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The Less They Can Borrow, The Less They Can Afford

A weekend topic starting with Civil Beat. “When University of Hawaii economists were assembling ‘The Hawaii Housing Factbook,’ they decided to look beyond a metric often used to show housing costs in the Aloha State – and how those costs have increased over time. The result: as much as home costs seem to have increased in the past two decades, the situation is worse than it has seemed, based on median home sales prices, a standard way of measuring the cost of buying a house. ‘The normal way looks pretty bad,’ said Justin Tyndall, an assistant professor of economics and the lead author. ‘But it’s even worse.'”

“The scholars looked at homes bought in 2000 and sold in 2022. They found 39 single-family homes in Hawaii that met that criteria. Such a home could be bought for an average of $334,000 in 2000, the report says. By 2022, the average price had increased by 340% to $1.47 million. ‘A young person wanting to buy the exact home their parents bought 22 years ago will need to pay 4.4 times as much,’ UHERO reported. ‘Considering this type of scenario demonstrates why the 260% increase in median home price can actually understate the severity of the housing crisis as experienced by Hawai‘i residents.'”

The Star Advertiser in Hawaii. “Oahu homebuyers snapped up properties at a relatively quick pace in June as the housing market cooled from a year ago amid a dip in prices. The median price for single-family home resales stabilized in June but remained above seven figures at $1,050, 000. That was down 4.5 % from $1.1 million a year ago and off 5.3 % from $1, 109, 000 in May, according to the Honolulu Board of Realtors. High mortgage rates have cut into both inventory and sales. ‘It’s definitely affecting the market,’ said Realtor Chris Zhu of Coldwell Banker Realty of Hawaii. ‘It reduces the buyer’s purchasing power. The higher interest rate lowers the loan amount they can get. The less they can borrow, the less they can afford. It will drive the prices down.'”

The Los Angeles Times. “Four days a week, Leticia Ortega de Ceballos sleeps in her car so she can pay for a house more than 100 miles away. Her workweek begins with the Sunday night shift at Loews Hollywood Hotel, where she cleans the hallways and lobby. When she finishes, exhausted, there’s just an hour until she starts her second job cleaning hotel rooms at the Hilton in Glendale. Then she has six hours to shower, eat and sleep before she starts all over again. Loews, Hilton, shower, eat, sleep. The 56-year-old sees the house in California City and the family within it on weekends.”

“Gladis Ávila, 39, can spend more than two hours in traffic commuting to her job at the W Hollywood Hotel from her new house in Victorville, a 90-mile drive away. Some nights she gets home just as her youngest children are getting ready for bed. ‘At the end of the day, when I’m heading home,’ Ávila said, ‘I wonder if it’s worth it.’ The women grapple with all the difficulties of the housing market in California today, the high prices that push first-time buyers increasingly far from work, the scarcity of anything they can actually afford.”

“But Ortega de Ceballos and Ávila are looking for more than just shelter. Sure, they want a home to live in now. But they also want to one day give their children the financial footing they themselves never had. The key is more than just hard work and a savings account with a laughably low interest rate. The key is a house, the kind of investment that can grow over time. ‘Traditionally, owning a home has been the way that most families accumulate wealth,’ said Marisol Cuellar Mejia, a research fellow at the Public Policy Institute of California. ‘That has happened for many years, and that was in some ways a manifestation of the American dream.'”

The Real Deal. “Tides Equities’ showed its hand last week. If this were poker, folding would be a good option. Instead, the multifamily syndicator asked investors to cough up more capital to salvage properties with negative cash flow and declining occupancy. In the past few years, Tides acquired a $7 billion multifamily portfolio by taking out floating-rate loans at dirt-cheap interest. When the Fed hiked rates, the firm’s debt service ballooned. Now, 20 percent of its portfolio faces distress, co-founder Ryan Andrade told investors in a letter. Without a capital infusion, Andrade warned, properties would not have ‘sufficient holding power.'”

“Tides isn’t alone. A number of small-time investors, lured by the cheap money of yesteryear, employed the same value-add strategy. So-called syndicators pooled money from well-heeled yet largely unsophisticated investors, promising outsized returns on multifamily deals. The premise was that rent increases, made possible by renovations and constrained supply, would boost revenue. But the music has stopped, insiders say. Rental housing is supposed to be a good investment in the event of high inflation because rents can be raised, but the Federal Reserve’s hiking of interest rates to fight inflation made floating-rate loans very expensive, very fast. When those loans mature, refinancing them will be painful if not impossible for many borrowers.”

Kelowna Now in Canada. “Last month in the Central Okanagan, 456 homes of all kinds (single-family, townhouse and condominium) changed hands, according to the Association of Interior Realtors. Last month the single-family benchmark was $1,063,800, up from $1,048,900 in May, $1,051,100 in April and $1,001,500 in March. June’s benchmarks are still well off the record highs set in the spring of 2022 — $1,131,800 for a single-family home. Current sales pace is down considerably from 957 in April 2021 when the market was booming as people went into a pandemic buying frenzy to get the home they wanted in the area they wanted.”

“While buyers acted with abandon during the boom, today’s buyer is cautious. ‘The costs of carrying mortgages could impact sales activity as interest rate sensitive buyers can no longer afford what they could have a year or so ago,’ said Chelsea Mann, president of the Association of Interior Realtors.”

The Globe and Mail. “Agustín Carstens is general manager at the Bank for International Settlements. Risks to financial stability loom. Debt and asset prices exceed those in past periods of interest rate hikes. The resulting financial strains will likely come through credit losses. Weak banks risk losing their footing. Historically, banking stress often goes in tandem with higher interest rates. High debt, high asset prices and high inflation add to the risks. The current episode ticks all the boxes. How should policy makers respond to these challenges? The task of central banks is clear: They must restore price stability. A shift to permanent high inflation would have enormous costs, especially for the most vulnerable in our societies.”

“Policy makers must be realistic about what they can achieve. High inflation and financial instability did not emerge by accident. They were the result of a long journey, reflecting in no small part an overly ambitious view of monetary policy’s ability to hit a small inflation target and a more general belief that macroeconomic policy could support growth indefinitely, without stoking inflation.”

