skip to Main Content
thehousingbubble@gmail.com

Maybe This Economy Was All A Charade To Begin With

A weekend topic starting with the Denver Gazette in Colorado. “‘Spring felt like a failure to launch, which has led to a summer kick-off where the natural rhythm of the Denver real estate market simply feels off,’ said DMAR Chair and Realtor Libby Levinson-Katz. ‘Due to the lack of inventory, buyers are experiencing a bit of fatigue as they wait for either the perfect home or to uncover a good deal.’ Another bright spot in the report included the ‘active listings at month’s end’ category, which stood at 5,228 in May, 13.2% higher than April and 43.2% higher than May 2022 ‘showcasing a slower absorption of listings on the market.’ Buyers closed on 4,167 homes — both single family and condominiums — which is down 28.7% from last year.”

From 94.9 WSJM. “After a burst of steam in March, the housing market in southwest Michigan chilled in April, with sales and selling prices falling behind last year. The Southwestern Michigan Association of Realtors says the number of homes sold in April in the region was down 26% from the same month last year. The average selling price was also down, at $324,000, compared to $364,000 last year, or an 11% decline. Inventory is slightly up bringing the inventory of houses for sale up to 3.3-month supply. It was 2.5 months in April last year.”

The Los Angeles Times. “State Farm General Insurance Co. said last week that it’s no longer accepting new applications for property and casualty coverage in California because of soaring wildfire and construction costs and ‘a challenging reinsurance market.’ Now, Allstate Corp. has told the state Department of Insurance that it stopped selling new home insurance policies last year. The notice was part of a recent request for a nearly 40% rate increase for home and business property and casualty insurance. ‘We have a lot of people going naked, which means they have no insurance,’ said Bill Dodd, a Democratic state senator representing fire-scarred Napa County and other parts of Northern California.”

“New home buyers could be forced to pay more, regardless of their home’s proximity to wildfire dangers. Before State Farm’s announcement, the company requested a 28% rate hike on homeowners’ insurance; Allstate has filed for a 39.6% increase. In San Francisco, real estate agents say they have seen deals fall through because would-be buyers couldn’t get insured. ‘What we’re hearing is that now, when buyers present an offer on a property we’re not only asking them for pre-approval for a lender, we’re also asking them if they’ve spoken to their insurance agent if they’ll insure the property,’ said Joske Thompson, a broker at Compass Inc. with 40 years’ experience in the area.”

From Fortune. “Between July 2022 and April 2023, Austin home prices as measured by the Zillow Home Value Index have fallen 10.02%—that’s 10 times greater than the national decline (1%) registered by ZHVI during the same time period. That’s the biggest decline, so far, among the nation’s 400 largest housing markets, just beating out San Francisco (-10%), Bend, Ore. (-9.5%), and Boise (-9.3%). ‘Once the cost of money [mortgage rates] went up, a lot of [Austin] speculators stopped buying,’ Sean Fuentes, a long-time real estate agent and housing investor in Austin tells Fortune. ‘Some of them are in trouble, some are taking haircuts on their investments, and others are still having to pay $100, $200, or more per month to support the property.'”

Bisnow Dallas Fort Worth. “Skyrocketing property values are the latest headache for multifamily owners in North Texas who have spent the last few months fending off hits to their bottom line. ‘It’s not the funnest time to be a property owner, and it was so fun for a decade,’ Ashland Greene CEO Shakti C’Ganti said. ‘It makes sense that we have a couple years of pain — what goes up must come down.'”

“The majority of buyers in the DFW multifamily market used bridge financing to acquire properties in the first half of 2022, C’Ganti said, and many have seen mortgage payments skyrocket amid a series of interest rate hikes totaling more than 500 basis points. ‘Increased costs on the bridge loan are almost doubling our mortgage, which is by far our largest expense,’ he said. ‘You’re having a cash crunch at all properties.’ The risk of defaults at a growing number of apartment buildings is on the rise as owners with floating-rate debt struggle to refinance, leaving many with no choice but to sell. ‘You’re going to see some sales because they don’t have $2M sitting on the side to go by a new interest rate cap,’ C’Ganti said.”

The Real Deal on Illinois. “The developers behind a high-rise project that stalled out in River North are jumping through hoops to block their lenders from foreclosing on the property. Entities with ties to Symmetry Property Development, a venture of New York intellectual property attorney Jeffrey Laytin and Chicago investor Jason Wei Ding, filed for Chapter 11 bankruptcy protection Wednesday, leading to the last-minute cancellation of a sheriff’s sale of the parcel that had been scheduled for Thursday, Crain’s reported.

“Laytin and Ding proposed a 60-story condominium-and-hotel tower for the site in 2017. The venture raised about $50 million from 90 Chinese investors through the EB-5 program — a federal initiative that grants U.S. residency to overseas citizens who invest in qualified projects. But officials blocked the proposal, leaving the developers with nothing but a brigade of angry investors and ensuing legal trouble. The investors are still waiting to be paid back. The lenders filed a foreclosure suit in 2019, claiming the Laytin-Ding venture defaulted on more than $22 million in debt.”

“‘These filings are an illegitimate use of Chapter 11 which is meant for reorganizing viable businesses,’ Doug Litowitz, a Deerfield-based attorney who represents the Chinese investors, told the outlet. ‘Chapter 11 is not meant for companies who have no assets except underwater real estate. This strikes me as an abuse of the bankruptcy laws to block a legitimate foreclosure.'”

The Globe and Mail. “This time last year, the R-word was on everyone’s lips – and panic was setting in. With energy prices soaring and consumers rushing back to restaurants and hotels, annual inflation spiked to 8.1 per cent, forcing central banks to get aggressive with their interest rate hike campaigns. In July, the Bank of Canada went so far as to surprise with a full percentage point rate increase, its largest since 1998. The question wasn’t whether Canada would have a recession, but, rather, just how painful it would be. What no one seems to ask is: What if a recession is a good thing? What if a prolonged economic slump is exactly what Canada needs?”

