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A Growing List Of Things Central Bankers Underestimated Over The Past Few Years

A report from the Advocate in Louisiana. “When David LeBoeuf listed his Gentilly house for sale in May, he thought the newly renovated, two-bedroom cottage would move quickly with a price tag of $315,000, or roughly $190 per square foot. But three months later, LeBoeuf has lowered his asking price to $285,000 and still hasn’t gotten a single offer. Homeowners who might otherwise be trying to sell are taking down their for-sale signs for now, and when possible, are offering their properties for lease instead. LeBoeuf, who bought his Gentilly house as an investment property to begin with, says he’ll take that route if he doesn’t get an offer close to his asking price. ‘For me, it might make more sense to rent it and try to sell for the original asking price later,’ he said. ‘Because right now, it’s drowning me.'”

“LeBoeuf’s experience is not unique midway through 2023, which is shaping up to be the worst year for residential real estate in New Orleans in more than a decade. After gradually cooling throughout 2022, the COVID-era housing boom that launched bidding wars among buyers and fostered unrealistic expectations among sellers has come to a screeching halt. ‘It’s very frustrating to go from getting multiple offers within hours of listing a house to sitting on the market for 60, 90, 120 days,’ said LeBoeuf’s real estate agent. ‘And you can’t bring the price down low enough to even get an offer because the buyer pool has been cut by two-thirds.'”

“‘Sellers are freaking out a little bit because everybody has a short memory and all they know is what their friends told them about how fast their homes sold last year,’ said Scott Brannon, a Realtor with Latter and Blum. ‘But, really, we’re back where we were before COVID.'”

Summit Daily in Colorado. “Summit County’s housing market has seen a significant decline in real estate transactions compared to the same time in 2022. For those on a fixed rate who purchased their homes before the interest rate spike, they are now experiencing what real estate professionals call golden handcuffs. In some cases, it can mean doubling of monthly payments for homeowners, said Dishon Lutz, president for the Summit Association of Realtors. ‘I would say our market is not very fluid. People are feeling very stuck,’ said Leah Canfield, a broker associate for Coldwell Banker Mountain Properties in Breckenridge. ‘Being able to have fluid movement without a lot of friction I think is the sign of a healthy market. And right now we’re kind of in a stagnant market because of those factors.'”

“Paired with interest rates, Canfield said another reason for the decline in transactions and increase in days on market could be local short-term rental regulations. In the past two years, limits on the amount of properties that can hold a short-term rental license have been enacted. Canfield said she’s seen more home buyers struggling to sell in Zone 1 compared to Zone 3. ‘If you cannot get a short-term rental license, the property is seeing more of a decrease in its value and having a harder time bouncing back from the price softening we’re seeing,’ Canfield said. ‘We’re seeing that already and I expect that to be true, at least over the short-term.’ As properties remain on the market longer, it’s typical for prices to inevitably drop.”

Candy’s Dirt in Texas. “We’ve been eagerly awaiting Goose, an energy-efficient housing development in Lake Highlands from StoryBuilt, but the project may be on hold. Local outlets are reporting that management changes, employee furloughs, and financial concerns took StoryBuilt, formerly known as PSW Homes, and its Goose development at Walnut Hill Lane and White Rock Trail to a grinding halt. Attempts to reach StoryBuilt’s Austin-based public relations office Thursday, but the number listed on the company website was no longer in service. According to The Real Deal‘s report, StoryBuilt was in the midst of a ‘financial meltdown.’ The company’s co-founder, Anthony Siele, addressed the matter in a letter to investors. ‘As you are aware, StoryBuilt has recently struggled with focused growth, reporting/financial controls, and liquidity,’ Siela wrote. ‘This has materially affected our performance as a business and our partners.'”

The Union Tribune in California. “Demand for San Diego County homes, affected by rising interest rates, hasn’t been this low since the Great Recession. Real estate firm Reports on Housing says demand, measured by the number of pending sales the previous 30 days, is the lowest it’s been since it started tracking in 2012. Looking at a more normal time in the market, the firm said pending sales were down 75 percent of the three-year average from 2017 to 2019. The data is point-in-time, as opposed to a monthly report, and tracked the 30 previous days from July 25.”

“Steven Thomas, founder of Reports on Housing, said pending sales are a more authentic view of demand because packed open houses don’t necessarily tell you anything. ‘We get the argument from people that there is crazy demand out there,’ he said. ‘The problem is the same buyers are writing multiple offers because they aren’t getting anything. It makes it appear that there are tons of buyers in the marketplace.’ In the first half of 2023, only 1 percent of the nation’s homes changed hands, said Redfin, which was its lowest in at least a decade. San Diego metro had one of the lowest turnover rates in the nation with seven in every 1,000 homes changing hands, close to the weakest home market in the country — San Jose — with six in every 1,000.”

The San Francisco Chronicle in California. “Earlier this month, Chinese billionaire Zhang Li finally agreed, after six months of negotiations, to be extradited to San Francisco from his London home. For a while it seemed that Zhang, who had been charged with bribing former San Francisco Public Works boss Mohammed Nuru in exchange for favorable treatment, would be held accountable for his role in the sprawling corruption case. As it turned out, Zhang’s day in court would be short-lived. He paid two fines — one for $1 million and one for $50,000 — and prosecutors agreed to drop the charges after three years. By 9 p.m., on the day he had arrived from London, Zhang was jetting off home to China.”

“Yet, Zhang’s company, Z&L Properties, left behind a trail of broken real estate deals, lawsuits, blighted properties and empty retail spaces across the Bay Area.In January 2022, San Francisco Opera singer Chester Pidduck was thrilled to learn that his family had been selected for a below-market-rate condo at the Oak. The 1,100-square-foot ninth-floor, two-bedroom condo looked out across at the San Francisco Conservatory of Music. Pidduck still hasn’t received his $12,500 deposit back and is talking to an attorney about a possible lawsuit. A similar unit could cost $1 million in the current market, which the family says it could not afford. ‘The timing was so perfect. We were so excited — this was a major lottery win,’ he said. ‘And now it’s all gone. We feel we have been incredibly screwed by Z&L. I couldn’t believe they could just walk away like that.'”

The Real Deal. “The nation’s largest owner of rental houses continues to fatten its portfolio having dropped wads of cash to acquire a massive Sun Belt portfolio. Dallas-based Invitation Homes paid $650 million for almost 1,900 single-family homes, including $495 million in cash, the Dallas Morning News reported. The sale equated to about $340,000 per home. The seller wasn’t revealed, but it’s highly likely that it was Barry Sternlicht’s Starwood Capital Group. Invitation was nearing a deal to buy Starwood’s roughly 2,000-home portfolio a month ago. Starwood, which bought the portfolio for more than $1 billion in 2021, was looking to offload the assets to bolster its real estate investment trust.”

Bisnow New York. “Less than a year after Thor Equities turned 470 Broadway over to its lender as it was staring down the barrel of a foreclosure lawsuit, the company has reacquired the building for less than a third of its previous value. A Thor affiliate acquired 470 Broadway for less than $8.1M this month, according to city property records. The Joe Sitt-led firm in October transferred the deed to the two-story building to LNR Partners in a transaction valued at $25.4M. The purchase price was $8,077,750, a far cry from the property’s appraised value of $29.2M when the CMBS loan was originated in 2012. The loss for the CMBS trust on the deal amounted to roughly $16.2M, according to the Morningstar Credit database.”

The Globe and Mail. “When the Bank of Canada restarted monetary policy tightening in June, it placed the blame for more interest rate hikes squarely on consumers. Rapid-fire rate increases last year were supposed to have squeezed household budgets and forced people to cut back on spending. By early summer, however, it looked like many Canadian shoppers had missed the memo. Spending blew past expectations in the first quarter, aided by unseasonably warm weather in January. Through the spring, Canadians continued to splurge on travel, entertainment and restaurants.”

