.

    Shepherdson, the chief economist and founder of Pantheon Macroeconomics, predicted the 2008 crisis three years before it happened, in 2005. Prices peaked in 2006 before sharply falling until 2012.

    Now he predicts that a recession will push down treasury rates, which in turn will cause mortgage rates to drop.

    But while this might stimulate some activity, Shepherdson said it would not be enough to encourage would-be buyers to invest in property.
    …
    https://www.dailymail.co.uk/news/article-12064453/Economist-predicted-2008-housing-crisis-says-property-prices-fall-15-percent.html

    1. ‘It comes after prices tumbled 5 percent in a year”

      That was last month. Now the NAR says 10%!

    2. warns property prices will plummet by another 15 percent before they recover

      Just 15%? What happens if UK interest rates go up even more?

    1. The Financial Times
      US banks
      FDIC to hit biggest US banks with $16bn bill for SVB clean-up
      US regulator’s proposal requires lenders with more than $50bn in assets to cover 95% of cost
      The FDIC on Thursday proposed that roughly 113 banks would be subject to a so-called ‘special assessment’
      Colby Smith in Washington and Brooke Masters and Stephen Gandel in New York 51 minutes ago

      The biggest US banks will be hit with nearly $16bn in extra fees over two years under a Federal Deposit Insurance Corporation plan to recover its losses associated with rescuing Silicon Valley Bank and Signature Bank in March.

      The FDIC on Thursday proposed that roughly 113 banks would be subject to a so-called “special assessment”. Larger lenders whose assets total at least $50bn would pay more than 95 per cent of the total cost. The figure includes both behemoths such as JPMorgan Chase and Bank of America as well as the regional lenders that have been at the heart of the US’s recent banking turmoil.

      The proposal spares the vast majority of the US’s 4,500 FDIC-insured banks, and the fees are computed based on banks’ uninsured deposits on the grounds that $15.8bn of the $18.5bn cost of the SVB and Signature losses were due to the coverage of accounts larger than the $250,000 limit, and most of those accounts are in large banks.
      …

    2. Financial Times
      PacWest Bancorp
      PacWest tumbles after reporting 9.5% drop in deposits last week
      California-based lender says outflows followed reports it was reviewing strategic options
      A PacWest bank sign in Los Angeles, California
      PacWest shares fell 20% in pre-market trade on Thursday
      Joshua Franklin in New York
      2 hours ago

      PacWest shares tumbled on Thursday after the lender said it lost almost 10 per cent of its deposits in the first week of May following reports it was reviewing strategic options in the wake of First Republic’s sale to JPMorgan Chase.

      PacWest had $28bn in deposits as of May 2, but disclosed in a filing on Thursday that these fell by about 9.5 per cent during the week of May 5. The majority of withdrawals were made on May 4 and 5 following reports that the bank was working with a financial adviser to explore strategic options including a sale, which the California-based lender later confirmed.

      PacWest shares, which have fallen more than 70 per cent so far in 2023, were down around 20 per cent in early trading in New York.
      …

        1. It’s the SVB and FRC option. Hand the good assets to JPM and dump the toxic assets on the taxpayers.

  12. Economy
    Fed report shows banks worried about conditions ahead, with focus on slowing economy and deposit outflows
    Published Mon, May 8 2023 2:28 PM EDT
    Updated Mon, May 8 2023 4:24 PM EDT
    Jeff Cox
    WATCH LIVE
    U.S. banks report tighter lending standards and weaker demand: Fed loan officer survey

    Tumult in mid-sized institutions caused banks to tighten lending standards both to households and businesses, potentially posing a threat to U.S. economic growth, according to a Federal Reserve report Monday.

    The loan officers further said they expect troubles to persist over the next year, owing largely to diminished expectations for economic growth as well as fears over deposit outflows and reduced risk tolerance.

    Asked their expectations for the next year, respondents gave a fairly gloomy outlook of what’s ahead.

    “Banks reported expecting to tighten standards across all loan categories,” the report said. “Banks most frequently cited an expected deterioration in the credit quality of their loan portfolios and in customers’ collateral values, a reduction in risk tolerance, and concerns about bank funding costs, bank liquidity position, and deposit outflows as reasons for expecting to tighten lending standards over the rest of 2023.”
    …
    https://www.cnbc.com/2023/05/08/senior-loan-officer-opinion-survey-shows-banks-worried-about-conditions-ahead.html

  13. “The Globe is not sharing the buyer’s name because she has not yet informed her husband that for the second time in recent years a preconstruction condo the couple invested in has fallen into receivership.”