The Telegraph. “The Bank of England was captured by groupthink that blinded it to obvious warning signs over the inflation crisis and prevented it from stamping out price rises, former top officials have said. Sir Charlie Bean, who was a deputy governor of the Bank until 2014, told MPs that the previous decade’s experience of trying to boost low inflation with ultra-low interest rates and money printing meant officials across the world missed the opposite problem looming.”

“Speaking to MPs on the Treasury Select Committee, he said: ‘There was a problem of groupthink across the central banking fraternity…. You had all of these discussions about negative interest rates and other ways to inject more demand. Connected to that was the idea of trying to signal interest rates would stay low for long and thereby put downward pressure on long-term interest rates. And really you had all central banks in that mindframe. I think they were all too slow to pivot to the dangers of a significant increase in inflation and the need to withdraw some of the, in my view, excessive monetary stimulus injected during the pandemic.'”

From The I News. “Homeowners are having to knock as much as £20,000 off their asking price in an effort to find a buyer, housing insiders have revealed. Figures published by Halifax on Friday showed there has been a 2.6 per cent fall in house prices across the UK in the past twelve months. The country’s biggest mortgage lender said it is the biggest fall in prices since 2011 following the global financial crisis and amounted to around £7,500 being wiped off the average UK house price in cash terms. Some regions of the UK have been hit harder than others.”

“Alan Greenin, a mortgage broker based in Kent, told i: ‘I’ve got clients trying to find a buyer and they’re struggling at the moment. They’ve have had to lower their expectations. I think it’s the knock-on effect of interest rates and not knowing where they’re going to be. I had a client lower their price yesterday and another this morning. This chap has had to lower it by £20,000, from £385,000 to £365,000, and he might take it down another £5,000 from that. He’s been on the market for a month and a half and only had two viewings.'”

From Mises.org. “First Republic, Signature Bank, and Silicon Valley Bank have all failed, and that’s not the only thing they have in common. Western Alliance Bank’s Ken Vecchione was jealous of these three large regional banks. The chief executive admitted to the New York Times, ‘We were, I have to admit, a bit envious of them.'”

“Obviously Vecchione was and likely still is oblivious to problems at his bank and others. He doesn’t understand the fragility of fractional reserve banking. ‘We certainly didn’t see this coming,’ Mr. Vecchione told the Times. Murray Rothbard saw it coming decades ago, writing, ‘Banks are ‘inherently bankrupt’ because they issue far more warehouse receipts to cash (nowadays in the form of ‘deposits’ redeemable in cash on demand) than they have cash available. Hence, they are always vulnerable to bank runs.'”

“Western Alliance’s chief financial officer Dale Gibbons and Mr. Vecchione were described as ‘gape-mouthed’ by the Times as long-standing clients decided to withdraw deposits and ask questions later. ‘These runs are not like any other business failures, because they simply consist of depositors claiming their own rightful property, which the banks do not have,’ wrote Rothbard. ‘The entire system of fractional-reserve banking, therefore, is built on deceit, a deceit connived by the legal system,’ Rothbard explained. Perhaps that’s why there is a banking crisis every ten to twenty years. The system must be propped up by an increasing number of schemes that can be described as government force.”

“There is no mention of the Federal Home Loan Bank (FHLB) in Rothbard’s book The Mystery of Banking. Created in the Great Depression, the FHLB was created to grease the wheels for financial institutions to make home loans. Now, the $1.5 trillion government behemoth is a go-to source for illiquid banks to obtain funding. According to Bloomberg, Silicon Valley Bank held $15 billion from an FHLB at the end of 2022; Signature Bank had $11 billion; and by this April, First Republic Bank ended up with more than $28 billion from FHLB. All three banks collapsed.”

“FHLB didn’t take a loss with these failures because as Bloomberg writer Heather Perlberg explains, ‘[The FHLBs] have a so-called super lien on the money they lend, putting them at the front of the line to get repaid if a bank collapses. The FHLBs note that any secured lender would take priority in the event of a bank failure.’ ‘You can look at who they are lending to and see it’s not because they’re doing a good job screening for bank quality’ said Kathryn Judge, a Columbia Law School professor who focuses on financial regulation. ‘It’s a byproduct of the fact there’s a mechanism in place to protect their interests.'”

“Bloomberg found two former long-time FHLB employees who said they never saw a loan turned down, no matter how poor the financial health of an institution. According to them it’s all about the collateral—US Treasuries, home loans, mortgage-backed securities, and other real estate assets. My experience is they would not lend against land loans or loans involving petroleum use, but little due diligence was done. Standard and Poor’s and Moody’s have said their credit ratings for the FHLB system would be several notches lower if not for the government’s presumed backing. According to Bloomberg, the CEO of the Council of Federal Home Loan Banks Ryan Donovan said, ‘The implied guarantee is also not something that’s conveyed by the government. It’s something the market perceives that we’re a safe place, that our debt that we issue is solid.'”

“Bloomberg’s Perlberg explains, ‘The FHLBs don’t track how banks use their financing. The lifelines can help troubled banks avoid fire sales of assets. But if a firm’s balance sheet is in bad shape, collateralized lending may do little more than postpone the bank’s inevitable demise, potentially letting losses worsen. The Federal Deposit Insurance Corp. is left to clean up the mess.’ ‘That delay makes a difference,’ said Judge, the law professor. ‘Fresh liquidity allows them to limp on longer rather than evaluate their own viability.’ Yes, that’s the idea.”

“The system’s total loans to members surged 28 percent to $1.04 trillion in the first quarter, beating a record set in the third quarter of 2008. In March the Federal Reserve created another facility to backstop the nation’s banks called the Bank Term Funding Program (BTFP). BTFP provides loans with maturities of up to a year to banks, savings associations, credit unions, and other eligible depository institutions. Banks can borrow at 100 percent of the par value of the US Treasuries and mortgage-backed securities among other securities. ‘This will allow banks to fund potential deposit outflows without crystalizing losses on depreciated securities,’ Goldman Sachs wrote the Sunday after the Fed announced the program.”