“Interest rate hikes, after all, work with a lag. And so far, only a third of Canadian mortgage holders have seen their monthly payments increase, meaning much of the impact of higher interest rates on household finances has yet to be felt. Becky Western-Macfadyen is seeing that lag time in action. The St. Catharines, Ont.-based financial coaching manager with Credit Canada has been helping clients manage inflationary pressures over the past two years. More recently, she’s been fielding calls from homeowners with fixed-rate mortgages who are expecting their payments to jump by $500 to $1,000 a month in the coming quarters. ‘It’s no longer just about, ‘Oh, I can just cut out my coffee spending.’ Everyone’s already done that stuff. So we’re finding so many more people have already cut what they can and they’re really at that bare bones,’ Ms. Western-Macfadyen said.”

“‘We knew when we started raising rates that it was going to be really hard to assess how much would be enough to cool off consumer spending,’ said Tim Lane, a former Bank of Canada deputy governor, who retired last September, five rate hikes into the current tightening cycle. ‘You had a whole set of models where all the parameters were estimated in a period when there was little or no inflation. And so clearly, those models were not going to be very reliable,’ he said. In short, you can add the strength of consumer spending to a growing list of things central bankers underestimated over the past few years – a list that includes, most prominently, the momentum of inflation in 2021 and early 2022.”

The Telegraph in the UK. “When Anna Smith’s mother died, she inherited her retirement flat. But what might usually be a welcome windfall soon became a nightmare. The flat took two years to sell, and in the meantime service charges racked up at a cost of £4,500 a year. Although her mother bought the flat 10 years ago for £220,000, Smith had to accept £155,000 to sell the McCarthy Stone flat in Stockton-on-Tees, County Durham, this month. ‘The considerable decrease in the equity has really been quite shocking,’ says Smith, who spoke using a pseudonym. Sebastian O’Kelly, of campaign group the Leasehold Knowledge Partnership, says the retirement housing sector ‘has been a disaster. It’s destined not to increase very much, given the repeated scandals in this sector and the appalling financial costs. Resale values are so often atrocious.'”

“Chris Longley, 57, says his father Ronald poured his life savings into his McCarthy Stone retirement home in Folkestone, Kent, at the age of 75. The new home cost him £163,500 in 2007. After Ronald’s death in 2015, Longley inherited the flat and put it up for sale, originally listing it for £139,000. Five years later, he finally found a buyer and sold the flat for £30,000. Longley says retirement homes are often painted as ‘the new future for people that retire, which is safe and secure. But a fool and their money are easily parted. They don’t really know what the resale values are going to be. I’ve got my own mortgage to pay,’ he says. ‘What you’re looking at is this financial millstone around your neck.'”

All Homes in Australia. “Canberra house hunters hoping to purchase are in luck, with a new report revealing the city’s housing market has stabilised. The latest Domain House Price Report revealed Canberra’s median house price stands at $1,034,057 – unchanged from the previous quarter. ‘House prices have finally hit a trough in Canberra,’ said Domain chief of research and economics Dr Nicola Powell. ‘It actually happened in March but now it’s flatlined.’ Despite that, house prices in Canberra are now down by about $140,000, or 11.9 per cent, from their June 2022 peak. In percentage terms, Canberra has fallen the furthest from its price peak of all the capitals.”

From Barron‘s. “Ally Liu, 27, graduated from Beijing’s prestigious Peking University with bachelor’s and master’s degrees in finance, and now works at an investment firm. She said she’s exhausted from long hours at work. ‘It’s embarrassing, but I’ll just say it,’ she said in an interview from China’s capital. ‘I want to find a guy.’ After a long pause, she added, ‘But it’s hard.’ China’s marriage rate steadily increased until hitting a peak in 2013, when 13.5 million marriages were recorded. By the end of that year, a precipitous decline began—one that continues. Last year the marriage rate hit half its 2013 level, at 6.8 million, according to China’s Ministry of Civil Affairs.”

“The factors complicating Liu’s romantic pursuits are manifold. Either she is drained of energy and pressed for time, or the potential suitor is. Her close relationship with her parents compels her to abide by one of their marriage demands: a spouse must own a home and ideally a car or other investments, or come from a rich family. Both the causes and effects of the marriage falloff are being widely discussed in China. For one, the rising unemployment rate for the youth cohort has broken record after record each of the past few years. Joblessness for this group, aged 16 to 24, hit a record high of 21.3% in June.”

“This sky-high jobless rate has given companies that employ younger workers—most notoriously tech firms—extreme leverage over their employees. If one wants a job at all, he or she may be forced to work the ‘996’ schedule—9 a.m. to 9 p.m., six days a week. Amid these work conditions lies a vast property market that is both unstable and out of reach for an increasing number of Chinese. Many young men were caught up in the recent spate of defaults among China’s large developers, which left millions of already-purchased units unfinished, leaving the owners in limbo.”

“The government is in a difficult spot. It wants to boost the property market because rising prices means rising wealth for the hordes of Chinese who put their life savings in housing. But this would exacerbate the unattainability of purchasing property. Not only are private companies reluctant to shrink working hours or take other employee-friendly measures because of cutthroat industry competitiveness, but firms could impede government from doing so, said Eli Friedman, chair of International and Comparative Labor at Cornell University who specializes in China.”

“‘If the government were to require fewer working hours without a reduction in wages—which would be necessary for people to still afford living expenses in large cities—you would see tremendous pushback from companies, as it would undermine a key tenet of their business model,’ he told Barron’s.”

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This Post Has 127 Comments

  1. ‘For me, it might make more sense to rent it and try to sell for the original asking price later,’ he said. ‘Because right now, it’s drowning me’

    Yer gonna have to stop eating Dave.

    ‘the COVID-era housing boom that launched bidding wars among buyers and fostered unrealistic expectations among sellers has come to a screeching halt’

    I do love a good screeching halt in the morning. Has the minor respiratory illness thing has worn off?

    ‘It’s very frustrating to go from getting multiple offers within hours of listing a house to sitting on the market for 60, 90, 120 days,’ said LeBoeuf’s real estate agent. ‘And you can’t bring the price down low enough to even get an offer because the buyer pool has been cut by two-thirds’

    But you told Dave he could always sell?

    2. I have to wonder what these people think. An “investment” that, if it goes wrong, breaks you, is not an investment. It’s gambling!

      Dave, methinks you still won’t learn.

    3. I do love a good screeching halt in the morning. Has the minor respiratory illness thing has worn off?

      Nothing like a minor respiratory illness to jack up the price of all assets – even depreciating ones – to obscene levels.

      Starting to see a lot of 2 year old vehicles with super high miles come onto the market – at asking prices higher than new. The people who could never have afforded these vehicles in the first place without their free stimmies are trying to offload them to some sucker, but the suckers don’t exist.

      1. In that case, the suckers are the banks that loaned a bunch of brokesters $60,000 for a $40,000 car that depreciated to $20,000 FMV

        1. Manheim and the other smaller auction lots across the country are backed-up with used cars that won’t sell due to rising interest rates.

  2. ‘We’ve been eagerly awaiting Goose, an energy-efficient housing development in Lake Highlands from StoryBuilt, but the project may be on hold. Local outlets are reporting that management changes, employee furloughs, and financial concerns took StoryBuilt, formerly known as PSW Homes, and its Goose development at Walnut Hill Lane and White Rock Trail to a grinding halt’

    I like to see grinding halts too. This is in the Dallas Fort Worth area. Not much being said about this high profile crater.

    1. Lake Highlands used to be one of the premier areas in Dallas until a Jimmy Carter federal judge forced Section 8 housing into the area back in the early 90’s.

