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The Unseen Hazards Faced By Wile E. Coyote

A report from Business Insider. “Realtor.com has re-examined its previous housing market predictions for this year and pointed them in the opposite direction. ‘We made a bold call that home prices wouldn’t go down in 2023, and with the latest data, we’re revising that projection,’ Chief Economist Danielle Hale said in the report. Earlier in the year, West Coast cities saw prices plunge as much as 10%. More apartments are coming to the market, easing rental shortages, Realtor.com said. For instance, completed multifamily construction projects expanded 24% year over year in April, according to Redfin.”

The Columbian in Washington. “You’ve heard it time and time again: Clark County has too many buyers and not enough homes. But in May, there were some silver linings for prospective buyers; 864 new listings were added to the housing market, an increase of nearly 40 percent from April. Compared with May 2022, new pending sales are down more than 31 percent. Closing sales also decreased more than 15 percent from April. On a month-to-month comparison, median sale prices — which only include residential home sales — decreased to $515,000, a 2.5 percent drop from the average of $525,000 in March.”

The Denver Post in Colorado. “Midwestern apartment markets are now some of the most popular in the country as people place affordability over the hipness associated with one-time draws like Austin, Texas, Seattle and Silicon Valley, according to a report from RentCafe.com. Several markets that were hot prior to the pandemic have lost momentum. Seattle ranked 42nd; San Jose, Calif., ranked 70th; Austin ranked 97th; Boise City, Idaho, ranked 105th, and San Francisco ranked 128th. The bottom five markets for apartment searches were Cape Coral, Fla.; Ontario, Calif.; Laredo, Texas; Fontana, Calif., and Salem, Ore.”

“One concern is that developers have concentrated their efforts too heavily on yesterday’s hot markets, and less so on the ones that apartment portals like Rent.com show people have shifted their attention to. But that could help push down rents in the months ahead. Oversupply could exacerbate the softness in markets like Denver; Phoenix; Austin; Nashville, Tenn.; Raleigh, N.C.; Jacksonville, Fla.; San Jose; San Francisco and Portland, Ore., predicted Caitlin Sugrue Walter, vice president of research at the NMHC.”

Bisnow Los Angeles in California. “Los Angeles County’s multifamily market is slowing. It’s a phenomenon playing out across the country. Asking rents for new leases rose slightly less than 2% in the 12 months ending May 2023, a sharp contrast to the double-digit increases of 2022. The widespread nature of the rent growth slowdown doesn’t seem to be comforting those in the multifamily business. ‘Rents have remained stagnant year over year, concerning investors and landlords in addition to high inflation and interest rates,’ a report from NAI Capital reads.”

“The number of units sold has dropped by 64.3% compared to Q2 2022, ‘as investors have retreated due to tight credit conditions and a disparity in prices between sellers and buyers, resulting in a transactional standoff,’ the report states. Higher borrowing costs, inflation and perceptions of weaker growth and greater risks in the market are taking a toll. Preliminary Q2 2023 figures show that every submarket in LA County has seen a decline in the median sale price per unit compared to this time last year, NAI Capital found. The submarket that NAI Capital uses to cover LA’s Westside saw per-unit prices for apartment buildings fall 35.2% compared to Q2 2022.”

The Pioneer Press in Minnesota. “When management consultant Sherry Johnson co-chaired a neighborhood task force looking at all the vacant properties on St. Paul’s popular Grand Avenue business corridor, she was taken aback to discover how many spaces were owned by the same out-of-state pension fund — the State Teachers Retirement System of Ohio. The retirement system has kept some of the three-mile corridor’s largest retail areas empty rather than lower rents and negotiate with small, local businesses. ‘All those Lululemons and J. Crews are not coming back, and now we’re just stuck with all these empty husks of buildings,’ Johnson said. ‘Personally, I’m just wondering if they’re waiting to sell them to a developer.'”

“At a time when public pension funds across the nation are increasing their real estate investments to balance volatility in the tech sector and other risks, St. Paul has become an illustrative example of out-of-state control over neighborhood commercial hubs. STRS Ohio lost some $5 billion last year, and then even more money when Silicon Valley Bank collapsed.”

The Wall Street Journal. “The world’s central banks raced at an extraordinary pace over the past year to cool inflation, but it hasn’t proved enough—yet. Chicago Fed President Austan Goolsbee compared the potential coming impact of the Fed’s 5 percentage points in rate increases to the unseen hazards faced by Wile E. Coyote, the unlucky cartoon character. ‘If you raise 500 basis poits in one year, is there a huge rock that’s just floating overhead…that’s going to drop on us?’ he said.”

From Reuters. “The world’s central bank umbrella body, the Bank for International Settlements (BIS), called on Sunday for more interest rate hikes, warning the world economy was now at a crucial point as countries struggle to rein in inflation. Despite the relentless rise in rates over the last 18 months, inflation in many top economies remains stubbornly high, while the jump in borrowing costs triggered the most serious banking collapses since the financial crisis 15 years ago. ‘The global economy is at a critical juncture. Stern challenges must be addressed,’ Agustin Carstens, BIS general manager, said in the organisation’s annual report. ‘The time to obsessively pursue short term growth is past. Monetary policy must now restore price stability. Fiscal policy must consolidate.'”

