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Some Buyers Are Asking Sellers For The Sun, The Moon And The Stars In Addition To Offering Below The Asking Price

It’s Friday desk clearing time for this blogger. “Austin Board of Realtors latest data shows the median price of a home is about 466-thousand dollars, a significant drop from the price a year ago – 521-thousand dollars. ‘Buyers have gotten scared, almost like the sky is falling and what the rates have done is eroded buying power,’ real estate investor Jesse Breidor told CBS Austin. His partner in business is Zach Schaphorst, a real estate lender. ‘I could characterize it as more of a correction to a relative mean,’ he said of the current market, compared to that of the last two years.”

“A lack of inventory remains the key driver behind a 32.5% statewide decline in existing home sales in April versus April 2022, according to the Wisconsin Realtors Association. Some counties at the core of the state’s major metro areas did see median prices decline in April: Eau Claire (-6%), Outagamie (-1.1%), Ozaukee (-6.7%), and Wood (-18.9%) counties all saw median price declines. The median purchase price in the eight-county Central region — which includes Wausau, Stevens Point and Wisconsin Rapids — declined 3.2%, from $206,600 in April 2022 to $200,000 last month.”

“High mortgage rates are discouraging homeowners from selling and fueling a growing lack of homes for sale in the Valley, according to the Cromford Report, which analyzes in the housing market in Maricopa and Pinal counties. Looking at total sales in April, the Cromford Report found they were down 28% from April 2022 and down 12.3% from March 2023. It said, ‘The median sales price is down almost 9% compared to a year ago, but has recovered nearly 4% over the last three months.’ ‘To find a location that is still strongly favorable to buyers, we need to look at the secondary cities,’ it said, pointing primarily to Casa Grande, which it called ‘the weakest market in Central Arizona.'”

“During most of 2022, it said, ‘we had plenty of sellers because those who saw their properties as investments were keen to avoid the risk of a major drop in value. Those were joined by the iBuyers who realized too late that they had purchased far too many homes for the market conditions since April. This caused a short-term stampede for the exits.'”

“Last year, rising mortgage interest rates chilled the previously hot Southern California housing market. Buyers backed off, sales plunged and, for the first time in a decade, home prices underwent a sustained slide. By one measure, prices in the six-county region fell 13% from the peak last spring. According to the California Realtors, though April’s median in the combined six-county Southern California region was up $15,000 from March, it was $52,000, or 6.2%, below April 2022 levels. In Los Angeles County, the median was 8% less than a year earlier and 17% lower than when prices topped out in the county last September. In Orange County, April prices were 8% from that county’s peak; in the Inland Empire, 5% below the peak; in Ventura County, 7% below the peak; and in San Diego County 5% below the peak.”

“The number of homes sold statewide dropped 4.7% in April compared to the previous month and was 36% lower than a year ago. In the San Francisco Bay Area, the California Association of Realtors reported declines in all markets, with the overall regional sales volume 38.5% lower compared to April 2022. All major markets in California saw the median home price drop from a year ago, according to the report. The Bay Area experienced the largest price drop with the overall regional median value declining by 16.7%. Home prices in six out of nine Bay Area counties fell more than 10% year-over-year.”

“In San Mateo County, the April median sales price of $1.97M was an 18% drop from the median price of $2.4M in April 2022. Santa Clara County’s median sales price of $1.8M was 8.6% less than the median price of $1.97M in April 2022.”

“Home sellers gave concessions to buyers in 42.9% of U.S. home sales during the three months ending April 30, up from 25.5% a year earlier, according to Redfin. That’s just shy of the 45.6% record-high hit in February. ‘High mortgage rates and low supply have thrown the housing market out of whack, and each deal is different. Some buyers are asking sellers for the sun, the moon and the stars in addition to offering below the asking price, and some are requesting no extras because they’re so motivated to secure one of the few homes on the market,’ said Boise, ID Redfin agent Shauna Pendleton. ‘The one consistency in the market right now is homebuilders handing out freebies. Most builders are offering concessions equal to about 3% of the sale price, which gets credited to buyers at closing, to offload properties.'”