      1. Ten or fifteen years ago there was a lengthy story about ArcGIS mapping tools that depicted crime waves around the country, and they were precisely where Section 8 housing was introduced. IIRC, the correlation was above 0.9, and the officials responsible didn’t want to admit culpability.

  3. ‘demand, measured by the number of pending sales the previous 30 days, is the lowest it’s been since it started tracking in 2012. Looking at a more normal time in the market, the firm said pending sales were down 75 percent’

    That’s some red hotcakes right there.

  4. ‘now it’s all gone. We feel we have been incredibly screwed by Z&L. I couldn’t believe they could just walk away like that’

    Well it was cheaper than renting Chester.

    ‘Dallas-based Invitation Homes paid $650 million for almost 1,900 single-family homes, including $495 million in cash, the Dallas Morning News reported. The sale equated to about $340,000 per home. The seller wasn’t revealed, but it’s highly likely that it was Barry Sternlicht’s Starwood Capital Group. Invitation was nearing a deal to buy Starwood’s roughly 2,000-home portfolio a month ago. Starwood, which bought the portfolio for more than $1 billion in 2021’

    That’s a mighty a$$ pounding Barry.

    ‘Less than a year after Thor Equities turned 470 Broadway over to its lender as it was staring down the barrel of a foreclosure lawsuit, the company has reacquired the building for less than a third of its previous value’

    That’s the spirit!

    1. ‘Less than a year after Thor Equities turned 470 Broadway over to its lender as it was staring down the barrel of a foreclosure lawsuit, the company has reacquired the building for less than a third of its previous value’

      Wow, less than a third of its previous value, and they have the same shingle out front.

      1. Is this arrangement available to a homeowner?
        How does “turning it over to the lender” avoid a foreclosure hit?

        1. It is a foreclosure, but they set up a new LLC to repurchase the property for 1/3 of what they owed. The lenders really got it up the arse on that one.

          1. The lawsuit comes amidst troubling accusations in another case reported by Inman in March 2022, where a former staffer of the trade group alleged that the organization used illegal means to “extort” agents into contributing to a political action fund.

            Now, with the shadow of embezzlement and fraud allegations looming, the once well-respected organization faces immense scrutiny.

            According to the embezzlement lawsuit, detailed by CBS 8, Mercurio allegedly collected hundreds of thousands of dollars in unearned vacation pay, made tens of thousands of dollars in purchases on association credit cards, which were then posted on eBay and deposited into his personal bank account.

            The association, funded by annual dues from approximately 20,000 members, reportedly saw more than a million dollars in member dues diverted from lobbying efforts into the pocket of the former CEO.

            The plaintiffs in the case claim they were fired without cause after discovering and investigating Mercurio’s alleged long-running embezzlement scheme.

            While the association’s board agreed to pay for an independent investigation in late 2022, the plaintiffs say Mercurio and others continued to retaliate against them until their termination in April 2023.

            These recent allegations come after a separate lawsuit filed in March 2022, as reported by Inman, in which Mark Cowan, formerly membership and compliance officer for the Greater San Diego Association of Realtors, accused the trade group of using illegal means to extort agents and force them to contribute to the National Association of Realtor’s controversial political action committee (RPAC). The lawsuit alleges that Mercurio added a mandatory fee to the association’s quarterly multiple listing service fee in 2021 against the advice of his legal team, causing anger among many of the association’s members.

          2. ‘allegedly collected hundreds of thousands of dollars in unearned vacation pay, made tens of thousands of dollars in purchases on association credit cards, which were then posted on eBay and deposited into his personal bank account’

            This guy is dumb. And check out his sketchy photo.

  5. . ‘For me, it might make more sense to rent it and try to sell for the original asking price later,’ he said. ‘Because right now, it’s drowning me.’”

    Die, speculator scum.

  6. ‘And you can’t bring the price down low enough to even get an offer because the buyer pool has been cut by two-thirds.’”

    Then you better tell the greedhead seller to get to sawin’ and slashin’ like they mean it, Realtor Boy.

  7. This piece is pretty long and detailed.

    Willamette Week — On Portland’s Fentanyl Corner, a Dance With Death Sells for $20 (7/26/2023):

    “Overdoses have surged in Portland over the past few years. Last year, the Multnomah County Medical Examiner’s Office recorded more than 350 overdose deaths involving opioids, nearly triple the number only three years earlier, an increase driven by fentanyl. Oregon has the highest rate of drug use disorder in the country, and the fastest-growing fatal overdose rate among teenagers.

    The sale and use of opioids in downtown Portland is a perennial story, featured on the cover of WW since the 1970s, when the Rose City became a heroin hot spot. What’s different about the fentanyl market is the potency of its product.

    What’s now being sold on this corner is a drug so powerful and unpredictable that observers can watch its victims collapse within feet of obtaining it. Unlike with heroin, every hit can be a potential overdose. The people who use it choose between risking their lives with each injection, or smoking it, which often means brutal withdrawal symptoms within hours, making daily life a constant battle to stay “well.”

    https://www.wweek.com/news/2023/07/26/on-portlands-fentanyl-corner-a-dance-with-death-sells-for-20/

    Chemicals from China, cooked up in Mexico, and sold on the streets by teenage Hondurans employed by the Mexican cartels. Open borders have consequences.

  8. ‘If you cannot get a short-term rental license, the property is seeing more of a decrease in its value and having a harder time bouncing back from the price softening we’re seeing,’ Canfield said.

    And how exactly is this mythical price bounce-back going to occur, Canfield the Liar?

  9. ‘As you are aware, StoryBuilt has recently struggled with focused growth, reporting/financial controls, and liquidity,’ Siela wrote. ‘This has materially affected our performance as a business and our partners.’”

    Translation: color yer money gone, bagholders.

  10. People are feeling very stuck,’ said Leah Canfield, a broker associate for Coldwell Banker Mountain Properties in Breckenridge.

    Correction: FBs are feeling stuck. I’ve been on a month-to-month lease for the past several years, so I can decamp anytime I please – although I’d prefer to stay put so I can watch the carnage play out as Housing Bubble 2.0 implodes all around me.

    1. “Seattle has become notorious for a downtown filled with vagrants, drugs and crime.”

      California North?

    1. Repayments have more than doubled for places in the south of England like Cornwall, where the average monthly mortgage bill has shot up from £565.38 in July 2020 to £1,142.36 in July this year.

      I’ve been to Cornwall. Everyone is broke as a joke there. If not for tourism the place would shrivel up and blow away.

    1. Something felt horribly wrong the last time I visited the UK, in 2017. I won’t set foot there ever again.

  14. A reader sent these in:

    W/1st community bank failure yesterday & so few notable economic skeptics left standing I can count them on one hand, I recall being inside @DallasFed in Sept 2007 when @Reuters reported on an economic review I vehemently protested (cited @nytimes)…3 months into Great Recession.

    https://twitter.com/DiMartinoBooth/status/1685287276576710656

    Look to Australia first, 85% are on adjustable (variable) rates. We’re currently getting trucked. I’m paying around 3k per month more than 14 months ago.

    https://twitter.com/roccohoward/status/1685262428903530497

    The more I study this the wave of correction seems to strike in this order: NZ, AUS, CAN, USA.

    https://twitter.com/gocrashboombang/status/1685332805784686592

    Any day now…

    https://twitter.com/RudyHavenstein/status/1684695262902824961

    The Bank of England hired the original “Quantitative Easing” money printer to help them understand their inflation forecasting. Bernanke’s only task is to blame everything in England EXCEPT the central banks printing of trillions of fiat Pounds £.

    https://twitter.com/WallStreetSilv/status/1685292904242089986

    America is falling apart. This is the Chicago Police 001 district 🚨🚨🚨

    https://twitter.com/WallStreetSilv/status/1684980209303396352

    This is not Apple, Nvidia or even Tesla. It’s Congress members over the age of 70.

    https://twitter.com/alifarhat79/status/1684994272376811520

    Housing Bros: Real Estate prices will stay elevated even with rates at 7%. Housing Reality: We just slashed our listing price by -50% after listing it for 1 month. God Speed 🫡

    https://twitter.com/GregCrennan/status/1685456869446553600

    Do tax breaks for landlords lead to lower rents for tenants? Did sharply lower interest rates for landlords since 2019 lead to lower rents for tenants?