“‘Because the pledged collateral is going to be valued at par, this new facility will ensure that other banks with similarly impaired hold-to-maturity portfolios will be able to easily leverage them to access liquidity, rather than have to realize significant losses and flood the markets with paper,’ according to Jefferies economists in a Reuters article.”

“Remember, the BTFP was just created in March. On June 14, aggregate BTFP borrowings reached just under $102 billion. Of course, we can’t forget about the Fed. But, while ‘the members certainly could go to the Fed, the challenge is there is a reputation risk associated with that. In talking with member institutions, they feel that the stigma is real.’ All that keeps bank depositors from pulling their money out is reputation, and more than a little help from bankers’ growing list of friends, old and new.”

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This Post Has 121 Comments

    1. Wall Street Journal — The Supermarket Aisle Where Prices Are Still Soaring (7/7/2023):

      “If you’re planning a cookout this summer, the chicken breasts and pork chops are finally a little cheaper. It’s the ketchup, potato chips and crackers that will cost you.

      The laws of supply and demand have tamed prices for goods such as meat, eggs, produce and gas. The Federal Reserve’s 10 rate hikes in the past 15 months have also helped bring some prices closer to normal levels.

      Prices, though, are stubbornly rising for what retail and food executives refer to as “the center store.”

      The middle of the store stocks items that can sit on shelves without going bad quickly, from cereal to cookies, paper towels to dish soap—all essentials that consumers can’t really put off buying.

      Since the beginning of 2019, prices for goods sold in the middle of the grocery store have risen by nearly a third, while products on the perimeter have increased roughly 22%, according to Circana Group, a market research firm.”

      https://archive.fo/7CH8g

      22 percent?

      Fuji apples are $1.99 a pound. Broccoli is $2.29 a pound. Store brand milk is $2.49 a half gallon. I don’t eat cereal and I buy cookies from the manager’s special markdown shelves. Must be one of those “we’re all in this together” kind of things.

        1. I used to be able to buy cantaloupes 3 for $1. Granted this was in the 90,s but saw them the other day at $2.99 EACH. yeouch

      2. The other day the guy in front of me was getting checked out and they put 2 honey crisp apples on the thing. 4.24

        I actually said something “wait is that right? two apples, $4.24”
        yep
        4 dollars for 2 freaking apples in a big grocery store.

  2. Tides isn’t alone. A number of small-time investors, lured by the cheap money of yesteryear, employed the same value-add strategy. So-called syndicators pooled money from well-heeled yet largely unsophisticated investors, promising outsized returns on multifamily deals. The premise was that rent increases, made possible by renovations and constrained supply, would boost revenue. But the music has stopped, insiders say’

    This article is worth reading in full. Oh they got yer value add, eviction strategies, anything to squeeze money out of people using borrowed money!

    ‘Rental housing is supposed to be a good investment in the event of high inflation because rents can be raised’

    Did they serve you a steak when they pitched that at you?

    1. ‘So-called syndicators pooled money from well-heeled yet largely unsophisticated investors, promising outsized returns’

      And here come the lawyers…

      1. Just recently became enlightened on what a real estate syndicator is. And I can sum it up in two words – con man.

      2. >>And here come the lawyers…

        “The good news for syndicators is that sales will be possible. Multifamily fundamentals are still solid, meaning investors will be waiting to pick up distressed assets. Also, most of the loans backing syndicator’s acquisitions are non-recourse, sources said, meaning lenders can’t come after a borrower’s personal assets — just the property.”

        The financial food chain is alive and well, and eventually these multi-family deals will pencil out.

    2. So-called syndicators pooled money from well-heeled yet largely unsophisticated investors, promising outsized returns on multifamily deals.

      Greedy & stupid is no way to go through life, son.

      1. With 5% bonds and CDs common these days investors can afford to wait for a return to fundamentals.

  3. ‘But Ortega de Ceballos and Ávila are looking for more than just shelter. Sure, they want a home to live in now. But they also want to one day give their children the financial footing they themselves never had. The key is more than just hard work and a savings account with a laughably low interest rate. The key is a house, the kind of investment that can grow over time’

    So let me get this straight: these people can get up at 3AM, work away from home for 4 days a week. And their husbands and other relatives do the same. But all that work will just go to banks and the REIC. The whole generations ‘wealth’ will come from a gotdam shack in Victorville. Wa could go wrong?

    1. First of all, California City?!! Look it up. It resides in the most god forsaken portion of the Mojave Desert. And Victorville? A little research and they would’ve discovered that in the last bust they were bulldozing entire housing tracts out there because it was cheaper than paying the fees and taxes on acres and acres of empty unsold homes. Yeah….nothing could possible go wrong there…

        1. “A Texas bank is about done demolishing 16 new and partially built houses acquired in Southern California through foreclosure, figuring it was better to knock them down than to try selling them in the depressed housing market.“

          The banks did this in Alaska to prevent a larger devaluation of their occupied RE portfolio.

    2. California City is not really a “city”. It is a ghost town–it was created in the late 1950’s by a developer. It never grew into anything because there’s nothing there. The closest highways are 10 miles away–there are no resources there (like mines or rail yards) and no businesses or jobs. The only people that live out there work at either Edwards Air Force Base or in Mojave which has aerospace companies. California City doesn’t even have a supermarket–the closest one is 20 miles away in Mojave.

      Homes are selling for $300,000+ there–this is insane. Check out Rosamond which is the next town south (80 miles from L.A.). Houses there are going for $400-500,000! Victorville is the same story. Houses in towns literally in the middle of the desert (nowhere) are selling for $300-500,000. In a rational market, nobody would even build a house in these locations.

      Lancaster is the furthest city north of L.A. where commuters into the Basin live. In 2000 homes in Lancaster/Palmdale sold in the low $100,000 range.

      Soon after, the housing bubble took off. Houses that sold in the low $100,000 range were now $200,000. Then $300,000. Prices peaked in the $500,000 range and are now falling.