“Commenting further on the economic picture, Carstens, former head of Mexico’s central bank, said the emphasis was now on policymakers to act. ‘Unrealistic expectations that have emerged since the Great Financial Crisis and COVID-19 pandemic about the degree and persistence of monetary and fiscal support need to be corrected,’ he said.”

From Bloomberg. “Some Canadians have extended the amortization period on their mortgages, and real estate experts say it could bring uncertainty for renewals. Amortization refers to the time it takes to pay back a mortgage. As elevated interest rates hit the housing market, some people have been extending their amortization period out several decades and are only paying interest on their homes. ‘These extended amortizations, this is really just a temporary Band-Aid solution, which in my view is preventing mortgage defaults,’ said Danie Vyner, the principal broker at DV Capital. ‘In other words, if somebody was in an adjustable-rate mortgage where each time this prime rate continued to hike, and they weren’t able to afford these mortgage payments, the mortgage would be in default.'”

“Vyner said that well-capitalized borrowers that have fixed-rate variable mortgage payments are generally not fazed by extended amortization periods. However, he said they understand the ‘free ride’ will end and they will need to ‘increase these payments or pay down principal.’ ‘But there are many people that I speak to, (who) are realizing when the maturity date of their mortgage comes and they’re going to be expected to either pay down principal or increase this mortgage payment, they’re not going to be able to afford this mortgage payment,’ Vyner said. Those who are unable to afford their payments may need to explore their options, Vyner said, which could include things like selling their home, repurchasing or seeking alternative financing. ‘At renewal, it’s judgment day, and we’re going to see if these homeowners are able to make their payments or not,’ he said.”

From Sky News. “The UK’s property values are expected to continue declining until the second half of 2025 as a hike in interest rates affects mortgages. A couple from Chorleywood said they have been left ‘reeling’ after almost £700 was added to their mortgage – and fear this could end up even higher after today’s announcement from the Bank of England. Cathy, 60, and Jim Patton, 61, say they have pleaded with their mortgage company to give them ‘breathing space’ as they try to sell their home.”

“In June 2021 the couple took a two-year fixed-rate interest-only mortgage at 1.19%. ‘We knew we’d need to repay the mortgage within the next eight years so my husband retired just over a year ago. We put our house on the market in January and we weren’t too worried as we’d assumed it would sell quickly. But it hasn’t and now we are in a panic with the new rate being raised from £218 to £894.’ With the rest of their bills, plus food, they say they are facing a £150 a month shortfall. ‘I’ve sent the mortgage company a letter outlining our situation but haven’t heard back,’ Cathy said.”

Daily Mail Australia. “New data has revealed the surprising suburbs in each state where Aussies can get their hands on a home for the same price they would have paid in 2013. Units and houses in several suburbs around Australia have stayed at similar median prices for the last 10 years largely due to more availability of accommodation. Deniliquin, a small town near Echucha on the NSW-Victoria border, was severely hit by floods in the 2022 record weather event. The devastation has caused the median price in the town to fall to the same price as in 2013 with units at $146,500. The median price of a house in Cobar, a mining town in central NSW, has fallen by four per cent since 2013 to $200,000.”

“The biggest dip in median unit prices around the state was recorded in Travancore. In 2013 the median price for a unit in Travancore sat at $501,250 but has fallen by an incredible 33 per cent to just $338,000 in 2023. Median prices have stayed the most consistent in regional areas of Queensland. The biggest property market falls in the state when comparing 2013 to 2023 were, by far, in the Gladstone region. In 2013 the median price of a unit in Gladstone Central was $472,500 but dropped by 51 per cent compared to 2023 with the median price now $230,000. In 2013 the median price of a unit in Gladstone Central was $472,500 but dropped by 51 per cent compared with 2023, with the median price now $230,000.”

“Similar falls can be seen in the town’s coastal regions with house price in Barney Point falling by 25 per cent. Several rural areas around Queensland have also suffered steep median price declines. Units in Emerald, 270km west of Rockhampton, fell by 43 per cent to $200,000 and houses in outback hub Longreach dropped by 12 per cent to $225,000. Unit prices in Hackham, in Adelaide’s south, saw the second biggest drop in the entire state with the median in 2013 sitting at $229,500 while the 2023 median dropped by 35 per cent to $150,000.”

The Investor. “Vietnam should restructure its real estate market towards reducing high-end housing and increasing social housing, including housing for workers, National Assembly member Tran Van Khai said Friday. He said people were hoping that the amendments would help remove the mindset that trading land was the most profitable business and provide coming generations with more opportunities to realize their dream of owning a house. ‘If government policies do not feature timely and effective solutions, there may be a financial crisis, or even more seriously, an economic crisis,’ he said, noting that many real estate businesses were on the verge of bankruptcy.”

“In a previous group discussion, National Assembly Economic Committee Chairman Vu Hong Thanh had acknowledged that Vietnam’s real estate market was unbalanced. The housing segment worth several hundreds of millions of Vietnamese dong (VND100 million = $4,250) a square meter was abundant, while that for low-income people was very scanty, he said.”

“Vo Huynh Tuan Kiet, senior manager of residential project marketing at CBRE Vietnam, said that last year, apartment supply hit 22,000-24,000 units, half of which came in the first two quarters. But this cart did not contain affordable housing, causing a scarcity in this segment at the end of the year. Many developers have plans to launch luxury and super luxury apartments, Kiet noted, adding that this could lead to a higher price range in the future.”