    Yes 4.1%
    No 95.9%

    https://twitter.com/JohnWake/status/1498507174191845380

    Canada is one big real estate Ponzi scheme. All selling bags to one another. Good luck

    https://twitter.com/DonMiami3/status/1685425798746910721

    Travis, the 37 year old pool guy who purchased 27 AirBnBs with $1.4m in PPP loans says the economy is fine and home prices never come down. Dr. Lacy Hunt, one of the greatest living economist says “consumers need to get their financial house in order to protect themselves” for what’s to come. Just not sure who to believe any more…..

    https://twitter.com/GRomePow/status/1685431663558619136

    In the first half of 2023, 340 U.S. firms filed for bankruptcy, setting a new 13-year high, per CNBC:

    https://twitter.com/unusual_whales/status/1685379919290028032

    Nothing says “housing shortage” quite like *checks notes* skyrocketing rental vacancies and collapsing rental prices.

    https://twitter.com/GRomePow/status/1676307579033755649

    The real estate industry is trying to solve a math problem with propaganda.

    https://twitter.com/GRomePow/status/1685391031112761344

    2007: No one will sell because they have a 5% mortgage
    2008: LOL
    2023: No one will sell because they have a 3% mortgage
    2024: LOL

    https://twitter.com/GRomePow/status/1685386699650863105

    Steps to find PPP recipients buying houses
    1. Download all PPP data https://data.sba.gov/dataset/ppp-foia
    2. Use local corporation commission to look up owners/managers/members
    3. Use County Assessors Office to review what property they own
    4. Look up address to find when property purchased

    https://twitter.com/GRomePow/status/1644497681354735617

    The CRE office sell off is just getting started. There’s still far too much hope (delusion) on biz and CRE owner side where there should not be for what is decade or longer bear until equilibrium found. Unlike tech or crypto bubbles this one will never fully recover. Dead money..

    https://twitter.com/AdamSinger/status/1685322782333120513

    I don’t do rentals, but I do look at them so I understand where rents are for investor properties. And I have not seen this many rentals available online (looking at Zillow) in the past 3-4 years

    https://twitter.com/JulieChangRE/status/1681701619698896896

    I think there’s a base assumption that there’s not (much) mortgage fraud this cycle and I think this assumption will prove to be very, very wrong.

    https://twitter.com/CXCarroll/status/1685339848515702784

    Let’s see how the levered up AirBNB gamblers are doing

    https://twitter.com/DonMiami3/status/1685320097856929793

    Shadow banking sure makes mortgage fraud easy. Imagine a property flipped between 3 LLCs since 2021 & a mortg taken out by each LLC w/o a single SMO filed. Tax lien on the property & none of the 3 initiated foreclosure. ‘But, but credit standards are so much tighter this time’ 🙄

    https://twitter.com/TrishaFLsun/status/1685255128616443904

    I remember trying to buy a Lexus ISF private party a few years ago. The KBB was around $35k and that’s what I offered cash after inspection. Owner: “I’m selling it for $44k because that’s what I owe.” That’s all you need to know about what’s coming for the car market.

    https://twitter.com/GRomePow/status/1632464944292835328

    Yeah, right 🙄

    https://twitter.com/TPAction_/status/1670162145353388035

    McDonalds manager throws a blender at customer for throwing food

    https://twitter.com/NoCapFights/status/1681922290181877760

    What a time to be alive

    https://twitter.com/MichaelAArouet/status/1685169824408772608

        1. It must be in Australia. The blender bounced right back to him for another shot.

          Do surveillance cameras zoom in like that?

    2. “I think there’s a base assumption that there’s not (much) mortgage fraud this cycle and I think this assumption will prove to be very, very wrong.”

      Captain Obvious strikes again.

    1. He states the immigrants coming to Ireland are not women, they are all military age males.

      Replacement Theory is not a theory, and it is brought to western nations by:

      Southern Poverty Law Center
      Anti Defamation League
      George Soros
      Alejandro Mayorkas
      Merrick Garland
      Et cetera

      As Paul McCartney & The Wings once sang (albeit in a different context) Give Ireland Back To The Irish.

  16. Illegal Chinese Virus Lab Found in Reedley, Californiaen自动翻译

    2023-07-28

    Summary： Enforcement inspections revealed illegal laboratories manufacturing COVID-19 and pregnancy test kits, bacterial and viral agents, and 900 mice, and potential sources of infection were found at the site. These included: chlamydia, E. coli, Streptococcus pneumoniae, hepatitis B and C, herpes types 1 and 5, and rubella. The CDC also found malaria samples. The problem is that no one has been held accountable so far in March. Why is California’s health regulation so weak? The local media has begun to dig deeper.

    The MidValley Times reported on July 25 that since October 2022, Wang Zhaolin of Prestige Biotech has been illegally operating the building, which is used by the lab to produce COVID\-19 tests and pregnancy tests.

    The massive medical violation was discovered in March when Reedly CA law enforcement officers investigated a warehouse at 850 I Street for illegally installing a garden hose.

    “Obviously, they didn’t have a business license,” said Reedly City Supervisor Nicole Zieba. “They didn’t have any city approvals; the building was supposed to be vacant.” Police did not have a search warrant at the time, but posted “unsafe to occupy” signs around the property and ordered people on the scene to leave. They then called the Fresno County Department of Public Health (FCDPH).

    Multi-Agency Involvement

    https://gnews.org/m/1496669

  18. ‘But, really, we’re back where we were before COVID.’

    It’s great news that housing is becoming more affordable again.

    1. Good news, we’re back where we were before Covid.
      Bad news, where we were before Covid was already history’s greatest bubble.

      1. “they are now experiencing what real estate professionals call golden handcuffs”

        This is yet another canard they’re pushing along with “just rent it out for positive cash flow until prices go back to the moon.” Any number of things (or a combination thereof) can push them out – job loss, health issues (including from the jab), corrupt property tax assessments, inflating HOA dues, inflating maintenance costs…

  19. “…demand, measured by the number of pending sales the previous 30 days, is the lowest it’s been since it started tracking in 2012.”

    Not a very long period, but I am guessing 2012 was itself a historically low year, coming in the wake of the Great Recession.

    “Looking at a more normal time in the market, the firm said pending sales were down 75 percent of the three-year average from 2017 to 2019. The data is point-in-time, as opposed to a monthly report, and tracked the 30 previous days from July 25.”

    Is 75 percent down a lot?

    1. I will mention that the folks in our personal circle who were making very comfortable livings in San Diego real estate before the pandemic left town during the pandemic with the CalExodus.

      1. CalMatters
        Donate
        After decades of historic growth, California switching to a period of chronic stagnation
        by Dan Walters July 30, 2023
        The skyline of San Francisco as seen from Bernal Heights Hill on March 16, 2020. Photo by Jeff Chiu, AP Photo

        In summary

        California has experienced population and economic growth for virtually all of its 173-year history, but now may be facing prolonged stagnation.

        From its founding 173 years ago, California’s history has been dominated by one word: growth.

        Its population grew from a few thousand to nearly 40 million, becoming by far the nation’s most populous state. Its economy grew to $3.6 trillion, the fourth largest in the world, and its $310.8 billion state budget is virtually the same as Russia’s.