“The economy has also been warped by years of cheap debt – a byproduct of ultralow interest rates and the vast sums of money created to facilitate stimulus spending. ‘Fifteen years of that amount of liquidity, or free money, distorts the financial system,’ says Mark Wiedman, of the global client business at BlackRock Inc., the world’s largest asset manager. ‘It also starts to distort the real economy.'”

“In Canada, much of the paper wealth has accumulated in the housing market. Strong demand, low supply, cheap money and rampant speculation have conspired to drive up prices to eye-watering levels. Canadian households are now the most indebted among the Group of Seven countries, as a percentage of gross domestic product (GDP), largely due to the oversized mortgages they’re paying down.”

“Short-term pain for the long-term greater good became the gospel for central bankers. That’s changed in the past 15 years. Now pain is avoided at all costs. It is hard to pinpoint precisely why, but one credible theory is the financial crisis was so terrifying that it forced policy makers to pull out their bazookas to restore order. Once central bankers and politicians had a whole new set of policy tools available, they got a bit addicted to their power.”

“But at what point does the stimulus drip need to stop? While it props up metrics such as GDP growth, the economy’s foundation doesn’t necessarily get any stronger. Perhaps the goal for policy makers shouldn’t be to avoid all pain, but to minimize it where they can. If that becomes the target, they might realize this is actually a rather opportune time to let the economy weaken. Corporate bankruptcies remain remarkably low; unemployment is barely noticeable; and the financial system is on much better footing following reforms made after the financial crisis. If a recession hit and everything collapsed from here, maybe this economy was all a charade to begin with.”

The Standard. “This is how you get off heroin. Debt is the most destructive and addictive form of economic behaviour we have in New Zealand. For everyone who lives in a house whether landlord or straight homeowner you feel the bank slipping that good leveraged needle of joy from fear back into eyes-rolled-back blissful security. For the majority of New Zealanders mortgage debt is a promise to yourself and your family that, decades into your future, somehow, you’re going to get out of this hellhole and live free. Whatever free means. Your land, your apartment, your property. But there is simply no way you can get to that pure free joyous plane unless you take the debt and let it tap your blood.”

“This post won’t talk too much about specific policies. It’s going to focus on the pain of mortgage debt addiction. Through 2021 our job incomes were secured by the government, so New Zealand went into a most almighty mortgage debt binge. We chose to secure our future with the only reliable asset class we had: property ownership through mortgages.”

“Apparently we spent over $14 billion on coastal property alone in one year. Those who could reach for a leveraged rental went for the lower end of the price range, out to the poorer periphery for multi-homeowners in Gisborne (where they were 83% of sales), Taharoa in Waikato (82% of sales), Tokomaru Bay (78% of sales), Okura Buch in Auckland (74%) and Te Kaha (73%). I’ve got a cousin who bought two little rentals in Westport. Westport!”

“The Reserve Bank had its base rate around 2% and your bank could tie the rubber tube around your forearm and insert the needle at around 3.5% and man it would kick you back for a while, and let you dream big and eyeball wide. At the same time the government underwrote our mortgages if we got into any trouble, with a mortgage payment deferral scheme that at peak had about 80,000 mortgages on deferral: about 7% of all of New Zealand’s mortgages. That’s the government putting a pillow under your head while you glide through the high.”

“The question is only, for every addict, how long can you hold the high. Finally, here comes the answer. As early as March 2022 Statistics New Zealand reported that household debt had gone up 29%. And now as the banks central and Australasia start to limit the heroin supply they will give you, from half a kilo to an ounce a week, the trends are getting worrying. Centrix Credit Bureau says the number of missed mortgage payments grew for the seventh consecutive month in February 2023. Overall, 1.29% of mortgages (18,900) were in arrears, up almost a quarter year-on-year. Centrix say this could be attributed to people rolling off fixed home loans and being unable to service higher interest rates.”

“Unsecured personal loans are up 7.8% in February this year and Buy Now Pay Later arrears are near an all time high. Consumer arrears are the highest they have been since 2019. We are only at about 6-8.5% for bank mortgage rates but yes this is going to go to over 9%. That heroin fix just gets more and more expensive to buy every time.”

“If you want to see the scale of pain that deleveraging out of real estate debt looks like, turn your eyes to China. Like New Zealand they have been warned for a decade that a real estate debt boom will leave scars all the way up your arm. Instead of being a growth driver, the whole real estate deal was a massive downer cycle. China is now in a world of deleveraging pain. And China is telling us that deleveraging out of real estate mortgage addiction is very, very, very very hard to do. Once you do crack, you never go back.”

“By March this year New Zealand’s median sale price was down 13.9% on a year previously. In Wellington it was down 20.6% and Auckland’s was down 15.2%. Pain. We’re going to hear many, many more very painful stories like we did in 2009 of people just walking out and telling the banks where to shove it. Or couples breaking up under the strain. Of choosing to eat out of a can rather than give up on their one shot at getting up and getting out.”

“Most analysts bet average sale value prices will come down to about 2019 levels. And of course after Cyclone Gabrielle all that coastal rental property in Gisborne, southern Bay of Plenty, and peripheral Auckland ain’t going to sell for a very, very long time. It ain’t karma it’s pure fate and that’s a dirty mattress to sweat on.”

“We don’t yet know if mortgage defaults and forced bank sales will follow suit yet. But they usually do. Suicide. Marriage breakups. Kids with no social mobility. Permanent social damage. But in a timespan about as fast as the 1988 sharemarket crash. There will be no shift from real estate to other asset classes (such as they are here), because most are now just trying to hang on to what they have and ride it out for as long as they can. Also, mortgage heroin is what our banks deal, so that is the stuff we use.”

“Mortgages are New Zealand’s very high grade heroin and we are being forced to come down off a most spectacular high into a rage-inducing forced withdrawal. We’re only just starting the shakes.”