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This Post Has 97 Comments

  1. ‘We put our house on the market in January and we weren’t too worried as we’d assumed it would sell quickly. But it hasn’t and now we are in a panic with the new rate being raised from £218 to £894.’ With the rest of their bills, plus food, they say they are facing a £150 a month shortfall’

    A-HA Cathy. You are still eating!

    1. “I’ve sent the mortgage company a letter outlining our situation but haven’t heard back,’ Cathy said.”

      Why should you hear back? They’re not you benevolent uncle there to listen to a sob story.

    2. “In June 2021 the couple took a two-year fixed-rate interest-only mortgage at 1.19%. ‘We knew we’d need to repay the mortgage within the next eight years so my husband retired just over a year ago.”

      That’s quite a retirement plan.

      3. I still can’t believe these folks took out these “fixed rate” mortgages without at least thinking of the possibility that rates would increase. Here on HBB in the 00’s bubble we talked a lot about what would happen when adjustable rate mortgages adjusted.

    3. well Greedheads, lower the price!!!1

      of course now it’s an old listing just sitting there gathering dust and you’ve got no leverage as interest rates have continued to increase. Better lower it even more.

      I mean you did say it’s an emergency right?

      Also who takes out a 2 year loan expecting to retire in a year and repay in 8? Am i missing something?

        1. I had the same question. Your Answer makes sense and I didn’t think of it, thanks.

          Also who takes out a 2 year loan expecting to retire in a year and repay in 8? Am i missing something?

  2. ‘The housing segment worth several hundreds of millions of Vietnamese dong (VND100 million = $4,250) a square meter was abundant’

    Vietnam’s super luxury glut. Built for ‘Chinese investors’ that never materialized.

    DONG!

    1. Imagine being a homeless, destitute Viet Cong or NVA vet saying, “I fought for this?” Not so different from what our own Vietnam vets must be feeling.

      1. It caught my eye when I first saw the term super luxury in Vietnam. So I ran the numbers and realized there is probably only a handful of locals who could buy one, and they have tens of thousands. And as we’ve seen before: what makes them super lux? The price, that’s it. It’s waaay up there folks!

    3. Vietnam’s super luxury glut. Built for ‘Chinese investors’ that never materialized.
      It appears that Malaysia did a lot building for Chinese investors as well. In fact, Mainland Malaysia changed their immigration policy to cater to “wealthy.”

  3. ‘in May, there were some silver linings for prospective buyers; 864 new listings were added to the housing market, an increase of nearly 40 percent from April’

    Harry Potter strikes again!

    ‘On a month-to-month comparison, median sale prices — which only include residential home sales — decreased to $515,000, a 2.5 percent drop from the average of $525,000 in March’

    Wa happened to my YOY numbers?

    1. “Wa happened to my YOY numbers?”

      – YoY only discussed in rising markets. Falling numbers are “inconvenient.”

      – YoY better vis-à-vis MoM, since smoothed and showing trend – down in this case.

      – Everyone loves a good asset bubble on the way up. Whistling past the graveyard on the way down.

      – Nothing to see here. Move along, move along.

  4. Re: At renewal, it’s judgment day, and we’re going to see if these homeowners are able to make their payments or not,

    Or, as Warren Buffet had said, “It’s only when the tide goes out that you learn who has been swimming naked.”

      1. Me too. Good to have folks paying down their debts rather than driving inflation with all the “free money”.

      2. I read that and not just making up stats here that it’s estimated 98.7% of student loans borrowers haven’t made a payment in 3 years. Three years of internet free and hardly anyone made payments. I personally had a small amount left from a professional degree and I just paid them off in a lump sum during the pandemic to avoid this nonsense. But I am not typical. Most haven’t paid a penny. Completely insane.

        1. “Three years of internet free and hardly anyone made payments.”

          It was a perfect opportunity to reduce one’s principal balance, but it was squandered playing the victim card.

    2. We already know. Everybody who got an 80 year loan extension did so cuz they couldn’t make the payment. K-da is clown world.

      1. an 80 year loan extension

        My gawd, that’s longer than the average life expectancy. This is getting ultra absurd. What’s next, 500 year loans? Central bankers have absolutely destroyed pricing.

  5. ‘We made a bold call that home prices wouldn’t go down in 2023, and with the latest data, we’re revising that projection,’ Chief Economist Danielle Hale said in the report.

    Wut? You mean to tell me that hard data trumps “I feel” when it comes to housing forecasts?

  6. Rising inventories…falling sales…pricing starting to crack…frens, I suspect we might very well be looking at the incipient phase of a bursting housing bubble.

    1. I was in a debate with an idiot (i know, don’t argue with idiots) and he claimed that higher mortgage rates means higher home prices.

  7. “When management consultant Sherry Johnson co-chaired a neighborhood task force looking at all the vacant properties on St. Paul’s popular Grand Avenue business corridor, she was taken aback to discover how many spaces were owned by the same out-of-state pension fund — the State Teachers Retirement System of Ohio.

    I’m preparing a hobo stew cookbook for the Comrades of Proven Worth (D) in Ohio’s NEA indoctrination mills. I’ve included a section on setting snares for squirrels & robbing birds’ nests.