        But that was then and this is now. California’s indices of growth have hit a plateau.

        The state’s population has been drifting downward for several years, and the state Department of Finance recently projected that it will remain virtually unchanged at just under 40 million at least until 2060 – a radical change from earlier predictions that it would top 50 million by then.
        …
        California lost one congressional seat after the 2020 census because its population grew slower than the rest of the country. Over the next several decades, at least, California and other slow- or no-growth blue states, such as New York, will lose more seats to fast-growing red states such as Florida and Texas, and therefore more presidential electoral college votes.

        California’s net loss in state-to-state migration patterns may already be a factor in the state’s projection of stagnant tax revenues. The state’s tax system is inordinately dependent on taxing the incomes of the state’s most affluent residents. The highest income 1% of Californians generate nearly half of income taxes, which are the lion’s share of overall revenues.

        A fierce debate has raged in academic and political circles over whether there has been a significant flight of wealthy taxpayers from the state as marginal tax rates rose and the federal government sharply restricted their ability to deduct state taxes on the federal tax returns – the latter an issue now raging in Congress.

        The debate gained new fodder recently when SmartAsset, a website devoted to economic issues, revealed that California and New York have the highest out-migration rates of taxpayers with incomes over $200,000 a year.
        …
        https://calmatters.org/commentary/2023/07/after-growth-california-chronic-stagnation/

        1. Just got an email from my sister–they left Chula Vista two weeks ago and are now unpacking in their new home in San Antonio. My sister just retired and her husband will be in a year or two. They were able to sell their big house in Chula Vista quickly–they had been there 20 years. Their plan was to leave California sooner than later, and this case it was later. But they’re no longer Californians.

          3. Ask their new neighbors in Texas about that….

            Husband was actually born and raised in Illinois. He’s a retired Navy Lt Cmdr. One of the reasons they chose San Antonio is that there are several large military bases there with their amenities and also health care facilities. My sister is from L.A. but dad was an “Honorary Texan” because of his service during the War. So they can live anyplace in Texas that they want.

          4. Ask their new neighbors in Texas about that….

            American intolerance is disgusting. I’ve met my fair share of commies from so-called “conservative” states.

      2. “San Diego metro had one of the lowest turnover rates in the nation with seven in every 1,000 homes changing hands, close to the weakest home market in the country — San Jose — with six in every 1,000.””

        Sounds like the San Diego used home sales industry is in a depression. Only the truly wealthy, including those who hit the real estate jackpot over the past decade, can afford to play.

  20. Personal Finance
    Published July 28, 2023 8:36am EDT
    Mortgage rates increase as home price growth slows
    The Federal Reserve announced another interest rate hike to curb inflation
    By Javier Simon Sponsored by Credible – which is majority owned by Fox Corporation. Credible is solely responsible for the services it provides.

    The average 15-year fixed-rate mortgage increased to 6.11%.

    The average 30-year fixed-rate mortgage rate increased to 6.81% for the week ending July 27, 2023, up from 6.78% last week, according to the latest data by Freddie Mac. At the same time, the average 15-year fixed-rate mortgage jumped to 6.11%, up from 6.06% last week.

    The data followed the Federal Reserve’s anticipated interest rate increase. But despite a tense interest rate environment, consumers have been confident about spending capabilities, according to Freddie Mac.

    “Mortgage rates inched up slightly after a significant decline last week,” Freddie Mac Chief Economist Sam Khater said in a statement. “Higher interest rates continue to dampen activity in interest rate-sensitive sectors, such as housing. However, overall U.S. consumer confidence is unwavering, surging to a two-year high in the Conference Board’s Consumer Confidence Index for July 2023. Rising consumer confidence often leads to greater spending, which could drive more consumers into the housing market.”

    Still, housing affordability and scarce availability have presented challenges to homebuyers in 2023.
    …
    https://www.foxbusiness.com/personal-finance/mortgage-rates-rise-home-price-growth-slows

    1. TRENDS
      Mortgage Rates Go Up—Right as the Housing Market Melts Down

      As much of the country swelters under a heat dome, the housing market is experiencing its own meltdown.

      Mortgage rates jumped to 6.81% for a 30-year fixed-rate loan for the week ending July 27, according to Freddie Mac. That’s up from last week’s average rate of 6.78%. And the welcome run of median home prices declining for 42 days flatlined for the week ending July 22.

      “The annual decline in the median listing price evaporated, with prices tying year-ago levels this week,” says Realtor.com® Chief Economist Danielle Hale in her analysis.
      …
      https://www.realtor.com/news/trends/mortgage-rates-go-up-right-as-the-housing-market-melts-down/

    2. “The nation’s largest owner of rental houses continues to fatten its portfolio having dropped wads of cash to acquire a massive Sun Belt portfolio. Dallas-based Invitation Homes paid $650 million for almost 1,900 single-family homes, including $495 million in cash, the Dallas Morning News reported.”

      If you want to know why rents are unaffordable, look no further than these megalandlords, who use dumb borrowed money to grab all the residential inventory on the market. If they control a large swath of rentals in an area, they can jack up rents without competition, squeezing the financial blood out of tenants who can afford inflated prices and leaving those who can’t afford to pay them out on the street.

      Monopoly pricing is normally illegal, but apparently ok for megalandlords to do.

      1. Blackstone Real Estate Income Trust
        Blackstone’s Breit sells property to finance push into AI data centres
        Flagship $68bn real estate fund turns net seller to meet redemptions and serve artificial intelligence boom
        Blackstone signage
        Since late last year, Blackstone’s real estate fund has made no large purchases and instead sold over $10bn in assets
        Antoine Gara in New York 3 hours ago

        Blackstone’s $68bn flagship property fund has gone from being one of the world’s biggest buyers of property to a large seller, as it raises liquidity to meet redemptions and invest billions in data centres to feed the artificial intelligence boom.

        From the beginning of 2021 to the third quarter of last year, the Blackstone Real Estate Income Trust, or Breit, acquired roughly $60bn of property, including hotels, warehouses and self-storage facilities, according to a Financial Times analysis of Blackstone’s securities filings. The wave of dealmaking included taking four publicly listed real estate investment trusts private.

        But since the autumn of last year, Breit has made no large purchases and instead sold over $10bn in assets to crystallise gains on successful investments and raise liquidity.
        …

      2. Financial Times
        Commercial property
        Financial storm bears down on US commercial real estate
        Long-awaited reckoning arrives as building loans come due at time of scarcer credit
        The Manhattan, New York, skyline
        The values of office buildings in New York City are estimated to have dropped by $76bn from their most recent sales prices
        Joshua Oliver and Joshua Chaffin in New York June 24 2023

        The 20-storey tower at 529 Fifth Avenue stands out from the other buildings around Grand Central Station for the surreal pink designs of an Alice in Wonderland-inspired art exhibit installed to fill vacant retail space on its ground floor.

        It is also remarkable as one among a small number of towers that have recently changed hands, giving a clue as to the value of Manhattan’s older offices now that the commercial real estate sector has emerged from a historic era of ultra-cheap money.

        Silverstein Properties sold the building three months ago for $105mn. In price per-square-foot terms, that was even less than a plot of land across the street commanded in 2015.

        “In New York, buildings are selling for less than the value of the land they sit on,” said Will Silverman, managing director at Eastdil Secured, a real estate investment bank. “We are seeing prices lower than they have been in 20 years in absolute dollar terms.”