“The inventory of homes in Pensacola seems to be stabilizing to pre-COVID levels. Increasing insurance costs, interest rates, sales prices and maintenance expenses are putting a strain on landlords and renters, according to Nicole St. Aubin, a broker associate for the rental company Realty Masters of Florida. ‘Many of the new landlords that we’re getting are not able to rent the house out for their expenses,’ St. Aubin said. ‘So, people who bought recently are now needing to move, and they’re trying to decide if they should sell or rent. They can’t rent for what their final cost is, or at least the rent doesn’t cover their final costs.’ She gave the example of a landlord with a $2,100 mortgage who tried to charge that amount for a rental property. With no takers, they ended up lowering the rent to $1,800.”

“In terms of the growing availability of homes, St. Aubin said the last few years, landlords who had Airbnb units have stepped back from the market to return to long-term rentals, since they did not get the returns they wanted financially. New developments have popped up across the area. ‘All this new construction is filling in the needs that we, have but they’re coming to the market at higher than the average house, if you look at these statistics,’ St. Aubin said. ‘So, I do think we’re past the availability shortage with this influx. And every month, there are so many new construction units coming to the market, from this mix of new construction houses and apartments, but again, not at the price point that most people need.'”

“The gloomy warnings have been coming thick and fast. On Wednesday, the latest arrivals to the misery party were the Canadian commercial banks. BMO and Scotiabank were the first in what is likely to be a trend by all the Canadian banks to set aside extra hundreds of millions of dollars — more than a billion for BMO — to cover loans that borrowers cannot afford to pay back in full. The central bank warned last week that half of all mortgage holders will find their mortgage payments have risen by the end of 2023; others will feel the effect as they renew in the coming years. The bank also warned that rates may have to stay higher for longer until inflation is defeated.”

“Walter Bolduc, the economic forecaster who compiled the Conference Board report, foresees a potential ‘snowball effect’ as people spend a little less, creating a wider slowdown in economic activity. ‘We might have some households which are completely unable to cope with these higher costs and maybe have to default on their mortgages,’ he said.”

“The Government has commissioned an investigation into developments stalled due to land speculation after it was revealed that 43,000 housing units with planning permission in Dublin had yet to begin construction at the end of 2022. A separate report on the operation of Home Building Finance Ireland, has found that lenders may not have the risk appetite to fund build-to-sell apartments because the demand for people to buy such homes is ‘unproven.’ It said ‘funding gaps remain’ in terms of meeting the expected housing demand at this time, as lenders ‘may not yet have the capacity or risk appetite to provide the overall levels of funding required.'”

“Germany’s efforts to increase housing supply are faltering as higher materials costs triggered a decline in residential construction orders by more than one third in the first quarter, according to the country’s main builders lobby. Builders are now facing the prospect of having to put workers on state-subsidized furlough or ‘in the worst case’ cutting jobs, said Felix Pakleppa the trade group’s managing director. ‘People willing to build are losing heart and canceling orders.'”

“Some of Germany’s European Union partners also have troubled housing markets. In the neighboring Netherlands, new construction remains well below government targets amid an acute shortage of affordable homes. Sweden’s residential property market saw construction levels falling by more than half in the first quarter as one of the world’s worst real estate routs continues to gather steam.”

“Richard Portes, a London Business School economist and an expert on financial stability, said in an interview that the same economic headwinds that helped catalyze the failure of Silicon Valley Bank and First Republic Bank remain. ‘Funding costs for regional banks took a big jump a couple of months ago and they haven’t come down,’ Portes said, noting that the spread between the interest rate regional banks must pay to borrow money in the debt markets and the rate large, diversified banks pay has widened significantly of late. ‘Regional banks own all these long-dated assets, whether they are mortgages or longtail securities that are not paying anywhere near those funding costs,’ he added. ‘That’s a really big deal.'”