    1. Francis Soyer, job creator: I’ve recruited a Special Assistant to help me get my hobo stew project off the ground & prepare retired teachers for their next, more mobile phase of life. I will also be adding a section on pairing fortified wines, i.e. Night Train and Mad Dog 20/20, with my hobo stew recipes. What a beneficent legacy, you must be thinking.

      https://www.youtube.com/watch?v=3TAkyYEBc1M&t=48s

      1. Francis; I say we merge my pots n’ pans franchise (bang ’em LOUDLY when things aren’t profitable) w/your hobo stew enterprise.
        we’ll corner the market like the Hunt Bros.

        err, well. . . maybe not.
        the Hunt Bros. didn’t end well.

        “Nevermind”
        Roseanne Roseanna Danna

        1. I still have high hopes for my vegan cat food start-up, if I can reel in a “woke” venture capitalist.

    2. How do state pension funds make money by purchasing apartments and keeping them empty? I’m missing something…

      1. They’re in a catch-22. If they lower rents to attract new tenants, all of the existing tenants will demand rent price reductions too. Most of these pensions are leveraged in RE just like PE funds. Lower rents across the board could mean they default and lose their entire investment. This is a slow motion train wreck.

        1. And, with every tick of the clock, holding costs accumulate.

          Empty buildings only accelerate the problem, as HVAC and plumbing will actually deteriorate faster if not used and cycled.

  9. A reader sent these in:

    Don’t know how anyone thinks we get out of this unscathed. This is widespread across Canada. All those ppl who said bottom is in & just buy reeled in more unsuspecting families should be ashamed of themselves. Going to get worse before it’s better.

    https://twitter.com/ManyBeenRinsed/status/1672606492745146373

    This is the most aggressive rate tightening cycle that most of us have witnessed at any time in our careers. I would respect it.

    https://twitter.com/JeffWeniger/status/1671656492003622912

    Based on current interest rates and house prices, the monthly mortgage payment needed to purchase a typical home in Canada has risen by $255 or 8.3% since March. Hard to see sustained upward momentum in demand in light of this.

    https://twitter.com/BenRabidoux/status/1669679685851049985

    Alt-a mortgages in Canada skew heavily to ultra-short terms. We’re past peak renewal pain for 1-yr terms (renewing at roughly +200bps currently) but pity borrowers who took 2-yr terms and are renewing today….looking at ~500bp rate increase. Brutal!

    https://twitter.com/BenRabidoux/status/1671884691568472068

    The average price of a used Tesla is at an all-time low, $23k lower than its peak last July.

    https://twitter.com/charliebilello/status/1673025299896827906

    The Federal Reserve Bank of New York has a variety of rainbow-colored toilet seats that employees can choose from.

    https://twitter.com/RudyHavenstein/status/1414265297339510784

    Eccles Building Break Room

    https://twitter.com/RudyHavenstein/status/1519130454179205120

    With all the discussion going on in the UK about helping mortgage borrowers because of higher rates, I think it’s worth reposting Bank of England data on household debt. Are we sure we want to “help” people on the right of the chart ?

    https://twitter.com/jeuasommenulle/status/1673223116506497024

  10. ‘Unrealistic expectations that have emerged since the Great Financial Crisis and COVID-19 pandemic about the degree and persistence of monetary and fiscal support need to be corrected’

    Wa happened to my pivot Agustin?

    1. What I don’t get about the Fed is how they made so many get so rich off the same dumb buy-and–hold real estate investing strategy. Genius!

      1. @GRomePow has an awesome chart showing RE is inversely related to rates going back decades. I tried finding it but got tired of scrolling through last week’s MSM distractions.

          3. @NipseyHoussle

            Via his timeline.

            https://twitter.com/EPBResearch/status/1673684936069349380 (w/ chart):

            The US Housing Market has split into 3 categories:

            Big Declines: San Francisco, Seattle

            Moderate Declines: Dallas, Denver, LA, Portland, San Diego, Phoenix, Las Vegas

            No Declines/Still At Peak: Cleveland, Atlanta, Detroit, Miami, Chicago, Charlotte, Boston, New York

        2. @GRomePow

          Twitter bio:
          Top 25 Business School Grad – Finance
          Formerly Series 7, 6, 63 Licensed
          New Century Mortgage (Big Short) Account Exec
          “Can you show me on the chart?”

  11. ‘every submarket in LA County has seen a decline in the median sale price per unit compared to this time last year, NAI Capital found. The submarket that NAI Capital uses to cover LA’s Westside saw per-unit prices for apartment buildings fall 35.2% compared to Q2 2022’

    How does a 2% drop in rents cause this kind of a$$pounding? One, notice they never mention effective rents anymore. (They are a lion). Two, the magic pixie dust of cap rates works in reverse too, bigly.

    How do those 5% cap rates look now Los Angeles?

  12. New York Times — What Is Happening in the Housing Market? (6/26/2023):

    “The Fed’s rate increases are aimed at slowing America’s economy — in part by restraining the housing market — to try to bring inflation under control. Those moves worked quickly at first to weaken interest-sensitive parts of the economy: Housing markets across the United States pulled back notably last year. But that cool-down seems to be cracking.