This Post Has 103 Comments
  1. The New Zealand comments are worth checking out:

    ‘Corporations feel no pain. Ditto speculators. NZ median house prices blew out in 2022 to an average of 471 k – more than three times the 144k of 2000, and more than 20% higher 2020. The median home owner buys infrequently, every 5-10 years at most. Corrections of less than recent inflation only affect speculators, and a tiny fraction of over-leveraged recent purchasers.’

    ‘Sustain these mostly unrealized losses for years and, yes, there may be some pain. But not on the scale of the harm done by the unenlightened policy of inflating real estate out of the reach of ordinary New Zealanders. For many, sustained falls are the only hope of getting the slumlords’ boots off their necks.’

  2. ‘Short-term pain for the long-term greater good became the gospel for central bankers. That’s changed in the past 15 years. Now pain is avoided at all costs. It is hard to pinpoint precisely why’

    We hardly talk about it, do we? We feel the effects, while these guys ride around in limos and never suffer any downside. Heck they hit the lecture circuit and make even more Jerry bucks.

  3. A reader sent these in:

    Monday Properties is at risk of losing 7 high-rise office buildings in Rosslyn, Va, across the river from DC, after it missed a payment on a piece of an $841M loan, which matures in less than 2 weeks.

    https://twitter.com/FCNightingale/status/1664407418602762240

    Bank of Canada has said mortgage payments in the country could spike as much as 40%, per Globe and Mail.

    https://twitter.com/unusual_whales/status/1664630697481449475

    Recently spoke to a dentist from CA. Bought 3 $800k+ homes in Scottsdale to Air BNB in early 22’. Invested all his savings. Why? “Because rates were so low it was a guarantee.” Homes are now upside down $100-$250k each. Struggling to get bookings. R/E is a hard game.

    https://twitter.com/SFR_Investor/status/1665017100543614976

    Just received an email for a brand new 32-unit build-to-rent housing development outside of Lubbock. What kind of developer offloads a project that was all the rage a year ago?

    https://twitter.com/agent_kujan/status/1665007801830363138

    Oh yes, indeedy. 3 days instead of 7 for those who are balling on a budget. I’ve been tracking Destin and Rosemary Beach and Airbnb prices are going ⬇️. This summer is going be very interesting to watch.

    https://twitter.com/m3_melody/status/1665007913415442435

    Wish I was making this up, but saw a post in a local Facebook group from a mom saying she and her husband can’t afford their property taxes, but have over 500k equity in their home. He wants to “take a vacation now” and sell the house “later” with a lien on it

    https://twitter.com/texasrunnerDFW/status/1665010193774649351

    Wanna get away? You TOO can through the end of June for a 3-night minimum, down from a previous 7-night minimum!

    https://twitter.com/DiMartinoBooth/status/1665001580423270401

    Who bought a car in 2021??? How much are you upside down???

    https://twitter.com/Luckylopez/status/1664902039653199874

    Remember what happened the last time Phoenix investors got out?

    https://twitter.com/GRomePow/status/1664774357485494272

    I bought my first house at 28. Today, that’s not an option for most 28yos.

    https://twitter.com/profgalloway/status/1664764327721836544

    What inning do you think we are in?

    https://twitter.com/m3_melody/status/1664346427965710353

    The most interesting housing market in America: Austin. During the ’00s housing crash, it took Austin 43 months to fall 8.5% peak-to-trough. This time around, Austin has fallen 10.02% in just 9 months.

    https://twitter.com/NewsLambert/status/1665056868824240129

    Real estate market is headed downhill.

    A lot of sponsors in serious stress figuring out how they’re going to pull of refinances at 7-9% interest rates. It won’t bubble to the surface until they fail to pull them off over the next 12-36 months. If rates are still here in 24 months, which I think is likely, chaos will be upon us in certain asset classes.

    https://twitter.com/sweatystartup/status/1664960033530994694

    Endless brand new $TSLA car inventory, parked at Princeton’s Quakerbridge Mall parking lot (dealership is the across Route 1). Ordinarily, there are just a few rows of new cars parked here.

    https://twitter.com/RagingVentures/status/1665074089176842241

    🏠 Investors purchased 49% fewer homes YoY in Q1—a $24 billion drop. 📊 They maintained 18% market share, which is relatively high. 💰 Around 1 in 7 of their homes sold at a loss in March.

    https://twitter.com/Redfin/status/1665042182057648129

    I was told if regular people stopped buying that all cash investors would fill in the gap

    https://twitter.com/NipseyHoussle/status/1665049705980518409

    1. Recently spoke to a dentist from CA. Bought 3 $800k+ homes in Scottsdale to Air BNB in early 22’. Invested all his savings. Why? “Because rates were so low it was a guarantee.” Homes are now upside down $100-$250k each. Struggling to get bookings. R/E is a hard game.

      And a lot of these dentists gave up being a dentist to become an STR millionaire, because you just sit back and watch the money roll in. Nobody wanted to work anymore. OOPS.

      1. So, a quick calc: whole house $500/night, 5 nights/week 50 weeks/year. It would take upwards of 7 years to break even on an $800K house. And that’s if nothing goes wrong. Who has the energy for that? Not me.

        1. They were speculating, looking for the appreciation with the “rent” as an added bonus. It’s over for all of these people. They are bleeding massive cash now.

        2. $500/night

          You really could have stopped right there in pointing out how ridiculous the idea would be. Add to that the guy is a debt donkey and would also be paying taxes, maintenance, utilities, furniture rental or purchase and probably property management (cleaning) fees.

          speculating, looking for the appreciation

        3. I’m sure the owner calculated in 5-20% annualized returns on property valuation. He could sell in a few years and make millions!

  4. 1)
    The Globe and Mail. “The economy has also been warped by years of cheap debt – a byproduct of ultralow interest rates and the vast sums of money created to facilitate stimulus spending. ‘Fifteen years of that amount of liquidity, or free money, distorts the financial system,’ says Mark Wiedman, of the global client business at BlackRock Inc., the world’s largest asset manager. ‘It also starts to distort the real economy.’”