      The Antelope Valley has a population of 350,000 and includes the Air Force Plant 42 which is a massive complex where the Space Shuttle and B-2 Bomber were built. Northrop/Grumman are producing the new B-21 Bomber there, and Boeing and Lockheed’s Skunk Works are also located there. So there are major companies and jobs in the AV.

      But even with homes priced in $400,000 range, it’s not sustainable in the long term.

  4. ‘A young person wanting to buy the exact home their parents bought 22 years ago will need to pay 4.4 times as much’

    The same fooking shack, except it’s 22 years older.

    1. And, quite likely, a home that hasn’t been properly maintained because there was no money left over to do so. It becomes evident driving through these housing tracts that are are approaching 15 to 20 years old that people can’t afford to maintain them.

    2. “The same fooking shack, except it’s 22 years older.”

      A fair portion may have been ingested by termites over the course of 22 years.

    3. The same fooking shack, except it’s 22 years older.

      What I am struggling to understand is how the FED is allowed to do this to society with almost no pushback whatsoever. Hyperinflating shelter prices, as well as untold other necessities of life, is morally wrong.

    4. good thing wages have gone up 4.4 times too
      wait, wut? they have barely moved at all? But how can that be? (/sarc)

  5. ‘Policy makers must be realistic about what they can achieve. High inflation and financial instability did not emerge by accident. They were the result of a long journey, reflecting in no small part an overly ambitious view of monetary policy’s ability to hit a small inflation target and a more general belief that macroeconomic policy could support growth indefinitely, without stoking inflation’

    Printing money doesn’t ‘support growth’ or any of the other central bank baloney’s. It simply creates more claims against existing assets. If this system were run by saints and nuns it would still eventually collapse. But it’s run by globalist scum and REIC dogs.

  6. ‘[The FHLBs] have a so-called super lien on the money they lend, putting them at the front of the line to get repaid if a bank collapses. The FHLBs note that any secured lender would take priority in the event of a bank failure.’ ‘You can look at who they are lending to and see it’s not because they’re doing a good job screening for bank quality’ said Kathryn Judge, a Columbia Law School professor who focuses on financial regulation. ‘It’s a byproduct of the fact there’s a mechanism in place to protect their interests’

    ‘Bloomberg found two former long-time FHLB employees who said they never saw a loan turned down, no matter how poor the financial health of an institution’

    That’s some rock solid lending right there! And that’s lending to the lenders. You can imagine how subprime their customers are.

    1. We are living in the era of the money-printers, so fog-a-mirror finance has permeated every nook and cranny of society. “Buy now, pay later” for Chinese made trinkets sold online. This stuff is obscene.

      I have an acquaintance who still owes me a very small portion for some work I did – $125. They are driving a brand new diesel 4×4. When I saw them they apologized and didn’t have all the money. $125 won’t even fill that truck up. Wonder how much debt they’re carrying…..

      1. “Wonder how much debt they’re carrying”

        I was still working as an electrical apprentice when I overheard my foreman on the phone with the bank trying to refinance his truck loan. Who does this? Why don’t you just pay it off? Oh, wait. You can’t…

  7. ‘The implied guarantee is also not something that’s conveyed by the government. It’s something the market perceives that we’re a safe place, that our debt that we issue is solid’

    And steaks were bought fer everybody in attendance!

  8. New York City.

    “New York City health officials’ plan for dealing with skyrocketing overdoses of the so-called “zombie drug” xylazine includes encouraging its use under medical supervision at overdose prevention centers — without any mention of how to get unhooked from the flesh-rotting poison, stunned critics told The Post.

    The agency recommends anyone who believes their drugs contain xylazine “avoid” using them, “especially alone or in a place where it might be dangerous to be unconscious for a long time.”

    But its tips for reducing “risk of harm” for “tranq” users are a far cry from former First Lady Nancy Reagan’s famous “Just Say No” anti-drug campaign.

    “Bring them to an overdose prevention center to use under supervision,” according to the agency.

    Nowhere does it suggest quitting or treatment.”

    https://nypost.com/2023/07/08/nyc-pushes-tranq-junkies-to-use-zombie-drug-under-supervision/

    Nothing says “progressive” and “compassionate” more than addicts’ bodies covered in pus oozing sores.

    1. Re-post of a related article.

      Washington Post — Once hailed for decriminalizing drugs, Portugal is now having doubts (7/7/2023):

      “Portugal decriminalized all drug use, including marijuana, cocaine and heroin, in an experiment that inspired similar efforts elsewhere, but now police are blaming a spike in the number of people who use drugs for a rise in crime. In one neighborhood, state-issued paraphernalia — powder-blue syringe caps, packets of citric acid for diluting heroin — litters sidewalks outside an elementary school.

      Portugal became a model for progressive jurisdictions around the world embracing drug decriminalization, such as the state of Oregon, but now there is talk of fatigue. Police are less motivated to register people who misuse drugs and there are year-long waits for state-funded rehabilitation treatment even as the number of people seeking help has fallen dramatically. The return in force of visible urban drug use, meanwhile, is leading the mayor and others here to ask an explosive question: Is it time to reconsider this country’s globally hailed drug model?

      “These days in Portugal, it is forbidden to smoke tobacco outside a school or a hospital. It is forbidden to advertise ice cream and sugar candies. And yet, it is allowed for [people] to be there, injecting drugs,” said Rui Moreira, Porto’s mayor. “We’ve normalized it.”

      Elsewhere in the world, places implementing decriminalization are confronting challenges of their own. In Oregon — where the policy took effect in early 2021 openly citing Portugal as a model — attempts to funnel people with addiction from jail to rehabilitation have had a rough start. Police have shown little interest in handing out toothless citations for drug use, grants for treatment have lagged, and extremely few people are seeking voluntary rehabilitation. Meanwhile, overdoses this year in Portland, the state’s largest city, have surged 46 percent.

      “When you first back off enforcement, there are not many people walking over the line that you’ve removed. And the public think it’s working really well,” said Keith Humphreys, former senior drug policy adviser in the Obama administration and a professor of psychiatry at Stanford University. “Then word gets out that there’s an open market, limits to penalties, and you start drawing in more drug users. Then you’ve got a more stable drug culture, and, frankly, it doesn’t look as good anymore.”

      https://archive.li/JQDta

      46 percent is that a lot?