    She may want to lock the windows, hide any sharp metal objects and open the garage door if the car is parked in there before she broaches that subject.

  14. “Were You Expecting Us?” – ATF Agents Go ‘Door to Door’ to Confiscate FRT-15 Triggers

    by Zero Hedge
    May 11th 2023, 10:17 am

    The Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) under the Biden administration continues its ‘door-to-door’ operation to seize Rare Breed FRT-15 triggers from private citizens.

    The latest example comes days ago when ATF agents, noticeably armed and wearing ballistic plate carriers, showed up at a person’s home, demanding the surrender of the FRT-15 trigger.

    The conversation begins with the woman ATF agent saying, “Were you expecting us?”

    The man responded, “Well, it doesn’t surprise me with a guy wearing a plate carrier showing up…”

    The woman ATF agent (who does most of the talking) said, “The reason why we’re here … that just recently, the ATF, classified the FRT as machine guns.”

    She said, “We are aware that you might have purchased some of these FRTs.” She admitted, “Like the whole agency is basically ‘reaching out’ to these purchasers, and we have to pick them up.”

    After all that, Moonlight’s owner responded, “Well, I won’t be answering any questions today … and I don’t have any comments on this subject … and I won’t be giving you anything.”

    In a split second, the male ATF agent asked Moonlight’s owner, “Are you refusing to give us the trigger?”

    Moonlight’s owner said, “I’m not refusing to give anything. I just won’t be answering any questions.”

    https://www.zerohedge.com/political/were-you-expecting-us-atf-agents-go-door-door-confiscate-frt-15-triggers?ref=biztoc.com

    ATF FRT?

    May 8, 2023

    https://youtu.be/FHhc4byi46w

  15. Credit Union of Colorado is offering promo CD rates 4.5% APY for 11 months and 4.75% APY for 22 months.

    Not that any of this would apply to people paying a $5,000 a month mortgage payment, with their new and improved Colorado property taxes. They don’t have two nickels to rub together.

    1. Not that any of this would apply to people paying a $5,000 a month mortgage payment, with their new and improved Colorado property taxes.

      I wouldn’t be surprised if most of them voted to repeal Gallagher and are now furious that their property tax went up. Nevermind that it was spelled out in black and white in the state provided voter guide that year: repealing Gallagher will result in higher property taxes.

      1. Nevermind that it was spelled out in black and white in the state provided voter guide…

        I’ve found many Americans are functionally illiterate. As I’ve grown up and continued to self educate I’m shocked how utterly horrible my “blue ribbon” CA public high school was!

        1. Agreed, and I’m sure that for them the voter’s guide book must look terrifying. So instead they rely on what the TeeVee tells them to do. And if the cute news anchor with the perky smile says that “it’s for the children”, then they will vote yes.

          Still, I recall TV ads warning voters that there would be huge property tax increases should Gallagher be repealed. Granted, they were few and far between.

        2. The top 4 U.S. cities by population all have negro mayors and they are all currently working to resettle as many invaders as possible. For them, illiteracy is a feature not a bug. These are the things you see as a nation is collapsing. Plan accordingly.

  16. Home buying costs could spike by 22% if US defaults on its debt
    By Anna Bahney, CNN
    Updated 8:54 AM EDT, Thu May 11, 2023

    Washington, DC(CNN) The United States has never defaulted on its debt, and it remains an unlikely outcome of the current standoff about raising the debt ceiling. But, if it were to happen — which could be as soon as June 1 without intervention — it would further crush an already wounded housing market, according to an analysis by Zillow.

    Housing costs would spike by 22% with the rate for 30-year, fixed rate mortgages rising above 8%. There would be 700,000 fewer homes sold in the 18 months after July — that’s almost 12% of the 6 million sales currently expected during that span.

    In other words, if you thought this past year of skyrocketing mortgage rates and plunging sales was miserable for the housing market, just wait, there’s more. If the United States defaults on its debts, we can do the past 12 months all over again.
    …
    https://www.cnn.com/2023/05/11/homes/debt-default-forecast-housing/index.html

    1. “Home buying costs could spike by 22% if US defaults on its debt”

      I wonder what that would do to already nonexistent sales?

      1. Costs could go up while prices continue to plummet, due to further liquidity dessication on top of what has already occurred.