    “Short-term pain for the long-term greater good became the gospel for central bankers. That’s changed in the past 15 years. Now pain is avoided at all costs.”

    2)
    The Standard. “This is how you get off heroin. Debt is the most destructive and addictive form of economic behaviour we have in New Zealand.”

    “For the majority of New Zealanders mortgage debt is a promise to yourself and your family that, decades into your future, somehow, you’re going to get out of this hellhole and live free. Whatever free means.”

    “We chose to secure our future with the only reliable asset class we had: property ownership through mortgages.”

    1)
    Money, Banking, and Markets – Connecting the Dots
    hussmanfunds.com/comment/mc230519
    John P. Hussman, Ph.D.
    President, Hussman Investment Trust
    May 19, 2023

    “…investors are often told that the trillions of dollars of quantitative easing “supported” the economy by encouraging bank lending. They might be surprised to learn that despite the most aggressive monetary policy in U.S. history, commercial bank lending since 2008 has grown at just 3.4% annually, easily the slowest rate in data since 1947.”

    “Prior to 2008, the liabilities of the Federal Reserve were almost entirely comprised of currency in circulation (see the top line of any dollar bill in your wallet), plus a relatively small quantity of reserves that were created by the Fed and held by banks. In 2008, total bank reserves amounted to less than $40 billion. In 2021, thanks to QE, total bank reserves peaked at over $4 trillion. Meanwhile, the amount of currency in circulation has more than doubled.”

    “Think about it. When the Federal Reserve follows deranged and unsystematic policies, what happens? The quantity of monetary liabilities becomes misaligned with the quantity of real output. The quantity of deposits in the banking system becomes misaligned with the quantity of bank lending, as we saw earlier. Speculation causes the quantity of market capitalization – the blotches of ink and pixels on computer screens that people count as “wealth” – to become misaligned with the cash flows available to service that market capitalization.”

    “Once unsystematic policy causes a misalignment of financial quantities and real economic quantities, how are they realigned? It’s not a surprise: inflation, bond losses, bank failures, pension crises, stock market collapse, debt default, dismal long-term returns. Too much money chasing too few goods. Too much market capitalization with too few cash flows to service it. One way or another, the two are brought back into alignment.”

    2)
    https://thefelderreport.com/2023/05/09/the-great-wealth-illusion/
    The Great Wealth Illusion
    jessefelder May 9, 2023

    “It’s no secret that for the past decade and a half the Federal Reserve has made it its mission to create a “wealth effect” in the economy by boosting asset prices. Back in 2010, Ben Bernanke explained, “…higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.” And so he began a process of printing money with the explicit purpose of inflating asset prices, a policy that has been continued by each of his successors.”

    “But when you look at household net worth relative to the growth in the money supply, it’s clear that the rise in the former was nothing more than an illusion. Net worth has actually declined relative to M2 since 2008 and is now back to levels not seen in the 20 years prior to that time. The truth is that there has been no “real” wealth created at all when measured this way.”

    3)
    https://charleshughsmith.blogspot.com/2023/06/a-nation-of-junkies-empty-future-of.html
    Charles Hugh Smith | Of Two Minds Blog | Thursday, June 01, 2023
    A Nation of Junkies: The Empty Future of a Stimulus-Speculation Economy

    “Compare this Real Economy with the Artificial Economy we now have that is completely dependent on central bank and government stimulus and rampant speculation. If either the stimulus or speculation disappeared, the economy would collapse. Without constantly increasing monetary and fiscal stimulus, the asset bubbles inflated by stimulus would collapse. “

    “…somehow the housing / mortgage market survived without the Fed owning any mortgage backed securities prior to 2009, but now the Fed must intervene to the tune of trillions of dollars to keep the housing / mortgage market from imploding. 

All this stimulus is sold as “help” but it all ends up “helping” the wealthiest few at the expense of the bottom 90%.”

    “All this “free money” fueled a dependency on speculation for “growth,” a dependency that has hollowed out the economy. As a direct result of all this stimulus / credit, corporations have bought tens of thousands of homes as rentals, inflating another housing bubble. Investors have snapped up tens of thousands of dwellings to cash in on the short-term rental (AirBnB etc.) boom, effectively distorting the long-term rental markets and pushing rents higher. ”

    “Every junkie has an excuse. Every junkie proclaims I can stop any time. Now that the US economy is totally dependent on trillions of dollars in stimulus and speculative gains reaped from the stimulus, there is no Real Economy left to pick up the pieces when the credit-stimulus-speculation bubbles all pop.

    – Central banks and Keynesian economic policies are a global pandemic; they’re worse than the CCP virus. Money printing causes inflation and debt isn’t wealth. The “growth” is artificial via central bank stimulus. There’s no organic, self-sustained growth. The monetary heroin of free money gives the illusion of a robust economy, but only until the bubbles pop. Hangover ensues. The bigger the boom, the bigger the bust.

    1. The quantity of monetary liabilities becomes misaligned with the quantity of real output.”
      If you had a machine that could make endless products cheap then you could get away with printing money but it seems the endless machine China isn’t playing the game anymore

  5. From the Denver article, $697,534 with 20% down at 7.08% per the Bankrate calculator is $4,267 a month for 360 payments.

    How many buyers in Denver have $139,500 for a down payment?

    And how many can afford that monthly mortgage nut?

    “This sucker could go down” — George W. Bush

    1. “How many buyers in Denver have $139,500 for a down payment?”

      You don’t need that much. 3% is enough for FHA and I read somewhere that there are loans with 1% down payment. Also, I bet CO may have some down payment “assistance” program a la Kali.

      1. Never mind the down payment. Denver median household income is 72K. Which means median home price should be in the 300K to 350K range. Anything above is unsustainable. I believe current median home price there is north of 500K. It has to revert back. It really is as simple as that. And this may make me sound old, but a 7% rate is a solid mortgage rate.