      I witnessed the aftermath of a bathroom overdose in the Glendale Home Depot a few months ago. They had what appeared to be a recently Narcan revived junkie strapped in a stretcher with a cluster of police, fire department, EMT’s and social workers around him (rudely blocking the tool I needed to buy). All of which paid for with taxpayer money. And that junkie will be back on the streets the next day doing it again.

      Buy a house in one of these cities, and this is what your property taxes are paying for.

    1. In the most heavily armed country on the planet, the J6 “insurrectionists” showed up unarmed. What a crock of sh*t the Official Narrative is.

    2. Watched the whole interview with Russel Brand today. Found it interesting/worth watching in full

  10. ‘It’s definitely affecting the market,’ said Realtor Chris Zhu of Coldwell Banker Realty of Hawaii. ‘It reduces the buyer’s purchasing power. The higher interest rate lowers the loan amount they can get. The less they can borrow, the less they can afford. It will drive the prices down.’”

    Thank you for that succinct observation, Captain Obvious.

    1. ‘The less they can borrow, the less they can afford. It will drive the prices down.’

      Pop goes the bubble.

    2. A relitter® telling the truth is something to be celebrated, since it happens about once per year.

  11. I’m struck by the Hawaii paragraph. It is rarely given any airtime, yet is the most unaffordable place in the US. People are having to pay top dollar on mostly hospitality wages, and many of the homes are substandard structures. Yet, it if you point this out to people who live there, they don’t want to know. That may in part be due to an opaque market with little data on housing available to the public. While a homelessness/housing crisis is recognized, profit is seen as the fix. For example, one solution is to introduce many more leasehold properties, an archaic system dating back to propertied classes maintaining their grip on ownership. Developers build luxury homes and only pay lip service to affordable quotas. They also then dump sold homes all at once on the MLS distorting comps in their favor.

    1. “People are having to pay top dollar on mostly hospitality wages, and many of the homes are substandard structures.”

      Lots of them ate full of bugs.

    2. Hard to believe this is possible in one of the few places where they actually ARE making more land. SMH.

      On a serious note, Hawaii serves as a really good example of this:

      “If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.”

      The game will continue until enough people decide that it wont.

  12. ‘A young person wanting to buy the exact home their parents bought 22 years ago will need to pay 4.4 times as much,’

    That’s an average annual price inflation rate of
    4.4^(1/22) – 1 = 7% for one of the major components of household expenditures. It’s quite a bit higher than the Fed’s preferred 2% inflation rate.

    But it’s different in Hawaii, because everyone wants to live there.

  13. Science Magazine — Rare link between coronavirus vaccines and Long Covid–like illness starts to gain acceptance (7/3/2023):

    “like all vaccines, those targeting the coronavirus can cause side effects in some people, including rare cases of abnormal blood clotting and heart inflammation. Another apparent complication, a debilitating suite of symptoms that resembles Long Covid, has been more elusive, its link to vaccination unclear and its diagnostic features ill-defined. But in recent months, what some call Long Vax has gained wider acceptance among doctors and scientists, and some are now working to better understand and treat its symptoms.

    “You see one or two patients and you wonder if it’s a coincidence,” says Anne Louise Oaklander, a neurologist and researcher at Harvard Medical School. “But by the time you’ve seen 10, 20,” she continues, trailing off. “Where there’s smoke, there’s fire.”

    Cases seem very rare—far less common than Long Covid after infection. Symptoms can include persistent headaches, severe fatigue, and abnormal heart rate and blood pressure. They appear hours, days, or weeks after vaccination and are difficult to study. But researchers and clinicians are increasingly finding some alignment with known medical conditions. One is small fiber neuropathy, a condition Oaklander studies, in which nerve damage can cause tingling or electric shock–like sensations, burning pain, and blood circulation problems. The second is a more nebulous syndrome, with symptoms sometimes triggered by small fiber neuropathy, called postural orthostatic tachycardia syndrome (POTS). It can involve muscle weakness, swings in heart rate and blood pressure, fatigue, and brain fog.

    “We can’t rule out rare cases,” says Peter Marks, director of the U.S. Food and Drug Administration’s Center for Biologics Evaluation and Research, which oversees vaccines. “If a provider has somebody in front of them, they may want to take seriously the concept [of] a vaccine side effect,” he says. But Marks also worries about “the sensational headline” that could mislead the public, and he emphasizes that vaccine benefits far outweigh any risks.

    https://archive.li/90UA6

    Sensational headline?

    Enjoy your turbo-cancer, vaxxtards. Purebloods will be laughing on your graves.

    1. Do you really think we are going to forget this?

      Gallup — American Public Opinion and Vaccination Requirements (9/3/2021):

      “Majorities of Americans now favor requiring people to show proof of COVID-19 vaccination to travel by airplane, stay in a hotel, attend events with large crowds, dine in a restaurant and go to their office or work site.

      The most recent update of these questions is from an Aug. 16-22 survey included in Gallup’s ongoing COVID-19 probability-based web panel.”

      From the chart in the article, Democrat Party favor poison injection requirements for the following activities:

      Travel by airplane 92%
      Stay in a hotel 83%
      Attend events with large crowds 90%
      Dine in a restaurant 85%
      Go to office or work site 88%

      https://news.gallup.com/poll/354506/update-american-public-opinion-vaccination-requirements.aspx

      NO AMNESTY

      1. This shows how easily the majority can be tricked and fooled.

        Jabbed and boosted relatives who nagged, begged and even threatened me to get jabbed are very silent now. Some are now even quietly acknowledging that the jab is dangerous.

        1. The year 2021, especially the second half, was the darkest time in this country in my lifetime. There’s too many examples to list all of them.

          How quickly it went from get injected and get a free donut to get injected or GET FIRED FROM YOUR JOB is worst of it, with the unelected occupant wishing a “winter of severe illness and death” on the Purebloods.

          There can NEVER be an amnesty for this.

          That 2m20s BitChute video compilation that our blog host first posted a few weeks ago is so bad I can’t watch it again.