“Economists estimate that the market assets of the U.S. banking system are worth more than $2 trillion less than the book value of those assets.”

“There’s nothing new about the causes of the recent mega-bank failures. Case in point: the implosion of San Francisco’s First Republic Bank, which is the second largest bank failure in the nation’s history, just behind Washington Mutual during the Great Meltdown of 2008. One of the root causes of First Republic’s takeover by the regulators was borrowing short and lending long, meaning that they made home loans to billionaires at below market rates, and fixed the rate for as long as 10 years with an eye to getting the borrower’s deposit and other banking business. It worked, as it always does, for a while, until short-term rates, and the bank’s cost of borrowing goes up. Then the yield on the low-interest loan is lower than the lender is paying to fund the loan, and the lender is losing money.”

“In every endeavor or business there are core guiding principles that are essential to the success of the activity or business model. For example: Investing: Buy low; sell high. Landscaping: Green side up. Skydiving: Do not exit aircraft after takeoff without parachute. And, in banking: Do not borrow short and lend long.”

“So why do lenders do the same thing over and over and expect different results? Well, yes, they’re probably insane, but it’s a valid question and the answer is elusive. Leading up to the Financial Crisis in 2008, very bright people decided it was a good idea to make mortgage loans to borrowers who demonstrably could not afford the debt service. Why?”

“Possibly it’s ‘hubris,’ from the Greek ‘hybris,’ meaning ‘wanton … arrogance resulting from excessive pride.’ (Webster’s Collegiate Dictionary). For example, if you’re really, really smart, you come to think you’re smarter than everybody else, and soon you figure maybe natural laws might not apply to you. In any event a lot of MBAs crossed the border into La La Land at the turn of this century motivated by, possibly, a dash of hubris and a lot of greed.”

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This Post Has 82 Comments

  1. ‘Some buyers are asking sellers for the sun, the moon and the stars in addition to offering below the asking price’

    That’s the spirit, kick em while they’re down!

  4. Happy Memorial Day weekend! Remember, stay safe and stay the Heck away from Bud Light and Target!

  6. “…They can’t rent for what their final cost is, or at least the rent doesn’t cover their final costs.’ She gave the example of a landlord with a $2,100 mortgage who tried to charge that amount for a rental property. With no takers, they ended up lowering the rent to $1,800….”

    Add in holding costs (property taxes, insurance, maintenance, HOA, utilities, and the like) and what have you got? Guesstimate: Another $1000 for a total monthly nut of $3,100.

    REIConplex response: Think long term! In the year 2048 you will be cash flow positive! We guarantee it! In the meantime, enjoy the tax loss and your high blood pressure.

    1. Think long term! In the year 2048 you will be cash flow positive! ”

      And the underwater owner wont put a dime into any maintenance so its will be junk by 2048, or just collect rent stop paying mortgage. or both

    2. i remember in Long Island City 2007-8 new builds were $3200 a month mortgage and you can rent for $2300….it was right on their website….but think of the tax deduction, and the 20 year graduated real estate tax reductions (421a)

  7. A reader sent these in:

    I have an offer, G F Y

    https://twitter.com/GRomePow/status/1661520885675888641

    Sell the insane $2.6 TRILLION in MBS NOW! If not now, when?! Who gave the Fed authority to hijack the entire US housing market just to make the rich even richer? Shelter inflation is destroying working class families and tearing apart the social fabric of America. RT if agree.

    https://twitter.com/OccupytheFeds/status/1655547164368465925

    You know how people talk about the good old times like 1990s? When you could afford to buy a house, raise a family on one salary. When few knew or cared about who the Fed Chair was. What changed? The Fed is literally succeeding in pumping all our wealth to the top 1% richest.

    https://twitter.com/OccupytheFeds/status/1660823876773740544

    Just a reminder, if you know a small business and think they took PPP, you can easily review the amount. If it’s large and they only have a few employees, takes but a few minutes to report them.