      2. Also, I bet CO may have some down payment “assistance” programy
        Certainly they do have DPA programs but usually they are income based. For example only eligible for people making 80% or less than the average income. VA and rural housing have some programs with 0% down so, to your point, no need for the $139K to buy a house

      3. For some real truth take a look at an Amortization schedule on $700k at 7%. The banks will bleed you dry.

  6. CNBC — Borrowers brace for student loan bills to resume — ‘$600 a month, where is that going to come from?’ (6/4/2023):

    “Borrowers are not ready to resume payments,” said Persis Yu, deputy executive director at the Student Borrower Protection Center. “Even if the risk from the virus has diminished, the financial fallout has not.”

    “It is critical for folks to understand that the student loan system is not prepared to return to repayment,” Yu said. “We are relying on brand new servicers and expecting them to help millions of borrowers through a byzantine system all at once.”

    https://www.cnbc.com/2023/06/04/student-loan-payments-will-restart-soon-many-borrowers-arent-ready.html

    You navigated your way to a Masters Degree in Obama Studies, so now you can figure out how to repay the $80,000 you borrowed to get that worthless degree.

    $1.8 trillion outstanding student debt per the article.

    1. “We are relying on brand new servicers and expecting them to help millions of borrowers through a byzantine system all at once.”

      People also ask
      What does Byzantine mean?

      : of, relating to, or characterized by a devious and usually surreptitious manner of operation. a Byzantine power struggle. : intricately involved : labyrinthine.

      1. “What does Byzantine mean?”

        Just make your payments, on time. No byzantine, no worries!

      2. sophisticated. it was he most advanced and civilized part of the world for 1000 years. when westerners were running around cracking each others heads, fighting for some food and raping and pillaging, the Byzantines were cultivated people living wealthy lives, going to the raises, reading in libraries and studying in universities.
        to compare the west to the Byzantines, it’s comparing living today in Paris vs some third world country in Africa. Yes, it was that bad.

          1. Really not sure what you man by that.
            Byzantium, later Constantinople was a very old and wealthy Greek colony, later to become the capital of the Roman Empire. The western part of the empire fell mostly due to a lack of resources. The Easter part, being far wealthier and resource full, lasted 1000 year longer.
            By the standard of that time they were very wealthy, sophisticated, civilized, and educated people.
            Barbarians hated them because they didn’t understand that “byzantine” way of being. All that reading, writing and all the talking, the politics. For the barbarians, if you had something to say, you had to say it straight, in as few words as possible, and with the sword in your hand to prove it. The “byzantines” always played games and politics, were very skilled, and very educated. Their ambassadors spoke many barbaric languages, and were many times accused that they could tell lies in many different tongs.
            In a way, it’s probably how some savages in some desert feel about Parisians. They are to sophisticated and don’t want to engage in a straight swords fight to make a point. Too much talking and politics.
            In sense, in todays language, being byzantine is to be a Parisians too concerned with the culture and civilization to really care about fighting if there are other ways around to settle a dispute. Byzantines were just too evolved for the barbarians. Both, in the east, and the west.
            They preserved and passed on the core of what we understand today to be the western culture and civilization. And please don’t buy into “oh, but all that Greek culture and was passed on to us through the Arabs”
            Why in the world would they use the Arabs as intermediaries when the original sources were right there under their nose. Actually the Renaissance was sparked by the influx of refugees (under the Turks pressure) form Constantinople. Arts, science, knowledge.

            In a way every people was/will be conquered at some point. The Britons were conquered by the Romans, than the Angles, Jutes and Saxons conquered wat was left of the Romans, then the Danes conquered the Angles. Then the Normans conquered the Danes. You see, you’re coming from a rich lineage of conquered peoples too.

    2. “Borrowers are not ready to resume payments,” said Persis Yu

      It’s time to put that therapeutic college degree to work. Chop chop!

      1. “Borrowers are not ready to resume payments,” said Persis Yu
        Best get that second job on the weekends. Lots of need for people working weekends.

  7. MarketWatch — Who do you blame for high house prices? Nearly half of young Americans point their finger at the government (6/3/2023):

    “As the cost of owning a home has skyrocketed over the last few years, some Americans are venting their frustrations by blaming the government for high housing prices.

    Nearly 90% of Americans said it’s too expensive to purchase a home right now, according to a survey of 1,386 people in the U.S., aged 46 and younger, by Mphasis Digital Risk.

    Many of those respondents also called out the government’s lack of action in boosting housing affordability.

    The survey indicated that 45% blamed state and local governments for current housing prices, while 70% said that the government hasn’t done a good job of making housing affordable.”

    https://www.marketwatch.com/story/who-do-you-blame-for-high-house-prices-nearly-half-of-young-americans-point-their-finger-at-the-government-c1be3180?mod=home-page

    How did these young people VOTE?

    The overwhelming majority of them voted for the politicians who enacted lockdowns, destroyed the economy, printed trillions of new money, all because of an alleged virus that, for their age group, has a statistical near zero chance of killing them.

    You did this to yourselves.

    1. You did this to yourselves.

      And they have no clue. They will continue to vote the same as always and wonder why things continue to get worse.

      1. You did this to yourselves.
        Just like voters in Chicago and NYC who complain about all the new immigrants did when they voted.
        Stupid should hurt, but unfortunately I don’t think the pain will be enough to get them to see reality.

      1. This started under trump. I thought you loved him!
        Pandemic money printing did certainly begin with Trump.
        PPP what a joke. I almost ending up tracking those loans for the bank I was working at in 2020.

      2. This started long before Trump. Here on HBB Ben was posting about the free-money loans for hedgies, and THAT was driving up the prices. As far back as.. uh, 2004 I think.

      3. “This started under trump. I thought you loved him!”