        A long-anticipated reckoning is under way in the US commercial property industry, with the results playing out at 529 Fifth and other addresses. Sharply rising rates, a regional banking crisis that curtailed credit and a trend towards remote work are all wreaking havoc. Older office buildings have borne the brunt of the downturn, but other real estate categories have not been spared.
        …

      3. ‘If you want to know why rents are unaffordable, look no further than these megalandlords’

        I don’t disagree, not that long ago a poster asked, how did ‘easy money’ to use a general term, translate into such high rents? I think one could easily write a book on what happened to rents since 2008. A brief list: the ‘pedal to the metal’ statement Mel Watt made was at a multifamily conference in Las Vegas IIRC. All the GSE’s pushed everything at apartments. This churned an environment of chasing yield. Rates go lower – cheaper to chase yield. The lenders weren’t holding you back.

        So besides leverage, how do you make money? Buy, rehab, jack up the rents. This became a nationwide machine. (Lots of readers probably don’t recall 2011 to 2014, but I covered this whole sorry process.) All this time interest rates go lower. Repeat.

        So land starts to shot up. It doubled or tripled in the above period even in tiny never heard of it flyover. Why that apartment land is gold! So I guess rents are going to just have to cover that expensive dirt. But how? Luxury! And soon everybody was luxury and viola! An amenities race! Remember the Atlanta lux tower that handed out ‘free’ beer and wine all day, at $5,000 a month. I never heard about it after. Or the glass swimming pools that hung over the street?

        Then you got into the guberment low income tax scam. Another sorry state of affairs with a bunch of mostly rich good old boys and girls facing zero scrutiny. There’s more like that. Yeah, Mel stuck the match but as we can see in this river of CRE foreclosures ongoing, there was plenty of ‘dry powder’ pouring into this debacle.

        1. I visited my old neighborhood recently, it’s now called Cypress Grove (it used to be Mar Vista). On some streets 2/3rds of the original houses still remain, some with the original owners. Other streets have more new homes, but the overall area is still lower middle-class. The houses here were all put up in the early to mid-fifties. The cost back then was between $10 to $15,000.

          This new home is listed at 3M:
          https://www.zillow.com/homedetails/12606-Admiral-Ave-Los-Angeles-CA-90066/20441941_zpid/

          A typical original home just down the street looks like this:
          https://tinyurl.com/6r7hnb9w

          There are thousands of old homes in this neighborhood that are in original condition. And now there are lots of 2-3 million dollar new houses. The question is who is going to buy all of these old houses and put a new custom home? Just how many wealthy people are there in L.A.?

          I know a physician that took a job at a California state prison–they have to pay well since nobody wants to work in a prison. But she only gets about $310,000 a year. And the job is nowhere near L.A. She can’t afford to live in this neighborhood.

          Are their millions of rich people wandering the streets of L.A. who are going to snatch up these $15,000 homes, build new and make a huge profit????

          1. “There are thousands of old homes…”

            Many of these old stucco boxes are 3br/1ba with a detached 1car garage, which are tough to share with a renter. The scam is to alter it into a 2br/2ba, and get two working souls in the place.

        1. The GSE’s (govt service enterprises) became the market after the last crash. Fannie Mae and Freddie Mac are the biggest but there are some others as well. No one talks about this but when the Fed bought all of those mortgage backed securities, most of them were probably originated by Fannie and Freddie because those two dominate the market by a wide margin.

          When you think of the Fed as just creating money out of thin air and causing inflation, this is one of the blatant ways they’ve been doing it. What is interesting now is that most of that ‘inventory’ is going to be at a much lower rate than people can invest their money at currently so who is going to want any of it? The Fed is not supposed to be holding any of that crap so what will they do now when Fannie and Freddie get into trouble? It’s going to be a bad look when the Fed is obviously bankrupt. Will anyone care? Stay tuned…

          At some point they will have to move trillions of underperforming mortgages into some sort of special entity. Within that entity there will need to be an entire department created to dispose of abandoned zombie houses. I’m not sure where the tipping point is but we can safely assume that in many areas of the country there is some serious rot that is being masked. Over time it will become more apparent and things will start to seize up.

  21. Does it seem like Mr Market is setting up for a megacrash like the one in October 1987?

    1. The Dow sinks, snapping its longest run since 1987
      By Krystal Hur, CNN
      Updated 4:21 PM EDT, Thu July 27, 2023
      Traders work the floor of the New York Stock Exchange on July 25, 2023, in New York City. Wall Street stocks were mixed early July 25 following a round of generally positive earnings as markets looked ahead to a Federal Reserve interest rate decision.
      Angela Weiss/AFP/Getty Images

      New York CNN —

      The Dow slipped on Thursday, snapping a 13-day winning streak.

      The blue-chip index fell 237 points after being on track to close higher for a 14th consecutive session. That would have marked the Dow’s longest run of consecutive gains since May 1897.

      If the Dow had closed higher Thursday and Friday, it would have notched 15 days of gains, its longest daily winning streak ever.

      But the index’s run was at historic levels before it was cut short Thursday: On Wednesday it notched its 13th straight day of gains, its best winning streak since 1987 and its highest level since February 2022.

      The Dow, up roughly 6% for the year, has rallied in recent weeks as cooler-than-expected inflation data has investors more optimistic that a soft landing, or no recession, could be in the cards for the economy.

      That, in turn, has spurred investors to snap up shares of cyclical stocks, or shares of companies that are sensitive to the economy.
      …
      https://www.cnn.com/2023/07/27/investing/dow-stock-market-news-today/index.html

    2. Does it seem like Mr Market is setting up for a megacrash like the one in October 1987?

      All asset prices are near all-time highs, and the speculation is still running rampant. We are right near the peak of the biggest speculative everything bubble in the history of the world.

    3. Economy
      ‘People give up on recession just as it arrives’: Don’t count out an economic downturn just yet
      Matthew Fox
      Jul 30, 2023, 5:30 AM PDT
      Recession slowdown spending consumer
      UCG / Getty Images

      – Despite solid economic data, some Wall Street strategists are sticking with their gloomy outlook for the economy and stocks.

      – A solid jobs market and a resilient consumer have increased the chances of a soft economic landing.

      – But don’t count out a decline just yet: “People give up on recession just as it arrives.”
      …
      https://www.businessinsider.com/recession-outlook-economic-downturn-forecast-greedflation-profits-fed-rate-hikes-2023-7

      1. Yesterday I crossed paths with several folks in one of my personal networks who are ‘between jobs’. These are people with good credentials that are highly valued in the labor market.

        Their unemployed status doesn’t quite jibe with the ‘everything is awesome’ economic picture.

        1. Business
          A ‘rolling recession’ or a ‘richcession’ might spare the U.S. economy from a full-scale downturn
          Customers shop for clothing at a store in Vernon Hills, Ill., in June. Despite higher interest rates, consumers keep spending, employers keep hiring and the much-anticipated recession still hasn’t arrived.
          (Nam Y. Huh / Associated Press)
          By CHRISTOPHER RUGABER
          Associated Press
          July 29, 2023 5:30 AM PT

          Despite more than a year of widespread warnings that a recession was near, America’s economy is, if anything, accelerating.

          Even as the Federal Reserve has sent borrowing costs sharply higher, the economy’s resilience has been on plain display: Consumers keep spending, and employers keep hiring. Inflation has reached its lowest level in two years, helping Americans stretch their paychecks.

          The government estimated Thursday that the economy expanded at a solid 2.4% annual rate in the April-June quarter, an unexpected pickup from the 2% pace in the first quarter. Businesses helped drive the growth, with robust investment in equipment, software and buildings.

          The latest snapshot of the economy coincides with rising sentiment that it may achieve an elusive “soft landing,” in which growth slows and inflation falls without igniting a full-blown recession.

          Analysts point to two trends that might help stave off an economic contraction.