    https://twitter.com/GRomePow/status/1661474932625399809

    Phoenix markets…

    https://twitter.com/pokerchessman/status/1661461938671345665

    FED’S WALLER: I HOPE THE FED NEVER GETS BACK INTO BUSINESS OF BUYING MBS.

    https://twitter.com/financialjuice/status/1661428135307497475

    Global Central Bank Update: -New Zealand hiked rates for the 12th time, 25 bps increase to 5.50%.

    https://twitter.com/charliebilello/status/1661511666012438533

    LA’s EY Plaza jingle-mailed by @BrookstoneCM per memo to @Colliers which is handling the building’s leasing & property management. Brookfield stopped payments in April on the EY Plaza, which has $305M in debt incl a $275M CMBS.

    https://twitter.com/DiMartinoBooth/status/1661814709874556932

    Hurricane has landed: Jonathan Litt shorts entire office space group

    https://twitter.com/danjmcnamara/status/1661535544797528065

    I hereby propose a countdown for @elonmusk. The @RudyHavenstein
    account is the single best anti-establishment truth/art account on Twitter. He’s currently banned, unfairly. Any serious admin would unban him if they have followed him for a long time. He’s a good artist. Do it.

    https://twitter.com/LynAldenContact/status/1661921270684962816

    People dont understand how dangerous low interest rates are to a healthy economy. Without normalized rates price discovery disappears, work ethic evaporates, wealth inequality soars and every fabric of society becomes distorted. 20 years of monetary perversion has brought us here

    https://twitter.com/BartsQuandry/status/1661855899806482432

    Toll Brothers CEO: 90% of Americans have a mortgage rate below 5%. Resale housing market is virtually non existent because no one wants to have to buy a new house at a 7% rate. This is completely screwing up the housing market.

    https://twitter.com/StealthQE4/status/1661735685513183232

    Slowly but surely, math matters again

    https://twitter.com/GRomePow/status/1661877163191324674

    1. ‘Phoenix markets…’

      This is all of Arizona. Lookie here Jerry: Lake Havasu City, Chino Valley, Mohave County, all theses sh$tholes sinking like a turd in a well. Widespread strategic defaults are baked in the cake.

    2. “Shelter inflation is destroying working class families and tearing apart the social fabric of America”

      All because of what we were told was a “respiratory virus” that was the greatest FRAUD of my lifetime, and the greatest medical genocide of all history.

      And there were Lockdown Lovers on yesterday’s thread defending it.

    3. Toll Brothers CEO: 90% of Americans have a mortgage rate below 5%. Resale housing market is virtually non existent because no one wants to have to buy a new house at a 7% rate. This is completely screwing up the housing market.
      🤣🤣🤣🤣

      1. Toll Brothers CEO: 90% of Americans have a mortgage rate below 5%. Resale housing market is virtually non existent because no one wants to have to buy a new house at a 7% rate. This is completely screwing up the housing market.

        Lower the fookin’ price, greedhead.

        1. Exactly. Instead of building McMansions, build affordable, entry level housing. Of course, there isn’t a lot of profit in those, is there?

      2. Most people don’t give a flying F what their interest rate is. Nor do most even know. All they care about is what their monthly payment is. (ask anyone what their car cost, they no idea, but they know what it costs per month (although no idea for how long).

        So if interest rates are up, prices must come down to keep that monthly payment in the range that people expect and are willing to pay.

      3. How many former Toll Brothers employees are living in their parents’ basements or on the street by now?

      1. “January 4, 2012

        Dear Mr. Chairman and Ranking Member:

        Restoring the health of the housing market is a necessary part of a broader strategy for economic recovery. There has been much discussion about the pathway
        forward, and the Federal Reserve has received questions and requests for our input and assistance. We have been looking at these issues and in the interest of continuing a dialogue, my staff has written a white paper, entitled “The U.S. Housing Market: Current Conditions and Policy Considerations.” In this report, we do not attempt to address every problem faced by the housing market; rather, it is our intention to provide a framework for thinking about certain issues and tradeoffs that policymakers might consider.