          Housing Wizard keeps posting that many of the articles, tweets, etc from this time period are vanishing. Except that they’re not. They’re all archived, as are the names of their authors / creators.

          No amnesty. No forgiveness. Never.

          1. That 2m20s BitChute video compilation that our blog host first posted a few weeks ago is so bad I can’t watch it again.

            I couldn’t watch it when Ben posted it. I only did after your repost. Like the WTC falling, I can’t/won’t watch it again. PTSD for sure.

    2. Yahoo News — NYT reporter slammed for calling Obama’s 60th birthday party low-risk due to ‘sophisticated, vaccinated crowd’ (8/9/2021):

      “During a segment discussing the controversy surrounding Obama’s much-criticized Martha’s Vineyard celebration, Karni insisted that although the former POTUS was spotted not wearing a mask the guests overall were “following all the safety precautions.”

      A NYT reporter on CNN justifying Obama’s huge maskless birthday bash because he only invited “a sophisticated, vaccinated crowd” is about as emblematic of liberal discourse as it gets.

      ‘”This has really been overblown, they’re following all the safety precautions, people are going to sporting events that are bigger than this, this is going to be safe, this is a sophisticated, vaccinated crowd and this is just about optics, it’s not about safety,” Karni stated in the clip.

      https://news.yahoo.com/nyt-reporter-slammed-calling-obama-220842756.html

      NO AMNESTY

    3. Cases seem very rare—far less common than Long Covid after infection.

      Where are the actual numbers to go along with these characterizations? Science is purportedly a prestigious scientific publication. COVID did us a favor by exposing many scientific publications as Big Pharma propaganda.

  14. “The median price for single-family home resales stabilized in June but remained above seven figures at $1,050, 000.”

    What does ‘stabilized’ mean when prices are dropping like a rock?

    “That was down 4.5 % from $1.1 million a year ago and off 5.3 % from $1, 109, 000 in May, according to the Honolulu Board of Realtors.”

    Annualized one month rate of decline is 1 – (1050/1109)^12 = 48%.

    Enjoy your falling knives, investors!

    1. I call on all HBB members to join me at noon MST to adjourn to our back decks and stamp our little feet in solidarity with reamed FBs.

    2. What does ‘stabilized’ mean when prices are dropping like a rock?

      Don’t panic.

  15. … many house buyers in California are not aware that almost every day there are small earthquakes, that shakes wooden build houses, slowly breaking construction, plumbing, foundation of the house and if you are buying an old house, you are buying it with plenty hidden problems… for astronomical prices…

    1. That’s the entire West Coast. Try coastal Oregon. It’s beautiful, but never buy a home over 20 years old there. The word “ramshackle” comes to mind.

    2. IIRC, most Californian houses have a cracked slab, which can be the cause of many problems.

      1. I was interested in buying a house a couple of years ago until I walked around the newly painted exterior and saw that the slab has been stuccoed and painted to match the exterior walls. Very concerning, especially as the house next door had plenty of cracks in its slab. Asked the realtor why they’d stuccoed over the slab and she replied I’m sure it’s just for cosmetics.

    1. FWIW, cars in Europe have always depreciated faster than in the US. By the time a typical Eurocar is ten years old it’s in the junkyard, as the Ministry of Transportation inspects cars and gives owners long and pricey punch lists they have to fix before they can be reregistered. As the cars approach 10 years of age the car is worth less than the punch list, so off it goes to the junk yard.

      I recall that the Euro-clunkers, which are perfectly drivable without the mandatory repairs, used to be exported to the third world, but I believe that their export is now outlawed in Europe (because of warmism), which makes their net worth close to zero.

  17. My wife and I finally thought we found what we are looking for in the Pensacola area. Despite the location (crime, drugs, and homeless) the price and square footage are attractive. But then, we looked at the interior pictures. Just a few years ago, we could have bought the same house, in move-in condition, for less than the current asking price. Sellers have lost their minds.

    https://www.zillow.com/homedetails/5917-Duchess-Rd-Pensacola-FL-32503/44652053_zpid/

        1. Curb staging only.

          The live oaks are nice. My place was like this with only a tree growing through the porch.

  18. SE Portland homeowner struggling to sell her home due to a growing ‘homeless campsite’
    KGW News
    Jun 27, 2023
    Susie, like many other Portlanders, wants out. She’s been trying to sell her home for months now and believes homeless camps in the area are to blame.

    https://www.youtube.com/watch?v=W09p9tSAbnk

    2:42. Here’s the print version:

    https://www.kgw.com/article/news/local/homeless/se-portland-home-for-sale-homeless-camp-sell/283-d99cd985-fdc8-492b-9569-2c44e636963e

    A “for sale” sign hangs outside a modest home in Southeast Portland. Across the street is a homeless camp where people struggle with their addictions to fentanyl.

    Some Portlanders are selling their homes in an effort to get away from the dual crisis of drugs and homelessness. They say it’s becoming more visible throughout parts of Southeast Portland.

    “There’re camps on every corner and things have just gotten out of hand since COVID,” said Susie, whose home has been on the market for three months. It’s located off Southeast 76th Avenue and Foster Road.

    “Since June 1, there’s been a camp on my corner, so the showings have been canceled,” Susie said. “Some don’t want to get out of their car or even come to the door.”

    Susie said she even dropped the price by $15,000.

    “How do I feel? Sad. Sad for the whole city, sad for the neighborhoods, sad that this is going on and it feels like no one’s even making a difference or doing anything,” she said.

    1. “He’s been homeless in Portland for five years and struggles with an addiction to fentanyl.”

      Precursor chemicals made in China, then cooked up into fentanyl by the Mexican cartels and shipped across our open border.

      They’re allowing this on purpose.

    2. If comments on video are correct she wants $400K for that shack. I wonder if she has much equity.

  19. Clown World.

    Not posting the link, but the Daily Mail has a piece (published today, still on the front page of the website) reporting that health professionals are urged to call the biological female anatomy that babies come from ‘bonus holes’ to avoid offending trans or non-binary patients.

    So much TheScience™ happening here.

    And see also: the collapse of ancient Rome.