          Some say the economy is experiencing a “rolling recession,” a circumstance in which only some industries shrink while the overall economy manages to stay above water.
          …
          https://www.latimes.com/business/story/2023-07-29/rolling-recession-or-a-richcession-might-spare-the-us-economy-from-a-full-scale-downturn

  23. “Earlier this month, Chinese billionaire Zhang Li finally agreed, after six months of negotiations, to be extradited to San Francisco from his London home. For a while it seemed that Zhang, who had been charged with bribing former San Francisco Public Works boss Mohammed Nuru in exchange for favorable treatment, would be held accountable for his role in the sprawling corruption case. As it turned out, Zhang’s day in court would be short-lived. He paid two fines — one for $1 million and one for $50,000 — and prosecutors agreed to drop the charges after three years. By 9 p.m., on the day he had arrived from London, Zhang was jetting off home to China.”

    Let’s see: Imprisoning him costs $$$. Much better to collect a million dollar fine. Cha-ching! I expect London Breed’s city hall to try to extort more cash from wherever they can.

      1. Haven’t you hear? The new “thing” is illegal biological labs being set up in vacant commercial real estate. We get needed cash (under the table) and China gets labs which are going to be used to infect Americans with a REAL infectious agent. It’s a win for everybody!

    1. And another, almost $20k above a new 2024:

      posted: 20 days ago

      updated: 4 days ago

      $67,000

      https://sfbay.craigslist.org/sby/cto/d/campbell-2021-jeep-wrangler-rubicon-4xe/7641698279.html

      I don’t know who these people are, but they are absolutely delusional on their pricing. The market they are fantasizing about simply does not exist.

      When I look at the used auto market, what I find appears to be a bunch of people looking for a bagholder, not realizing it’s them.

      1. When he stimmie checks are long gone suddenly those $1000+ per month payments become real.

        1. Yep, it was a daily driver, and he probably lived waaaay out where rent was cheap, but the drive to work was 30-min each way, so the typical 20k miles per year. All of the bolt on goodies were likely charged to a 22% credit card.

          1. People who can afford motor vehicles which cost $50,000+ have more than one car. This guy is just clueless. What do the rest of his finances look like?

      1. Yeah, Lucky Lopez isn’t kidding about those student loans restarting in October, and the $1,000 per month pandemic cars will be repossessed.

  26. “Canada is one big real estate Ponzi scheme. All selling bags to one another. Good luck”

    There was an episode of Beavis and Butt-head where they each had to sell a bag of candy bars for a school fund-raiser. One of them produced a dollar bill and they proceeded to pass it back and forth while “selling” all the candy bars to each other and eating them.

    That’s the modern “economy” in a nutshell.

    1. “The government is in a difficult spot. It wants to boost the property market because rising prices means rising wealth for the hordes of Chinese who put their life savings in housing. But this would exacerbate the unattainability of purchasing property.”

      Lol, this is what passes for serious financial journalism – literally conflating an obvious Ponzi scheme with “rising wealth.”

  27. Devon Archer is going to testify before Congress tomorrow about the Unelected Occupant’s full knowledge of, and participation in, his crackhead son’s illegal and corrupt overseas business deals.

    As of now, he is “in hiding” because of threats.

    1. DOJ tries to jail key Hunter Biden witness Devon Archer on eve of congressional testimony

      By Ryan King
      July 30, 2023 2:13pm

      The Justice Department is pushing for Devon Archer to report to prison — just days ahead of the former Hunter Biden business partner’s hotly anticipated congressional testimony, according to new court documents.

      Manhattan federal prosecutors on Saturday filed a letter requesting a judge set a date for Archer to start his one-year sentence in a fraud case unrelated to the first son’s various scandals.

      The request came after the Second Circuit Court of Appeals affirmed Archer’s 2018 conviction last Tuesday on two felony charges for his role in a conspiracy to defraud a Native American tribe.

      Archer — who is set to deliver closed-door testimony to the House Oversight Committee on Monday about Biden — had been challenging the conviction.

      His attorney, Matthew Schwartz, said he would be filing a formal response to the request from the US Attorney’s Office by Wednesday — and noted that his client would still testify as planned despite allegations the DOJ letter was an intimidation tactic.

      “We are aware of speculation that the Department of Justice’s weekend request to have Mr. Archer report to prison is an attempt by the Biden administration to intimidate him in advance of his meeting with the House Oversight Committee,” Schwartz said in a statement, per Politico.

      https://nypost.com/2023/07/30/doj-tries-to-jail-key-hunter-biden-witness-devon-archer-on-eve-of-congressional-testimony/

  29. Looks like we might need another minor respiratory virus to juice RV sales:

    RV Life Losing Luster? Motorhome, Trailer Sales Down 49 Percent This Year

    To offer some context for the percentages, actual sales of towable RVs through June 2023 totaled 105,975 units. At this time last year, it was 228,740.

    That’s a haircut of over 50%. I don’t know many industries or businesses which can handle a loss of revenue that large without major carnage.

    https://www.msn.com/en-xl/news/other/rv-life-losing-luster-motorhome-trailer-sales-down-49-percent-this-year/ar-AA1elO90

    1. Financial Times
      US banks
      US banks under pressure as corporate depositors demand higher rates
      Earnings from BofA, PNC and BNY Mellon point to headwinds for net interest income
      Montage of bank logos and a US dollar note
      Shares of Bank of America, PNC Bank and BNY Mellon rallied on Tuesday
      Brooke Masters, Stephen Gandel and Joshua Franklin in New York July 18 2023

      Corporate and institutional depositors are demanding higher rates on their deposits, putting pressure on US bank profit margins and signalling that lenders are running out of room to wring more revenue from tighter monetary policy.

      As the US Federal Reserve has aggressively increased rates, large American banks, in particular, have been able to increase what they charge for loans much more quickly than they have had to boost interest rates for savers. That has resulted in bumper hauls of net interest income.

      However, the trend is starting to reverse as institutional clients shift their cash from non-interest bearing accounts to those that offer a better yield while also demanding higher rates more broadly.

      Bank of America reported a quarter-on-quarter drop in NII on Tuesday, as did PNC, which derives about a third of NII from non-retail clients, and BNY Mellon, which caters to corporates, institutions and wealthy customers.

      Shares of all three banks rallied by between 2.5 and 4 per cent on Tuesday, recovering from declines last week when comments from State Street and Citigroup made investors start to fret about the diminishing gains from the Fed’s rate rising campaign.

      Goldman Sachs analysts flagged the “deteriorating NII outlook” at PNC, and a KBW note described a “heightened focus on deposits and its implications to forward NII” at BNY.

      BofA reported that its interest expense, the amount it pays out to clients, had risen twice as fast as its interest income between the first and second quarters. It also noted that corporate clients are now keeping 60 per cent of their cash in interest bearing accounts, up from 30 per cent a year ago.

      Citigroup and State Street last week both reported rising deposit costs because of pressure from institutional and corporate customers.

      State Street’s shares dropped sharply on Friday after it warned that its 10 per cent quarter-on-quarter NII fall would be followed by another 12 to 18 per cent decline in the third quarter.

      Ron O’Hanley, its chief executive, predicted that other banks would face similar headwinds as a wider range of customers became more aware of the possibility of better returns. Some digital banks are offering more than 4 per cent interest on insured deposits, while money market funds, which invest in short-term securities, are offering 5 per cent or more.

      “Everybody is being pressed on their NII . . . how quickly and how much is a function of the nature of their deposits,” O’Hanley said. He added that State Street was suffering earlier than others because it had “sophisticated clients and they obviously want to make some money on their deposits, which they weren’t able to do for many, many years”.

      Citigroup’s chief financial officer Mark Mason said corporate customers, which account for more than 60 per cent of Citi’s overall deposits, had been more sensitive to moves in interest rates.

      The deposits of large multinationals “tend to have a higher beta associated with them, which means we pass on more of the rate increases that we see to those corporate deposits”, Mason said after the bank reported earnings last week.