        This started under Obama and ACORN forcing loans to be made to people who couldn’t possibly ever pay them back. So the smart bankers came up with MBS and sold the bad loans in pieces with a little qualified buyer on top. They made lots of money, their banks and homes didn’t get threatened and eveyone was happy until…

        How did mortgage-backed securities contribute to the 2008 financial crisis?

        Ultimately, as house prices declined nationwide and mortgage defaults began rising, the value of all the mortgage-backed securities deteriorated. The rise in defaults, by undermining the value of trillions of dollars of mortgage-backed securities, severely disrupted the securitization funding mechanism itself.

    2. You did this to yourselves.

      Both parties are FED QE money-printing junkies. The Uniparty rules.

      1. The Uniparty rules.

        Anyone who doesn’t see this after this last debt ceiling nonsense is blind or dumb. McCarthy voluntarily gave the Biden administration 2 years with no debt ceiling limit.

        1. “McCarthy voluntarily gave the Biden administration 2 years with no debt ceiling limit.”

          Indeed. Bail-outs are coming for those deemed important.

    3. It doesn’t help that the opposition party is obsessed with abortion and corporate socialism. At least Trump got it right that economic nationalism and working class living standards matter. But what did the Republican Party do to Trump? Throw him under the bus.

      Who are the young supposed to vote for exactly? Sincere question.

      1. “Who are the young supposed to vote for exactly?”

        Ron Paul was a glimmer of hope, but he was already nearing the end of his political career when his spark caught on.

        People like Dennis Kucinich the former “Boy Mayor” of Cleveland and later U.S. House Representative of a district I used to live in. Sadly, too short, too ugly, just too weird for national political ambition.

        Robert F. Kennedy Jr. is polling at 20% in the D primaries but you’d never know that, because the people who make all the Important Decisions don’t want you to know, or think about that.

        1. Robert Kennedy Jr would need to run as an independent because the DNC does backroom deals. I’d love to see him do it though.

        2. A DJT/RFK Jr ticket would be awesome and a combo the Deep State should fear. RFK Jr has said he wouldn’t, but is that just messaging?! People forget DJT and JFK Jr were good friends.

          1. Before his inauguration, DJT wanted RFK Jr to look into vaccines, which Bill Gates said was a non-starter.

  8. You did this to yourselves.” Will the voters learn from this ??

    I doubt a democracy can work if most voters are idiots

    1. if most voters are idiots

      Consider all the effort that has been put forth to guarantee that our grandchildren cannot get the kind of education that we got.

      1. the kind of education that we got

        I am told by my “betters” that it was very raycis. They made you learn math and other supremacist stuff.

    2. Redpilled posted a piece in yesterday’s post about the Frankfurt School Marxism methods in infiltration of social engineering of critical race theory.
      Such a good piece she posted on the infiltration of these Marxism commies that wanted to break down US and Europe by attack on everything.
      Looks like they were sucessful in warping the minds of people for the woke and political correct divide and conquer strategy. So, using minorities, and groups like transgenders was part of the breakdown society strategy.
      So now you have smaller groups attacking normies, Whites, history, western civilization,, capitalism, family structure and religion…
      The new religion is Science and transhumanism. Artificial intelligence and robot replacement, hacking humans, and total enslavement, and depopulation.
      It’s all totally nuts of course…

        1. BTW, I wasn’t able to find this video on YT. If you search “frankfurt school,” you’ll get videos “debunk”ing it as a “conspiracy theory.” What have we learned about topics with those labels of late?!

  9. “Between July 2022 and April 2023, Austin home prices as measured by the Zillow Home Value Index have fallen 10.02%—that’s 10 times greater than the national decline (1%) registered by ZHVI during the same time period. That’s the biggest decline, so far, among the nation’s 400 largest housing markets, just beating out San Francisco (-10%), Bend, Ore. (-9.5%), and Boise (-9.3%).”

    July through April, or three quarters, is an odd measurement period. And April was two months ago, plus I would guess the index crunches old data (i e. before April). Why do relitters like reporting stale statistics?

    The annualized rate of decline for Austin over the July 2022 through April 2023 period was 1-(1-0.1002)^(4/3) = 13.13%.

  10. The Hill (6/3/2023):

    “Costco’s shoppers were less often choosing to purchase beef or steaks from the stores’ meat departments in recent months — a trend indicative of a recession or at least “concern” for a recession, according to CFO Richard Galanti.

    Galanti, speaking with investors in a third-quarter earnings call last week, said more shoppers were choosing less expensive cuts of meat instead.

    “Historically, we’ve always seen, like within fresh protein, we’ve always seen when there’s a recession, whether it was ’99, ’00 or ’08, ’09, ’10, we would see some sales penetration shift from beef to poultry and pork,” Galanti said in a third-quarter earnings call last week. “We’ve seen some of that now.”

    He also said he had heard from a fellow executive that Costco was seeing “some switch even to some canned products, like canned chicken and canned tuna and things like that.”

    Products from Kirkland Signature — Costco’s private label — were also seeing increased interest over name-brand items, Galanti said.

    https://thehill.com/homenews/nexstar_media_wire/4030378-costco-shoppers-shifting-away-from-specific-item-cfo-says-its-indicator-of-recession/

    $1 trillion in outstanding credit card debt in USA. How much of that is from buying FOOD in the past year?

    No shortage of wagyu beef being consumed by the people who tell you that cow farts are creating global warmism.

  11. Bloomberg — US Mayors Cite ‘Unprecedented’ Mental Health Crisis as Top Concern (6/3/2023):

    “An “unprecedented” mental health crisis is overwhelming US cities, which lack adequate resources to address growing challenges, according to a new report released today by the US Conference of Mayors. In recent years, the Covid-19 pandemic exacerbated mental health issues, particularly involving substance abuse, said a survey of mayors of 117 cities in 39 states.

    Substance abuse was the main cause for increasing mental health problems, 85% of cities reported. That was followed by Covid-19, homelessness and economic concerns.