    1. Sure, let’s not offend a small percentage (not sure what the number is but I’d be shocked if it were more than 1%) and offend the far larger percentage of the population.

    2. When I read about how the Roman elite had vomitoriums so they could empty their stomachs and resume feasting at parties, I wondered how they could have fallen so low.

      Now I know how.

      1. Gibbon’s The Decline And Fall Of The Roman Empire (1776-1788) is a slog of a book to get through.

        You don’t see many new books being published detailing the extent of the depravity of Rome. Hits a little too close to home for what they’re pushing on us now…

        1. I red the book. It’s a long read with plenty details. Not sure about the vomitorium, but I know Cato the Elder was complaining a lot that the youth of those days have become too soft under the influence of Greek culture. He said something like “these guys are so soft, they eat every time they’re hungry.” Stoicism was the rule in those days.

    1. The Fed’s radical monetary experiments have gone on since 2008. At some point it seems like the long-deferred financial reckoning day is going to show up, but this sh*t show has gone on a lot longer than I ever thought possible.

      1. They’re just printing money. That’s all. Nothing technical at all. Just printing money.

    2. Markets
      DOW 33,734.88 -0.55%
      S&P 500 4,398.95 -0.29%
      NASDAQ 13,660.72 -0.13%

      Fear & Greed Index
      Why isn’t the housing market behaving the way it’s supposed to?
      By Elisabeth Buchwald, CNN
      Updated 2:50 PM EDT, Sat July 8, 2023
      Nightcap 062223 Housing Clip Thumb
      Want to buy a home? Here’s what to do now

      New York CNN —

      When the Federal Reserve kicked off its rate-hiking campaign in March last year, the housing market responded predictably — mortgage rates climbed, leading to eventual declines in home prices.

      But after 10 rate hikes, the housing market — traditionally one of the most interest-rate-sensitive areas of the economy — is anything but predictable.

      “It’s creating a lot of confusion,” said Orphe Divounguy, a senior economist at Zillow.

      The Fed has raised its benchmark interest rate by five percentage points since last March to help lower inflation, which was at a 40-year high.

      When the Fed raises interest rates, that increases the rates that banks charge each other for overnight loans. Banks and other financial institutions pass on the higher cost of borrowing to consumers by charging them higher rates on mortgages, credit cards, auto loans and other loans. In theory, consumers respond to this by cutting back on spending, which means businesses can’t raise prices as much as they had.

      Before the Fed announced its first rate hike on March 16, 2022, average 30-year fixed mortgage rates hadn’t gone above 4% since May 2019, according to data from Freddie Mac. Rates began to increase in anticipation of the Fed’s decision to raise rates and climbed even higher to 4.42% immediately after the first hike. Mortgage rates then continued to climb in tandem with the Fed’s hikes until November, when mortgage rates peaked at 7.08%, despite four subsequent rate hikes since then.

      Mortgage rates have been moving higher recently, after weeks of declines. For the week ending July 6, mortgage rates hit 6.81%, the highest level for the year so far, Freddie Mac reported on Thursday.

      But the median price of an existing home in May was $396,100, down from 3.1% compared to a year prior, according to data from the National Association of Realtors. However, median prices were up 2.6% for the month, marking the fourth-straight monthly increase. The median price of a new home was $416,300 in May. That’s a 7.6% decline from last May, but a 3.5% increase on a monthly basis, according to US Census Bureau data.
      …
      https://www.cnn.com/2023/07/08/business/mortgage-rates-home-prices/index.html

      1. Real Estate
        Mortgage rate soars to 7.22% after strong economic data
        Published Thu, Jul 6 2023 12:53 PM EDT
        Updated Thu, Jul 6 2023 2:07 PM EDT
        Diana Olick

        Key Points

        – The average rate on the popular 30-year fixed mortgage hit 7.22%, according to Mortgage News Daily.

        – That’s the highest point since early November.

        – For a homebuyer taking out a $400,000 mortgage, the monthly payment of principal and interest rose to $2,720 from $2,637 in just a week.
        …
        https://www.cnbc.com/2023/07/06/mortgage-rate-soars-after-strong-economic-data.html

        1. “Mortgage rate soars to 7.22% after strong economic data”

          So much for the false hypothesis that mortgage rates peaked last November.

          The REIC bullshit machine is certainly stumbling a lot as of late!

          2. “Pull up a looksee at a $700,000 loan at 7% amortization schedule for a reality check.”

            — $4,657 a month

            — $55,884 a year

            — 30% of a $186,000 income

            — $700,000 is way below the price of homes in nicer areas of California

            Nobody except the very wealthy can afford that kind of monthly payment, and those folks are already housed.

      2. “In theory, consumers respond to this by cutting back on spending, which means businesses can’t raise prices as much as they had.”

        So, we’re counting on the people who’ve spent themselves into unrecoverable debt to…stop?!?!

        1. If the plastic is maxed out they may have no choice but to spend less. Or get a second job.

    3. Will labor data send mortgage rates to 8%?
      The honey badger labor market is putting up a good fight, but it has limits
      July 7, 2023, 12:33 pm By Logan Mohtashami

      The 10-year yield and mortgage rates have been rising close to the 2023 high as some labor data shows that the honey badger labor market is still growing. To make things even more complicated, the spreads between the 30-year mortgage rate and the 10-year yield keep getting wider. The question is: will the labor data push mortgage rates to 8%?
      …
      https://www.housingwire.com/articles/will-labor-data-send-mortgage-rates-to-8/

  22. Re: The task of central banks is clear: They must restore price stability.

    What exactly IS price “stability” and how is it restored?

  23. Primary reasons for civilization collaspe.
    –Invasion
    –Natural Disasters
    –Famine and drought
    –poison – like lead containers
    –relocation based on religion
    –Heat, or cold
    –flooding
    –disease
    –water/ food poisoning
    – political overthrow

    any others?

      1. Thank you for adding moral decadence, I knew I was missing something. Its a very important element of fall of civilizations.

      1. Currency debasement would be a big factor in civilization collaspe, no question about it.
        I though of another one. Artificial Intelligence, and Robot replacement as a possible factor in collaspe of civilization.