        In particular, mortgage interest rates could go up A LOT if foreign buyers suddenly pulled back from owning Treasurys. We’ve already witnessed the corossive effects on home prices of a slight interest rate increase since early 2022.

      1. That’s like eating your seed corn. Unfortunately, that’s the entire economic model at this point.

    1. Finance
      Jamie Dimon warns panic will overtake markets as U.S. approaches debt default
      Published Thu, May 11 2023 9:31 AM EDT
      Updated 3 Hours Ago
      Hugh Son

      Key Points

      – JPMorgan Chase CEO Jamie Dimon said Thursday that markets will be gripped by panic as the U.S. approaches a possible default on its sovereign debt.

      – “The closer you get to it, you will have panic” in the form of stock market volatility and upheaval in Treasurys, he said.

      – Such an event would ripple through the financial world, impacting “contracts, collateral, clearing houses,” Dimon said.
      …
      https://www.cnbc.com/2023/05/11/jpms-jamie-dimon-warns-of-market-panic-as-us-nears-default.html

      1. FFS this is such nonsense. This is the boy that cried wolf. It happens every time. OMG the world is ending……….and nothing happens and the ceiling ALWAYS goes up.

        In the end, just like always, the republicans will give the democrats everything they want, just like always and we continue to swirl the bowl

        1. The closer you get to it, you will have panic

          Yes but the same line works every time, no matter how illogical.

          1. Did you ever see the recurring Peanuts episode where Lucy holds the football for Charlie Brown to kick it?

  18. I’m going to go live in an RV off grid in the desert. The desert I own, specifically.

    My neighbor tells me himself, his wife, and three dogs use about $70 of water a month. You buy the water in town, and haul it on a trailer to fill up your underground water tank.

    1. I know a couple who do that out in Mesa County, CO. Nice little spot, if you enjoy the desert and solitude.

      1. There is a spot in town where you can drive in and fill up a water tank in your pickup’s bed, for a fee. I learned that a lot of people outside city limits have no water service nor a well and this is the only way to get water for the homestead.

        1. It’s probably at least a few years away. First I need to get, in this order:

          Surveying
          Driveway cut-in (with inspection by the county)
          Shipping container (on top of which I will build a canopy to cover the RV and for mounting solar panels)
          Septic (with inspection from the county)
          Propane tank
          The RV itself

          I can afford to rent in Denver, just getting sick of city life and the urban environment.

          Why wait until retirement? I own the land outright. These few improvements and I can live there legally.

          Seeing someone passed out on the sidewalk in broad daylight is the New Normal in my neighborhood. You don’t really think about it. It’s just part of the urban landscape, like a planter or a bus stop bench.

      2. Southern Colorado. About elevation 7,000 feet. Not alpine, not totally desert, lots of piñon trees. Desert cacti. If you put out hummingbird feeders and keep them full of sugar water, you’ll have flocks of them. Too low and too dry for bears. Can raise chickens (protect them from coyotes) and keep bees. If you want horses or other large mammals, which I don’t, you have to pay for all their water.

        1. “Southern Colorado. About elevation 7,000 feet.”

          One year in late September while visiting Tucson, AZ I decided to drive north to Page, AZ and through the Indian reservations and Bryce Canyon, UT. The elevation was easily above a mile as my car was gasping for air, no power. Lots of wind swept barren land as far as the eye could see and an occasional turquoise jewelry stand already shuttered for the winter. The dead of winter up there is likely long, cold and bleak.

      1. When he brought this up a while ago, I suggested he consider a ground catchment basin and store that in an underground tank.

        It worked for the Aztecs.

        I spend a lot of time living off a water tank (boat cruising). In moderate conservation mode, a couple of gallons per day is plenty.

  19. “‘Everyone’s saying it feels slow. It’s slow, it’s slow. It’s slow,’ said Kurt Harland, a Berkshire Hathaway agent. ‘If you look at the numbers, it’s not. It’s normal.”

    Every time I go check the actual numbers the Relitter is lying- it’s actually slow, slow extremely slow. I wonder if this time is any different?

  21. Q. What do you call an 80% loss followed by a 27% gain?

    A1. A CR8R with a dead cat bounce.

    A2. A 74.6% loss.

    1 – 1.27*(1-0.8) = 74.6%

    1. Cathie Wood’s Flagship ARK ETF Marks 5-Day Winning Streak — Outperforming Nasdaq, FAANG In May
      by Piero Cingari, Benzinga Editor
      May 11, 2023 8:57 AM | 2 min read

      Zinger Key Points:

      – Ark Innovation ETF soared more than 8% thus far in May, snapping five days of consecutive gains.