    Substance use disorders topped the list of mental and behavioral health problems in 65% of cities, followed by homelessness stemming from mental illness in 56%.”

    https://www.bloomberg.com/news/articles/2023-06-03/cities-cite-mental-health-loneliness-and-depression-as-top-policy-concerns

    Fentanyl and meth.

    I see tweakers and junkies on the streets of Denver EVERY DAY. There are no consequences for public drug consumption. Being passed out on the sidewalk in the middle of the day is the new normal here.

    Public restrooms are all either heavily restricted or permanently closed because of it. You can judge the condition of neighborhood pretty well by whether: no restroom available, or key or code required for restroom access, limited to paying customers.

    1. Who would pay $7 million for a haunted mansion? Good luck finding a clueless mark!

    2. A truly sad tragedy. And the Boulder PD’s arrogance and incompetence was shocking too. Very likely nothing will move forward until everyone involved is retired or dead.

    3. Would it bother you to find out that someone had died in your house? Would that information have impacted your decision to buy? Gather as much information about the history of a house before you make an offer or sign the lease.

      diedinhouse. com
      https://www.diedinhouse.com/

      1. Would it bother you to find out that someone had died in your house? Would that information have impacted your decision to buy?

        An old person of natural causes? Absolutely not. A mass murder where the perp has not been caught? Absolutely.

          1. I’m with Tarara on this one, if anyone is going to die in my house it will be me.

            🙂

          2. if anyone is going to die in my house it will be me.

            Most of the houses around here were at one time the site of a death, a wake and funeral anyway.

          3. When we first moved to Las Vegas, my brother took me around to a place that was about to be auctioned. A father had murdered his adult drug addicted daughter there. Don’t remember more than that, but I couldn’t wait to get away from the house. Tragic.

        1. “It is the ultimate in bad manners to turn blue in your friend’s bathroom.” —Keith Richards

  12. Wall Street Journal — Get Ready for the Full-Employment Recession (6/4/2023):

    “The dichotomy emerges from the divergent behavior of employment and output, two key indicators of economic activity.

    In May, employers added 339,000 jobs, bringing the total number of jobs added this year to nearly 1.6 million, a gain of 2.5% annualized.

    But real gross domestic income, a measure of total economic activity, shrank in both the fourth quarter and the first quarter. Two negative quarters of output growth are one indicator of a recession.

    What explains these dissonant signals is productivity, or output per hour worked: It is cratering. That raises questions about whether the much-hyped technology adoption during the pandemic and, more recently, artificial intelligence are making a difference. It also raises the risk that the Federal Reserve will have to raise interest rates more to tame inflation.”

    https://archive.is/9z9FU

    Cratering, did you say? People can’t afford a place to live, a vehicle to drive to work, or food to eat.

    Anecdotal: it took ALMOST A YEAR to get some Eaton 50 amp two pole GFCI breakers delivered. Specialty product disconnects and meter stacks? Good luck getting any of those.

    How is the economy supposed to be “productive” with these schedule delays (and resulting cost overruns) caused by years of phony lockdowns for a phony virus?

    1. “Get Ready for the Full-Employment Recession (6/4/2023)”

      This has never happened before in history, but maybe we have entered a New Er

    2. Anecdotal: it took ALMOST A YEAR to get some Eaton 50 amp two pole GFCI breakers delivered. Specialty product disconnects and meter stacks? Good luck getting any of those.

      Blew a tranny cooler line on a work truck. Two weeks out so had to do an emergency repair – fabrication. TCMs (transmission control module) for 2011-2016 Allison trannies are backordered for months. There’s a class action lawsuit because some trucks have been sitting at the dealer for up to 9 months, waiting. The truck is a brick without them.

    1. “Climate change” is the biggest scam in history, designed to extract wealth and privilege from the common people and give it to the “right people.” They are using the schools to beat it into the minds of the children so they accept it.

      We have a global narcissistic billionaire problem. There are several thousand evil people who control most everything on this planet, and who need to be guillotined.

      1. I’m dreading the “climate” regulations I’ll be facing when I start building my house. I don’t want a lot of space to have to heat and cool anyway, but the commies in the state legislature are doing their best to add extra costs they can virtue signal about.

        1. IIRC, if you rebuild a house destroyed in the Marshall fire you have to put a car charging station in the garage.

      2. This is planned starvation, especially in developing countries. Are these kids really going to say “oh well, at least Granny and Auntie helped save the planet, that’s what I learned in school” ? Someone’s going to start a revolution, probably on Twitter.

  13. WATCH: Maricopa County Supervisor Bill Gates RUNS From Questions at Secret Zuckerberg Funded, Soros Tied DC Election Summit – Elon Musk Responds: “They’re Supposed to Be Impartial”

    By Jordan Conradson
    May. 9, 2023 3:05 pm

    Maricopa County Supervisor Bill Gates ran away from conservative journalist Laura Loomer’s questions about his election corruption and participation in a far-left election conference yesterday in Washington, DC.

    Twitter owner Elon Musk responded to the video, questioning the integrity of Bill Gates and the other election officials.

    As the Gateway Pundit reported, Gates appeared yesterday and today at the secret invite-only “Summit on American Democracy” from May 8-9 with partisan hack David Becker, who heads the Center for Election Innovation and Research (CEIR), for “A conference on the current state of American democracy and elections.” David Becker is the far-left operative who founded the ERIC system used in over 30 states, including Arizona, with 35m voter records.

    As reported by Laura Loomer, “in August 2020, less than three months before the Presidential election, CEIR accepted $69.5 million from Facebook founder and billionaire Mark Zuckerberg and his Chinese wife, Priscilla Chan, to create more mail-in ballot drop boxes in key swing states under the guise of ‘COVID-19 safety precautions’.”

    https://www.thegatewaypundit.com/2023/05/watch-maricopa-county-supervisor-bill-gates-runs-from-questions-at-secret-zuckerberg-funded-soros-tied-dc-election-summit-elon-musk-responds-theyre-supposed-to-be-impartial/

    1. Arizona’s Maricopa County Supervisor Bill Gates Says He Will Not Seek Re-election Next Year

      By Katabella Roberts
      June 2, 2023

      A high-profile election official in Arizona who faced criticism over his handling of both the 2020 presidential election and the 2022 midterms will not be seeking reelection.