    Home prices fell nationally in late 2022, but they have begun to rebound in recent months, a resurgence that has come as the market has proved especially strong in Southern cities including Miami, Tampa and Charlotte. Fresh data set for release on Tuesday will show whether that trend has continued. Figures out last week showed that national housing starts unexpectedly surged in May, jumping by the most since 2016, as applications to build homes also increased.

    Housing seems to be finding a burst of renewed momentum. Climbing home prices will not prop up official inflation figures — those are based on rental rather than purchased housing costs. But the revival is a sign of how difficult it is proving for the Fed to curb momentum in the economy at a time when the labor market remains strong and consumer balance sheets are generally healthier than before the pandemic.”

    https://archive.is/7G1cb

    Consumer balance sheets are healthier? Recent NBC poll finds that 74% of Americans say the country is on the wrong track.

    See also 1992: “It’s the economy, stupid.”

  13. From Bloomberg. “Some Canadians have extended the amortization period on their mortgages, and real estate experts say it could bring uncertainty for renewals.

    Amortization refers to the time it takes to pay back a mortgage. As elevated interest rates hit the housing market, some people have been extending their amortization period out several decades and are only paying interest on their homes.

    ‘These extended amortizations, this is really just a temporary Band-Aid solution, which in my view is preventing mortgage defaults,’ said Danie Vyner, the principal broker at DV Capital.”

    “In other words, if somebody was in an adjustable-rate mortgage where each time this prime rate continued to hike, and they weren’t able to afford these mortgage payments, the mortgage would be in default.”

    – Ahem. So, riddle me this house-man, or woman, how is interest-only payment different vis-à-vis renting? Rhetorical. Even for a 30 yr. loan, payments are mostly interest until late n the loan. Few.

    – If the amortization on your loan is 40 or 50 years, will you be dead before you pay it off? Also rhetorical.

    – Extended amortizations are just more can-kicking.

    – You will still own nothing, but slick marketing, preying on human emotions, including TINA and FOMO will suck you in. Central bank rug-pull. Rinse and repeat.

    – Asset bubbles appear to be wonderful while inflating, but they always pop, leading to “inconvenience.” Housing bubbles are especially damaging, since most people “own” a house.

    1. “Ahem. So, riddle me this house-man, or woman, how is interest-only payment different vis-à-vis renting?”

      1) It reflects last year’s mania pricing and this year’s interest rates, rather than current market rental rates.

      2) Depending on how high prices were when you bought and current interest rates and rents, monthly payments could be a lot higher than rents.

      3) With the interest only payment strategy, you are gambling on being able to sell the home later at a higher price. This could work out badly for those who bought at peak mania price levels, just as it did for many in the 2006-2012 housing bust.

      1. how is interest-only payment different vis-à-vis renting

        Not having to ask permission to paint the walls or restoring it when you move out.

        1. “…how is interest-only payment different vis-à-vis renting?”

          “Not having to ask permission to paint the walls or restoring it when you move out.“

          ///

          Immortal line by Carl Spackler in “Caddyshack”:

          “Carl: A looper, you know, a caddy, a looper, a jock. So, I tell them I’m a pro jock, and who do you think they give me? The Dalai Lama, himself. Twelfth son of the Lama. The flowing robes, the grace, bald… striking. So, I’m on the first tee with him. I give him the driver. He hauls off and whacks one — big hitter, the Lama — long, into a ten-thousand foot crevice, right at the base of this glacier. And do you know what the Lama says? Gunga galunga…gunga — gunga lagunga. So we finish the eighteenth and he’s gonna stiff me. And I say, “Hey, Lama, hey, how about a little something, you know, for the effort, you know.” And he says, “Oh, uh, there won’t be any money, but when you die, on your deathbed, you will receive total consciousness.” So I got that goin’ for me, which is nice.“. 😂

  14. “Those who are unable to afford their payments may need to explore their options, Vyner said, which could include things like selling their home, repurchasing or seeking alternative financing.”

    Translation: Get some boxes soon.

    1. If the homeowner can’t afford the payments, then who would they sell to, since buyers can’t afford the payments either?

      Oh, right, BLACKROCK.

      1. Because private equity firms love losing other people’s money in real estate investments?

        1. Yahoo
          Blackstone REIT Continues Trend Of Bad News For Real Estate Investors
          Eric McConnell
          June 5, 2023·5 min read
          In this article:

          Blackstone real estate investment trust (BREIT) is known as one of America’s largest and most dependable privately held REITs when it comes to delivering investor returns. However, 2023 has proven to be a difficult year for real estate investors, and Blackstone is not immune. As of May 1, 2023, Blackstone announced it is limiting investor withdrawals from its REIT, which is worth an estimated $70 billion.