        I have enclosed a copy of the white paper for your review. I and my staff would be happy to discuss these ideas more fully. I hope that you will not hesitate to contact me if we can be of assistance.

        Sincerely,

        Ben Bernanke”

        1. “There are no atheists in foxholes or ideologues in a financial crisis.”

          – Ben Bernanke

          1. “…or ideologues in a financial crisis.”

            There’s little free market faith when faced with losses.

          2. Translation: If Wall Street traders gamble like a bunch of drunken sailors, and can convince the Fed that they are too big to fail, then bailouts are in the bag, once the tide goes out and reveals they are swimming naked.

          3. Speaking of losses, how much money has the Fed’s bloated Treasury bond & mortgage-backed securities portfolio lost since interest rates started climbing in 2022?

            I’m guessing alot.

          4. Wit & Wisdom
            from Ben Bernanke, Harold Wilson, Yogi Berra, John Allen Paulos, Francois de La Rochefoucauld, Katharine Whitehorn, Woody Allen,
            The Week Staff
            January 8, 2015

            “There are no atheists in foxholes and no ideologues in financial crises.”
            Fed Chairman Ben Bernanke, quoted in Slate.com

            “A week is a long time in politics.”
            British Prime Minister Harold Wilson, quoted in The New York Review of Books

            “Anybody who is popular is bound to be disliked.”
            Yogi Berra, quoted in the London Daily Telegraph

            “Uncertainty is the only certainty there is, and knowing how to live with insecurity is the only security.”
            Mathematician John Allen Paulos, quoted in the Financial Times

            “Good advice is something a man gives when he is too old to set a bad example.”
            Francois de La Rochefoucauld, quoted in the Montreal Gazette

            “A good listener is a good talker with a sore throat.”
            Journalist Katharine Whitehorn, quoted in Canada’s Waterloo Region Record

            “Life doesn’t imitate art, it imitates bad television.”
            Woody Allen, quoted in the San Jose Mercury News

          5. Apr 11, 2023
            Economics
            Fed Operating Losses Seen Growing With Higher Interest Rates

            – New York Fed released annual report on open market operations

            – Remittances to Treasury will be suspended for ‘some time’
            …
            The Treasury portfolio decreased to a $672.8 billion unrealized loss in 2022 from a $134.6 billion unrealized gain the prior year. Weighted average maturity of Fed’s Treasury securities holdings, about 7.9 years, remained significantly higher than that of the outstanding Treasury universe, which is about 6.2 years.
            …
            https://www.bloomberg.com/news/articles/2023-04-11/fed-projects-operating-losses-to-keep-growing-amid-higher-rates#xj4y7vzkg

        2. “The Treasury portfolio decreased to a $672.8 billion unrealized loss in 2022…”

          Everyone who owned risk assets, like stocks, long-term bonds, housing, CRE, cryptocurrencies, and commodities, gained immensely during the Fed’s protracted period of extraordinary accommodation through Quantitative Easing-driven risk premium suppression. Meanwhile, savers who stayed in cash and refused to gamble were continuosly thrown under the bus.

          I wonder who loses when the Fed realizes those bond portfolio losses as it winds down Quantitative Easing? One relevant lesson I recall from day one of freshman economics is, “There is no such thing as a free lunch.”

  8. “I could characterize it as more of a correction to a relative mean”

    Of course Zach isn’t going define what a “relative mean” correction looks like. And there’s a real good chance Zach has no idea himself.

      2. Uh…no, unless it was invented since I took an untold number of undergraduate and graduate stat courses.

  10. STR’s are a cancer in every community they touch, and zoning laws exist for a reason:

    “Residents across Jefferson County say they have fallen victim to an issue that has long plagued other parts of the state: short-term rentals, or STRs.

    Joining Denver and some of Colorado’s biggest ski towns — which have created strict rules for STRs in recent years — people from across the mountain county west of the Mile High City are complaining about rotating doors of strangers wandering through their neighborhoods and on their property, loud late-night parties, and behavior that people fear could start wildfires.