      Maricopa County Supervisor Bill Gates, 51, announced his decision in a lengthy statement on June 1, citing his plans to “pursue other interests and opportunities.”

  14. Too many potential headlines in this post to count:

    It Ain’t Karma It’s Pure Fate And That’s A Dirty Mattress To Sweat On

  15. ‘I’ve got a cousin who bought two little rentals in Westport. Westport!’

    Thank you thank you, I’ll be here all week!

      1. When I lived in NYC, I used to take Metro-North to visit a friend in CT. The Bridgeport stop was totally sketchy!

          1. IME, Greenwich, Darien and rural CT were the only areas of CT that weren’t sketchy.

  16. I finally got around to reading that piece from Toronto posted a couple of days ago regarding Courtney Wallis Simpson. She fits the profile of a true psychopath, zero empathy for her victims and the damage done to their lives. A great catch there, Ben!

  17. 2 Connecticut lighthouses for sale

    by: The Associated Press
    Posted: May 26, 2023 / 08:32 AM EDT

    BOSTON (AP) — Ten lighthouses that for generations have stood like sentinels along America’s shorelines protecting mariners from peril and guiding them to safety are being given away at no cost or sold at auction by the federal government.

    The aim of the program run by the General Services Administration is to preserve the properties, most of which are more than a century old.

    The development of modern technology, including GPS, means lighthouses are no longer essential for navigation, said John Kelly of the GSA’s office of real property disposition. And while the Coast Guard often maintains aids to navigation at or near lighthouses, the structures themselves are often no longer mission critical.

    https://www.wtnh.com/news/connecticut/middlesex/like-the-idea-of-owning-a-lighthouse-us-is-giving-some-away/

  18. Bloomberg
    A $1.5 Trillion Backstop for Homebuyers Props Up Banks Instead
    The Federal Home Loan Bank system provides billions to banks curtailing mortgage lending, and millions to its executives
    By Heather Perlberg, data analysis by Ann Choi and Noah Buhayar
    June 4, 2023 at 4:00 PM PDT

    The first sign of deep trouble in US banking this year came from a sunbaked office complex in a San Diego suburb. There, a small firm called Silvergate Capital Corp. assured investors it was weathering a run on deposits. Its lifeline: about $4.3 billion from a Federal Home Loan Bank.

  19. HOME MARKETS
    Housing supply is plunging in some parts of the the US and surging in others as high mortgage rates split the housing market
    Jennifer Sor Jun 4, 2023, 8:15 AM ET
    Housing inventory is falling and surging in different parts of the US as higher rates distort the market.
    A Realtor.com report found that home supply fell in 21 of the 50 largest metropolitan cities in May.
    But housing activity has kicked up in the South as increased affordability draws both buyers and sellers.

    Mortgage rates at 20-year highs have split the US housing market, with supply plunging in some parts of the US, while the number of homes for sale surges in others.

    Home inventory fell in 21 out of 50 of the largest metropolitan cities last month, according to a report from Realtor.com. San Jose, California saw the steepest decline with 35% fewer active listings in May compared to the same month last year. That was followed by Sacramento, California with 27% fewer listings compared to May 2022, and Hartford, Connecticut with 26% fewer listings.

    But while home inventory has continued to fall off in certain areas, supply has surged in other pockets of the US, mainly in the South.

    Active listings in the region jumped 54% in May compared to last year, though overall housing supply is still 41% lower than it was before the pandemic. Nashville, Tennessee led the wave of new inventory that has hit the Southern housing market, with listings growing 124% from last year. Listings in Austin, Texas grew 113%, while listings in San Antonio, Texas grew 93%, the report said.

    The divide has largely been created by high mortgage rates, which have spurred housing activity in more affordable areas of the US.

    In more expensive metropolitan areas, high borrowing costs have sidelined many prospective home buyers, causing demand and home prices to fall. Meanwhile, falling home prices high rates have discouraged existing homeowners from putting their properties up for sale, leading inventory to dry up.

    https://markets.businessinsider.com/news/commodities/housing-market-supply-inventory-decline-affordability-high-mortgage-rates-2023-6

  20. The Financial Times
    Property sector
    US banks prepare for losses in rush for commercial property exit
    Lenders prepare to offload debt at a discount even when borrowers are up to date on payments
    Montage of bank logos and San Francisco skyline
    Some lenders are willing to take losses on so-called performing property loans after multiple warnings that the asset class is the ‘next shoe to drop’
    Stephen Gandel, Joshua Chaffin and Eric Platt in New York and Joshua Oliver in London yesterday

    Some US banks are preparing to sell off property loans at a discount even when borrowers are up to date on repayments, a sign of their determination to reduce exposure to the teetering commercial real estate market.

    The willingness of some lenders to take losses on so-called performing real estate loans follows multiple warnings that the asset class is the “next shoe to drop” after the recent turmoil in the US regional banking industry.

    “The fact that banks want to sell loans is coming up in a lot of conversations,” said Chad Littell, an analyst at CoStar, a research company focused on commercial real estate. “I am hearing more about it than any time in the past decade.”

    1. COSTAR INSIGHT
      Downtown San Diego Braces for New Office Development, Higher Vacancies
      Wave Comes As Landlords Struggle To Fill Older Buildings
      By Joshua Ohl
      CoStar Analytics
      May 31, 2023 | 8:40 AM

      Downtown San Diego is staring at its deepest pipeline in two decades, as roughly 2.7 million square feet of office and lab space is under construction. With 95% of that space available …

      https://www.costar.com/article/2008366663/downtown-san-diego-braces-for-new-office-development-higher-vacancies

Comments are closed.