          This move is not a new trend, as Blackstone has been limiting monthly investor withdrawals since November. A clause in Blackstone’s standard shareholder agreement allows the company to limit withdrawals if the total amount of the withdrawal requests exceeds 5% of the fund’s net asset value. In what can be seen as a sign of the times for the troubled real estate market, Blackstone hasn’t released an estimate on when it may fulfill all investor redemption requests.
          …
          https://finance.yahoo.com/news/blackstone-reit-continues-trend-bad-193739975.html

          1. Do y’all expect the Fed to bail out Blackstone and other CRE REIT providers before this CR8Ring process ends?

        2. Premium Readership
          Hedge Fund Investor Letters
          News
          Here’s Why Artisan Value Fund Exited Blackstone (BX)
          Published on May 24, 2023 at 6:01 am by Soumya Eswaran in Hedge Fund Investor Letters, News
          …
          Artisan Value Fund highlighted stocks like Blackstone Inc. (NYSE:BX) in the first quarter 2023 investor letter. Headquartered in New York, New York, Blackstone Inc. (NYSE:BX) is an asset management firm. On May 23, 2023, Blackstone Inc. (NYSE:BX) stock closed at $83.73 per share. One-month return of Blackstone Inc. (NYSE:BX) was -1.85%, and its shares lost 24.60% of their value over the last 52 weeks. Blackstone Inc. (NYSE:BX) has a market capitalization of $100.607 billion.
          …
          https://www.insidermonkey.com/blog/heres-why-artisan-value-fund-exited-blackstone-bx-1154130/

          1. “…its shares lost 24.60% of their value over the last 52 weeks.”

            I wonder how they lost so much, given that housing is red hot cakes in perpetuity? Must have been one of their other portfolio segments…

        3. I always confuse Blackrock with Blackstone.

          Blackstone just needs to wait a little bit for prices to cr8er, then buy up the houses with cash, which is what they did last time. But even Blackstone isn’t going to be able to secure financing rates low enough to undercut end consumers.

      2. Business | Schumpeter
        BlackRock v Blackstone
        Mirror, mirror on the wall, who is the mightiest finance tycoon of them all?
        Jan 13th 2018

        THE two most successful entrepreneurs on Wall Street of the past two decades work on opposite sides of Park Avenue. Larry Fink, 65, is a Democrat whose hand is glued to a Starbucks cup and who runs BlackRock from 52nd Street. Stephen Schwarzman, 70, is a Republican who wears striped shirts with plain collars and runs Blackstone from between 51st and 52nd. The two are ex-colleagues, but have sharply opposing views on investment and management. Their trajectories illustrate how finance is changing. Mr Fink, once the underdog, is on top.

        His firm, BlackRock, is the world’s largest asset manager, with $6trn of assets. It stands for computing power, low fees and scale, and is booming. Mr Schwarzman’s firm, Blackstone, is the largest “alternative” manager, focused on private equity and property, with $387bn of assets. It stands for a time-honoured formula of brain power, high fees and specialisation. Lately, it has trod water.

        When Mr Fink was a securities trader in his 30s he joined Blackstone, co-founded by Mr Schwarzman, to set up its bond-investment business. This was named BlackRock, and became a separate company in 1995. As late as 2007 the two firms had similar market values. Yet they have taken diametrically different approaches to investment and to their own control structures.

        BlackRock mainly sells passive funds (including exchange-traded-funds, or ETFs) to institutions and to the masses. It has been a leader in the shift away from conventional asset managers. Its fees are wafer-thin: it makes 0.2 cents of revenue a year for every dollar it manages. Blackstone, meanwhile, uses leverage and changes the management of firms in order to try to outperform. Its fees are 1.8 cents. Its clients are institutions and the rich.

        The structure of Mr Fink’s firm is simple; one share, one vote. He owns only 0.66% of it (the largest shareholder is PNC, a bank, with a stake of 22%). This gave BlackRock the flexibility to issue shares to buy Barclays’ fund-management arm in 2009. Mr Schwarzman, by contrast, has tightly hugged control of his partnership. Outside shareholders have no vote at Blackstone, and its accounting is as baffling as Kanye West or the works of Hegel.
        …
        https://www.economist.com/business/2018/01/13/blackrock-v-blackstone

        1. Larry Fink, 65, is a Democrat whose hand is glued to a Starbucks cup and who runs BlackRock from 52nd Street. Stephen Schwarzman, 70, is a Republican who wears striped shirts with plain collars and runs Blackstone from between 51st and 52nd.

          Both globalists.

  15. Are you worried that the Fed may make good on repeatedly announced plans to remove the punch bowl, ending Wall Street’s decade-long drinking binge?

    1. Yahoo Finance
      Federal Reserve’s message to the bullish stock market: We will break you
      Brian Sozzi
      Mon, June 26, 2023 at 6:00 AM PDT·3 min read

      Not watching stocks tick by tick sometimes has its benefits.

      That’s where I am at right now after spending a week in sunny Cannes, France, with my Yahoo colleagues covering the Cannes Lions.

      We laughed, we didn’t cry, we talked to big names such as Kevin Hart and Pinterest CEO Bill Ready about business matters and we ate incredibly fresh food that oddly didn’t seem too inflationary. I even tried to dance at a late-night party (it was for business, people).

      One thing we didn’t do was pay attention to stocks every waking second. It felt as refreshing as the ocean water I let touch my calves during a 15-minute break after we wrapped taping on Thursday. At least for me, that market detox has proven incredibly helpful as I get back to reality in increasingly warm New York City.
      …
      https://finance.yahoo.com/news/federal-reserves-message-to-the-bullish-stock-market-we-will-break-you-130024015.html

      1. Federal Reserve’s message to the bullish stock market: We will break you

        Hardly. They just messaged them to keep speculating with their recent “pause.”

        1. The pause was more to keep the banks from imploding. The problem is with a stock bubble, people will “feel” rich. That will keep driving inflation.