        1. Oh, I forgot mass delusion, as a possible factor in civilization collaspe, or some call it fake news.
          Wouldn’t factors that caused humans to do counterproductive acts, be a factor? Mass brainwashing could be a factor in collaspe of a civilizations.
          And I would add Climate Change fraud, bio-weapons , necular war fallout as factors that could collaspe civilizations. Add blocking out the Sun by Bill Gates, which could collaspe civilizations. . incorrect technology or science by reckless psychopaths.

    3. Fiat Money and Excessive Debt – perhaps not civilization collapse, but you better get a big dog in case you need to eat him. Of course, if things get that bad, he’s already thinking about eating you.

    4. — drug addiction rendering large swaths of society dependent and disfunctional

      — a hardened and ensconsed criminal underclass preying on productive society and tolerated by authorities

      — abandonment of religion or other social bonding mechanisms that foster mutual concern and shared values

      — prices of essentials, like food and housing, outstripping ordinary citizens’ means to pay for them

  25. ‘Sure, they want a home to live in now. But they also want to one day give their children the financial footing they themselves never had. The key is more than just hard work and a savings account with a laughably low interest rate’

    This is kinda interesting word craft. When I started this blog I would regularly see CD’s in the 6’s. They vanished for many years didn’t they? And millions of people start looking around for ‘investments’ and the property brothers are smacking that drywall on the tee vee and money is free! says Diane. So who was responsible for this savings yield vanishing act? Central banks. They just stole the interest of a near generation and are flat footed now the bill has come due. Low returns juiced speculation = meet moral hazard – again!

    ‘The key is a house, the kind of investment that can grow over time. ‘Traditionally, owning a home has been the way that most families accumulate wealth…That has happened for many years, and that was in some ways a manifestation of the American dream’

    manifestation
    măn″ə-fĕ-stā′shən
    noun

    The act of manifesting. The state of being manifested. An indication of the existence, reality, or presence of something.

    1. Language. Language and linguistics. All designed to manipulate and control. Start noticing the patterns then follow the money and you’ll find the answers…

  26. ‘I’ve got clients trying to find a buyer and they’re struggling at the moment. They’ve have had to lower their expectations. I think it’s the knock-on effect of interest rates and not knowing where they’re going to be. I had a client lower their price yesterday and another this morning. This chap has had to lower it by £20,000, from £385,000 to £365,000, and he might take it down another £5,000 from that. He’s been on the market for a month and a half and only had two viewings’

    Yer showing weakness Alan. Don’t give it away!

  27. Ignore empirical regularities at your own risk. The AI bots who are competing with you will not.

    1. The Inverted Yield Curve and Next US Recession
      Richard M. Salsman
      – July 8, 2023 Reading Time: 5 minutes

      No better, more reliable forecaster of the US business cycle has existed in recent decades than the initial shape of the US Treasury yield curve, and since last October it’s been signaling another US recession that’s likely to begin in 2024. This is important, because recessions have been associated with bear markets in stocks and bull markets in bonds. Moreover, if a recession arrives early in 2024 it may affect the US elections in November.

      Typically, the yield curve is upward sloping (longer-term rates are higher than shorter-term rates) and precedes economic expansions; but an inverted curve, which occurs more rarely (only eight times over the last six decades), signals a recession with a lag of roughly 10-13 months. Counting from October 2022, a contraction will probably start in early 2024.

      Figure One depicts the yield curve as it stands today (inverted), and as it stood in May 2021 (upward-sloping) before the Fed embarked on a series of rate hikes that brought its overnight Fed Funds rate to above 5 percent. Longer and medium-term interest rates have also increased over the past two years, but not by as much as short-term rates. History reveals that it doesn’t matter how or why the yield curve inverts; as long as it does so, it signals trouble ahead.

      Since the late 1960s US yield-curve inversions have predicted all eight US recessions, beginning roughly a year in advance (Table One). The yield curve’s forecasting record since 1968 has been perfect: Not only has each inversion been followed by a recession, but no recession has occurred in the absence of a prior yield curve inversion. There’s even a strong correlation between the initial duration and depth of the curve inversion and the subsequent length and depth of the recession. The current inversion will likely be long and deep. The Fed isn’t likely to materially cut its policy rate over the balance of 2023, which means not only that the next US recession will be relatively more severe, but it may also extend into 2025.
      …
      https://www.aier.org/article/the-inverted-yield-curve-and-next-us-recession/

      1. “But eight for eight since ‘68 is better than just good – it’s great.”

        Thanks for this piece, concise and hits home!

  28. Yahoo
    Benzinga
    Millennials Face Record $4 Trillion Debt Crisis — They’re Struggling to Build Wealth, Homeownership and Retirement Savings
    Jeannine Mancini
    Fri, July 7, 2023 at 8:09 AM PDT·4 min read

    A Wall Street Journal analysis of Federal Reserve data reveals a concerning financial situation for people ages 30 to 39, which constitute the majority of the millennial generation.

    The demographic accumulated nearly $4 trillion in debt during the fourth quarter of 2022, reflecting a substantial $140 billion rise from the preceding quarter. The surge represents a 27% increase since late 2019, constituting the most significant upswing in debt accumulation since the 2008 financial crisis.

    Contrary to popular belief, the escalating debt among millennials in their 30s cannot be solely attributed to discretionary spending on luxuries. While the rising costs of certain consumer goods, impacted by inflation, have played a role, it is not the sole driver of their financial predicament. The mounting debt is indicative of broader economic challenges faced by this generation.
    …
    https://finance.yahoo.com/news/millennials-face-record-4-trillion-150913206.html

  29. Ok, I’m adding “false ideology “to list of collaspe of countries or civilizations.
    A example would be Communism, where numerous countries collapsed applying such ideology.

    1. numerous countries collapsed applying such ideology.

      Saying they were applying an ideology. Many were made rich and many were crushed in poverty, or just killed.

  30. ‘The key is a house, the kind of investment that can grow over time. ‘Traditionally, owning a home has been the way that most families accumulate wealth,’’

    When did owning a home become a pyramid game?

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