      Even JPMorgan Chase, whose lending business received a further boost with the acquisition of First Republic in May, has seen deposits from corporate and institutional clients leave at a much faster rate over the past 12 months than retail clients.

      Average deposits in the second quarter of 2023 at JPMorgan’s corporate and investment bank fell almost $75bn, or 10 per cent, from a year earlier. By comparison, its consumer and community bank that houses its Chase retail banking business saw deposits fall 2 per cent over that period.
      …

  31. Hunter Biden’s Judge Declares Court Clerk Off Limits Amid Impersonation Claims

    According to Theodore Kittila, the congressman’s attorney, the court clerk’s office received a call from Jessica Bengels of New York-based Latham and Watkins, who requested that information submitted by Mr. Kittila be removed from the court docket. During that call, Ms. Bengels reportedly claimed to work for Mr. Kittila’s firm.

    After learning of the call from the clerk’s office, Mr. Kittila notified Judge Noreika in a July 25 letter. The judge, in turn, demanded an explanation for the trick.

    “The Court has discussed the matter with the relevant individuals in the Clerk’s Office and has been informed that the caller, Ms. Jessica Bengels, represented that she worked with Mr. Kittila and requested the amicus materials be taken down because they contained sensitive grand jury, taxpayer, and social security information,” she wrote in an order.

    “The caller misrepresented her identity and who she worked for in an attempt to improperly convince the clerk’s office to remove the amicus materials from the docket,” she added.

    The materials in question included whistleblower testimony provided to the House Ways and Means Committee relating to the Justice Department’s investigation of Mr. Biden.

    The first son’s attorneys, however, told the court that the incident was simply an “unfortunate and unintentional miscommunication.”

    https://www.theepochtimes.com/us/hunter-bidens-judge-declares-court-clerk-off-limits-amid-impersonation-claims-5430852

    1. “The caller misrepresented her identity and who she worked for in an attempt to improperly convince the clerk’s office to remove the amicus materials from the docket,”

      Getting desperate.

  32. ‘Resign Immediately’ – Occupant Destroyed After Republicans Uncover Leaked Email (7/30/2023):

    “The sequence of events that led to the firing of Viktor Shokin, and the subsequent comments by then-Vice President Biden, raise serious concerns as to what machinations were really at play — and were purposefully concealed from the American people,” Rep. Virginia Foxx, R-N.C., a member of the House Oversight and Accountability Committee, told Fox News Digital.

    “No matter how you slice Hunter Biden’s involvement, it screams public corruption at the highest levels and must be fully investigated,” she added.

    “The calm, judicious, steady reveal of incredibly condemning evidence that clearly incriminates the Biden crime family will eventually alarm even the most ardent supporters of this WH occupier,” added Rep. Clay Higgins, R-La., who also sits on the committee.

    “Our President is compromised, he should resign and be forever condemned, and the Democrat Party should begin rebuilding itself,” he noted further.

    https://republicbrief.com/resign-immediately-biden-destroyed-after-republicans-uncover-leaked-email/

    1. “Our President is compromised, he should resign and be forever condemned, and the Democrat Party should begin rebuilding itself,”

      Would that fit on a bumper sticker?

  33. (Kinda like picking some people out and having an annual death by stoning)

    CDC Poised to Recommend Annual COVID-19 Shots: Director

    By Zachary Stieber
    July 30, 2023

    The U.S. Centers for Disease Control and Prevention (CDC) is tracking toward recommending Americans get a COVID-19 vaccine once a year, the agency’s new director says.

    Dr. Mandy Cohen, who recently replaced Dr. Rochelle Walensky, says that the new CDC recommendation is expected to be finalized and announced in September.

    “We’re just on the precipice of that, so I don’t want to get ahead of where our scientists are here and doing that evaluation work, but yes we anticipate that COVID will become similar to flu shots, where it is going to be you get your annual flu shot and you get your annual COVID shot,” Dr. Cohen told Spectrum News.

    “We’re not quite there yet, but stay tuned. I think within the next couple of weeks, month we’re going to hear more from our experts on COVID shots,” Dr. Cohen added.

    https://www.ntd.com/cdc-poised-to-recommend-annual-covid-19-shots-director_933788.html

    1. Not that I’m keeping track, but the “conspiracy theorists” are up about 37-0 over the “experts.”

    2. And millions will trip over each other to get the booster that only boosts your chances of dying suddenly.

    1. LOL, you’d think they might mow the lawn and try tidying up the interior before listing it.

    2. “Welcome to the perfect fixer-upper investment property opportunity! Nestled in a charming neighborhood, this single-family home offers immense potential for those looking to make their mark in the real estate market.”

      A Bonfire of the Vanities in the real estate industry.

  36. ‘Attempts to reach StoryBuilt’s Austin-based public relations office Thursday, but the number listed on the company website was no longer in service’

    The phones always go first.

  37. ‘In the first half of 2023, only 1 percent of the nation’s homes changed hands, said Redfin, which was its lowest in at least a decade. San Diego metro had one of the lowest turnover rates in the nation with seven in every 1,000 homes changing hands, close to the weakest home market in the country — San Jose — with six in every 1,000’

    But it’s still a strong sellers market with 45 seconds on the market.

    1. Besides housing, I can think of another area where there is no shortage: Scam artist journalists who pretend that housing is still going up like it was in early 2022…

    2. 1. Sellers can’t afford to sell because they’ll lose their shirts (investors).
      2. Buyers can’t afford to buy because money is too expensive and everyone knows that buying at the peak of the biggest bubble in history will doom you to the poor house.

      So, it’s not really a bad time for homes sales! The prices in much of America have gotten so out whack with reality, that I can’t see how a “normal” real estate market will ever return. Like my old neighborhood where $250,000 houses are going for $1,250,00+. The market has ruined much of America.

  38. ‘‘The timing was so perfect. We were so excited — this was a major lottery win,’ he said. ‘And now it’s all gone. We feel we have been incredibly screwed by Z&L. I couldn’t believe they could just walk away like that’

    Ennio Morricone – L’estasi dell’Oro (In Concerto – Venezia 10.11.07)
    SelfDistribuzione
    Dec 20, 2011
    Song taken from “The Good, the Bad, the Ugly”, performed in the magical setting of San Marco’s square in Venice and directed by Ennio Morricone himself.

    https://www.youtube.com/watch?v=J3IlqY1CbI0

    4 minutes.

  39. ‘We knew when we started raising rates that it was going to be really hard to assess how much would be enough to cool off consumer spending…You had a whole set of models where all the parameters were estimated in a period when there was little or no inflation. And so clearly, those models were not going to be very reliable’

    Gosh Tim, I hope no one overpaid in such an environment!

  40. ‘Sellers are freaking out a little bit because everybody has a short memory and all they know is what their friends told them about how fast their homes sold last year…But, really, we’re back where we were before COVID’

    Not really Scott. Cuz I bet yer prices are WAY up from before CCP virus. So you got that going for ya!

  42. ‘If the government were to require fewer working hours without a reduction in wages—which would be necessary for people to still afford living expenses in large cities—you would see tremendous pushback from companies, as it would undermine a key tenet of their business model’

    That’s quite a pickle Eli.

  44. A car carrier freighter called The Fremantle Highway has been burning for about a week. The fire can’t be put out because there are 500 EVs onboard. You can’t do anything to put out an EV fire. They are just letting it burn and trying to keep it off the Dutch Coast.

    Great commentary on EV idiocy.

    1. TYVM Blueskye for the YT link to “Auto Expert John Cadogan”. Delightful fifteen minute presentation. Surely too much common sense for today’s world. You did notice he rebadged the “Fremantle Highway” as the “Dutch Oven”. LOLs.

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