          1. people will “feel” rich

            I just want to not feel poor. What’s the proper interest rate for that??

    2. DOW 30 -0.04%
      S&P 500 -0.45%
      NASDAQ 100 -1.36%

      Warren Buffett’s global market gauge soars to nearly 110%, signaling stocks are overvalued and might crash
      Theron Mohamed
      Jun 26, 2023, 7:41 AM PDT
      Warren Buffett. CNBC

      – The global “Buffett indicator” has jumped to nearly 110%, signaling stocks are overvalued.

      – Warren Buffett’s preferred gauge divides the total market cap of global stocks by worldwide GDP.

      – The indicator spiking is a “very strong warning signal” for the stock market, Buffett has said.
      …
      https://markets.businessinsider.com/news/stocks/warren-buffett-indicator-global-stock-market-outlook-bubble-crash-warning-2023-6

  16. If you realized rents were falling, would that make you more eager or less eager to buy a home?

    1. Rent is falling in America for the first time in years
      By Alicia Wallace, CNN
      Published 6:35 AM EDT, Mon June 26, 2023

      Minneapolis CNN —

      Some welcome news for renters: The US median rent in May fell from May 2022, the first annual rent decline in at least three years, according to a Realtor.com report released Monday.

      In May, the national median asking rent was $1,739, which was up a skosh ($3) from April but down 0.5% from May 2022. It’s the first decline since Realtor.com started tracking the year-over-year data in March 2020.

      “This is yet another sign that rental-driven inflation is likely behind us, even though we may not see this trend in official measures until next year,” Danielle Hale, Realtor.com’s chief economist, said in a statement. “Although still modest, a decline in rents combined with cooling inflation and a still-strong job market is definitely welcome news for households.”
      …
      https://www.cnn.com/2023/06/26/economy/us-rents-may/index.html

      1. “Although still modest, a decline in rents combined with cooling inflation and a still-strong job market is definitely welcome news for households.”

        Maybe not so much for homeowners with vanishing equity?

  17. “…borrowers that have fixed-rate variable mortgage payments…”

    I know that lending and mortgage products and such are different in other countries, but the conundrum posed by fixed variables baffles the brain.

    1. Yahoo Finance
      Crypto has a new rescuer: Wall Street
      David Hollerith
      Sun, June 25, 2023 at 5:39 AM PDT·5 min read

      Some of the biggest names in finance are making new bets on cryptocurrencies, adding competition and momentum to an upstart industry that is under increasing pressure from US regulators.

      The world’s largest money manager, BlackRock (BLK), wants to start a new exchange-traded fund that would use bitcoin as an underlying asset.

      Two other sizable money managers, Fidelity Investments and Charles Schwab (SCHW), are backing a new cryptocurrency exchange with Citadel Securities.

      And one of the world’s biggest lenders, Deutsche Bank, wants to operate a crypto custody business that would hold digital assets for its clients.

      These endorsements from institutions that have a track record on Wall Street are helping to push the value of cryptocurrencies higher, espjecially bitcoin (BTC-USD).
      …
      https://finance.yahoo.com/news/crypto-has-a-new-rescuer-wall-street-123946418.html

  19. CNBC — Americans think they will need nearly $1.3 million to retire comfortably, study says (6/26/2023):

    “When it comes to how much they will need to comfortably retire, Americans have a “magic number” in mind — $1.27 million, according to new research from Northwestern Mutual.

    That’s up from $1.25 million last year, the financial services firm found, based on an online survey of 2,740 adults conducted between February and March.

    Yet across all age groups, the amount respondents said they currently have saved toward retirement fell short of their million dollar-plus goals — with an average of just $89,300 set aside, a 3% increase from 2022.

    Those closest to retirement had more saved, but not by much, with an average of $110,900 for those in their 50s, $112,500 for those in their 60s and $113,900 for those in their 70s.”

    https://www.cnbc.com/2023/06/26/americans-think-they-need-nearly-1point3-million-retire-comfortably-study.html

    How many of these people will have a paid off house that they can afford the carrying costs on when they retire?

  20. Washington Post — Covid isn’t over, but even the most cautious Americans are moving on (6/25/2023):

    “Emboldened by the government’s recent lifting of the public health emergency, Americans who have tried to be rule-following pandemic citizens for the past three summers are at last abandoning precautions as the coronavirus fades into a background threat.

    Officials are no longer warning of scary new variants. Free tests are harder to come by. The White House covid team has disbanded, and the virus is increasingly erased from public conversation. After 2020’s summer of isolation followed by 2021’s “hot vax” summer and last year’s summer of revenge travel, this summer, the fourth since covid arrived, marks a season of blissful ignorance — or begrudging acceptance that the rest of society is moving on.”

    https://archive.is/Mj0wz

    Begrudging acceptance? Mass Formation Psychosis is one hell of a drug.

    2. The Branch Covidian cultists had one last gasp this past March when they tried to Twitter trend #bringbackmasks and failed miserably as most people mocked them.

      2. website

        Regarding COVID, I remember citing Paul Alexander on this website a fair amount. El Gato Malo’s stuff is good as well. Jay Battacharya, Martin Kulldorff and Harvey Risch should also be good reads.