    O’Keefe estimates that there are “probably seven or eight hundred short-term rentals operating in Jefferson County illegally.” However, he explains, because STR vendors have not complied with the county’s requests for data regarding the number and location of STRs in the area, that estimate is rough.

    “Only 28 short-term rentals have gone through the process and been approved [for a license],” he adds.

    https://www.westword.com/news/jefferson-county-struggling-with-short-term-rentals-str-problem-16861637

  11. There is plenty of available new inventory, and more under construction, in the Pensacola area. Just be prepared to pay over $200 a sq/ft for a small cookie cutter stick house on a small lot. Builders have been slowly reducing prices, but housing is still very expensive relative to income considering the median household income of 59K. Also, don’t forget to budget for those property taxes and hefty insurance costs too.

  13. I had such a weird day at the store yesterday. Was there something in the air, or did the warm weather trigger it. It was like a love fest.
    Everybody I ran into was happy, funny, talking up a storm, showing the love.There was even a few that were swaying to the beat of the Tom Petty music that was playing in the store .
    This was a total difference from the stressed out, paranoid, I want to bite your head off if you get close to me Covid insanity, we all know. Is this a sign that you can’t keep the human spirit down , no matter how much social enginerring?

    2. “Everybody I ran into was happy, funny, talking up a storm, showing the love.There was even a few that were swaying to the beat of the Tom Petty music that was playing in the store .”

      Were you wearing your Hawaiian shirt, shorts and sandals?

    3. Is this a sign that you can’t keep the human spirit down

      Ignorance is bliss. They haven’t a clue our country hangs in the balance.

  14. CNBC — Tech layoffs ravage the teams that fight online misinformation and hate speech (5/26/2023):

    “Over multiple rounds of layoffs, Meta announced plans to eliminate roughly 21,000 jobs, a mass downsizing that had an outsized effect on the company’s trust and safety work. The fact-checking tool, which had initial buy-in from executives and was still in a testing phase early this year, was completely dissolved, the sources said.”

    https://www.cnbc.com/2023/05/26/tech-companies-are-laying-off-their-ethics-and-safety-teams-.html

    Trust and safety?

    This Memorial Day, consider the known fact that more Americans have been killed or made permanently disabled from mRNA “vaccines” than have died in all wars since this country’s founding in 1776.

    1. Tech layoffs ravage the teams that fight online misinformation and hate speech

      Imagine, being paid six figures to censor people. It has to be a Woke Bolshevik’s dream job. Except now they’re gone and the terminated are learning that they have no marketable skills.

      1. Government? Foundations and globalist orgs?

        These are the foot soldiers, they do the dirty work. They will be employed.

    1. That’s not working anymore. I saw a stat where over 90% of new vehicles are now selling for msrp or below. A $25k greedcharge ain’t getting paid.

      1. The Civic Type R can be hard to find. A search on cars dot com found the nearest one almost 600 miles from my little. Not a single one in Colorado.

        Still, a $25K markup is absurd.

        2. Damn! Is it too late to sell my old used Honda Civic and just rely on Lyft cab rides for transportation?

      2. “A $25k greedcharge ain’t getting paid.”

        It’s at Stevens Creek Honda, and I set a watch filter on it.

    2. Famed economist David Rosenberg says home prices are set to fall further as buyers retreat to the sidelines and a hawkish Fed means stubbornly high mortgage rates
      William Edwards
      May 26, 2023, 4:30 AM EDT
      A realtor sign advertises that the price of a house has been reduced
      David McNew/Getty Images

      – Housing affordability remains near the lowest levels in decades.
      With mortgage rates unlikely to budge and incomes unlikely to grow, prices are due to drop.