      – Cathie Wood’s flagship fund is up 27%, outperforming the Nasdaq 100.

      Cathie Wood’s flagship fund Ark Innovation ETF ARKK
      marked a five-day winning streak on Wednesday for the first time since January, as a lower-than-expected U.S. CPI cemented market expectations of a Fed rate hold in June.

      Wood’s biggest fund experienced a massive downturn between February 2021 and December 2022, losing up to 80% from peak to trough, as a cocktail of rising inflation and rising interest rates slaughtered high-growth companies in the ARK Innovation ETF.
      …
      https://www.benzinga.com/etfs/sector-etfs/23/05/32325835/cathie-woods-flagship-ark-etf-marks-5-day-winning-streak-outperforming-nasdaq-faang-in-may

  22. Is the deflating credit bubble leading you to reassure yourself that there is no reason to panic?

    1. The Financial Times
      Opinion Insurance
      The deflating credit bubble could hurt more than just the banks
      Low rates have created distortions across the financial world — life insurance companies are now facing issues
      Gillian Tett
      Illustration of an umbrella turned inside out, collecting dollar bills that are flying around.
      Gillian Tett 9 hours ago

      Another week, another wave of worry about American regional banks. Thankfully, the level of panic has dropped somewhat since the Federal Deposit Insurance Corporation appears to be backstopping the system — by precedent, if not by law. But the problem now is one of attrition: weakling banks are losing deposits, watching funding costs rise while their loans to commercial real estate and risky companies turn sour.

      That means more consolidation looms. And while that is welcome in the longer term (since it is crazy that America has 4,000 plus banks), this could create bumps in the short run.

      However, as investors — and American politicians — uneasily watch those banks, there is another sector that also deserves our attention: life insurance.

      In recent months, insurance has largely stayed out of the headlines. No wonder: these companies tend to be boring because they are supposed to hold long-term assets and liabilities. Logic suggests that they should win in a world of rising interest rates because they have large portfolios of long-term bonds that they do not usually need to mark to market, meaning they can reap income gains from rising rates without posting losses.

      However, their balance sheets are becoming a little less predictable right now. And while this is no reason for investors to panic, it highlights a bigger problem: a decade of extremely low rates has created distortions across the financial world and it could take a long time for these to unwind. That attrition problem goes far beyond the banks.
      …

  23. What was that about Elon being the savior of free speech?! 👌🤮

    Via ZeroHedge: Top NBCUniversal Ad Exec And World Economic Forum Taskforce Chair In Talks To Become Twitter CEO: WSJ

    1. As PacWest shares dive, are we seeing the 2008 financial crisis all over again?
      By Elisabeth Buchwald, CNN
      Published 1:44 PM EDT, Thu May 11, 2023
      More turmoil in regional banking as PacWest shares plummet
      03:59 – Source: CNN
      New York CNN —

      If the current banking crisis looks like ’08, sounds like ‘08 and feels like ‘08, is it ‘08 all over again? Using abductive reasoning, the answer is yes.

      But similarities between the two crises are deceiving, experts say. The current banking crisis is a separate, much smaller beast than in 2008.

      Bank failures then versus now

      In 2008, 25 banks failed, according to the Federal Deposit Insurance Corporation’s database. Included in that count is Washington Mutual, the largest bank failure in US history. Over the three years that followed, nearly 400 banks failed.

      Three banks, Silicon Valley Bank, Signature Bank and First Republic Bank, have failed so far this year. But investors are fearful that there are more dominoes to fall.

      One of those dominoes could be PacWest Bancorp. Shares of the bank were down as much as 30% on Thursday after it reported customers recently withdrew 9.5% of its total deposits.

      Prior to 2008, there were no bank failures in 2005 or 2006 and just three in 2007. Similarly, two years before SVB collapsed in March there weren’t any bank failures.

      In both cases, that’s not something worthy of celebrating, said Aaron Klein, former deputy assistant secretary at the Treasury Department. “When no banks are failing, we should be concerned.”

      Leading up to both crises, “financial regulators were asleep at the switch — they went easy on banks and failed to require them to protect themselves,” he said.
      …
      https://www.cnn.com/2023/05/11/business/2008-banking-crisis-comparison/index.html

      1. “But similarities between the two crises are deceiving, experts say. The current banking crisis is a separate, much smaller beast than in 2008.”

        Yeah, right, uh-huh uh-huh…

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