    4. “…even the most cautious Americans are moving on…”

      Thank God. And this group includes some close friends and relatives…

  22. The Rich decided a long time ago that Capitalism was just to beneficial to the human populations , as well as individual freedoms and constitutional protections.
    The Rich want rigged systems, monopolies, inflitrated and bought off Governments, endless wars, and ongoing division and divide amount populations of the World.
    At this point in history these Powers have a plan to just take over the World and have a dictorship in which populations are controlled,enslaved, with world resources controlled and populations controlled on consumption and movement.

    1. The Rich want rigged systems, monopolies, inflitrated and bought off Governments, endless wars, and ongoing division and divide amount populations of the World.

      I suppose it depends how you define “rich”, but not everyone with wealth wants this.

      I’d guess first-generation wealth (those who built their own and are living the ‘american dream’) don’t want that. However, those who either amassed their wealth via corrupt means, or inherited it, may be more likely to feel this way?

      Anway, just trying to push back on painting with too broad a brush. Along the same lines as demonizing “the 1%”, which is a very different cohort than the .01% (which is what most people I believe intend to direct their ire at).

  23. Not every wealthy person or multi billion dollars Corporations is part of the One World Order innsurrection.
    So I agree with you that this group is more like .01% of population.
    86 of them have more wealth than 3.5 billion people.
    The Rothschilds and Royalty have unknown amount of trillions and trillions.
    Its the Club of Rome, world Banks, United Nations, fake news and Big Pharmacy working in collusion with this group.
    Some say this group is headed up by a Committee of 300, who are never seen …
    If they inflitrated Governments, than there is no end to the power they can assert.

    1. The Rothschilds and Royalty have unknown amount of trillions and trillions.
      Its the Club of Rome, world Banks, United Nations, fake news and Big Pharmacy working in collusion with this group.

      I have a question. Where are all of these trillions and trillions located? Where does the “power” of these people reside? Not even Fort Knox has trillions of dollars of gold. How is wealth stored these days and who guards it?

      In the old days, the King or Lord or whatever had a big castle and an army. Then kings and emperors came along like Napoleon or Tokugawa Ieyasu. But Napoleon ended up dying on a little island and the Shoguns faded (and the Emperor is holed up in a castle).

      If some huge magnetic storm toasted all the computers, disk drives and tapes in the world what would happen to all the wealth in the world? Or if all the people that run all of these financial systems dropped dead, what would we all do?

      They say that the destructive capabilities of one US Navy ballistic missile sub is more than all of bombs and explosives used in all of wars in the history of humanity. And the crew of these subs can launch their missiles without the launch codes from the POTUS.

      Who has more power? A bunch of people that fly around in Mickey Mouse private jets? Just who exactly controls everybody? The World these days is a complicated place. If things fall apart it will happen in completely unexpected ways.

      1. “But Napoleon ended up dying on a little island and the Shoguns faded (and the Emperor is holed up in a castle).”

        Ozymandias
        By Percy Bysshe Shelley

        I met a traveller from an antique land,
        Who said—“Two vast and trunkless legs of stone
        Stand in the desert. . . . Near them, on the sand,
        Half sunk a shattered visage lies, whose frown,
        And wrinkled lip, and sneer of cold command,
        Tell that its sculptor well those passions read
        Which yet survive, stamped on these lifeless things,
        The hand that mocked them, and the heart that fed;
        And on the pedestal, these words appear:
        My name is Ozymandias, King of Kings;
        Look on my Works, ye Mighty, and despair!
        Nothing beside remains. Round the decay
        Of that colossal Wreck, boundless and bare
        The lone and level sands stretch far away.”

      2. If you inflitrated the Government, and put Puppets in high places, like the White House, you than have the military forces of that Government.
        Joe Biden said that the USA should lead in the One World Order, which is a admission that he is advancing the agenda of the One World Order.

        1. you than have the military forces of that Government.

          Just how big are these “military forces”? Seems to me that Generals and Admirals are pretty powerless without the countless enlisted ranks. My dad was in the infantry in World War II. His company’s advance was stopped by the Germans who had machine gun nests and tanks on the edge of town well dug in. The division Commanding General called my dad on the field telephone and told him to get moving–“there are only a couple of machine guns in the way!” My dad told the general, “Well, you come up here and lead the charge, we’ll be right behind you!”

          The general hung up the phone. Generals aren’t very powerful since they are just one person. The POTUS or Pentagon can bark out all the orders they wish, but that doesn’t mean that anyone will follow them.

  24. ECONOMY
    Markets are pricing in rate cuts too soon, IMF’s Gopinath says
    PUBLISHED TUE, JUN 27 2023 5:10 AM EDT
    UPDATED 2 MIN AGO
    Silvia Amaro

    KEY POINTS
    Gita Gopinath, first deputy managing director of the International Monetary Fund, told CNBC that central bankers “should continue tightening and importantly [interest rates] should stay at a high level for a while.”
    Both the U.S. Federal Reserve and European Central Bank have raised rates significantly over many months.
    “It is taking too long for inflation to come back to target that means that central banks will have to remain committed to fighting inflation, even if that means risking weaker growth or much more cooling in the labor market,” Gopinath added.
    …
    https://www.cnbc.com/2023/06/27/imf-gopinath-central-banks-will-have-to-hold-rates-high-for-much-longer-.html

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