      – That’s according to David Rosenberg, who said monthly payments for first-time buyers are up 33% YoY.
      …

      1. A 33% payments increase with no income increase sounds a bit like a 25% drop in market value.

  19. ‘To find a location that is still strongly favorable to buyers, we need to look at the secondary cities,’ it said, pointing primarily to Casa Grande, which it called ‘the weakest market in Central Arizona’

    No!

    2. Casa Grande, which it called ‘the weakest market in Central Arizona’

      You couldn’t pay me to live in that frying pan.

    3. “‘To find a location that is still strongly favorable to buyers, we need to look at the secondary cities,”

      The closer you get, the further I fall
      I’ll be over the edge now in no time at all
      I’m fallin’ faster and faster and faster with no time to stall
      The closer you get, the further I fall

      https://youtu.be/WJavemS5L20

  20. ‘In terms of the growing availability of homes, St. Aubin said the last few years, landlords who had Airbnb units have stepped back from the market to return to long-term rentals, since they did not get the returns they wanted financially. New developments have popped up across the area. ‘All this new construction is filling in the needs that we, have but they’re coming to the market at higher than the average house, if you look at these statistics,’ St. Aubin said. ‘So, I do think we’re past the availability shortage with this influx. And every month, there are so many new construction units coming to the market’

    ex·com·mu·ni·cate
    verb
    past tense: excommunicated; past participle: excommunicated
    /ˌekskəˈmyo͞onəˌkāt/

    -officially exclude (someone) from participation in the sacraments and services of the Christian Church.
    “Martin Luther was excommunicated by the Pope”

    1. The Financial Times
      US equities
      Hedge funds raise bets against US stocks as debt deadline nears
      Shorts linked to S&P 500 hit 12-year high amid caution on valuations and earnings
      People walk along Wall Street outside of the New York Stock Exchange
      Some in the market believe that problems could start to be felt later in the year
      Chris Flood and Laurence Fletcher yesterday

      Hedge funds and asset managers have raised their bets against the US stock market to their highest level since 2011, driven by fears about a possible US debt default and a recession.

      Net short positions — bets on price falls — held in derivative contracts linked to the S&P 500 have increased sharply in recent weeks, according to a Société Générale analysis of a combination of futures positions from the US Commodity Futures Trading Commission.

      Investors have been racing to protect their portfolios as the US edges closer to a debt default, with president Joe Biden warning Republicans in Congress that a failure to reach a deal to raise the government’s $31.4tn borrowing limit would be a “catastrophe” for the economy.
      …

    2. Is unusually hot inflation data, similar to in the 1970s, really cause for stocks to rally, even in the presence of a hawkish Fed?

      1. Sign In

        Stock Market Today

        Dow Jones Rallies 375 Points After Hot Inflation Data; Ulta Beauty Dives On Sales Miss
        SCOTT LEHTONEN 10:32 AM ET 05/26/2023

        The Dow Jones Industrial Average rallied 375 points Friday after hot inflation data, with the release of critical consumer pricing data. Meanwhile, Ulta Beauty (ULTA) dived after missing Wall Street’s sales estimates in its latest quarter.

        The Commerce Department’s April Personal Consumption Expenditures Price Index, or PCE, rose 0.4% on the month, with a 4.4% annual increase, hotter than Wall Street’s estimates. The core PCE index climbed 0.4% on the month, with a 4.7% annual rise, also above forecasts.
        …
        https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-inflation-data-ulta-stock-dives-on-sales-miss/

      2. I wasn’t alive in the 1970s, but via Twitter I’ve gathered we all just got more money and paid everything off with cheaper dollars. It sounds like magic when I read about the time.

        Stocks, houses, etc. all go up virtuously with the price level, and everyone wins!

        1. We didn’t have stocks, we had kids. They are an ever increasing expense. We didn’t buy anything on credit, except a house. Lost money on that because we moved for work in less than 5 years. Wages increased after price increases and never kept up except for career steps.

          Be careful what you wish for.

          1. Wages increased after price increases and never kept up

            This.

            I got a 6% increase last year. Not even close to the official CPI, nevermind the real one.

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